Holding

Section 34(2) of the Recovery of Debts due to Bank and Financial Institutions Act, 1993 does not save recovery proceedings under the Uttar Pradesh Public Monies (Recovery of Dues) Act, 1972, and such proceedings are therefore barred.

Summary

U.P. Financial Corporation initiated recovery proceedings against Unique Butyle Tube Industries Pvt. Ltd. under the Uttar Pradesh Public Monies (Recovery of Dues) Act, 1972 for default on a loan. The appellant contended that, after the enactment of the Recovery of Debts due to Bank and Financial Institutions Act, 1993, Section 34(2) of that Act gives it overriding effect over other statutes, thereby rendering the UP Act proceedings impermissible. The Allahabad High Court held that the corporation could choose either the RDB Act or the UP Act and allowed the recovery under the latter. On appeal, the Supreme Court examined the language of Section 34(2) and held that the UP Act is not listed among the exceptions and its mode of recovery is a separate scheme, so the proceedings under the UP Act are barred. The Court quashed the UP Act proceedings and directed that the corporation may pursue recovery only under the RDB Act or the Financial Act. The appeal was allowed.

Issues considered

Whether recovery proceedings initiated under the Uttar Pradesh Public Monies (Recovery of Dues) Act, 1972 are maintainable in view of Section 34(2) of the Recovery of Debts due to Bank and Financial Institutions Act, 1993.
Whether Section 34(2) of the RDB Act confers an overriding effect that excludes the applicability of the UP Act.

Legislation cited

Subjects

statutory interpretationoverriding effectSection 34recovery of debtsfinancial corporationUttar Pradesh Public Monies Actcausus omissusexclusive jurisdictioncivil recovery

Judgment

A MIS. UNIQUE BUTYLE TUBE INDUSTRIES PVT. LTD.
V.

U.P. FINANCIAL CORPORATION AND ORS.

DECEMBER 20, 2002

B [SYED SHAH MOHAMMED QUADRI AND
ARIJIT PASAYAT, JJ.]

Recovery of Debts due to Bank and Financial Institutions Act, I993-
C Section 34(2)-Uttar Pradesh Public Monies (Recovery of Dues) Act, I972-
Recovery proceedings by financial Corporation under U.P. Act in view of
Section 34(2)-Maintainability of-lfeld, recovery proceedings under U.P Act
is not permissible since Section 34 confers overriding effect vis-ii-vis other
statutes and proceedings under U.P. Act are not the exceptions to such
overriding effect-Further the U.P. Act deals with separate modes of recovery
D and such proceedings are not relatable to proceedings under the Financial
Act.

Interpretation ofSlatutes-Legislative intent-language of the statute is
the determinative factor-Intention is found in the words used by legislature
itself-If statutory provision is plain and unambiguous Court cannot read
E anything into it.

Principle ofconstruction-Causus omissus and reading statute as whole-
Discussed.

F Respondent-Corporation initiated recovery proceedings under the
Uttar Pradesh Public Monies (Recovery of Dues) Act, 1972 against
appellants. Appellant chaUenged the same on the ground that after the
enactment of the Recovery of Debts due to Bank and Financial Institutions
Act, 1993 (the Act), the proceedings were not maintainable. High Court ··
held that the choice was left open to Financial Corporation to proceed
G under the D.R.T. Act or under the other modes of recovering the debts
i.e. it could proceed under the provisions of the U.P. Act. Hence the present
appeal.

Appellant contended that Section 34 of the Act confers overriding
effect vis-a-vis other statutes; that the only exceptions to such overriding
H 666
UNIQUE BUTYLE TUBE INDUS. PVT. LTD. 1·. U.P. FINANCIAL CORPN. 667

effect are enumerated in sub-section (2), which does not encompass the A
proceedings under U.P. Act; and that the action permissible so far as
Financial Act is concerned can be spelt out from Section 32(G) of the
Financial Act.

