1999 (4) TMI 633 - SC - Indian Laws

Summary

Issues Involved:
1. Jurisdiction of the Debts Recovery Tribunal (DRT).
2. Definition and scope of the term "debt" u/s 2(g) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
3. Applicability of the Act to the plaintiff's claim.

Summary:

Jurisdiction of the Debts Recovery Tribunal (DRT):
The appellant, United Bank of India, filed a suit in the High Court of Calcutta, which was transferred to the Debts Recovery Tribunal (DRT) u/s 31 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The respondents contended that the tribunal lacked jurisdiction as the reliefs sought were not within the scope of the Act. The High Court ruled that the tribunal had no jurisdiction, as the plaintiff's claim was not a "debt" u/s 2(g) of the Act. The Supreme Court, however, held that the tribunal had exclusive jurisdiction to decide the dispute and set aside the High Court's order.

Definition and Scope of the Term "Debt" u/s 2(g):
The High Court concluded that the plaintiff's claim was for damages and compensation, which required quantification before a decree could be passed, and thus did not fall within the definition of "debt" u/s 2(g) of the Act. The Supreme Court disagreed, stating that the expression "debt" should be given the widest amplitude to include any liability alleged as due from any person by a bank during the course of any business activity, whether secured or unsecured, and legally recoverable on the date of the application.

Applicability of the Act to the Plaintiff's Claim:
The Supreme Court emphasized that the entire averments in the plaint must be examined to determine whether the claim falls within the tribunal's jurisdiction. The Court found that the plaintiff's claim was essentially for the recovery of a debt due to the bank, and thus, the tribunal had the exclusive jurisdiction to adjudicate the matter. The Court noted that the purpose of the Act was to provide for the establishment of tribunals for the expeditious adjudication and recovery of debts due to banks and financial institutions, and this objective would be frustrated if the suit was relegated to ordinary civil courts.

Conclusion:
The Supreme Court set aside the impugned order of the Calcutta High Court and directed that the suit, which stood transferred to the tribunal and was registered as Transferred Application No. 163 of 1996, be disposed of by the tribunal in accordance with law. The appeals were allowed without any order as to costs.