9911796707
TMI Blog2009 (7) TMI 1193X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal-III at Mumbai. Some of the parties to the lis before us are the banks or financial institutions within the purview of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (1993 Act). The others are debtors of such banks or financial institutions. The parties hereto entered into diverse agreements in terms whereof banks or the financial institutions lent money to the debtors. Appellant entered into International Swaps and Derivatives Agreement with the respondent. On 1.11.2006, the appellant and the respondent entered into globally used market standard Master Agreement and Schedule published by ISDA (ISDA Master Agreement) (hereinafter referred to as "Master Agreement") wherein the respondent undertook derivative transactions for hedging or transformation of risk exposure. Under the said Master agreement i.e. the ISDA Agreement including the Schedule thereto, the appellant had entered into ten transactions with the respondent and out of those ten transactions, appellant has unwound (closed at the instance of the appellant at a mutually agreed value) four transactions; one transaction got matured and one expired due to occurrence of a contingent event. In a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication No.125 of 2008 for recovery of dues under the two remaining Foreign Exchange Derivative Contracts dated 13.7.2007. Meanwhile, the order of status quo passed on 5.4.2008 was extended by the learned Civil Judge by an order dated 16.4.2008 till 23.4.2008. In the original application filed by the respondent-bank, the Tribunal by an order dated 22.4.2008 restrained the appellant from alienating, or in any way creating third party interests in its fixed assets in relation to the transactions which were not the subject matter of the suit. Respondent-bank issued two letters on 24.4.2008 to the appellant calling upon it to pay the amount due under the two transactions dated 26.7.2008 and 30.7.2008, and on the same day filed another application before the Debt Recovery Tribunal for recovery of dues under the said two foreign exchange derivative contracts. An application for clarification and/or modification of stay of the order dated 5.4.2008 was filed by the appellant before the civil judge which was heard on 13.5.2008 and 17.5.2008. The matter was adjourned to 29.5.2008. IMPUGNED JUDGMENT Respondent, however, filed transfer application before the High Court of Punjab & Haryana o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer under the DRT Act is restricted to cases filed by Banks that were pending on the date when the Act came into force and in respect of those cases in which DRT has jurisdiction. (II). Whether the decision of this Court in Indian Bank v. ABS Marine Products (P) Ltd. [(2006) 5 SCC 72], is applicable in the case of transfer of a suit from the Civil Court to the DRT to be tried as a counterclaim, and could a Coordinate two Judge Bench in State Bank of India v. Ranjan Chemicals Ltd. and another, [ (2007) 1 SCC 97 ] have departed from the ratio thereof after noticing it and without referring the matter to a larger bench of Three Judges? (III) Even if the power to transfer exists, in the facts and circumstances of the case, whether it ought to have been exercised. (IV) Whether Article 142 is applicable to direct a transfer from a Civil Court to DRT, especially when: (i) The DRT Act does not bar the jurisdiction of the Civil Court to entertain a suit against a bank and therefore powers under Article 142 ought not to be exercised to have such an effect. (ii) Article 142 is not applicable where a statute occupies the field. (iii) Power under Article 142 should be exercised only to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rthermore resulted in ouster of the jurisdiction thereof, neither of which could be ordered or directed without any specific empowering provision in the statute. h) It is well settled legal position that jurisdiction of the Civil Court can only be ousted by a specific and unequivocal statutory provision or by necessary implication. i) Transfer of a suit to a Tribunal having no jurisdiction to decide the issues raised by the plaintiff against the bank and/or financial institution would affect the rights of the appellant. It would furthermore affect its right of appeal, which is a right vested on the plaintiff on the date of filing of the suit. The condition of pre-deposit being one of the conditions for maintaining an appeal before the Appellate Tribunal, in the event such a right of transfer is upheld, the same would amount to burdening the right of appeal with certain conditions which the Parliament never intended to confer. An unfettered right of appeal, which is statutory would thus become fettered, without the intervention of statute. Thus, what has not been done directly would be done indirectly as a result of transfer. j) The Bench deciding Ranjan Chemicals being a coor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y agreement for enforcement whereof the bank should have no option but to approach the Tribunal only. b) When a particular claim made by a bank is a `debt' within the meaning of