STANDARD CHARTERED BANK Vs. INDIA GLYCOLS LTD.

JUDGEMENT

(1.) This is a writ petition challenging the order of the Debts Recovery Appellate Tribunal (DRAT) dated 22.9.2011 which upholds an order of the Debt Recovery Tribunal (DRT), which found Section 10 of the Code of Civil Procedure ("CPC") to be applicable to the DRT proceedings, on account of an earlier proceeding being instituted before the High Court, invoking its original civil jurisdiction.

(2.) The brief facts are that the petitioner bank and the respondent company (hereafter "the borrower") entered into transactions under which, the latter defaulted on its obligations. The borrower filed a suit before this Court on 27.10.2009 claiming that its transactions with the bank were based on speculative and wagering agreements and thus were unenforceable, illegal and contrary to public policy. It sought injunction against the petitioner bank from enforcing the demand against it (the borrower). This Court refused to grant any ad interim injunction.

(3.) The petitioner bank later filed an original application before the Debt Recovery Tribunal under Section 19 of the Recovery of Debts due to Banks and Financial Institutions Act ("Recovery Act"), seeking to enforce a demand for ?19,15,22,110/- with an interest at the rate of 7% p.a. w.e.f. 22.1.2010. The borrower filed a written statement in the proceedings as well as an application under Section 10 of the CPC, seeking a stay of the proceedings in the O.A. The ground urged was that a prior suit had been filed before this Court, involving the same issues, under the same cause title, and between the same parties. The DRT allowed the application on 1.6.2011, and stayed proceedings before it on the ground that a superior forum with jurisdiction should hear the matter. The Bank's appeal from this order was dismissed by the DRAT on 22.9.2011.