JAY JEE SERVICE STATION BANGALORE Vs. SYNDICATE BANK

JUDGEMENT

(1.) COMMON questions of law arise for consideration in these two petitions which shall stand disposed of by this common order. The questions relate to the true and correct interpretation of the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the Rules framed thereunder. The controversy arises against the following backdrop.

(2.) O. S. NO. 5063/92 was filed by the Syndicate Bank against the petitioners in W. P. No. 21008/97 in the City Civil Court at Bangalore for the recovery of a sum of Rs. 13,38,263. 45 in connection with two facilities extended to the said petitioner by way of loan and over draft against two sets of documents separately executed for each one of the said facilities. Similarly O. S. No. 14/90, was filed by the respondent Vijaya Bank, against the petitioners in W. P. Nos. 24613-14/97 claiming a decree for a sum of Rs. 177,03,394-89 on account of two facilities one by way of Open Loan Cash Credit and the other by way of Import Letter of Credit facility, extended by the plaintiff/bank to the petitioners. With the coming into force of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, both the suits were transferred in terms of Section 31 of the Act, to the Debt Recovery Tribunal, at Bangalore, where the same were registered as O. A. No. 18/96 and O. A. No. 338/95 respectively. The petitioner in W. P. No. 21008/97 then moved in I. A. before the Tribunal, in which they challenged its jurisdiction to entertain and proceed with O. A. No. 18/96 primarily on the ground that continuance of the proceedings before the Tribunal, on transfer from the Civil Court, were hit by Rule 10 of the Debt Recovery Tribunal (Procedure) Rules, 1993. The Tribunal examined the question raised before it and by its order dated 14th July, 1997, while rejecting the contentions urged on behalf of the petitioners dismissed the I. A. filed by them. Aggrieved, W. P. No. 21008/1997 has been filed by the petitioners assailing the validity of the said order and for a declaration that the Tribunal is bound to follow the procedure prescribed by Rule 10 (supra) even in suits that are transferred to it under Section 31 of the Act. To the same effect is the prayer made in W. P. Nos. 24613-24614/1997.

(3.) M/s. S. P. Shankar and Chaitanya Hegde, counsel appearing on behalf of the petitioners argued that Rule 10 of the Debt Recovery Tribunal (Procedure) Rules, 1993, permitted the filing of an application based on a single cause of action only. They urged that the Rule contained a prohibition against the filing of applications by the Banks seeking a relief or reliefs, based on more than one of action. This Rule against plural remedies, it was contended, implied that the application filed before the Tribunal, should not only be based on a single cause of action but the said cause must be in respect of a debt of more than Rs. 10 lakhs. That is because debts of Rs. 10 Lakhs and above alone fall within the jurisdiction of the Tribunal in the absence of any notification under Section 1 (4) of the Act, authorising filing applications of lesser amounts also. The contention in other words was that a suit pending in any Civil Court on the date of the promulgation of the Act, could in terms of Section 31, be transferred to the Tribunal only if the same satisfied the requirement of Rule 10, in that the suit was based on a single cause of action and the cause of action was one which if it had arisen after the establishment of the Tribunal would be within its jurisdiction. Since both the suits with which we are concerned, in these writ petitions were according to the learned Counsel, based on more than one causes of action, the same could not have been either transferred by the Civil Court or tried by the Tribunal.