Decided on August 08,2007



- (1.) THIS is an application filed on behalf of the defendant/bank under section 31 of the Recovery of Debts Due to Banks and Financial Institutions act, 1993 (hereinafter referred to as the "said Act") seeking transfer of the present suit to the Debt Recovery Tribunal. The contention of the defendant/applicant is that the present suit is concerned with the return of title deed of the property which has been mortgaged with the bank and the mortgage itself is the subject matter of the pending application (OA677/2000)before the Debt Recovery Tribunal for recovery of money based upon the mortgage. Another application, being O. A. 24/2004, in respect of the same transaction is also pending before the Debt Recovery Tribunal. The plaintiff is a party in both the applications either in the capacity of a mortgager or principal borrower.
(2.) THE learned counsel for the defendant Bank referred to the provisions of Section 31 (1) of the said Act which reads as under:- "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 of such Tribunal, shall stand transferred on that date to such Tribunal: provided that nothing in this sub-section shall apply to any appeal pending as aforesaid before any court. He submitted that since the Tribunal has jurisdiction in respect of the subject matter of the present suit, the same ought to be transferred to the tribunal and ought not to be continued before this Court. The learned counsel also referred to the provisions of Section 19 (6) to 19 (11) which read as under:- "19. Application to the Tribunal. (6) Where the defendant claims to set-off against the applicant's demand any ascertained sum of money legally recoverable by him from such applicant, the defendant may, at the first hearing of the application, but not afterwards unless permitted by the Tribunal, present a written statement containing the particulars of the debt sought to be Set-off. (7) The written statement shall have the same effect as a plaint in a cross-suit so as to enable the Tribunal to pass a final order in respect both of the original claim and of the set-off. (8) A defendant in an application may, in addition to his right of pleading a set-off under sub-section (6), set up, by way of counter-claim against the claim of the applicant, any right or claim in respect of a cause of action accruing to the defendant against the applicant either before or after the filing of the application but before the defendant has delivered his defence or before the time limited for delivering his defence has expired, whether such counter-claim is in the nature of a claim for damages or not. (8) shall have the same effect as a cross-suit so as to enable the Tribunal to pass a final order on the same application, both on the original claim and on the counter-claim. (9) A. counter-claim under sub-section (10) The applicant shall be at liberty to file a written statement in answer to the counter-claim of the defendant within such period as may be fixed by the Tribunal. (11) Where a defendant sets up a counter-claim and the applicant contends that the claim thereby raised ought not to be disposed of by way of counter-claim but in an independent action, the applicant may, at any time before issues are settled in relation to the counter-claim, apply to the Tribunal for an order that such counter-claim may be excluded, and the Tribunal may, on the hearing of such application, make such order as it think fit. " The aforesaid provisions clearly demonstrate that they relate to set off and counter-claims and empower the Tribunal to pass final orders in respect of both, a set-off as well as a counter claim.
(3.) AFTER referring to the aforesaid provisions, the learned counsel for the defendant/applicant referred to the decision in the case of United Bank of india, Calcutta v. Abhijit Tea Co. Pvt. Ltd. and Others, (2000) 7 SCC 357 and, in particular, he placed reliance on paragraph 38 of the said decision which reads as under: "38. In our view, the above pleas raised by the respondent Company are all inextricably connected with the amount claimed by the Bank. The plea of the Company is that interest is not to be charged or is to be charged at a lesser rate, that instalments are to be permitted and more monies should have been advanced. In our view, these claims made by the Company in its Suit No. 272 of 1985 against the bank amount to "counter-claim" and fall within sub-sections (8) to (11) of Section 19 of the Act ( as introduced by Act 1 of 2000 ). The plea for deduction of damages is in the nature of a "set-off falling under sub-sections (6) and (7) of Section 19. " The aforesaid paragraph indicates that the suit which was in question before the Supreme Court was "inextricably connected" with the application pending before the Debt Recovery Tribunal and, therefore, the same could be construed to be a set-off / counter-claim falling within the provisions of section 19 (6) to 19 (11) of the said Act. It is in this context that the learned counsel submits that the present suit should also be transferred under section 31 of the said Act to the Tribunal to be treated as a counter claim and be adjudicated upon by the Tribunal along with the applications of the bank referred to above.;

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