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2025 (3) TMI 1054 - HC - Indian LawsDebts Recovery Appellate Tribunal (DRAT) was justified in remanding the matter to the DRT for fresh consideration of jurisdiction and other issues or not - claim made by HDFC Bank constitutes a debt under Section 2(g) of the Recovery of Debts and Bankruptcy Act 1993 - HELD THAT - The issue whether the questions like whether the issue of jurisdiction stood concluded either by earlier orders of DRAT or by the order of Gujarata High Court in an appeal against the order disposed of on 28 February 2014 were legal issues that the DRAT was duty bound to address and decide upon. Similarly even the issue whether HDFC s claim constituted a debt under Section 2(g) of the said Act was a legal issue squarely raised before the DRAT and which the DRAT should have itself decided. The DRAT also had sufficient factual material before it to decide the issue of entitlement of HDFC to claim against Ashima and BBK. The DRAT was not at all justified in simply remanding the matter to DRT for deciding the issue of jurisdiction and all other issues in the original application afresh . The DRAT without discharging its of an first appellate authority has simply chosen to remand the matter to DRT without recording any cogent reasons for adopting this easy course of action. This was admittedly not a case where the DRT had decided on a preliminary point without recording findings on other issues. In such a case if the appellate court reverses the decree on a preliminary point the appellate court may remand the matter to the trial court to decide other issues and determine the suit. This is what is provided under Order 41 Rule 23 of the Code of Civil Procedure. Under Order 41 Rule 23-A the appellate court can order a remand even in other cases not covered by Order 41 Rule 23. However by a catena of decisions the Hon ble Supreme Court has clarified that the remand cannot be ordered lightly. In a case where the provisions of Order 41 Rule 23 do not apply the remand can be ordered if considered necessary by the Appellate Court in the interest of justice. The Hon ble Supreme Court has held that as far as possible the Appeal Court should dispose of the appeal finally unless remand is imperative. In Ashwinkumar K Patel 1999 (3) TMI 654 - SUPREME COURT the Hon ble Supreme Court held that the High Court should not ordinarily remand a case under Order 41 Rule 23 CPC to the lower court merely because it considered that the reasoning of the lower court in some respects was wrong. Such remand orders lead to unnecessary delays and cause prejudice to the parties to the case. When the material was available before the High Court it should have itself decided the appeal one way or the other. It could have considered the various aspects of the case mentioned in the order of the trial court and considered whether the order of the trial court ought to be confirmed reversed or modified. The DRAT also failed to appreciate that the original application was filed by HDFC in 2005. The DRT rejected the Respondents objection to maintainability on 26 October 2005. The Respondents s appeals instituted in 2006 and 2007 were disposed of only on 11 July 2014. The DRT allowed HDFC s original application on 30 June 2017. The impugned common order has been made on 26 April 2024. Thus the matter is lingering for last almost 20 years. Still the DRAT has remanded the matter to DRT without recording any cogent reasons to justify such remand. Conclusion - i) An order of remand prolongs and delays the litigation and hence should not be passed unless the appellate court finds that a re-trial is required or the evidence on record is not sufficient to dispose of the matter. ii) The DRAT must now decide the appeals in accordance with law without remanding them back to the DRT and all parties contentions remain open for consideration. Petition disposed off.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment were:
ISSUE-WISE DETAILED ANALYSIS 1. Jurisdiction and Definition of "Debt" The relevant legal framework involves Section 2(g) of the Recovery of Debts and Bankruptcy Act, 1993, which defines "debt" and the jurisdiction of the DRT to entertain claims. The Court noted that the DRT had previously ruled that HDFC's claim constituted a "debt" under this provision, thereby granting it jurisdiction. However, this finding was contested by BBK and Ashima, who argued that the DRAT should have addressed this jurisdictional question. The Court found that the DRAT failed to exercise its jurisdiction by not deciding on the issue of whether HDFC's claim was a "debt." The Court emphasized that the DRAT had sufficient material to make this determination and should not have remanded the matter to the DRT. 2. Justification for Remand by DRAT The Court examined whether the DRAT was justified in remanding the matter to the DRT. The legal precedents cited, including decisions from the Supreme Court, established that remand should not be ordered lightly and only in circumstances where a re-trial is necessary or the evidence is insufficient for a decision. The Court concluded that the DRAT's decision to remand was unjustified, as the DRAT had the necessary material to decide on the jurisdiction and other issues. The Court criticized the DRAT for avoiding its duty to decide the appeal and for remanding the matter without cogent reasons. 3. Release of Amount Held in No-Lien Account BBK sought the release of funds held in a no-lien account with HDFC, arguing that the DRAT should have directed HDFC to restore this amount. The Court noted that since the DRAT's order was set aside, BBK's request was rendered infructuous, and the petition was dismissed. SIGNIFICANT HOLDINGS The Court set aside the DRAT's common order dated 26 April 2024, citing a failure to exercise its jurisdiction and an unjustified remand to the DRT. The Court restored the appeals to the DRAT for a decision on merits without further remand. The Court preserved the principle that remand should not be ordered routinely and emphasized the appellate court's duty to decide appeals based on the available evidence. In verbatim, the Court stated, "An order of remand prolongs and delays the litigation and hence, should not be passed unless the appellate court finds that a re-trial is required, or the evidence on record is not sufficient to dispose of the matter..." The final determination was that the DRAT must now decide the appeals in accordance with law, without remanding them back to the DRT, and all parties' contentions remain open for consideration. The Court directed the parties to appear before the DRAT on 05 March 2025 and requested the DRAT to expedite the disposal of the appeals, considering the prolonged litigation since 2005.
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