STATE BANK OF INDIA Vs. GHANSHYAMDAS GEMS

JUDGEMENT

(1.) By way of this civil revision petition, the petitioner-State Bank of India, seeks transfer of pending proceedings in O.S. No. 814 of 2011 from the file of III Additional Chief Judge, City Civil Court, Hyderabad to the Debts Recovery Tribunal, Hyderabad to be tried and disposed of along with O.A. No. 457 of 2011 pending on its file.

(2.) The brief facts of the case are that the respondent No. 1 is the partnership firm involved in the business of manufacturing, purchase and sale of gold ornaments, bullion gold, precious stones etc. Respondent Nos. 2 to 7 are the partners of respondent No. 1 firm. The respondent No. 1 availed credit facility from the petitioner-Bank under 'Metal Gold Scheme' during the year 2010-2011 for loan limit to the extent of Rs.60.00 crores vide sanction letter dtd. 21/4/2011 duly executing security documents and furnishing bank guarantees. Later on, alleging fraudulent acts on the part of respondent No. 1 in furnishing created bank guarantees in the name of Punjab National Bank for withdrawing the gold, the petitioner-Bank lodged a complaint on 15/9/2011 with the CBI as well as Banking Securities and Fraud Cell, Bangalore apart from initiating proceedings under the Recovery of Debts and Bankruptcy Act, 1993 (previously, Recovery of Debts Due to Banks and Financial Institutions Act, 1993) (for short, 'RDB Act') by filing O.A. No. 457 of 2011 before the Debts Recovery Tribunal, Hyderabad against the respondents on 26/9/2011 for recovery of outstanding debts of Rs.62,00,43,259.00. Without putting up appearance before the Debts Recovery Tribunal, the respondent No. 1 filed a suit against the petitioner-Bank in O.S. No. 814 of 2011 on 23/11/2011 before the III Additional Chief Judge, City Civil Court, Hyderabad seeking recovery of Rs.13,75,000.00 with interest thereon at 18% per annum from 11/7/2007 onward apart from damages and costs. Hence, the petitioner-Bank approached this Court seeking transfer of proceedings in the suit in O.S. No. 814 of 2011 to be tried and disposed of along with O.A. No. 457 of 2011.

(3.) Learned Standing Counsel for the petitioner-Bank submits that the Bank has filed the O.A. seeking recovery of debt due from the respondents placing reliance on the security documents executed by the respondents and that the respondent No. 1 is claiming relief of recovery of money and damages etc., from the petitioner-Bank in the suit in O.S. No. 814 of 2011 before the III Additional Chief Judge, City Civil Court, Hyderabad and therefore, the Bank has to rely upon all the loan documents already filed in O.A. No. 457 of 2011 to prove its case in the suit instituted by the respondent No. 1. It is contended that the RDB Act was amended on 17/1/2000 by substituting Sec. 19 and by virtue of the said amendment, a counter-claim against the claim of the petitioner-Bank is provided under Sub-Sec. 8 of Sec. 19 of the RDB Act. Furthermore, Sub-sec. 9 of Sec. 19 of the RDB Act provides that a counter-claim shall have the same effect as of a cross-suit. It is submitted that the Debts Recovery Tribunal has been conferred with the jurisdiction to try the suits of the Banks with the value of more than Rs.10.00 lakhs and thus, the jurisdiction of the civil courts is taken away under the RDB Act. Thus, after the amendment and substitution of Sec. 19 with effect from 17/1/2000, the Debts Recovery Tribunal is vested with the power to adjudicate the claim of the respondent No. 1 against the petitioner-Bank in O.S. No. 814 of 2011 and therefore, the suit filed by the respondent No. 1 against the petitioner-Bank is nothing but a cross-suit against the claim of the Bank in the O.A. Such being the case, until and unless the suit in O.S. No. 814 of 2011 is transferred from the court of III Additional Chief Judge, City Civil Court, Hydeabad to the Debts Recovery Tribunal, Hyderabad for trial and disposal along with O.A. No. 457 of 2011, the parties will not be in a position to lead evidence effectively as all the documents relied upon in the O.A. are also the documents to be relied on by the parties in the suit. Hence, it is just and necessary to try the suit in O.S. NO. 814 of 2011 along with the O.A. pending before the Debts Recovery Tribunal, Hyderabad not only for convenient trial but also to avoid multiplicity of proceedings and conflicting judgments.