Case Note & Summary
The matter arose from a writ petition filed by M/s Ashwini Trading Co., defendant no.11 in Commercial Suit No.12/2019, challenging an order dated 4 April 2024 passed by the District Judge-2, Aurangabad, which allowed an application (Exhibit-230) to transfer the suit to the Debts Recovery Tribunal, Aurangabad. The underlying suit was originally filed by HDFC Limited as Special Civil Suit No.46/2007 in 2007 for recovery of Rs.3,14,85,223 against the petitioner and respondent nos.2 to 12, pertaining to two loan accounts with outstanding amounts of Rs.2,32,28,013 and Rs.82,62,210. After the Commercial Courts Act, 2015 came into force, the suit was transferred to the Commercial Court and renumbered as Commercial Suit No.12/2019. During pendency, HDFC Limited amalgamated with HDFC Bank Limited by an order dated 17 March 2023 passed by the National Company Law Tribunal, Mumbai in Company Scheme Petition No.240/2022. HDFC Bank Limited is a banking company under the Banking Regulation Act, 1949, and all assets and liabilities of HDFC Limited vested in it, along with the right to continue litigations. Consequently, HDFC Bank Limited was impleaded as plaintiff and filed an application under Sections 17 and 18 of the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) seeking transfer of the suit to DRT. The petitioner opposed the application contending that DRT lacked jurisdiction because the original lender HDFC Limited was neither a bank nor a financial institution, and the amount advanced could not be termed 'debt' under Section 2(g) of the RDB Act. The petitioner further argued under Section 31 of the RDB Act that only suits which would have been within DRT's jurisdiction at the time of filing could be transferred, and since HDFC Limited was not a bank at filing, the suit could not be transferred merely due to subsequent amalgamation. The petitioner also submitted that assignment of the subject matter does not alter jurisdiction and relied on Dhurandhar Prasad Singh v. Jai Prakash University, (2001) 6 SCC 534. The respondent/plaintiff argued that HDFC Bank Limited is a banking company and the suit for recovery by a banking company lies before DRT, and that the term debt includes any amount claimed by the bank. The trial court allowed the transfer application, holding that the suit was required to be transferred to DRT in view of amalgamation. The High Court heard arguments on 25 July 2025 and pronounced judgment on 11 August 2025; however, the provided judgment text does not include the final analysis or operative order of the High Court.
Headnote
A) Debt Recovery Tribunal Jurisdiction - Definition of Debt - Section 2(g), Recovery of Debts and Bankruptcy Act, 1993 - The petitioner contended that loans advanced by HDFC Limited, a non-banking entity, did not constitute 'debt' within the meaning of Section 2(g) and therefore DRT lacked jurisdiction; the respondent contended that the amount claimed by HDFC Bank Limited, a banking company, is a debt. The court was called upon to decide whether DRT could entertain the transferred suit (Paras 5-7). B) Transfer of Suit - Section 31, Recovery of Debts and Bankruptcy Act, 1993 - The petitioner argued that Section 31 permits transfer only if DRT would have had jurisdiction on the date of filing, and since original plaintiff was not a bank, DRT lacked jurisdiction at filing; the respondent argued that amalgamation made the plaintiff a banking company. The court considered whether subsequent amalgamation could confer jurisdiction (Paras 5-7). C) Effect of Amalgamation/Assignment - Assignment of Rights - The petitioner contended that assignee steps into shoes of assignor and assignment does not alter jurisdiction, relying on Dhurandhar Prasad Singh v. Jai Prakash University, (2001) 6 SCC 534. The court considered the impact of amalgamation on the pending suit's forum (Paras 5-6).
Issue of Consideration
Whether the Commercial Court was justified in transferring Commercial Suit No.12/2019 to Debts Recovery Tribunal, Aurangabad under Sections 17, 18 and 31 of the Recovery of Debts and Bankruptcy Act, 1993 when the original plaintiff HDFC Limited was not a bank or financial institution at the time of filing of the suit.
Final Decision
The provided judgment text is incomplete and does not contain the final operative order or reasoning of the High Court. The court reserved judgment on 25 July 2025 and pronounced on 11 August 2025.
Law Points
- Definition of debt under Section 2(g) of RDB Act
- DRT jurisdiction
- transfer of suit under Section 31 of RDB Act
- effect of amalgamation on jurisdiction
- assignee steps into assignor's shoes
- Banking Regulation Act
- 1949
