COCHIN INTERNATIONAL AIRPORT LIMITED Vs. PRESIDING OFFICER DRT

JUDGEMENT

(1.) The question that arises for consideration in this writ petition is:- "Whether "debt", as defined in Section 2(g) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as 'the said Act'), would include a claim to share certificates" This question arises in the context of the maintainability of an application under Section 19 of the said Act before the Debts Recovery Tribunal (herein after referred to as 'DRT'), wherein the main relief sought by the respondent is the delivery/issuance of share certificates in respect of 5,20,00,000 shares at the face value of Rs 10 each and the benefits accrued on the shares. Briefly stated, the case of the petitioner is that such an application would not be maintainable under the said Act before the said tribunal for the simple reason that the relief of delivery / issuance of share certificates does not amount to recovery of any debt. The expression "debt" as defined in Section 2(g) of the said Act only refers to a liability inclusive of interest which is claimed as due from any person by a bank or a financial institution etc., during the course of any business activity undertaken by the bank or financial institution etc., under any law for the time being in force, in cash or otherwise, and which is legally recoverable on the date of the application. The contention of the petitioner is that the expression "in cash or otherwise" does not and cannot, by any stretch of imagination, include equity shares in a company. On the other hand, the stand of the respondent is that the word "otherwise" is wide enough to cover equity shares and, therefore, an application under Section 19 of the said Act was maintainable and, consequently, the finding of the DRT to that effect cannot be faulted.

(2.) The respondent had filed O.A. No. 10/2006 on 21.04.2006 under Section 19 of the said Act wherein, it claimed, inter alia, the following reliefs:-

(3.) Thereafter, the petitioner filed an application being IA No. 458/2006 in the said O.A. No. 10/2006 before the DRT, wherein the petitioner took the pleas that: (a) the DRT at Delhi lacked territorial jurisdiction; (b) no cause of action had accrued to the respondent inasmuch as the entire loan amount stood paid on account of exercise of the right of foreclosure; and (c) the application under Section 19 of the said Act for delivery of shares was not maintainable inasmuch as the said relief did not amount to recovery of a debt as defined in Section 2(g) of the said Act. It was contended on the part of the petitioner that the respondent only had the right of recovery of the sum of Rs 175.07 crores as per the Package Loan Agreement of 07.03.2003 between the parties. Since the petitioner had tendered the entire balance due on account of that loan transaction, the respondent had no subsisting right under the loan agreement.