CENTURION BANK TD Vs. INDIAN LEAD LTD

JUDGEMENT

(1.) THE plaintiffs by the present petition have applied for leave under Clause 12 of the Letters Patent. The suit by the plaintiff is for a declaration that the Hire purchase Agreement dated 27th January, 1995 and the Hire Purchase Agreement dated 3rd July, 1995 are validly terminated with effect from 5th June 1999: a further declaration that the defendants have no right, title or interest or claim whatsoever in respect of the said equipment, etc that the defendants be ordered and directed forthwith to hand over and deliver possession to the plaintiffs of the said equipments that the defendants be ordered and decreed to jointly and/or severally pay a sum of rs. 31,32,608/- collectively under the said Agreements being arrears of hire charges upto 5th June, 1999 with further interest thereon; that the defendants jointly and/or severally be ordered and decreed to pay to the plaintiffs a sum of Rs. 25,02,274/-towards hire purchase charges for the remaining period of hire; that the defendants be ordered and decreed to pay damages/compensation for wrongfully retaining and using the equipments in a sum of Rs. 35,744/- per month from 5th June, 1999 with further interest thereon till possession of the equipments is handed back: without prejudice to the above prayers a sum of Rs. 74,48,000/- by way of loss and/or damages with interest thereon and for perpetual injunction to restrain the defendants from in any manner retaining or holding on the possession or using the said equipments given on hire under the said agreements.

(2.) THE suit by the plaintiffs is against the defendant No. 1 with whom the hire purchase agreement was entered into and defendant No. 2 who was a guarantor. It is the contention on behalf of the plaintiffs that the reliefs which are prayed for with the exception of prayer clause b (iii) are reliefs which are not covered by the provisions of the Recovery of Debt Due to Banks and Financial institutions Act, 1993 and consequently this Court will have jurisdiction to hear and decide the suit. It is contended that prayer clause b (iii) is an ancillary relief to the main relief and as such the plaintiffs should not be driven to another Forum for recovery of the debts due under the provisions of the Recovery of Debts/to Banks and Financial institutions Act (hereinafter referred to as the Recovery of Debts Act ). On the other hand on behalf of the defendants, it is contended that there is a specific prayer for recovery of debts. The suit against the defendant No. 2 is in his capacity as guarantor, which will purely be for recovery of debt and consequently this Court will have no jurisdiction and the suit lies within the exclusive jurisdiction of the Recovery of Debts Act. It is contended on behalf on the defendants that this court has no jurisdiction in view of the Recovery of Debts Act.

(3.) TO decide whether this Court will have jurisdiction it will be useful to consider some of the Sections involved, to answer the various contentions. Section 2 (0)of the Recovery of Debts Act defines what is a "debt". Section 17 is the Section which confers jurisdiction on the Tribunal and the Appellate Tribunal. It will be worthwhile reproducing Section 17 (1), which reads as under :