BANK OF BARODA Vs. INDOCHEM AND VARNISH INDUSTRIES

JUDGEMENT

(1.) The petitioner has invoked the jurisdiction under section 19 of the Recovery of Debts Due To Banks And Financial Institutions Act, 1993. The case of the petitioner before the Debt Recovery Tribunal, was that according to the OA, he contended that Bank of Baroda had lend cash credit limit of Rs. 8 lacs to M/s Indochem & Varnish Industries, of which, Mrs. Namita Dalakoti was its proprietor and respondent Nos. 3 and 4, i.e. Sri Jagdish Chandra Dalakoti and Sri Umesh Chandra Dalakoti were the guarantors of respondent No. 1. The opposite party No. 5, i.e. State Bank of India, in the instant case, was the Collecting Branch of the transactions.

(2.) The case of the petitioner before the Tribunal was that during the course of business activities of M/s Indochem with various other firms dealing with it, there was a business transaction held by M/s Indochem with one other firm called as Balaji. According to the petitioner, his case is that in terms of the business transaction firm, Balaji has remitted a draft of Rs. 7 lacs to the borrower of the petitioner M/s Indochem. The borrower of the petitioner deposited the said amount to the Bank of Baroda, who, in turn, sent the draft of Rs. 7 lacs to the collecting Branch of State Bank of India for its clearance. The Bank of Baroda contends that some of the officials of the State Bank of India or its employees had somehow fraudulently changed the contents of the draft and as a matter of fact the State Bank of India felt duped with the amount which was otherwise would have been remitted by the State Bank of India to the Bank of Baroda, as a consequence of clearance of draft. Thus, the State Bank of India, on its own, has withdrawn a sum of Rs. 7 lacs and odd amount from the member Branch of Bank of Baroda. This action of withdrawal by the State Bank of India from the member Branch of Bank of Baroda was questioned before the Debt Recovery Tribunal by invoking section 19 of the Act. When the issue crept up for argument before the Debt Recovery Tribunal, the rival contentions were raised between the parties and, ultimately, by the impugned judgment of the Debt Recovery Tribunal which was affirmed by the Appellate Tribunal, it was held that the proceedings as drawn by the petitioner for recovery of the amount as against the State Bank of India for the amount withdrawn by State Bank of India from the Bank of Baroda, will not fall to be the proceedings under Section 19 of the Act.

(3.) On perusal of the impugned judgment what has revealed is that the reason drawn by the Tribunal to the said effect was from the view point of the "debt" as defined under Sub-section (g) of Section 2 of the Act, which reads as under : "2(g) "debt" means any liability (inclusive of interest) which is claimed as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by the bank or the financial institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any civil court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on, the date of the application;"