Case Note & Summary
The dispute arose between a bank and a debtor company regarding the transfer of a suit pending in the Calcutta High Court to a Debt Recovery Tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The appellant, United Bank of India, filed Suit No. 410/85, claiming a substantial amount due from the debtor company, Abhijit Tea Co. Pvt. Ltd. A compromise decree was initially passed in 1994, but it was set aside by a Division Bench in 1998, leading to the restoration of the suit. The debtor company contended that the suit should remain in the High Court as it was not pending on the crucial date when the Act came into force. The High Court agreed, leading to the bank's appeal. The Supreme Court analyzed whether the suit was pending immediately before the Act's commencement and the implications of the remand order. It concluded that the suit was indeed pending due to the remand, thus requiring transfer to the Tribunal. The court also examined the debtor's related suit for specific performance, determining it was a counter-claim under the Act, further supporting the need for both suits to be handled by the Tribunal. The Supreme Court allowed the appeal, set aside the High Court's order, and directed the transfer of both suits to the Tribunal, emphasizing the need for expeditious resolution given their age.
Headnote
A) Civil Procedure - Transfer of Pending Cases - Jurisdiction of Civil Courts - Recovery of Debts Due to Banks and Financial Institutions Act, 1993, Sections 18, 31 - The court held that the suit filed by the Bank was pending on the crucial date of 27.4.94 due to the remand order, thus it should be transferred to the Tribunal as per the Act. The High Court's retention of the suit was erroneous as it conflicted with the provisions of the Act (Paras 1-11). B) Counter-Claim - Nature of Claims - Recovery of Debts Due to Banks and Financial Institutions Act, 1993, Section 19 - The court determined that the debtor's suit was in the nature of a counter-claim and thus fell within the purview of the Act, necessitating its transfer to the Tribunal. The interconnectedness of both suits justified their simultaneous handling under the Act (Paras 11-11).
Issue of Consideration
Whether the suit filed by the Bank could be treated as pending immediately before the commencement of the Recovery Act, 1993 and whether it should be transferred to the Tribunal.
Final Decision
The Supreme Court allowed the appeal, set aside the High Court's order, and directed the transfer of Suit No. 410/85 to the Tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The court also determined that the debtor's suit was a counter-claim and should be similarly transferred.
Law Points
- Jurisdiction of Civil Courts
- Transfer of Pending Cases
- Recovery of Debts Due to Banks and Financial Institutions Act
- 1993
- Remand of Suits
- Counter-Claim
