TMI Blog2006 (10) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... or being jointly tried and disposed of pending on its file. - CIVIL APPEAL NO. 4443 OF 2006 - - - Dated:- 11-10-2006 - H.K. SEMA AND P.K. BALASUBRAMANYAN, JJ. R. Mohan, Sanjay Kapur, Mrs. Shubhra Kapur, Rajiv Kapur and Ms. Arti Singh for the Appellant. K. Radha Krishnan, Krishnanand Pandey and Goutam Prasad for the Respondent. JUDGMENT P.K. Balasubramanyan, J. - Leave granted. 2. This appeal is filed by the State Bank of India (hereinafter referred to as the bank ) challenging the order of the High Court of Patna affirming an order of Subordinate Judge-I, Patna in Suit No. 168 of 2001 refusing to transfer the suit for being tried jointly with O.A. No. 18 of 2002 filed by the bank before the Debt Recovery Tribunal, Patna. The bank sought the transfer on the basis that the suit was in the nature of a counter-claim to its claim and arose out of the same cause of action as the one put in suit by the bank before the Tribunal. The bank originally granted a term loan to M/s. Ranjan Chemicals Ltd. (hereinafter referred to as the company ) of Rs. 30 lakhs. The bank further extended a cash credit facility to the company. The company failed to meet its obli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejected. On a challenge by the bank of the above-said order before the High Court of Patna, that court held that there was no bar created by the Recovery of Debts Act or any other law, which could prevent a person from filing a suit in the civil court or making any claim, much less, one for damages which was even otherwise, completely alien to the claim based on the loan made by the bank before the Tribunal. Since the suit was not hit by section 18 of the Recovery of Debts Act, the jurisdiction of the civil court was not affected and the Court had full authority to proceed with the suit for damages which was filed earlier and which was unconnected with the loan transaction. The revision was thus dismissed. This order is challenged in this appeal. 4. It appears to us that the High Court and the Trial Court asked themselves the wrong question. The question was not whether the civil court had jurisdiction to entertain the suit or to continue with the suit. The question was whether in the nature of the respective claims arising out of the loan transaction, it was just and proper to order a joint trial of the two causes and whether there was anything in the Recovery of Debts Act w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dly a plea of set off falling under sub-sections (6) and (7) of section 19 of the Act. With respect, we see no reason to differ from the reasoning and conclusion therein in that regard. It is therefore clear that the claim made by the company in the suit filed by it could be considered as a claim for set off and/or as a counter-claim within the meaning of section 19 of the Act. 6. Even otherwise, after the amendment of Order VIII, Rule 6A of the Code of Civil Procedure by Act 104 of 1976, for maintaining a counter-claim, the cross action need not even arise out of the same cause of action or be intrinsically connected with the cause of action sued upon. Any right or claim in respect of a cause of action accruing to the defendant against the plaintiff can be made the subject-matter of a counter-claim. Section 19(8) of the Act is also on the same lines. Therefore, there can be no objection to treating a claim in favour of the company arising out of the Loan transaction and/or rehabilitation package as a counter-claim in the application filed by the Bank before the Debt Recovery Tribunal. 7. Learned Senior Counsel for the company, relied on the decision in Indian Bank v. AB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t trial, does not depend upon the volition of the parties but it depends upon the convenience of trial, saving of time and expenses and the avoidance of duplicating at least a part of the evidence leading to saving of time and money. 9. On going through the application filed by the bank and the plaint filed by the company in the present case, we find that both causes of action arise out of a cash credit facility extended by the bank to the company and while the claim by the bank is for recovery of amounts due under that account, the suit of the company is for recovery of compensation based on the alleged failure of the bank to fulfil its obligations under the cash credit facility in time and in a meaningful manner. Obviously, if the company is able to establish its claim, the amount that may be awarded to it by way of damages has necessarily to be set off against any amount that may be found due to the bank on the basis of the loan transaction including the cash credit facility extended by it to the company. The decree to the one or the other would depend upon an ascertainment of the rights and obligations arising out of the loan transaction and the state of the loan account. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tried with another if the circumstances warranted and justified it. In the light of our conclusion that the claim of the company in the suit could be considered to be a claim for set off and a counter-claim within the meaning of section 19 of the Act, the only question is whether in the interests of justice, convenience of parties and avoidance of multiplicity of proceedings, the suit should be transferred to the Debt Recovery Tribunal for being tried jointly with the application filed by the bank as a cross suit. Obviously, the proceedings before the Debt Recovery Tribunal could not be transferred to the civil court since that is a proceeding before a Tribunal specially, constituted by the Act and the same has to be tried only in the manner provided by that Act and by the Tribunal created by that Act. Therefore, the only other alternative would be to transfer the suit to the Tribunal in case that is found warranted or justified. 12. It is clear that in both proceedings what are involved are, the nature of the loan transaction and the cash credit facility extended, the relationship that has spring out of the transactions, the right and obligations arising out of them, their br ..... X X X X Extracts X X X X X X X X Extracts X X X X
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