the provisions of the Act, it must be determined or adjudicated upon by the Tribunal only and not by a Civil Court. c) The allegation of `Fraud', `Misrepresentation', `Undue Influence' or any other defence, which are available to a borrower to contest the claim of the bank, can be raised before the Tribunal itself and adjudicated upon and determined by the Tribunal. d) As both the suits pending before the Civil Court and/or the High Court as also the petitions pending before the Tribunals arise out of the Master Agreement entered into by and between the parties, the Tribunal having jurisdiction would be entitled to determine the said questions. e) Having regard to the scheme of the Act as also the provisions of the Code, the Tribunal must be given an extended meaning so as to hold that the Tribunal is in effect and substance a court and thus the High Court in exercise of its jurisdiction under Section 24 of the Code and this Court in exercise of its jurisdiction under Section 25 thereof h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nancial institutions by following a summary procedure. The setting up of Special Tribunals will not only fulfill a long-felt need, but also will be an important step in the implementation of the Report of Narasimham Committee. Whereas on 30th September, 1990 more than fifteen lakhs of cases filed by the public sector banks and about 304 cases filed by the financial institutions were pending in various courts, recovery of debts involved more than Rs. 5622 crores in dues of Public Sector Banks and about Rs. 391 crores of dues of the financial institutions. The locking up of such huge amount of public money in litigation prevents proper utilisation and recycling of the funds for the development of the country." Section 2 is the interpretation section. Section 2(g) defines `debt' to mean any liability (inclusive of interest) which is claimed as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by the bank or the financial institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and from 11.11.2004. Section 22 provides for the procedure and powers of the Tribunal and Appellate Tribunal, sub-section (1) whereof reads as under: "Section 22 - Procedure and Powers of the Tribunal and the Appellate Tribunal.--(1) The Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act and of any rules, the Tribunal and the Appellate Tribunal shall have powers to regulate their own procedure including the places at which they shall have their sittings." Section 24 provides that the provisions of the Limitation Act, 1963 shall, as far as may be, apply to an application made to a Tribunal. Section 31 provides for transfer of pending cases. It reads, thus : "Section 31. Transfer of pending cases.--(1) Every suit or other proceeding pending before any court immediately before the date of establishment of a Tribunal under this Act, being a suit or proceeding the cause of action where on it is based is such that it would have been, if it had arisen after such establishment, within the jurisdiction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provides that `revenue court' would not be civil court. Section 9 of the Code empowers the Civil Court to try all suits of civil nature excepting the suits of which their cognizance is either expressly or impliedly barred. Sections 10 and 11 thereof deal with stay of suit and res judicata. Section 12 provides for bar to further suit. The place of suing of a suit is dealt with under Sections 15 to 21. Section 22 provides for power to transfer suits which may be instituted in more than one court. Section 23 of the Code reads as under: "Section 23-To what Court application lies.--(1) Where the several Courts having jurisdiction are subordinate to the same Appellate Court, an application under section 22 shall be made to the Appellate Court. (2) Where such Courts are subordinate to different Appellate Courts but to the same High Court, the application shall be made to the said High Court. (3) Where such Courts are subordinate to different High Courts, the application shall be made to the High Court within the local limits of whose jurisdiction the Court in which the suit is brought is situate." Section 24 pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any debt. Although having regard to the provisions contained in clauses (a) to (b) of sub-section (2) of Section 22 of the Act it had all the trappings of a court but it was held not to be a court as such, opining: "38. For reasons more than one, we are of the opinion that a set-off or a counter claim cannot be entertained by a Debt Recovery Tribunal. [...] It has not been conferred with jurisdiction to entertain counter-claim or plea of set-off by reference to the provisions of Order 8 of the CPC. Entertaining a counter-claim or a cross suit or a plea of set-off would not only be without jurisdiction but also an exercise in futility inasmuch as the Tribunal would not adjudicate thereupon nor pass a decree in favor of the defendant against the plaintiff. The law creating Tribunal and conferring jurisdiction on it has not provided for set-off or counter claim being entertained by it just as the Civil Procedure Code does it for civil courts. If a counter claim was to be tried by Tribunal it may have to go into disputes arising between the parties though not 'filling the same character'. There may be disputes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Tribunal. 