ORIENTAL BANK OF COMMERCE Vs. RAJNI MALIK
LAWS(DR)-2007-10-2
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on October 04,2007

Appellant
VERSUS
Respondents

JUDGEMENT

M.C.Jain, - (1.) BOTH these Miscellaneous Appeals arise out of the same O.A. 1/2004 of DRT-III, Delhi and have been filed by the applicant of the said O.A., i.e., Oriental Bank of Commerce against the respondents (defendants in O.A.). So, they can be conveniently decided together.
(2.) Miscellaneous Appeal 68/2005 is directed against the order dated 27.1.2005 passed by the Tribunal below dismissing LA. 342/2004 moved by the Oriental Bank of Commerce. The said I.A. 342/2004 had been made by the Bank under Section 19(11) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as 'the Act') to exclude the counter-claim of the defendants from the O.A. and to direct the counter-claim to be disposed of by an independent order. The Bank has filed the O.A. in question for the recovery of Rs. 40 lakh and odd against the respondents herein (defendants in O.A.). They put in appearance before the DRT and filed written statement with a counter-claim for Rs. 9,90,107.68 with interest @ 24% per annum. Their contention was that owing to the alleged lapses of the Bank they suffered huge loss to the tune of Rs. 40 lakh. So, the said amount of Rs. 40 lakh was said to be due to them as damages. According to them, after subtracting the amount of claim of the Bank, they were claiming a balance amount of Rs. 9,90,107.68. Since the prayer of the Bank, as stated earlier, did not find favour with the Tribunal below, it dismissed the Bank's application. The Bank has preferred this appeal feeling aggrieved thereby.
(3.) I have heard the learned Counsel for the parties. The learned Counsel for the appellant-Bank has urged that the claim of the defendants for the alleged loss of Rs. 40 lakh was based on the Bank having declined to merge the loan granted to their proprietary concern with that of the partnership firm in the name and style of Sanraj Marketing Corporation which admittedly came into existence after the loan facilities had been availed of by the proprietorship concern. Further, the loanee. M/s. Sanraj Corporation, proprietorship concern, had furnished from the applicant Bank, a Bank Guarantee of Rs. 7.50 lakh in favour of M/s. Spices Trading Corporation Ltd. The respondents/defendants alleged that M/s. Spices Trading Corporation Ltd. supplied certain damaged articles to them. The defendants requested M/s. Spices Trading Corporation Ltd. to change the damaged stock worth Rs. 5 lakh. They also requested that the amount of Rs. 7,56,500/- to be released by invoking Bank Guarantee should be released only after 10.1.2001. But, M/s. Spices Trading Corporation Ltd. realized a sum of Rs. 7,57,500/- from the appellant-Bank without the approval of the defendants. The result was that they had been left with damaged stock of worth Rs. 7,57,500/- unsaleable in the market. The learned Counsel submitted that neither the Bank was obliged to accede to the request of the respondents to merge the loan account of the proprietorship concern with the newly formed partnership firm M/s. Sanraj Marketing Corporation, nor could it decline to honour the invocation of the Bank Guarantee by M/s. Spices Trading Corporation Ltd. owing to the alleged dispute between the borrowers and M/s. Spices Trading Corporation Ltd. The learned Counsel pointed out that the issue of Bank Guarantee was a separate contract between the Bank and the beneficiary and the Bank having issued the Bank Guarantee was under legal obligation to honour the same. On account of the alleged supply of damaged goods by M/s. Spices Trading Corporation Ltd. to the borrowers, the Bank could not be prevented or directed by them (borrowers) against the enforcement of Bank Guarantee given by it (Bank). It has further been submitted by the appellant-Bank that the claim of the respondents/defendants to the tune of Rs. 40 lakh was hypothetical and it had been fileo only with a view to frustrate the claim of the Bank by causing delay, simply paying a Court fee of Rs. 12,000/-. The learned Counsel invited my attention to the provision contained in Section 19(11) of the Act, which reads as under: 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 thinks fit. The learned Counsel, relying upon the aforesaid provision of Section 19(11) of the Act, urged that it is a fit case where the counter-claim of the respondents/defendants ought to be segregated from the O.A. That is, the O. A. should not have been clubbed with the counter-claim which could be decided separately according to law.;


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