Respondents contended that under the U.P. Act, there is no question
of any adjudication of dues payable and once there is default, there is B
statutory empowerment to issue a certificate for recovery; that the
procedure is not in conflict with any proceeding that can be taken under
the Act; that the statutory intention for enactment of the Act was to do
away with the cumbersome procedure involved for recovery and the
provisions are not inconsistent with any provision of the U.P. Act, which C
in terms of Section 3(3) prohibits institution of a case for recovery of the
sums due, therefore, High Court was justified in its conclusion; and that
in any event, the procedures under the Act are in pari materia with those
which can be taken under the Financial Act so such a prescription has to
be read into Section 34(2) of the Act by application of the principle known
as causus omissus and deficiency, if any, can be reconciled by purposive D
interpretation by reading the said statute as a whole, and finding out the
true legislative intent.

Allowing the appeal, the Court

HELD: 1.1 Section 34 sub-section (I) of the Recovery of Debts due E
to Bank and Financial Institutions Act, 1993 deals with the over-riding
effect of the Act notwithstanding anything inconsistent therewith contained
in any other law for the time being in force or in any instrument having
effect by virtue of any law other than the Act. It makes an exception as
regards matters covered by sub-section (2). U.P. Act is not mentioned
therein. Mode of recovery of debt under the U.P. Act is no~ saved under F
sub-section (2). Even a bare reading therein makes it clear that it is
intended to be in addition to and not in derogation of certain statutes; one
of which is the Financial Act. In other words, a Bank or Financial
institution has the option or choice to proceed either under the Act or
under the modes of recovery permissible under the Financial Act. To that G
extent, High Court's conclusions were correct. However it went wrong by
holding that proceedings under the U.P. Act were permissible. U.P. Act
deals with separate modes of recovery and such proceedings are not
relatable to proceedings under the Financial Act. Therefore the
proceedings under the U.P. Act are quashed. However, it will be open to
the Corporation to take such action under the Act or the Financial Act as H
668 SUPREME COURT REPORTS (2002) SUPP. 5 S.C.R.

A is legally available to it. (674-D, E, F; 676-FI

Allahabad Bank v. Canara Bank and Anr., (20001 4 SCC 406; Directo1
of Industries UP. and Ors. v. Deep Chand Agarwal, (1980( 2 SCC 332 and
S.K. Bhargava v. Collector, Chandigarh and Ors., 11998( 5 SCC 170, referred
to.
B
It
2.1. is well settled principle in law that Court cannot read anything
into a statutory provision which is plain and unambiguous. A statute is
an edict of the legislature. The language employed in a statute is the
determinative factor of legislative intent. The first and primary rule of
C construction is that the intention of Legislation must be found in the words
used by Legislature itself. The question is not what may be supposed and
has been intended but what has been said. (674-G, H; 675-AI

2.2. Two principles of construction-causus omissus and reading the
statute as a whole-appear to be well settled. Under the first principle a
D causus omissus cannot be supplied by the Court except in the case of clear
necessity and when reason for it is found in the four corners of the statute
itself but at the same time a causus omissus should not be readily inferred
and for that purpose all the parts of a statute or section must be construed
together and every clause of a section should be construed with reference
to the context and other clauses thereof so that the construction to be put
E on a particular provision makes a consistent enactment of the whole
statute. This would be more so if literal construction of a particular clause
leads to manifestly absurd or anomalous results which could not have been
intended by the Legislature. Therefore, High Court's conclusions holding
proceedings under the U.P. Act to be in order are indefensible.
F (675-G, H; 676-A, q

Union of India and Ors. v. Filip Tiagpo De Gama of Vedem Vasco De
Gama, AIR (1990) SC 981; D.B. Venkatchalam and Ors. v. Dy. Transport
Commissioner and Ors. etc., AIR (1977) SC 842; Rishabh Agro Industries
ltd v. P.N.B. Capital Services ltd., (200015SCC515; N. Narasimhaiah and
G Ors. v. State of Karnataka and Ors. etc. 119961 3 SCC 88 and State of
Karnataka and Ors. v. Nanjudaiah and Ors., 119961 to SCC 619, referred
to.

Lenigh Valley Coal Co. v. Yensavage, 218 FR 547; Artemiou v.
H Procopiou, (1966) lQB 878 and Luke v. l.R.C., 119661 AC 557, referred to.
UNIQUE BUTYLE TURE INDUS. PVT. LTD ... u.r. FINANCIAL CORPN. (ARIJITPASAYAT, J.J 669

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8624 of A
2002.