3. A plea of set-off raised in a suit filed by a bank or financial institution cannot be tried by Tribunal nor would it enable the suit being retained by civil court before it if the subject matter of suit lies within the jurisdictional competence of tribunal otherwise." One of the questions which would arise, thus, for our consideration is whether having regard to the amendment of Section 19 by reason of Act 1 of 2000 and Act 30 of 2004 empowering the Tribunal to determine a claim of set off and/or counter claim, and whether Cofex Exports Ltd. (supra) is still good law. The Debts Recovery Act, as it originally stood, did not contain any provision enabling a defendant in an application filed by the bank/financial institution to claim any set-off or make any counterclaim against them. On that, among other grounds, the Act was held to be unconstitutional by the Delhi High court in Delhi High Court Bar Assn. v. Union of India, [AIR 1995 Del 325]. During the pendency of appeal against the said decision, before this Court, the Act was however amended by Act 1 of 2000 to remove the lacuna by providing for set-off and counterclaims by defendants in the applications fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Amending Act 1/2000) and if that be so, whether it could still be successfully pleaded by the respondent-company that the pendency of the company's suit 272/85 was a ground for retention of Bank's suit No. 410/85 on the original side of the High Court?" Applying the principles of purposive construction as well as having regard to the statements of objects and reasons of the Act, it was held that if speedy disposal is the purpose of the Act, in the event of the respondent's contention being accepted, the suit would perpetually remain pending on the original side of the Calcutta High Court because of the provisions contained in Section 18 of the Act, stating : "Surely, that would place the Bank in a worse position after the 1993 Act than before inasmuch as before the Act, there was at least the possibility of the Bank's suit being decided by the civil court on some future day, however, remote." It was opined: "38. In our view, the above pleas raised by the respondent company are all inextricably connected with the amount claimed by the Bank. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit facilities but the sanctioned loan was not utilized. The company filed a suit for damages with interest. INDIAN BANK In that case, the following questions were raised : "(i) Whether the subject-matter of the borrower's suit before the High Court and the Bank's application before the Tribunal were inextricably connected? (ii) Whether the provisions of the Debts Recovery Act mandate or require the transfer of an independent suit filed by a borrower against a bank before a civil court to the Tribunal, in the event of the bank filing a recovery application against the borrower before the Tribunal, to be tried as a counterclaim in the bank's application? (iii) Whether the observation in Abhijit that the suit filed by the borrower against the bank has to be transferred to the Tribunal for being tried as a counterclaim in the applications of the bank, is to be construed as a principle laid down by this Court, or as an observation in exercise of power under Article 142 in order to do complete justice between the parties?" The credit facilities and the packaging facilities were held to be not inextricably linked with each other stating : "9. The issues that arose in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erit in the first respondent's submission, we do not propose to examine that aspect. Suffice it to clarify that the observations in Abhijit that an independent suit of a defendant (in the bank's application) can be deemed to be a counterclaim and can be transferred to the Tribunal, will apply only if the following conditions were satisfied: (i) The subject-matter of the bank's suit, and the suit of the defendant against the bank, should be inextricably connected in the sense that decision in one would affect the decision in the other. (ii) Both parties (the plaintiff in the suit against the bank and the bank) should agree for the independent suit being considered as a counterclaim in the bank's application before the Tribunal, so that both can be heard and disposed of by the Tribunal. In short the decision in Abhijit is distinguishable both on facts and law." In regard to the effect of sub-sections (6) to (11) of Section 14 of the amended Act, it was observed : "16. ... The effect of sub-sections (6) to (11) of Section 19 of the amended Act is that any defendant in a suit or proceeding in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excluded or barred under Section 18 or any other provision of the Debts Recovery Act." The question came up for consideration again in Ranjan Chemicals (supra), wherein this Court, inter alia, held that having regard to the nature of the respective claims arising out