Presiding Officers of DRT entitled to benefit of increased age under section 6 of the Recovery of Debts and Bankruptcy Act, 1993 – Supreme Court
ABCAUS Case Law Citation:
ABCAUS 2507 (2018) 09 SC
Petitioners in the instant petitions were appointed as Presiding Officers of Debt Recovery Tribunal created under the Recovery of Debts due to Banks and Financial Institutions Act, 1993 which was renamed as Recovery of Debts and Bankruptcy Act, 1993 (the ‘Act’) by the Finance Act, 2017.
As per Section 6 of the unamended Act, a Presiding Officer to a Tribunal, could hold office for a term of five years from the date on which he enters upon his office or until the attainment of 62 years of age, whichever is earlier. However, the Section 6 was substituted w.e.f. September 1, 2016 and the amended to enhance the age limit from 62 years to 65 years.
Also, a new Section 6A was also introduced to provide that qualifications, appointment, term of office, salaries etc. and the other terms and conditions of service of the Presiding Officer of the Tribunal shall be governed by the provisions of section 184 of that Act: Provided that the Presiding Officer appointed before the commencement of Finance Act, 2017, shall continue to be governed by the provisions of this Act, and the rules made thereunder as if the provisions of section 184 of the Finance Act, 2017 had not come into force.
All the petitioners were appointed before the amendment to Section 6. Thus, at the time of their appointment, the term of their office was “five years or till attaining the age of 62 years, whichever is earlier”. These officers have not completed five years of service. However, they are completing/or have attained 62 years of age after coming into force amended Section 6.
As per the provisions of unamended Section 6, the petitioner could continue only upto December 26, 2016 as he had completed 62 years of age on that date though he had not completed five years of term as the Presiding Officer. If amended Section 6 is applicable, then he would be entitled to continue upto December 26, 2019 on which date he shall attain the age of 65 years.
Therefore, the question for consideration of the Hon’ble Supreme Court was as to whether the petitioners were entitled to complete the term of five years taking advantage of the amended provision which gives such Presiding Officers to continue until attaining the age of 65 years or to continue till they reach the age of 65 years, whichever is earlier.
The Hon’ble Supreme Court opined that in the first instance, the language/terminology which the Legislature used while inserting new Section 6 with effect from September 01, 2016 was important. This section stood ‘substituted’ with the old section. The word ‘substituted’ has its own significance.
The Hon’ble Supreme Court opined that ordinarily wherever the word ‘substitute’ or ‘substitution’ is used by the legislature, it has the effect of deleting the old provision and make the new provision operative. The process of substitution consists of two steps: first, the old rule is made to cease to exist and, next, the new rule is brought into existence in its place. The rule is that when a subsequent Act amends an earlier one in such a way as to incorporate itself, or a part of itself, into the earlier, then the earlier Act must thereafter be read and construed as if the altered words had been written into the earlier Act with pen and ink and the old words scored out so that thereafter there is no need to refer to the amending Act at all. No doubt, in certain situations, the Court having regard to the purport and object sought to be achieved by the Legislature may construe the word “substitution” as an “amendment” having a prospective effect. Therefore, we do not think that it is a universal rule that the word ‘substitution’ necessarily or always connotes two severable steps, that is to say, one of repeal and another of a fresh enactment even if it implies two steps. However, the aforesaid general meaning is to be given effect to, unless it is found that legislature intended otherwise. Insofar as present case is concerned, the legislative intent was also to give effect to the amended provision even in respect of those incumbents who were in service as on September 01, 2016.
The Hon’ble Supreme Court opined that the purpose of amending Section 6 was to reduce the burden of pendency by enhancement of age of the Judges concerned. In order to fulfill the aforesaid objective of reducing the arrears and tackle the issue of pendency of cases in various Debt Recovery Tribunals, ‘purposive interpretation’ is to be given.
The Hon’ble Court opined that while carrying out the amendment with the intention to substitute the amended provision with that of unamended, the Parliament desired that the benefit of this provision extended even to those who are serving as Presiding Officers on the date when the amendment became enforceable.