From the Judgment and Order dated 27.4.2001 of the Allahabad High
Court in C.M.W.P. No. 13738 of2001.

Sunil Gupta, Pramod Dayal, Piyush Sharma and Anand Padmanabhan, B
for the Appellant.

Shrish Kumar Misra, for the Respondents.

The Judgment of the Court was delivered by

ARIJIT PASAYAT, J. Leave granted.
c
The only question that falls for determination in this case is whether
the proceedings for recovery initiated by U.P. Financial Corporation
(hereinafter referred to as 'the Corporation') under the Uttar Pradesh Public
Mcinies (Recovery of Dues) Act, 1972 (in short 'the U.P. Act') on 6.1.2001 D
are maintainable in view of Section 34 (2) of the Recovery of Debts Due to
Bank and Financial Institutions Act, 1993 (in short 'the Act').

Factual position sans unnecessary details is as follows:

Certificate was issued under the U.P. Act for recovery of certain dues E
from the appellant for its alleged failure to comply with the terms and
conditions of loan granted to it; similar failure was alleged by three Directors
and three guarantors. On 14.2.200 I Citation for recovery was issued by the
Tehsildar, Varanasi, for recovery of the alleged dues as arrears ofland revenue.
Appellant challenged the said action before the Allahabad High Court in
CMWP No.13738 of 200 I on the ground that after the enactment of the Act, F
the proceedings were not maintainable. Reliance was placed on the provisions
contained under Section 32(G) of the State Financial Corporation Act, 1951
(in short 'the Financial Act') to contend that no other proceeding is permissible
to be taken under the Act. Reference was made to Sections 17 and 34 of the
Act to substantiate his stand. Stand of the Corporation before the High Court G
was that alternative modes of recovery were prescribed under different statutes
and one cannot stand on the way of the other mode. Choice was left upon to
the Corporation to act either under the Act or under the modes permissible
under the Financial Act. Proceedings initiated under the U.P. Act were covered
by the said Act. A Division Bench of the High Court on consideration of the
rival submissions held that the language of Section 34(2) of the Act placed H
670 SUPREME COURT REPORTS [2002] SUPP. 5 S.C.R.

A the position beyond controversy and concluded as follows:
"The choice is clearly left open to the Financial Corporation which
may proceed under the D.R.T. Act or may proceed under the other
modes of recovering the debts as are permissible under the S.F.C.
Act, i.e. it can proceed under the provisions of the U.P. Public Money
B (Recovery of Dues) Act."

Judgment of the High Court dated 27.4.200 I is under challenge.

In support of the appeal learned counsel for the appellant submitted
that the field of operation so far as the Act is concerned, has been clearly
C delineated in Allahabad Bank v. Canara Bank and Anr., [2000] 4 SCC 406.
Section 34 of the Act confers overriding effect vis-ii-vis others statutes. The
only exceptions to such overriding effect are enumerated in sub-section (2)
thereof. Proceedings under the U.P. Act are not encompassed by the exceptions.
On the contrary, the action permissible so far as Financial Act is concerned,
D can be spelt out from Section 32 (G) of the said Act.
In response, learned counsel for the Corporation submitted that
A/fahabad Bank's case (supra) has no application to the facts of the case.
Under the U.P. Act, there is no question of any adjudication of dues payable
and once there is default, there is statutory empowerment to issue a certificate
E in terms of Section 3 of the said Act. With reference to the decision of this
Court in Director of Industries, UP. and Ors. v. Deep Chand Agarwal,
(1980] 2 sec 332, it was submitted that validity of the said provisions has
been upheld by this Cou11 and the procedure adopted in the present case has
been held to be legally permissible. The authorized functionary can take
action, the moment there is default and no adjudicatory process is involved.
F The procedure is not in conflict with any proceeding that can be taken under
the Act. The statutory intention for enactment of the Act was to do away with
the cumbersome procedures involved for recovery and provisions are not
inconsistent with any provision of the U.P. Act, which in terms of Section
3(3) prohibits institution of a case for recovery of the sums due. Therefore,
G the High Court was justified in its conclusion. In any event, according to him,
the procedures under the Act are in pari materia with those which can be
taken under the Financial Act. So such a prescription has to be read into sub-
section (2) of Section 34 of the Act by application of the principle known as
causus omissus and the deficiency, if any, can be reconciled by purposive
interpretation by reading the said statute as a whole, and finding out the true
H legislative intent.
UNIQUE BUTYLE TUBE INDUS. PVT.LTD.•·. U.P. FINANCIAL CORPN. !ARIJIT PASAYAT, J.] 671

In order to appreciate the rival submissions a few provisions throwing A
light on the controversy need to be noted.

