PUNJAB NATIONAL BANK Vs. TATA INFOTECH LTD
LAWS(DR)-2004-11-13
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on November 02,2004

Appellant
VERSUS
Respondents

JUDGEMENT

Pratibha Upasani, - (1.) THIS Misc. Appeal is filed by the appellant/original applicant Punjab National Bank being aggrieved by the order dated 21.10.2003 passed by the learned Presiding Officer of the Debts Recovery Tribunal-I, Mumbai on Exhibit No. 7 in Original Application No. 65/2003. By the impugned order, the learned Presiding Officer held that the amount which was sought to be recovered by the applicant Bank from the defendants, did not amount to "Debt" within the meaning of Section 2(g) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and, therefore, the Tribunal did not have jurisdiction to entertain and try the original application filed by the Bank. Holding this, he ordered the original application to be returned to the applicant Bank for being presented before appropriate forum. Being aggrieved, the present appeal is filed by the bank.
(2.) I have heard Mr. D'lima for the appellant Bank and Mr. Purohit for the respondent. I have also gone through the proceedings including the impugned order and in my view, the learned Presiding Officer has not committed any error in passing the impugned order. Few facts, which are required to be stated, are as follows: Case of the applicant Bank is that they were desirous of installing a software solution which would be a complete solution enabling the Bank to complete all tasks relating to the Foreign Exchange Offices at Delhi and Mumbai. The respondents/Tata Infotech Ltd. had offered to provide such solution. Detailed discussions were held between the parties and the applicant Bank vide its letter dated 19.12.1998 placed an order with the respondents for the said software solution at the cost of Rs. 50 lacs. The respondents had accepted the terms and conditions recorded in the said letter. Subsequently a sum of Rs. 10 lacs was also paid to the respondents after deducting T.D.S. However, in spite of the advance payment, the respondents did not perform their part of contract. The applicant Bank therefore called upon the respondents to refund a sum of Rs. 10 lacs with interest at the rate of 16% per annum with quarterly rests and liquidated damages of Rs. 5 lacs. The respondents, however, did not comply with the said notice. Therefore, the Bank filed the original application against the respondents in the DRT for recovery of the said amount.
(3.) THE case of the respondents is that the original application filed by the Bank is based on an action in tort namely a claim arising out of an alleged breach of contract and for consequential damages. THEir contention is that the claim for damages for the alleged failure of the respondents in providing software solution to the Bank would not amount to "Debt" as contemplated under the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. It is contended by them that there is no Banker-Customer relationship between the applicant bank and the defendants/respondents nor does the claim of the Bank is arising out of any financial/lending transaction. According to them, the claim for return of money paid under the contract for the development and installation of a software solution and damages for alleged breach of contract is essentially an action for unliquidated damages and therefore cannot be said to be a "Debt" as defined by the DRT Act in Section 2(g).;


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