Decided on March 22,2007



K.Gnanaprakasam, - (1.) AGGRIEVED by the order dated 5.10.2006 in IA-84/2006 in TA-615/2001, passed by the DRT-2, Chennai, the defendants 2 to 4 have filed this Appeal. Heard the learned Advocate for the appellants and the respondent.
(2.) The learned Advocates for the appellants states that there was One Time Settlement (OTS) in the year 2001, and the appellants have settled the entire amount by 2.8.2004. The appellants also filed certain documents along with the petition filed before the DRT to prove the settlement. The respondent Bank also admitted the OTS, but had stated that the appellant have not paid the amount in time and, therefore, the proposal was not acted upon and appellants are not entitled to the benefit of the OTS.
(3.) THE Tribunal was of the view that the OTS is an affair between the borrower and the Bank, and the Tribunal has no role to play. I am unable to subscribe my view to the same. THE Tribunal, though it does not constitute a Court in the technical sense, it exercises judicial powers and decides matter brought before it judicial or quasi-judicial. It is not a Tribunal constituted to adjudicate purely administrative or executive functions. But the DRT is a Tribunal constituted under the RDDB & FI Act, 1993. Section 2(o) defines the Tribunal that it means "the Tribunal established under Sub-section (1) of Section 3 of the Act". Section 3(1) of the Act speaks about the establishment of Tribunal which states, "THE Central Government shall, by notification, establish one or more Tribunals, to be known as the Debts Recovery Tribunal, to exercise the jurisdiction powers and authority conferred on such Tribunal by or under this Act. (2) THE Central Government shall also specify, in the notification referred to in Sub-section (1), the areas within which the Tribunal may exercise jurisdiction for entertaining and deciding the applications filed before it. THE applications that could be filed before the DRT is broadly set out in Section 19. Sub-section (6) of Section 19 states, "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." Sub-clause (8) of Section 19 deals with the adjudicatory powers of the Tribunal which states, "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". Sub-clause (9) of Section 19 says, "A counter-claim under Sub-section (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". A fair and conjoint reading of sub-sections of Section 19 would disclose the adjudicatory mechanism provided under the Act. Sub-clause (8) clearly makes out a case where any set off is pleaded or counter claim is made by the defendant, it has got to be considered and orders have got to be passed by the Tribunal, Sub-clause (8) also gives right to the defendant to put forward a claim in respect of a cause of action accruing to the defendant against the applicant either before or after filing of the application, but before the defendant has delivered his defence. As such, the defendant is entitled to put forward his claim arising before or after the filing of the application. OTS might have been entered into before or after filing of the application. In the said context, the Tribunal has to decide whether there was an OTS and whether it was complied with or not. If the borrowers are able to prove that there was an OTS and the same was complied with, it is for the Tribunal to hear the parties and give a finding whether there was an OTS and the same complied with or not, as the OTS is in the nature of set off or counter claim. But the Tribunal has not chosen to give an opportunity to prove the case of the appellant in this case and, therefore, I feel that the order passed by the Tribunal has got to be interfered with and it is liable to be set aside and accordingly it is set aside. THE appellants must be given an opportunity to prove their case.;

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.