Important Point—Proposition of law must be finally settled for sake of judicial consistency.

JUDGMENT

S. A. BOBDE, J.

1. Leave granted.

2. In these appeals, the question before us is whether having regard to the Recovery of Debts due to Banks and Financial Institutions Act, 1993 [hereinafter referred to as ‘RDB Act’], a suit containing a “counter-claim” or claiming a “set-off” filed by a debtor can be heard and tried before the Debt Recovery Tribunal (hereinafter referred to as ‘DRT’) under the RDB Act or must be tried by a Civil Court alone.

3. The appellant – Bank filed an application for recovery under Section 19 of the RDB Act before the DRT for a recovery certificate against the respondent for Rs. 8,62,41,973.36/-. Though the respondent entered appearance before the DRT, it filed Civil Suit No. 77 of 1998 before the Calcutta High Court against the appellant claiming a decree for sale of pledged shares and payment of sale proceeds to the respondent. After the appellant sold pledged shares for a total sum of Rs. 5,77,68,000/-, the respondent filed Civil Suit No. 129 of 1999 praying inter alia for following reliefs:

i) A declaration that sale of shares of BFL Software Ltd. was void;

ii) A decree for return of pledged shares in respect of overdraft facility account and in default to pay Rs. 48.95 crores; and

iii) A declaration that no sum was payable by the respondent to the appellant in respect of Term Loan dated 27.07.1994 and overdraft Account dated 19.09.1995 and that the appellant is not entitled to a decree for a sum of Rs. 8,62,41,973.36 from the respondent.

4. The appellant filed an application in C.S. No. 129 of 1999 for rejecting the suit on the ground that the High Court did not have jurisdiction since the subject matter was within the exclusive jurisdiction of the DRT. The Single Judge allowed that application and directed that the suits be taken off from the file of the High Court. The Division Bench stayed operation of the Order of the Single Judge.

5. Since the DRT held that the appellant’s claim for Rs. 6,04,17,777.36 was satisfied, it directed inter alia to return the title deeds of the pledged shares. On the counter claim, the DRT held that the respondent was entitled to recover Rs. 6,88,187.49 from the appellant within 4 weeks.

6. The appellant’s petition under Article 227 of the Constitution before the High Court of Calcutta challenging the DRT order dismissing the appellant’s appeal against the DRT order was dismissed in default. The Division Bench allowed the appeal filed by the respondent against the order of the Single Judge taking off the suits from the file of the High Court. This Judgment of the High Court is questioned in these appeals.

7. In United Bank of India, Calcutta vs. Abhijit Tea Co. Pvt. Ltd. and Others, (2000) 7 SCC 357 a two-Judge Bench of this Court took the view that as per the legislative scheme of the RDB Act, jurisdiction was indeed conferred upon the Tribunal to try “counter-claim” and “set-off” by Section 19 of the RDB Act and that all such counter-claims and set-offs, including a cross suit filed independently should be tried by a Debt Recovery Tribunal. The Court was considering a case where the borrower-company had filed an application that suit filed by the Bank should remain on the Original Side of the Calcutta High Court. That application was allowed by the Single Judge. Against this order the Bank had preferred the Special Leave Petition. Though the RDB Act had not come into force when the suit was filed by the Bank, the debtor-company had filed the application and resisted the transfer of the suit. This Court took the view that the above pleas raised by the respondent-company are all inextricably connected with the amount claimed by the Bank and therefore directed transfer of the suit.

8. In a later decision in Indian Bank vs. ABS Marine Products (P) Ltd., (2006) 5 SCC 72 a Bench of two Judges of this Court took the view that the jurisdiction of the Civil Courts is not barred in regard to any suit filed by a borrower against a bank for any relief. That jurisdicti