of the loan transactions, the Court can exercise its inherent jurisdiction when it was just and proper to order a joint trial of the two causes as there is nothing in the Act to show that the Tribunal is prevented from entertaining the claim made by the borrower in his suit. Purporting to distinguish the decision in Indian Bank (supra), it was held that as the claim of the company in the suit could have been maintained as a counter claim in the application of the bank, there was no warrant for curtailing the power of the court to order joint trial by introducing a restriction to the effect that it could be ordered only if there was consent by both the parties, holding: "8. Their Lordships have held that the subject matter of the suit and the proceeding before the Tribunal were in no way connected, but it appears to us that the two litigations arise o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred 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." PRECEDENTIAL VALUE The core question which would arise for our consideration is whether by reason of a transfer the jurisdiction of the civil court can be taken away or otherwise conferred upon the Tribunal? In Indian Bank and Ranjan Chemicals coordinate bench of this court took somewhat different views even thereupon. Whereas in Indian Bank it was held that the transfer can be effected with consent, the said question was ignored in Ranjan Chemicals. Whereas the question of jurisdiction of the civil court vis-`-vis the Tribunal was uppermost in the mind of the Bench in Indian Bank, no significance was attached thereto in Ranjan Chemicals. It proceeded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sreading and misinterpreting the judgment. We may notice some decisions of this court as regards the binding nature of the precedents of a coordinate Bench. In Union of India v. Raghubir Singh, [ (1989) 2 SCC 754 ], this Court has held :- "27. [...] It is in order to guard against the possibility of inconsistent decisions on points of law by different Division Benches that the Rule has been evolved, in order to promote consistency and certainty in the development of the law and its contemporary status, that the statement of the law by a Division Bench is considered binding on a Division Bench of the same or lesser number of Judges. This principle has been followed in India by several generations of Judges. 28. We are of opinion that a pronouncement of law by a Division Bench of this Court is binding on a Division Bench of the same or a smaller number of Judges, and in order that such decision be binding, it is not necessary that it should be a decision rendered by the Full Court or a Constitution Bench of the Court." See also Union of India v. Godfrey Philip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs by a bank or financial institution for recovery of a debt. It is evident from section 31 that only those cases and proceedings (for recovery of debts due to banks and financial institutions) which were pending before any court immediately before the date of establishment of a tribunal under the Debts Recovery Act stood transferred, to the tribunal" In Raghunath Rai Bareja & Anr. v. Punjab National Bank & Anr, (2007) 2 SCC 230 this court opined: "19. [...] Apart from section 31, there is no other provision for transferring a suit or other proceedings pending before any other court to tribunal. [...] 28. [...] whatever power there are of transfer of proceedings to the tribunal are contained in section 31 of the RBD Act, and no transfer is permissible dehors section 31." Therefore there exists no express power of transfer under the DRT which would be applicable to the facts of the present case. The provisions of the Act and the entire statutory scheme being well-defined, no further elaboration on our part is required. POWER IN THE COURT TO TRANSFER CASES UNDER SECTIONS 23, 24, AND 25 OF THE CODE. The power of the Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the manner suggested by the learned counsel for the respondent - wife would result in allowing inroad and encroachment on the power of this Court not intended by Parliament. Section 23, therefore, in our considered view, must be read subject to Section 25 of the Code. The decisions taking a contrary view do not lay down correct law. We, therefore, overrule them..." WHETHER TRIBUNAL IS A CIVIL COURT The terms "Tribunal", "court" and the "civil court" have been used in the Code differently. All "courts" are "Tribunals" but all "Tribunals" are not "courts". Similarly all "civil courts" are "courts" but all "courts" are not "civil courts." It is not much in dispute that the broad distinction between a "court" and a "Tribunal" is whereas the decision of the "court" is final the decision of the "Tribunal" may not be. The "Tribunal", however, which is authorized to take evidence of witnesses would ordinarily be held to be a "court" within the meaning of Section 3 of the Evidence Act, 1872. It includes not only Judges and Magistrates but also persons, except Arbitrators, legally authorized to take evidence. It is an inclusive definition. There may be other forums which would also come w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said