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TMI Blog1999 (9) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... e debts as contemplated by the Act and, therefore, they are not required to be transferred to the Tribunal. X X X X Extracts X X X X X X X X Extracts X X X X ..... issues. Taking this view the High Court allowed both the revision applications and by a common judgment set aside the orders passed by the District Court. 2. Aggrieved by the judgment of the High Court the appellant-bank has filed these appeals. It was contended by Mr. Dave, the learned senior counsel for the bank, that the High Court has wrongly criticized the District Court by observing that it had overlooked the provisions of the law. In his submission it is really the High Court which has overlooked the relevant provisions of the Act and erroneously allowed the revision applications. He submitted that the suits being proceedings for recovery of debts alleged to be due, the civil court ceased to have any jurisdiction to deal with them o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (g) defines the term 'debt' as under : "(g) 'debt' means any liability which is alleged as due from any person by a bank ... in cash or otherwise, whether secured or unsecured, or whether payable under a decree or order of any civil court or otherwise and subsisting on, and legally recoverable on, the date of the application;" 4. Section 17 of the Act provides that a Tribunal shall exercise, on and from the appointed day, the jurisdiction powers and authority to entertain and decide applications from the banks and financial institutions for recovery of debts due to such banks and financial institutions. Section 18 of the Act has created a bar that no Court or other authority can thereafter exercise any jurisdiction, powers or authority (e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in any instrument having effect by virtue of any law. 6. According to the definition the term 'debt' means liability which is alleged as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions. It should have arisen during the course of any business activity undertaken by the bank or the financial institution or the consortium under any law for the time being in force. The liability to be discharged may be in cash or otherwise. It would be immaterial whether the liability is secured or unsecured or whether it is payable under a decree or an order of any civil court or otherwise. However, it should be subsisting and legally recoverable on the date on which proceedings are initiated fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt when the Tribunal came to be established under the Act, section 31 became applicable to those suits and they shall have to be treated as transferred to the Tribunal on and from the date the Tribunal was established. Section 31 makes it clear that the transfer is automatic because of operation of law and, therefore, the bank was really not required to file applications. Those applications should have been really treated as applications for forwarding the records of the suits to the Tribunal. In our opinion, the trial court rightly understood the correct position of law and passed correct orders on those applications. The High Court took an erroneous view of the law and wrongly set aside the orders passed by the trial court. The High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e insurance/guarantee possibly would stand discharged from its liability to the insured on the exporters delivering the documents of export of goods to the insured, prima facie, the principal debt would still remain subsisting. Thus, even this prerequisite for the liability to be called a debt as contemplated by the Act having been satisfied the suits filed by the bank should have been treated by the High Court as proceedings for recovery of the debts. 9. For the reasons stated above, we are of the view that the High Court was wrong in holding that the applications made by the bank were premature and till the Court decides that the amounts are still due and payable to the bank they cannot be treated as suits for recovery of the debts as co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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