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TMI Blog1996 (2) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... e Governing Body of the said defendant, creating an equitable mortgage of the properties by way of a security for repayment of the term loan granted by the plaintiff-bank. The loan was not returned and the plaintiffs, Therefore, filed the present suit for recovery of the said amount. The amount was sought to be recovered by sale of the mortgaged properties mentioned in the plaint. (2) On the establishment of the Tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (in short referred as The Act ), no Court or other authority had any jurisdiction, power or authority (except the Supreme Court, and a High Court exercising jurisdiction under Articles 226 and 227 of the Constitution) in relation to the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that unless an election is made by the bank that they will not recover money from the property mortgaged by the defendant, the suit cannot be transferred. According to Mr. Sawhney, in the form which has been prescribed in the rules for filing an application before the Debts Recovery Tribunal, there is no provision that recovery can be made by sale of the mortgaged property. It is, Therefore, argued that this being not a simple suit for recovery of money, this Court should not transfer the same to Debts Recovery Tribunal. (5) Under Section 31 of the Act, every suit or other proceedings pending before any Court immediately before the date of establishment of the Tribunal under the Act, shall stand transferred on that date to such Tribunal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e can be no mortgage without a debt. Properties are offered as security only for securing recovery of debt. If debt is repaid the mortgage ceases to be a mortgage. Even if the term debt would not have been defined in Act No. 51 of 1993 the mortgage would have been included within the meaning of debt. This is the general law and settled trend of judicial opinion. However, Act 51 of 1993 incorporates the definition of debt in its interpretation clause by way of abundant caution and gives it out a very wide meaning. The quaint essence of the definition is the existence of any liability founded on an allegation as due from any person; the creditor being a bank or a financial institute or a consortium of the two. The liability may be in cash or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ught by a mortgagee for recovery of the amount due from the mortgagor, the Court may, at its discretion, stay the suit and all proceedings therein, notwithstanding any contract to the contrary, until the mortgagee has exhausted all his available remedies against the mortgaged property. The contention is that it is only the Court which can stay the proceedings and the Tribunal does not have any power as have been provided by Section 68 of the Transfer of Property Act. (10) I fail to understand as to how Section 68 of the Transfer of Property Act will be applicable to the present case. The suit has been filed for recovery of money which was given by way of loan to the defendant and it was only by way of collateral security that the defenda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l not come into play because Section 68(i)(a) of the Transfer of Property Act will not be applicable to such a suit To my mind, mind the arguments about Section 68 the Transfer of property Act are (12) As it is not disputed that the amount secured by way of loan is a debt under Section 2(g) of the Act. in my opinion, there is no force in the argument that a suit which has been filed for recovery of money and in which it has also prayed that the amount sought to be recovered should be recovered by sale of the mortgaged property, cannot be transferred to the Debts Recovery Tribunal constituted under the Act for any of the reason argued by the defendants. I do not find any reason as to why the aforesaid Judgment delivered by R.C.Lahoti,J. s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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