SIDDHARTH RICE MILLS Vs. BANK OF BARODA
LAWS(DR)-2007-5-2
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on May 17,2007

Appellant
VERSUS
Respondents

JUDGEMENT

R.S. Tripathi, J. (Chairperson) - (1.) THE respondent No. 1 -Bank of Baroda instituted an Original Application No. 175 of 2002 under Section 19 of the RDDBFI Act, before D.R.T., Jabalpur for recovery of Rs. 38,61,829.33. The appellant -defendants contested the above Original Application filing their written statement challenging the claim of the respondent No. 1 -Bank. For the actual short controversy, raised in this case, we need not give the details of pleadings of both parties. In the written statement apart from other pleadings a pleading was raised that the officers of the Bank have acted in most mala fide and fraudulent manner on account of which irreparable loss had been sustained by the appellant -defendants as because of illegal and unauthorised fraudulent transfer of a sum of Rs. 10 lacs from cash credit account to the term loan account. The appellant -defendants pleaded that they had filed criminal complaint case against the Bank officer under Section 420 of the Indian Penal Code which was pending before competent Court at Dhamtari and they further claimed to have filed a suit for declaration against the Bank being Suit No. 16 -B of 2002 before the Court of Civil Judge, Dhamtari before filing of the Original Application before D.R.T., Jabalpur. They denied their liability to pay the amount claimed by the Bank during the pendency of the case before D.R.T. An application dated 1st June, 2005 was moved by the appellant -defendants for staying the disposal of Original Application till the decision of the Suit No. 16 -B of 2002. This application was opposed by the respondent Bank by filing the reply and after hearing the parties the leaned Presiding Officer, D.R.T., Jabalpur passed the impugned order dismissing the application dated 1st June, 2005 and feeling aggrieved against this order this appeal has been filed.
(2.) BEFORE this Tribunal after hearing the learned Counsel for the appellant and respondent Bank the points which require to be decided are: Whether the original Suit No. 16 -B of 2002 pending before the Court of Civil Judge -II, Dhamtari should be taken into consideration for staying the proceedings of Original Application No. 175 of 2002 pending before D.R.T., Jabalpur or whether the aforesaid suit can be ordered to be transferred before D.R.T., Jabalpur for decision along with aforesaid Original Application treating civil suit to be a counter -claim? On above two points the learned Counsel has taken this Tribunal towards the facts of the case where it is pointed out that the cheque for Rs. 10 lacs was taken by the respondent Bank from appellant No. 1 with the understanding that it would not be encashed by the Bank and shall be treated as security but the Bank officials after the receipt of above cheque illegally and fraudulently encashed the above cheque causing a lot of problem to the appellant, therefore, the appellant had no option but to file the above civil suit for declaration against the Bank to the effect that the appellant -defendants were entitled to be compensated in the form of damages for the loss of running of their business smoothly due to above illegal act of the Bank authorities. Another declaration was sought in suit to the effect that the Bank authorities had no right to withdraw the amount from their cash credit limit account on 29th March, 1996 and 19th October, 1996 for converting it into term loan without the consent of the appellants. Third relief of declaration was that the appellants could not sell their stock of rice due to oral discussions of the then branch manager of the defendant No. 3 Bank resulting into the loss of the entire stock of rice for which the Bank officers were liable. Learned Counsel for -the appellants has argued before this Tribunal that from the perusal of the facts and circumstances of this case when the original Suit No. 16 -B of 2002 was filed before institution of Original Application No. 175 of 2002 by the Bank, hence, the proceeding of Original Application should either be stayed awaiting a judgment of above civil suit or the above suit may be got transferred to the Tribunal for decision along with Original Application treating it to be counter -claim of the present appellants. His contention is that if the above submission is not considered the findings, if any, recorded in Original Application or original suit is going to affect the finding of the other case. He has also drawn the attention of this Tribunal towards the criminal complaint filed by the appellants against the Bank officials before the competent Court with regard to above fraudulent act of the Bank officers. There is no doubt about the fact that the aforesaid civil suit and criminal complaint both are pending before the appropriate Courts. Learned Counsel for the appellants as well as respondents have relied upon Indian Bank v. A.B.S. Marine Products Private Ltd. I (2007) BC 112 (SC), wherein there are some observations in para 17 of this ruling and on the basis of this observation it has been argued that the counter -claim can be disposed of along with Original Application. Against this submission learned Counsel for the respondent Bank has repelled above arguments and has contended that the nature of relief claimed in the suit pending before Civil Court is beyond the jurisdiction of D.R.T., therefore, it cannot be taken for disposal by the Tribunal. He has also relied upon that very ruling cited from the side of the appellants.
(3.) HAVING considered all these arguments when this Tribunal goes through the copy of plaint of civil suit 16 -B of 2002 available on the file as Annexure -4 it becomes clear that the pleadings were made in the plaint from the side of the appellants that by fraudulent act the authorities of the Bank encashed cheque of Rs. 10 lacs given by appellant whereas Orally as well as in writing they had assured the appellant not to encash it as the cheque was to be kept by way of security. Another assertion in suit with regard to stock of rice is that despite repeated requests the branch manager of the concerned Bank did not permit to the appellants to sell the said stock and the entire rice by lapse of time was destroyed and perished. The declaration to the effect that on account of above the appellant firm suffered financial loss and the cheque was encashed without any consent of the appellants, therefore, for the loss of the stock of rice and above fraudulent act the Bank authorities were liable and the Bank was not entitled to any relief in respect of above term loan. In the case of ruling Indian Bank v. A.B.S. Marine Products Private Ltd. (SC) (supra), the facts were that the A.B.S. Marine Products Private Ltd. never wished its case to be transferred to the Tribunal and only Bank had prayed for such transfer. Hon'ble Apex Court confirming the judgment passed by the Hon'ble High Court held that the suit for damages etc. could not be transferred to the Tribunal along with application for recovery of money. We have another ruling of Hon'ble Calcutta High Court reported as I.C.I.C.I. Bank Pvt. Ltd. v. Coventry Coil -O -Matic (Haryana) Limited IV (2005) BC 91 : 2005 (1) Bank C.L.R. 769 (Cal.), wherein it has been observed that suit for declaration, injunction and specific performance arising out of debt cannot be entertained and decided by the Tribunal constituted under RDDBFI Act. These rulings are applicable in this case. The reliance has been placed on rulings, Allahabad Bank v. Canara Bank I (2000) BC 627 : III (2000) CLT 129 (SC) : 2000 (1) Bank C.L.R. 481 (SC); Heera Lal and Sons v. Laxmi Commercial Bank III (2002) BC 190 (SC) : 2002 (3) Bank C.L.R. 343 (SC); P. Kasilingam v. P.A.C. Collage Technology ; United Bank of India v. D.R.T. 1999 (2) Bank C.L.R. 327 (SC). In view of above discussions this Tribunal is of the opinion that the reliefs claimed in the civil suit make it very clear that above suit cannot be allowed to be taken as the counter -claim for decision by the Tribunal as the Tribunal has no jurisdiction to decide the controversies raised in view of the provisions of RDDBFI Act. Also question of staying the proceedings pending before D.R.T. due to pendency of above civil suit in the circumstances of this case does not arise. Moreover, in the application moved before the D.R.T. available as Annexure -7 on the file of memo of this appeal there is no prayer for transfer of the above suit to the Tribunal and the question of staying the proceedings of Tribunal cannot be considered on account of pendency of above civil suit and criminal case filed at the instance of the appellants.;


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