provision vis-`-vis the provisions of the Act a little later. In P. Sarathy v. State Bank of India [(2000) 5 SCC 355], this Court opined that although there exists a distinction between a court and a civil court, but held that a Tribunal which has not merely the trappings of a court but has also the power to give a decision or a judgment which has finality and authoritativeness will be court within the meaning of Section 14 of the Limitation Act, 1963. In the context of Section 29(2) of the Limitation Act, 1963 the term `court' is considered to be of wide import. However, there again even for that purpose exists a distinction between a court and the civil court. In P. Sarathy v. State Bank of India, (Supra) this Court has held :- "12. It will be noticed that Section 14 of the Limitation Act does not speak of a "civil court" but speaks only of a "court". It is not necessary that the court spoken of in Section 14 should be a "civil court". Any authority or tribunal having the trappings of a court would be a "court" within the meaning of this section. 13. ... in order to constitute a court in the strict sense of the term, an essential condition is that the court shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en pointed out by Mr. Dwividi that reliance placed by Mr. Desai on the cases cited by him and referred to herein is misleading as the Head Notes of those cases are misleading. He argues that though the SCC refers to Section 25 of the CPC therein in regard to the power of transfer of the court, however, the text of the judgments is silent in regard thereto. We may hereinafter may make reference to the Head Notes of a few of them. The SCC Head Note to Kahlon (supra) reads as under: "Civil Procedure Code, 1908 - S. 25 - Motor accidents claim case filed by petitioner in town of place of work - due to 100 per cent disablement due to accident, petitioner quitting job and shifting back to home town - transfer of claim case to home town of petitioner, allowed" Similarly, the SCC Head note of Mohan Singh (supra) reads: "Civil Procedure Code, 1908 -- S. 25 -- Motor accident claim petition -- Transfer of -- Petitioner residing in Delhi and most of the evidence related to the case present in Delhi -- Amended provision of the statute providing that the claim may be filed where the claimant resides -- On facts and circumstances of the case, claim petition pending before Motor Accident Claims T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire discussion and the statement of law was only with reference to the confession of the co-accused. While clarifying that the confession of the co- accused is not evidence in the ordinary sense of the term as pointed out by the Privy Council, this Court observed in Kashmira Singh case that such a confession cannot be made the foundation of a conviction and can only be used in support of other evidence. 22. In Chimanlal case the learned Judges, after referring to the headnote portion of Kashmira Singh in AIR 1952 SC 159 proceeded to apply the test applicable to the confession of the co-accused to a case of retracted confession. 23. In view of the error in comprehending the scope of the decision in Kashmira Singh case the decision in Chimanlal case falls close to the category of decisions rendered per incuriam." Reliance has also been placed on a decision of this Court in Rajasthan State Road Transport (supra) wherein a Motor Accident Claims Tribunal was held to be a civil court purported to be on the basis of a decision in Bhagwati Devi (supra) wherein the principles contained in Order XXIII of the Code had been held to be applicable to the Motor Accident Claims Tribunal. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourts are created under different Acts. They have their own hierarchy. They necessarily are subordinate to the High Court. The appeals from their judgment will lie before a superior court. The High Court is entitled to exercise its power of revision as also superintendence over the said courts. For the aforementioned purpose, we must bear in mind the distinction between two types of courts, viz., civil courts and the courts trying disputes of civil nature. Only because a court or a tribunal is entitled to determine an issue involving civil nature, the same by itself would not lead to the conclusion that it is a civil court. For the said purpose, as noticed hereinbefore, a legal fiction is required to be created before it would have all attributes of a civil court. The Tribunal could have been treated to be a civil court provided it could pass a decree and it had all the attributes of a civil court including undertaking of a full-fledged trial in terms of the provisions of the Code of Civil Procedure and/or the Evidence Act. It is now trite law that jurisdiction of a court must be determined having regard to the purpose and object of the Act. If the Parliament, keeping in view the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a salutary principle, the same cannot be extended to a case which would lead to an anomaly. It can inter alia be resorted to only when difficulty or doubt arises on account of ambiguity. It is to be preferred when object and purpose of the