Shravan Jairam Jadhav v. State Bank of India & others
2000-11-09
B.B.VAGYANI
body2000
DigiLaw.ai
JUDGMENT - B.B. VAGYANI, J.:---Heard learned Advocate Shri A.B. Naik for the petitioner, Shri A.H. Joshi, learned Advocate for respondent No. 1 and learned Advocate Shri J.S. Gavane for respondent No. 4. Liberty to delete respondent Nos. 2 and 3. The validity of section 31 of the Recovery of Debts Due to Banking and Financial Institutions Act, 1993, is not pressed. 2. Rule, made returnable forthwith. With the consent of the parties, the matter is heard finally. 3. The respondent No. 1 bank had advanced a loan of Rs. five lacs to present petitioner on 13th April, 1983. The deleted respondents No. 3 and 4 stood sureties for the petitioner to the bank. Another loan of Rs. Ten lacs was also advanced by the respondent No. 1 bank to the petitioner. Petitioner also availed one more financial assistance for agricultural purposes i.e. grape-vine and purchase of trailer. The petitioner could not repay the loan, as agreed, and, therefore, the respondent No. 1 Bank filed Special Civil Suit No. 63/1990 in the Court of Civil Judge, Senior Division, Kopergaon, district Ahmednagar, for the purpose of recovery of Rs. 12,53,586-55. 4. The petitioner, who is main contesting party, filed written statement Exh. 36 and thereby contested the money claim. The petitioner submitted a counter claim vide Exh. 66 under the provisions of Order 8, Rule 6-A of C.P.C. and claimed damages to the tune of Rs. 25 lacs from the respondent bank on the ground that respondent bank did not disburse the loan in time. The counter claim set up by the petitioner has been objected by the respondent bank. The learned trial Judge was pleased to allow application Exh. 66 and thus, counter claim preferred by the petitioner has been registered. 5. During pendency of the suit, an Act, called Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (Act No. 53/1993) came to be passed by the Parliament. The said Act came into force w.e.f. 24th of June, 1993. After introduction of the Act, the Government of India, in exercise of its power under section 3 of the aforesaid Act, on 16-7-1999, issued a notification establishing a Debt Recovery Tribunal for the State of Maharashtra and Goa.
The said Act came into force w.e.f. 24th of June, 1993. After introduction of the Act, the Government of India, in exercise of its power under section 3 of the aforesaid Act, on 16-7-1999, issued a notification establishing a Debt Recovery Tribunal for the State of Maharashtra and Goa. Pursuant to the said notification dated 16th of July, 1999, the High Court on 31st of July, 1999, issued a circular directing the courts, wherein suits are filed by the banks/financial institutions are pending and having valuation of Rs. ten lacs and more, to transfer the suits to the Debt Recovery Tribunal. On the basis of the enactment, particularly the provisions of section 31 of the aforesaid Act, the learned Civil Judge, Senior Division, Kopergaon, before whom the Special Civil Suit No. 63/1998 was pending, exercised powers under section 31 and transferred the said suit to Debt Recovery Tribunal by order dated 27th of October 1999. While passing the said order the learned Civil Judge, Senior Division, Kopergaon, is pleased to separate the counter claim filed by the present petitioner and directed to treat the counter claim as a separate suit. This order is impugned in the present writ petition by the petitioner. 6. Learned Advocate Shri A.B. Naik vehemently submitted before me that the impugned order passed by the Civil Judge, Senior Division, Kopergaon, is manifestly incorrect in law. According to him, the counter claim springs from the original claim though it is an independent suit in the eye of law. He submits further that the counter claim is a shadow of the original claim and, therefore, the learned trial Judge ought to have transferred the counter claim preferred by the present petitioner along with the Special Civil Suit No. 63/1998 to the Debt Recovery Tribunal. In order to support his submission, learned Advocate Shri A.B. Naik relies upon (M.E. Industries Pvt. Ltd. v. Banaras State Bank Ltd.)1, A.I.R. 2000 Allahabad 181. 7. Learned Advocate Shri A.H. Joshi, for the respondent bank has supported the impugned order. 8. I gave anxious consideration to the rival submissions. The counterclaim is substantially a cross-suit. The position of a party setting up a counter claim is that of plaintiff. The plaintiff in the original suit becomes the defendant who is required to file a written statement in answer to the counter-claim of the defendant.