Act:

"34: Act to have over-riding effect-

( I) Save as otherwise provided in sub-section (2). the provisions of B
this Act shall have effect notwithstanding anything inconsistent
therewith contained in any other law for the time being in force or in
any instrument having effect by virtue of any law other than this Act.

(2) The provisions of this Act or the rules made thereunder shall be C
in addition to, and not in derogation of, the Industrial Finance
Corporation Act, 1948(15 of 1948), the State Financial Corporations
Act, 1951 (63 of 1951), the Unit Trust of India Act, 1963 (52 of
1963), the Industrial Reconstruction Bank of India Act, 1984 (62 of
1984),, the Sick.Industrial Companies (Special Provisions) Act, 1985
(I of 1986) and the Small Industries Development Bank of India Act, D
1989(39 of 1989).

Financial Act:

"32G: Recovery of amounts due to the Financial Corporation as an
arrear of land revenue. - Where any amount is due to the Financial E
Corporation in respect of any accommodation granted by it to any
industrial concern, the Financial Corporation or any person authorized
by it in writing in this behalf, may, without prejudice to any other
mode of recovery, make an application to the State Government for
the recovery of the amount due to it, and if the State Government or
such authority, as that Government may specify in this behalf, is F
satisfied, after following such procedure as may be prescribed, that
any amount is so due, it may issue a certificate for that amount to the
Collector, and the Collector shall proceed to recover that amount in
the same manner as an arrear of land revenue.

UP. Public Moneys (RecovelJ' of Dues) Act, 1972: G
3. Recovery of certain dues as arrears of land revenue "(!) Where
any person is party

(a) ........
H
672 SUPREME COURT REPORTS [2002) SUPP. 5 S.C.R.

A (b) ....... .

(c) to any agreement relating to a guarantee given by the State
Government or the Corporation in respect of a loan raised by an
industrial concern; or

B (d) to any agreement providing that any money payable thereunder to
the State Government or the Corporation shall be recoverable as arrears
of land revenue; and such person

(i) makes any default in repayment of the loan or advance or any
instalment thereof; or
C (ii) having become liable under the conditions of the grant to refund
the grant or any portion thereof, makes any default in the refund
of such grant or portion or any instalment thereof; or

(2) The Collector on receiving the certificate shall proceed to recover
D
the amount stated therein as an arrear of land revenue.

(3) No suit for the recovery of any sum due as aforesaid shall lie in
the civil court against any person referred to in sub-section (I).

(4) In the case of any agreement referred to in sub-section (I) between
E any person referred to in that sub-section and the State Government
or the Corporation, no arbitration proceedings shall lie at the instance
of either party for recovery of any sum claimed to be due under the
said sub-section or for disputing the correctness of such claim:

Provided that whenever proceedings are taken against any person
F for the recovery of any such sum he may pay the amount claimed
under protest to the officer taking such proceedings and upon such
payment the proceedings shall be stayed and the person against whom
such proceedings were taken may make a reference under or otherwise
enforce an arbitration agreement in respect of the amount so paid,
G and the provisions of Section 183 of the Uttar Pradesh Land Revenue
Act, 190 I, or Section 287-A, of the Uttar Pradesh Zamindari Abolition
and Land Reforms Act, 1950, as the case may be, shall mutatis
mutandis apply in relation to such reference or endorsement as they
apply in relation to any suit in the civil court."

H Allahabad Bank's case (supra) did not specifically deal with Section
UNIQUE BUTYLETUBE INDUS. PVT. LTD. r. U.P. FINANCIALCORPN. [ARlJITPASAYAT,J.l 673

34(2) of the Act. However, certain observations made in the said judgment A
are of relevance:

"20. We shall refer to Sections 17 and 18 in Chapter Ill of the ROB
Act ·which deal with adjudication of the debt:

"17. Jurisdiction, powers and authority of Tribunals - (I) A B
Tribunal shall exercise, on and from the appointed day, the
jurisdiction, powers and authority to entertain and decide
applications from the banks and financial institutions for recovery
of debts due to such banks and financial institutions.