Act is required to be promoted. For the foregoing reasons, we are of the opinion that the decisions of this Court laying down the principles of purposive interpretation, whereupon strong reliance has been placed by Mr. Divan, viz., New India Assurance Company Ltd. v Nusli Neville Wadia and Another [(2008) 3 SCC 279], Dilip S. Dahanukar v. Kotak Mahindra Co. Ltd. and Another [(2007) 6 SCC 528], South Eastern Coalfields Ltd. v. CCET, MP [(2006) 6 SCC 340] and Uco Bank v. Rajinder Lal Capoor [(2008) 5 SCC 257], cannot have any application. On the other hand, if the principles of purposive interpretation are resorted to, the same would amount to rewriting of the statute. In Sri Ram Saha v. State of West Bengal and Ors. [JT 2004 (9) SC 136 : (2004) 11 SCC 497], this Court held: "19. It is well-settled principle of interpretation that a statute is to be interpreted on its plain readin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower is excluded and not included. e) In the event the bank withdraws his claim the counter-claim would not survive which may be contrasted with Rule 6 of Order VIII of the Code. f) Sub-section (9) of Section 19 of the Act in relation thereto has a limited application. g) The claim petition by the bank or the financial institution must relate to a lending/borrowing transaction between a bank or the financial institution and the borrower. h) The banks or the financial institutions, thus, have a primacy in respect of the proceedings before the Tribunal. i) An order of injunction, attachment or appointment of a receiver can be initiated only at the instance of the bank or the financial institution. We, however, do not mean to suggest that a Tribunal having a plenary power, even otherwise would not be entitled to pass an order of injunction or an interim order, although ordinarily expressly it had no statutory power in relation thereto. j) It can issue a certificate only for recovery of its dues. It cannot pass a decree. k) Although an appeal can be filed against the judgment of the Tribunal, pre-deposit to the extent of 75 % of the demand is imperative in character. l) Even cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im order in question or whether a petition under Art. 227 of the Constitution is maintainable." In M/s. Brooke Bond India Ltd. v. Union of India and others, [AIR 2001 AP 526 ] the Andhra Pradesh High Court has held:- "The contention urged by the counsel for appellant that the Railway Claims Tribunal is a civil Court cannot be accepted. Merely because Section 18(3) of the Act provides that the Claims Tribunal, for the purpose of discharging the functions under the Act, shall have the same powers as are vested in the civil Court under the Code of Civil Procedure, 1908 and S. 25 provides that the proceedings before the Tribunal shall be deemed to be `judicial proceedings' as contemplated under Sections 193, 210 and 228, IPC, they do not make the Railway Claims Tribunal a `Civil Court'. In Devendra Somabhai Naik v. M/s. Accurate Transheet Pvt. Ltd. [AIR 2003 Gujarat 141] the High Court has held :- "No doubt, Article 137 deals with filling of applications, but then the applications, which are contemplated to be filed, are the applications filed before the civil Court. The appellant is also not successful in convincing this Court to hold that the `Copyright Board' is a `Civ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idencies Small Cause Court. The subordination of the Courts is determined under Section 3, CPC on the basis of the provisions of Code of Civil Procedure applicable to it having regard to the provisions contained in Bengal, Agra and Assam Civil Courts Act." In Greater Bombay Coop. Bank Ltd. v. United Yarn Tex (P) Ltd.,[ (2007) 6 SCC 236 ], this Court has held :- "76. Section 31 of the RDB Act clearly refers to transfer of "every suit or other proceeding pending before any court". The word "court", in the context of the RDB Act, signifies "civil court". It is clear that the Registrar, or an officer designated by him or an arbitrator under Sections 61, 62, 70 and 71 of the APCS Act, 1964 and under Section 91 and other provisions of Chapter IX of the MCS Act, 1960 are not "civil courts". 77. In Harinagar Sugar Mills v. Shyam Sundar Jhunjhunwala this Court held: (AIR p. 1680, para 32) "By 'courts' is meant courts of civil judicature and by `tribunals', those bodies of men who are appointed to decide controversies arising under certain special laws. Among the powers of the State is included the power to decide such c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advanced before us whether having regard to the provisions of Sections 17 and 18 of the Act the civil court jurisdiction is completely ousted, we are of the view that the jurisdiction of the civil court would be ousted only in respect of the matters contained in Section 18 which has a direct co-relation with Section 17 thereof, that is to say that the matter must relate to a debt payable to a bank or a financial institution. The application before the Tribunal would lie only at the instance of the bank or the financial institution for the recovery of its debt. It must further be noted in this respect that had the jurisdiction of the civil courts been barred in respect of counterclaim also, the statute would have said so and Sections 17 and 18 would have been amended to introduce the provision of counterclaim. We may in this context place on record the following observations from Indian Bank (supra): "14. Section 9 of the Code of Civil Procedure provides that the courts shall have jurisdiction to try all suits of a civil nature, excepting suits of which their cognizance is either expressly or impliedly barred. 