Judgment

B.P. SINGH, J. - Special leave granted.

2. In this appeal by special leave, the appellant, M/s Southern Petrochemicals Industries Corpn. Ltd. has impugned the judgment and order of the High Court of Judicature at Bombay dated 10 - 8 - 2004 in Writ Petition 9 No. 5758 of 2004 upholding the order passed by the Chairperson of the Debts Recovery Appellate Tribunal in Misc. Appeal No. 132 of 2004. The High Court held that the action brought against the appellant Company by Respondents 1 and 2 herein for recovery of debts due to them, was rightly entertained by the Tribunal constituted under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, which had jurisdiction to h entertain the claim. The objection to the jurisdiction of the Debts Recovery Tribunal was taken at the threshold and, therefore, in this appeal we are not concerned with the merit of the claims of Respondents 1 and 2.

3. The questions which arise for consideration in this appeal are whether Respondents 1 and 2, namely, Administrator of Specified Undertaking of Unit Trust of India and UTI Trustee Company Private Limited are "financial institutions" within the meaning of that term in the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as "the DRT Act"). If the answer is in the affirmative, whether the action brought by them before the Debts Recovery Tribunal is for recovery of debts due to them from the appellant herein, and not due to any other person on whose behalf the aforesaid respondents are suing.

4. The factual background in which these questions arise is as follows:

Under a common loan agreement dated 1 - 10 - 1992 executed between Unit Trust of India (for short "UTI"), Industrial Development Bank of India (for short "IDBI") as the lead institution, IFCI, Respondent 4 herein, ICICI Ltd., Respondent 5 herein, and the appellant herein, a sum of Rs 10 crores was advanced to the appellant for its project on the terms and conditions contained therein. UTI also advanced a sum of Rs 25 crores against privately placed debentures. The appellant Company accumulated liabilities exceeding Rs 1000 crores and defaulted in its obligation to UTI under the common loan agreement. Reserve Bank of India was contemplating a restructure scheme pursuant to which all the creditors of the appellant Company met in September 2003 to consider proposals for reduction in the rate of interest and fresh scheduling of repayment, etc. There was a general consensus among the other creditors but Unit Trust of India did not agree with the suggested scheme and instead filed a claim under the DRT Act being OA No. 237 of 2003.

5. At this stage, it may be noted that under the UTI (Transfer of Undertaking and Repeal) Act, 2002 (hereinafter referred to as "the UTI Act, 2002"), Respondent 1, the Administrator of Specified Undertaking of Unit Trust of India, and Respondent 2 UTI Trustee Company (P) Ltd., were created. The Unit Trust of India Act, 1963 was repealed and the Board of Trustees referred to in Section 10 of the said Act stood dissolved.

6. In OA No. 237 of 2003, the appellant filed a miscellaneous application on 12 - 12 - 2003 praying for dismissal of the OA on the ground that Respondents 1 and 2 not being "financial institutions" within the meaning of that term in the DRT Act, the Tribunal under the Act had no jurisdiction to entertain and decide the application filed by Respondents 1 and 2 for alleged recovery of debts due to them. The Debts Recovery Tribunal by its order of 12 - 2 - 2004 dismissed the said application. The appellant challenged the order of the Tribunal before the Debts Recovery Appellate Tribunal but the appeal was also dismissed on 5 - 5 - 2004. The Appellate Tribunal held that Respondents 1 and 2 were "financial institutions" as defined under Section 2(h)(i) of the DRT Act and, therefore, the application filed by them for recovery of debts due from the appellant was maintainable under Section 19