(2) An Appellate Tribunal shall exercise, on and from the C
appointed day, the jurisdiction, powers and authority to entertain
appeals against any order made, or deemed to have been made,
by a Tribunal under this Act.

l8. Bar of jurisdiction-On and from the appointed day, no court
or other authority shall have, or be entitled to exercise, any D
jurisdiction, powers or authority (except the Supreme Court, and
a High Court exercising jurisdiction under Article 226 and 227
of the Constitution) in relation to the matters specified in Section
17."

.It is clear from Section 17 of the Act that the Tribunal is to decide
E
the applications of the banks and financial institutions for recovery of
debts due to them. We have already referred to the definition of
"debt" in Section 2(g) as amended by Ordinance I of 2000. It includes
"claims" by banks and financial institutions and includes the liability
incurred and also liability under a decree or otherwise. In this context F
Section 31 of the Act is also relevant. That section deals with transfer
of pending suits or proceedings to the Tribunal. In our view, the word
"proceedings" in Section 31 includes "execution proceedings" pending
before a civil court before the commencement of the Act. The suits
and proceedings so pending on the date of the Act stand transferred G
to the Tribunal and have to be disposed of "in the same manner" as
applications under Section 19.

21. In our opinion, the jurisdiction of the Tribunal in regard to
adjudication is exclusive. The RDB Act requires the Tribunal alone
to decide applications for recovery of debts due to banks or financial H
674 SUPREME COURT REPORTS [2002] SUPP. 5 S.C.R.

A institutions. Once the Tribunal passes an order that the debt is due,
the Tribunal has to issue a certificate under Section 19(22) formerly
under Section 19(7) to the Recovery Officer for recovery of the debt
specified in the.certificate. The question arises as to the meaning of
the word "recovery"· in Section 17 of the Act. It appears to us that
basically the Tribunal is to adjudicate the liability of the defendant
B and then it has to issue a certificate under Section 19(22). Under
Section 18, the jurisdiction of any. other court or authority which
would otherwise have had jurisdiction but for the provisions of the
Act, is ousted and the power to adjudicate upon the liability is
exclusively vested in the Tribunal. This exclusion does not however
c apply to the jurisdiction of the Supreme Court or of a High Court
exercising power under Articles 226 or 227 of the Constitution). This
is the effect of Sections 17 and 18 of the Act.

Section 34 of the Act consists of two parts. Sub-section (I) deals with
the over-riding effect of the Act notwithstanding anything inconsistent
D therewith contained in any other law for the time being in force or in any
instrument having effect by virtue of any law other than the Act. Sub-section
(I) itself makes an exception as regards matters covered by sub-section (2).
The U.P. Act is not mentioned therein. The mode of recovery of debt under
the U.P. Act is not saved under the said provision i.e. sub-section (2) which
E is of considerable importance so far as the present case is concerned. Even
a bare reading therein makes it clear that it is intended to be in addition to
and not in derogation of certain statutes; one of which is the Financial Act.
In other words, a Bank or Financial institution has the option or choice to
proceed either under the Act or under the modes of recovery permissible
under the Financial Act. To that extent, the High Court's conclusions quoted
F above were correct. Where the High Court went wrong is by holding that
proceedings under the U.P. Act were permissible. U.P. Act deals with separate-
modes of recovery and such proceedings are not relatable to proceedings
under the Financial Act.

Since a plea of causus omissus for purposes of interpretation was urged,
G we think it necessary to deal with that plea also.
It is well settled principle in law that the Court cannot read anything
into a statutory provision which is plain and unambiguous. A statute is an
edict of the legislature. The language employed in a statute is the determinative
H factor of legislative intent. The first and primary rule of construction is that
UNIQUE BUTYLE TUBE INDUS. PVT.LTD. '" U.P. FINANCIAL CORPN. [ARIJITPASA YAT, J.) 67 5

the intention of the Legislation must be found in the words used by the A
Legislature itself. The question is not what may be supposed and has been
intended but what has been said. "Statutes should be construed not as theorems
of Euclid". Judge Learned Hand said, "but words must be construed with
some imagination of the purposes which lie behind them". (See lenigh Valley
Coal Co. v. Yensavage, 218 FR 547). The view was re-iterated in Union of B
India and Ors. v. Filip Tiago De Gama of Vedem Vasco De Gama, (AIR
(1990) SC 981.