15. It is evident from Sections 17 and 18 of the Debts Recovery Act tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... civil court has not been ousted. The civil court, in the instant case, was concerned with the rival claims of the parties as to whether one party has illegally been dispossessed by the other or not. Such a suit, apart from the general law, would also be maintainable in terms of Section 6 of the Specific Relief Act, 1963. In such matters the court would not be concerned even with the question as to the title/ownership of the property." Therein five principles were laid down stating :- "22. The dispute between the parties was eminently a civil dispute and not a dispute under the provisions of the Companies Act. Section 9 of the Code of Civil Procedure confers jurisdiction upon the civil courts to determine all disputes of civil nature unless the same is barred under a statute either expressly or by necessary implication. Bar of jurisdiction of a civil court is not to be readily inferred. A provision seeking to bar jurisdiction of a civil court requires strict interpretation. The court, it is well settled, would normally lean in favour of construction, which would uphold retention of jurisdiction of the civil court. The burden of proof in this behalf shall be on the party who assert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ably the banks and the financial institutions for the purpose of enforcement of their claim for a sum below Rs. 10 lakhs would have to file civil suits before the civil courts. It is only for the claims of the banks and the financial institutions above the aforementioned sum that they have to approach the Debt Recovery Tribunal. It is also without any cavil that the banks and the financial institutions, keeping in view the provisions of Sections 17 and 18 of the Act, are necessarily required to file their claim petitions before the Tribunal. The converse is not true. Debtors can file their claims of set off or counter-claims only when a claim application is filed and not otherwise. Even in a given situation the banks and/or the financial institutions can ask the Tribunal to pass an appropriate order for getting the claims of set-off or the counter claims, determined by a civil court. The Tribunal is not a high powered tribunal. It is a one man Tribunal. Unlike some Special Acts, as for example Andhra Pradesh Land Grabbing (Prohibition) Act, 1982 it does not contain a deeming provision that the Tribunal would be deemed to be a civil court. The liabilities and rights of the parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded to lay down an exhaustive code in respect of the subject matter covered by the earlier law so as to replace it in its entirety and whether the earlier special statute can be construed as remaining in effect as a qualification of or exception to the later general law, since the new statute is enacted knowing fully well the existence of the earlier law and yet it has not repealed it expressly. The decision further lays down that for examining whether the two statutes cover the same subject matter, what is necessary to examine is the scope and the object of the two enactments, and that has to be done by ascertaining the intention in the usual way and what is meant by the usual way is nothing more or less than the ascertainment of the dominant object of the two legislations. ... .... .... 48... The legislative intent is clear. Since, further, the Parliament had enacted the later statute knowing fully well the existence of the earlier statute and yet it did not expressly repeal it, it will be presumed that the Parliament felt that there was no need to repeal the said statute." However, in that case itself it has been held that repugnancy and inconsistency is synonymous. Furthermo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition to redress the error of the court below" and "though procedure does surround an appeal the central idea is a right". The right of appeal has been recognized by judicial decisions as a right which vests in a suitor at the time of institution of original proceedings. The Privy Council in Colonial Sugar Refining Company v. Irving, [(1905) AC 369 (PC)] noted that " to deprive a suitor in a pending action of an appeal to a superior tribunal which belonged to him as of right, is a very different thing from regulating procedure" When a person files a civil suit his right to prosecute the same in terms of the provisions of the Code as also his right of appeal by way of first appeal; second appeal etc. are preserved. Such rights cannot be curtailed, far less taken away except by reason of an express provision contained in the statute. Such a provision in