RAKESH HATIA Vs. CITIFINANCE CONSUMER PVT LTD

JUDGEMENT

(1.) The petitioners borrowed money from the respondent which they did not repay. In accordance with the loan agreement, the respondent invoked the arbitration and appointed an arbitrator. The Arbitral Tribunal passed an award. That award was put for execution before the District Court at Pune by the respondent. The respondent objected to the execution petition contending that the award was without jurisdiction inasmuch the arbitrator had no jurisdiction to entertain and adjudicate upon the dispute in view of the provisions of section 18 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short "the Debt Recovery Act"). The District Judge by his order dated 25 March 2011 overruled the objection. That order is impugned in the present revision application. Section 18 of the Debt Recovery Act says that on and from the appointed day, no court or other authority shall have, or be entitled to exercise, any jurisdiction, powers or authority in relation to the matters specified in section 17 of the Debt Recovery Act. Sub-section (1) of section 17 of the Debt Recovery Act says that the Debt Recovery Tribunal (Tribunal) shall on and from the appointed day exercise the jurisdiction and have powers and authority to entertain and decide the applications from banks and financial institutions, for recovery of debts due to such banks and financial institutions. The jurisdiction to decide applications for recovery of debts due to banks and financial institutions is vested exclusively with the Debt Recovery Tribunal and a Arbitral Tribunal cannot entertain and decide a claim for recovery by a bank or a financial institution.

(2.) Counsel for the applicant submits that the respondent is a financial institution within the meaning as defined under clause (c) of section 45-I of the Reserve Bank of India Act, 1934 (for short "the RBI Act") and therefore only the Debt Recovery Tribunal constituted under section 17 of the Debt Recovery Act had the jurisdiction to try the dispute regarding the recovery of the debt or money due from the petitioners to the respondent. The submission cannot be accepted for the reasons indicated below.

(3.) The word "financial institution" has been defined under section 2(h) of the Debt Recovery Act. It is a settled principle of law that when a word or an expression has been defined in an Act then the word or expression used in any provision of the Act shall have the same meaning as given to it under the definition unless the context requires otherwise. A definition of the very word or expression given in any other Act would not govern the meaning of the word or expression used in the Act. Consequently, one has to look to the definition of an expression "financial institution" given in section 2(h) of the Debt Recovery Act and not the definition given in section 45-I of the RBI Act for the purpose of ascertaining its meaning for the purpose of section 17 of the Debt Recovery Act. Section 2(h) of the Debt Recovery Act defines the expression "financial institution" as :