Smt. Ranjana Desai, J.

1. Respondent 1 is a banking corporation incorporated under the laws of Germany having its Head Office at Kaizerplatz, Frankfurt, Germany. The petitioner-company had taken certain credit facilities from respondent 1. The petitioners did not clear the outstanding dues and, therefore, respondent bank filed Original Application No. 153 of 2001 for recovery of the said amount in the Debts Recovery Tribunal II, Mumbai (for short, “the DRT”).

2. It is the petitioner's case that after they filed their written statement in January, 2002, they came to know from the newspaper reports that respondent 1 had surrendered its banking licence in India and had stopped its banking operation in India. The petitioners therefore filed a miscellaneous application and called upon respondent 1 to produce the banking licence. Respondent 1 in its reply admitted that it had surrendered its banking licence. The petitioners, therefore, filed a miscellaneous application seeking dismissal of the original application on the ground that respondent 1 was no longer a bank as defined under the Recovery of Debts Due to Banks and Financial Institution Act, 1993 (for short, “the RDDB Act”).

3. Respondent 1 opposed the said application. It contended that it was a bank at the time of filing of the original application and, therefore, the DRT had jurisdiction to entertain and decide the application. The Presiding Officer by his order dated 13/3/2003 dismissed the said application. Being aggrieved by the said order, the petitioners preferred an appeal before the Debts Recovery Appellate Tribunal (for short, “the DRAT”). By order dated 30/5/2003, the DRAT dismissed the said appeal. Hence, this writ petition.

4. We have heard, at some length, Mr. Sen, learned counsel appearing for the petitioners. Counsel submitted that respondent 1 having surrendered its licence, it was no longer a bank for the purpose of RDDB Act. Counsel pointed out that under Section 2(d)(i) of the RDDB Act, 'bank' means a banking company. Section 2(e) thereof, defines 'banking company'. It says that 'banking company' shall have the meaning assigned to it in clause (c) of Section 5 of the Banking Regulation Act, 1949 and clause (c) of Section

5 of the Banking Regulation Act, 1949 says that 'banking company' means any company which transacts the business of banking in India. Counsel submitted that by surrendering its licence, respondent 1 gave up its status as a bank and consequently, DRT's jurisdiction was ousted. Counsel submitted that under Section 17 of the RDDB Act, the DRT has to entertain and decide the application. No doubt, when the application was filed by respondent 1, the DRT could have entertained it because at that time, respondent 1 was a bank. But, since due to the subsequent event, respondent 1 was robbed of its character as a bank, the DRT cannot decide the application. The words 'entertain and decide' are important. The DRT must not merely have jurisdiction to entertain the application but it must have jurisdiction to decide it. Counsel submitted that therefore, the DRT and DRAT erred in rejecting the petitioners' application.

5. Mr. Chinoy, learned senior counsel for respondent 1-bank, on the other hand, submitted that the impugned orders calls for no interference. In support of his submissions, counsel relied on Smt. Ujjam Bai v. State of Uttar Pradesh & Anr. AIR 1962 SC 1621 and Carona Ltd. v. Parvathy Swaminathan & Sons. (2007) 8 SCC 559.

6. There is no dispute about the fact that when respondent 1 filed the application, it had banking licence. While accepting the surrender of the banking licence, the Reserve Bank of India had allowed respondent 1 to open Special Rupee Account with a bank inter alia for crediting the recovered loan amounts. The affidavit of Mr. C.G. Pradeep Kumar, Head – Credit Administration of respondent 1 discloses that the petitioners have admitted in the Restructuring Agreement dated 22/9/1999 that as on 16/8/1999, a sum