In D.R Venkatcha/am and Ors. etc. v. Dy. Transport Commissioner and
Ors. etc.,,AIR (1977) SC 842 it was observed that Courts must avoid the
danger of apriori determination of the meaning of a provision based on their C
own pre-conceived notions of ideological structure or scheme into which the
provision II?,. be interpreted is somewhat fitted. They are not entitled to usurp
legislative function under the disguise of interpretation.

While interpreting a provision the Court only interprets the law and
cannot legislate it. If a provision of law is misused and subjected to the abuse D
of process of law," it is for the legislature to amend, modify or repeal it, if
deemed necessary. [See Rishabh Agro Industries ltd. v. P.N.B. Capital Services
ltd, [2000] 5 SCC 515]. 'The legislative causus omissus cannot be supplied
by judicial interpretative process. Language of Section 6(1) is plain and
unambiguous. There is no scope for reading something into it, as was done E
in N.Narasimhaiah and Ors. v. State of Karnataka and Ors. etc., [1996] 3
SCC 88. In State of Karnataka and Ors. v. Nanjudaiah and Ors., (1996] IO
sec 619 the period. was further stretched to have the time period run from
date of service of High Court's order. Such a view cannot be reconciled with
the language of Section 6(1). If the view is accepted it would mean that a
case can be covered by not only clauses (i). and/or (ii) of the proviso to F
Section 6(1), but also by a non-prescribed period. Same can never be the
legislative intent.

Two principles of construction one relating to causus omissus and the
other in regard to reading the statute as a whole appear to be well settled.
Under the first principle a causus omissus cannot be supplied by the Court G
except in the case of clear necessity and when reason for it is found in the
four corners of the statute itself but at the same time a causus omissus should
not be readily inferred and for that purpose all the parts of a statute or section
must be construed together and every clause of a section should be construed
. with reference to the context and other clauses thereof so that the construction H
676 SUPREME COURT REPORTS (2002] SUPP. 5 S.C.R.

A to be put on a particular provision makes a consistent enactment t>f the whole
statute. This would be more so if literal construction of a particu~ar clause
leads to manifestly absurd or anomalous results which could not have been
intended by the Legislature. "An intention to produce an unreasonable result'',
said Danckwerts, L.J., in Artemiou v. Procopiou (1966 1 QB 878), "is not to
be imputed to a statute if there is some other construction available". Where
B to apply words literally would "defeat the obvious intention of the legislation
and produce a wholly unreasonable result" we must "do some violence to the
words" and so achieve that obvious intention and produce a rational
construction. [Per lord Reid in Luke v. l.R.C., (1966) AC 557 where at p.
577 he also observed: "this is not a new problem, though our standard of
C drafting is such that it rarely emerges".] Therefore, the High_ Court's
conclusions holding proceedings under the U.P. Act to be in order are
indefensible.

We may notice here that to strengthen his arguments, learned counsel
for the appellant referred to the decision of this Court in SK. Bhargava v.
D Collector, Chandigarh and Ors., [1998] 5 SCC 170. The said case related to
Haryana Public Moneys (Recovery of Dues) Act, 1979 (in short 'Haryana
Act'). With reference to certain observations. in paragraph 8 of the said
judgment, it was submitted that a process of adjudication is inbuilt, even
when the Managing Director of the Corporation takes action. We notice that
E Section 3 of the Haryana Act is couched differently from Section 3 of the
U.P. Act. Reference was made in the said case to Director of Industries 's
case (supra), and held that while upholding the validity of Section 3 of the
U.P. Act, the Court was not called upon to deal with the question as to
whether the principles of natural justice were implicit in the said Section. We
also do not think it necessary to go "into that question.
F
The impugned.order is set aside and the proceedings under the U.P. Act
are quashed. It shall be, however, open to the Corporation to take such action
under the Act or the Financial Act as is legally available to it. The appeal is
allowed without any costs.

G N.J. Appeal allowed.