Law:

Section:

Section 22 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, read with Schedule II to the Income-tax Act, 1961 - Tribunals and Appellate Tribunals - Procedure and powers of - Whether object of RDB Act is expeditious recovery of dues of banks and financial institutions and in order to achieve that, Parliament has not only fixed a time schedule but also made a departure from normal provisions of Code of Civil Procedure - Held, yes - Whether, therefore, Tribunal and Appellate Tribunal shall not be bound by the procedure laid down by Code of Civil Procedure but shall be guided by principles of natural justice and, they shall have powers to regulate their own procedure - Held, yes - Whether, since publication in the Official Gazette/reputed newspaper is a very time-taking process, a discretion has been left with Recovery Officer whether to publish sale proclamation in aforesaid manner or not having regard to time constraint - Held, yes - Whether, resultantly, provisions of Schedule II cannot be said to be ultra vires the Constitution - Held, yes HELD Section 28(5) of the RDB Act provides that the Recovery Officer may recover any amount of debt due from the defendant by distraint and sale of his movable property in the manner laid down in the Third Schedule to the IT Act. Section 29 of the RDB Act provides that the provisions of Second and Third Schedules to the Income-tax Act, 1961, and the Income-tax (Certificate Proceedings) Rules, 1962, as in force from time to time shall, as far as possible, apply with necessary modifications as if the said provisions and the rules referred to the amount of debt due under this Act instead of to the Income-tax Act. The proviso to the section lays down that any reference under the said provisions and the rules to the 'assessee' shall be construed as a reference to the defendant under this Act. [Para 4] The whole premises of the argument of the petitioner was wrong. Prior to the enactment of the RDB Act, the normal remedy for the recovery of debts due to banks and financial institutions was to institute a suit in the Civil Court which was tried and decided in accordance with the procedure laid down in the…

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