8. I gave anxious consideration to the rival submissions. The counterclaim is substantially a cross-suit. The position of a party setting up a counter claim is that of plaintiff. The plaintiff in the original suit becomes the defendant who is required to file a written statement in answer to the counter-claim of the defendant. Therefore, the original claim and counter claim are to be regarded as a unified proceeding. Under the circumstance, the original claim and the counter claim are required to be disposed of simultaneously by one forum. The same meaning emanates from Order 8, Rule 6-A(2) of Code of Civil Procedure. Order 8 Rule 6-A(2) C.P.C. reads as under :- "Such counter claim shall have the same effect as a cross suit so as to enable the Court to pronounce a final judgment in the same suit, both on the original claim and on the counter-claim." If the above rule is taken into consideration with reference to its true spirit, both the claim require treatment by a single judgment. Therefore, the counter claim cannot be divorced from the original claim. Moreover, segregation would certainly cause hardship and inconvenience to both the parties and their witnesses. The parties would be shunted to two different places unnecessarily. Both the parties are forced to attend Debt Recovery Tribunal, Mumbai, and at the same time they are also required to go to Kopergaon. 9. In case of M.E. Industries Pvt. Ltd., cited supra, the Division Bench of Allahabad High Court has taken a view that Tribunal is not merely an executive authority to recover debts and, therefore, is bound to decide the debts due to bank considering the cause shown by the debtor. Such cause could also include counter claim and set-off. Under the circumstances, it cannot be said that the set-off and counter claim cannot be adjudicated by the Debt Recovery Tribunal. 10. Learned Advocate Shri A.B. Naik further submits that there is amendment in the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, and, by virtue of amendment in section 19, the counter claim is also liable to be transferred to the Debt Recovery Tribunal. 11. The submissions of learned Advocate Shri A.B. Naik carry much substance. There is amendment in section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
11. The submissions of learned Advocate Shri A.B. Naik carry much substance. There is amendment in section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The counter claims are also brought within the ambit of Debt Recovery Tribunal. This amendment came into force w.e.f. 17th of January, 2000. If regard is had to the recent amendment, there is no manner of doubt that the counter claim is also brought within the ambit of Debt Recovery Tribunal. Under the circumstance, the counter claim cannot be segregated from the original suit. 12. A reference with profit can also be made to (United Bank of India, Calcutta v. Abhijit Tea Co. Pvt. Ltd.)2, A.I.R. 2000 S.C.W. 3203. The Supreme Court has observed that the word counter claim in section 19(8) to (11) of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (No. 51/1993) which is equated to a cross suit, includes a claim even if it is made in an independent suit filed earlier. If a set off or counter claim is to be equated to cross suit under section 19, a fortiori, there can be no difficulty in treating the cross suit as one by way of set off and counter claim and as proceedings which ought to be dealt with simultaneously with the main suit. The Supreme Court has specifically made clear that the suit filed by the debtor amounts to counter claim and set off under section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and, therefore, both the suits are suits falling within the ambit of the Act and are required to be tried by the Tribunal. 13. Taking into consideration the discussion made above, I am of the clear opinion that the second part of impugned order dated 27-10-1999 passed by the Civil Judge, Senior Division, Kopergaon, suffers from illegality and, therefore, it is liable to be quashed and set aside. 14. In the result, writ petition is allowed. The impugned order of retention of the counter claim is quashed and set aside. The counter claim preferred by the petitioner be transferred to Debt Recovery Tribunal, Mumbai. The learned Civil Judge, Senior Division, Kopergaon, is hereby directed to transmit the record and proceedings of the counter claim preferred by the petitioner to Debt Recovery Tribunal, Mumbai, forthwith.
The impugned order of retention of the counter claim is quashed and set aside. The counter claim preferred by the petitioner be transferred to Debt Recovery Tribunal, Mumbai. The learned Civil Judge, Senior Division, Kopergaon, is hereby directed to transmit the record and proceedings of the counter claim preferred by the petitioner to Debt Recovery Tribunal, Mumbai, forthwith. Rule is made absolute in the above terms. Writ petition allowed. -----