Facts of the Case

The appeals have been filed before the Supreme Court pursuing to dismissal order passed by the Calcutta High Court by the bank regarding the transfer of the case to debt recovery tribunal from the High Court.

The respondent herein (the company) approached the bank to receive the overdraft facility for business. The bank herein the appellant after receiving the sanction advise, provided the facilities on the date 12/07/1991 and 6/12/1991 respectively. Such facility provided by the bank had the credit facilities up to Rs. 20 lacs and 5 lacs respectively. The company over a period has withdrawn the credit facilities but have failed to return the money with interest. Pursuing to such failure the bank (appellant) has filed the case under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 for the issue of the certificate against which the amount of Rs 30,67,820/- has been paid by the company including the interest for the credit provided. The application made by the bank was still pending, and no trial was initiated or yet to commence. On the 9/12/1991 the bank provided the credit of Rs. 90 lacs and some other credit facilities but due to nonpayment of the earlier loan the bank did not proceed with the release of the loan amount. The company filed a chamber summons against the bank for the amount of Rs.25,38,58,00/- for loses including the interest due non-disbursement of the loan to the company.

Bank made the submission in the court that such proceeding is already being filed in the debt recovery tribunal and is yet to commence with the proceeding so the Honorable High Court will not be able to proceed with the contention. The Honorable High Court dismissing the bank pleading said that any suit filed by the company against the bank where no such application is in process reddeners, not such suit will be terminated as counterclaim or cross suit and will be entertained by this court. Further adding to the plea in contrary to the courts dismissal it stated that the case should be transferred to the tribunal saying that the case was a counterclaim and connected to the oral application made by the bank. The Honorable High Court dismissed the plea made by the bank by the doctrine of res judicata. Bank filed an appeal against both the order passed by the Honorable Court.

1. Whether the suit filed by the borrower before the High Court and the application made by the bank in the tribunal are connected.

2. Whether a single suit can be filed by the borrower can be filed by a party pursuing to the provisions of Debt Recovery Act while the application is in the process by a party to tribunal.

3. Whether the filed suit should be treated as a counterclaim or the court to provide justice has interpreted to deal with the matter by self by pursuing to article 142.

Dealing with the question od interconnected suit it was decided by the bank that the suit filed by the borrower and application mad by the ban is not at all connected both the pleadings were with a different objective and has different prayer and hence cannot be said to be interconnected and appealed in the High Court was accepted and dismissed the bank’s contraction.

While validity the jurisdictional legality of the High Court regarding proceeding related to the suit it was stated that such being independent of the application made by the bank in the tribunal would have a complete validity should hold the order by the High Court valid.

By the observation made by the Honorable Court - that subject matter of the suit and application and prayer made in the suit and application itself are distinguishable by all the aspect and interpretation further it states that for any suit or application to be treated as a counterclaim and grant relief would in adverse interest and is non-compliance of the law. So, this court read the provision to form a decision that the court will not treat it as a counterclaim and dismissed the contention made by the bank in this behalf.

The order passed by the High Court does call for some interferences and further this court provides direction to deal with the matter and clarity on Article 142, furthermore dismissing all the above appeals.

Case No: CA 10074-10075 of 2003

Date: 18/04/2006