Debt and Financial Laws

Recovery of Debts Due to Banks and Financial Institutions Act, 1993

— Ss. 31, 17, 18, 19(6) to (11) and 2(g) — Provision in S. 31 for transfer of suit to Tribunal and bar of jurisdiction of civil court under Ss. 17 and 18 — Applicability — The said bar, held, not applicable to any suit filed by a borrower or any other person against the bank — Hence, such a suit, held, does not attract S. 31 — More so, when the suit was filed long after the Tribunal had been established — Ss. 19(6) to (11) (as introduced in 2000) are merely enabling provisions — They do not provide the exclusive remedy and do not deprive the borrower, of his remedy of suit or any other appropriate remedy in respect of his claim against the bank — Hence, where the borrower had filed a suit for damages against the bank for non-release of the sanctioned loan and the bank thereafter filed an application before the Tribunal for recovery of its debts against the same borrower, held, the borrower's suit was an independent suit and the borrower could not be compelled to make his claim against the bank not by suit but only by way of a counterclaim — Nor could his suit be transferred to the Tribunal against his wishes — Hence, bank's application for transfer of the said suit of the borrower to Tribunal, held, not maintainable, (2006) 5 SCC 72-A

Debt and Financial Laws

Recovery of Debts Due to Banks and Financial Institutions Act, 1993

— Ss. 19(6) to (11), 31, 17 and 18 — Counterclaim — Deemed counterclaim — Observations in Abhijit case, (2000) 7 SCC 357 that an independent suit of a defendant in the bank's application could be deemed to be a counterclaim and transferred to the Tribunal — Applicability — Held, applicable only when: (i) the subject-matter of the suit of the bank and the suit of the defendant against the bank is inextricably connected in the sense that the decision in one would affect the decision in the other, and (ii) both the parties agree to the independent suit being considered as a counterclaim so that the same could be heard and disposed of by the Tribunal — Where the bank filed an application before the Tribunal for the recovery of its debts and the borrower filed a suit for damages on the ground that at a later stage the bank had sanctioned to it further loan but had failed to release the same, held, the cause of action in the said two cases as well as the issues arising therein were quite different — Hence, rejecting the contention of the Bank that the subject-matter of its application and that of the borrower's suit were inextricably connected, further held, neither the decision in one depended on the decision in the other nor would separate trial of the said two cases lead to inconsistent results, (2006) 5 SCC 72-B

Constitution of India

— Arts. 141 and 142 — Law laid down by Supreme Court — A direction issued in exercise of power under S. 142 to do proper justice and the reason, if any, stated therefor, if can be treated as law laid down by Supreme Court — Question left open — However, in such decisions even if there was no express reference to Art. 142, held, the courts should ascertain and follow the ratio decidendi and not the relief so granted, (2006) 5 SCC 72-C