the statute must be express or must be found out by necessary implication. In Garikapati Veeraya v. N. Subbiah Choudhry, [ 1957 SCR 488 ], this Court opined :- "23. From the decisions cited above the following principles clearly emerge: (i) That the legal pursuit of a remedy, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hai Virabhai & Co., [(2005) 4 SCC 1 ], Malwa Strips Pvt. Ltd. v. Jyoti Limited [(2009) 2 SCC 426]} More recently in Transmission Corporation of A.P. v. Ch. Prabhakar and Ors., (2004) 5 SCC 551 this court similarly opined: "....The right of appeal is a substantive right which is really a step in series of proceedings all connected by an intrinsic unity and is to be regarded as one legal proceeding and further being a vested right such a right to enter the superior court accrues to the litigant and exists as on and from the date the lis commences...." A civil suit may also be maintainable before Original Side of the High Court in terms of the statutes under which the High Courts are constituted or in terms of the provisions of the Letters Patent. An intra court appeal is available against a decree passed by a learned Single Judge of a High Court in a suit filed before it. In the event, however, if a civil suit is transferred to the Debt Recovery Tribunal, the plaintiff would be deprived of his right in relation to the procedural mechanism as contained in the Code as also the Evidence Act. His right of appeal would also stand curtailed. While exercising the power of transfer, the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of time. It is no business of the Court to collect evidence for a party or even to protect the rival party from the evil consequences of making forged entries in those account books. If the plaintiff does forge entries and uses forged entries as evidence in the case, the defendants would have ample opportunity to dispute those entries and to prove them forgeries. 11. We are therefore of opinion that the Additional Munsif had no inherent power to pass the order appointing a Commissioner to seize the plaintiff's account books. The order appointing Sri Raghubir Pershad as Commissioner for this purpose was therefore an order passed without jurisdiction and was therefore a null and void order." The said decision, we are not oblivious, has been distinguished by this Court in Manohar Lal Chopra v. Rai Bahadur Rao Raja Seth Hiralal [AIR 1962 SC 527] in a case for grant of injunction stating that Rules 1 and 2 of Order XXXIX of the Code of Civil Procedure is not exhaustive, stating: "22. In the above case, this Court did not uphold the order of the civil court, not coming under the provisions of Order 26, appointing a commissioner for seizing the account books of the plaintiff on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Such observations were made keeping in view the provisions of Articles 323A and 323B of the Constitution of India. The logical extension of the said observations would not lead to a conclusion that the tribunals are either civil courts or this Court would be entitled to exercise its inherent power for transfer of a civil suit to a tribunal. We may place on record that in Durgesh Sharma (supra) this Court has clearly held that the provisions of Sections 22 to 25 of the Code of Civil Procedure are exhaustive in nature. If that be so, inherent power of the court could clearly not be invoked. Reliance has also been placed on M/s. Ram Chand and Sons Sugar Mills Private Ltd. v. Kanhayalal Bhargava and Others [AIR 1966 SC 1899] wherein it has been held: "Having regard to the said decisions, the scope of the inherent power of a court under Section 151 of the Code may be defined thus: The inherent power of a court is in addition to and complementary to the powers expressly conferred under the Code. But that power will not be exercised if its exercise is inconsistent with, or comes into conflict with, any of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 142 of the Constitution of India is a wide and extensive one. This Court may resort thereto to do complete justice. While doing so, this Court would be entitled to impose conditions. Whether such a power should be exercised or not is the question. The principal submission made on behalf of the Bank is that the suit is pre-emptive in nature. It may be so but then the banks and the financial institutions have their own remedies. As adequate remedy is available to them in law, ordinarily, the same should be directed to be followed. A case of very exceptional nature must be made out for invoking the extraordinary constitutional jurisdiction of a court. One of the contentions which have been raised is whether the transactions under derivative agreements would come within the purview of the DRT Act. Of course, a tribunal will have a jurisdiction to decide the issue being a jurisdictional issue. Furthermore, the company has alleged fraud and misrepresentation. This Court in Mardia Chemicals Ltd. and Others v. Union of India [(2004) 4 SCC 311] has also held that even in such an event, the jurisdiction of the civil court can be invoked. Several other issues of complicated nature may ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
