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2012 (11) TMI 367 - HC - Indian LawsWhether the Original Application filed by the Bank of India before the Tribunal is based on the same cause of action for which the Bank of India had filed the Suit before the Singapore High Court ? - Held that - It is clear from the facts hereinabove that the cause of action which led to the filing of the Suit in the Singapore High Court was the banking facilities made available by the Bank of India to the Singapore Company in terms of the sanction letter dated 3rd May, 2001 issued by the Bank and the other terms and conditions stipulated therein, while the cause of action for filing the Original Application was the non payment of the amount by the Indian Company after accepting the Bill of Exchange dated 20th June, 2001. Thus, the causes of action for filing the Suit in the Singapore High Court and the Original Application before the Tribunal are different and if this be so, O2 R2 CPC would not bar the Bank of India from afterwards filing the Original Application. It is not necessary for the Court to examine the contention of learned counsel for the Bank of India that the Bank of India had to institute the proceedings against the Indian Company, which was the acceptor of the Bill of Exchange, otherwise the liability of the Singapore Company to pay the amount to the Bank of India in terms of the sanction letter would stand discharged. The Tribunal, therefore, committed an illegality in dismissing the Original Application filed by the Bank of India for the reason that the relief claimed in the Original Application could have been claimed by the Bank of India in the Singapore High Court and the Bank could not afterwards sue for this relief and the Appellate Tribunal was justified in setting aside the judgment of the Tribunal and directing the Tribunal to decide the matter on merits.
Issues Involved:
1. Jurisdiction of the High Court to entertain the writ petition. 2. Applicability of Order 2 Rule 2 (O2 R2) of the Code of Civil Procedure (CPC) to the proceedings before the Debts Recovery Tribunal (DRT). 3. Whether the cause of action for the suit filed in Singapore High Court and the Original Application filed before the DRT are the same. 4. Whether the Bank of India is barred from filing the Original Application due to non-inclusion of the relief in the earlier suit filed in Singapore High Court. Detailed Analysis: 1. Jurisdiction of the High Court to entertain the writ petition: The High Court of Allahabad has jurisdiction to entertain the writ petition because the order passed by the Debts Recovery Appellate Tribunal (DRAT) at Allahabad constitutes part of the cause of action. The Supreme Court in Kusum Ingots & Alloys Ltd. v. Union of India (2004) 6 SCC 254 clarified that a writ petition is maintainable in the High Court within whose jurisdiction the appellate authority is situated, as part of the cause of action arises there. 2. Applicability of Order 2 Rule 2 (O2 R2) CPC to the proceedings before the DRT: The provisions of O2 R2 CPC apply to proceedings before the DRT. Section 22 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (the Act) states that the DRT is not bound by the procedure laid down by CPC but shall be guided by principles of natural justice. However, the Supreme Court in Industrial Credit & Investment Corporation of India Ltd. v. Grapco Industries Ltd. (1999) 4 SCC 710 held that this does not mean the DRT cannot exercise powers similar to those in CPC, including O2 R2. 3. Whether the cause of action for the suit filed in Singapore High Court and the Original Application filed before the DRT are the same: The cause of action for the suit filed in the Singapore High Court and the Original Application filed before the DRT are different. The suit in Singapore was based on the banking facilities provided to the Singapore Company under the sanction letter dated 3rd May 2001, while the Original Application before the DRT was based on the non-payment of the Bill of Exchange dated 20th June 2001 by the Indian Company. The Supreme Court in Om Prakash Srivastava v. Union of India (2006) 6 SCC 207 explained that "cause of action" refers to every fact necessary to be proved for the plaintiff to succeed. Since the facts required to prove the claims in the two cases are different, the causes of action are distinct. 4. Whether the Bank of India is barred from filing the Original Application due to non-inclusion of the relief in the earlier suit filed in Singapore High Court: The Bank of India is not barred from filing the Original Application due to non-inclusion of the relief in the earlier suit filed in Singapore High Court. The Supreme Court in S. Nazeer Ahmad v. State Bank of Mysore (2007) 11 SCC 75 and State of Maharashtra v. National Construction Co. (1996) 1 SCC 735 held that O2 R2 CPC bars a second suit only if it is based on the same cause of action as the first suit. Since the causes of action in the suit before the Singapore High Court and the Original Application before the DRT are different, the bar under O2 R2 CPC does not apply. Conclusion: The Tribunal erred in dismissing the Original Application based on the provisions of O2 R2 CPC. The Appellate Tribunal correctly set aside the Tribunal's order and directed the Tribunal to decide the matter on merits. The writ petition is dismissed as the Original Application is not barred by O2 R2 CPC.
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