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2008(1) Bankmann 258 (Mad.)
MADRAS HIGH COURT
S.J. Mukhopadhaya and N. Paul Vasanthakumar, JJ.
J. Sinu Simon — Petitioner
versus
1. The Debts Recovery Appellate Tribunal, Chennai. & Anr. — Respondents
W.P. No. 13803 of 2007 and M.P. No. 1 of 2007
Decided on : 4-10-2007
Counsels for the parties :
For the Petitioner:Mrs. Narmada Sampath, Advocate.
For the Respondents:Tribunal for Respondent No. 1; Mr. V. Bhiman for Sampath Kumar Associates, Advocate for Respondent No. 2.
IMPORTANT POINT
Bank could not club two different loans in respect of two different persons in one original application only because guarantor in both loans were same so as to make claim more than Rs. 10 lakhs to file it in Debt Recovery Tribunal.
Headnote:Recovery of Debts due to Banks and Financial Institution Act, 1993 — Section 19(4) — Pecuniary jurisdiction of Debt Recovery Tribunal — Respondent Bank filed original Application by clubbing two debts wherein guarantors defendants 3 to 5 were same —Total claim of Two debts exceeded Rs. 10 lakhs— Persons who availed the loan were different—Loans could not be clubbed for purpose of recovery—Claim petition before Debt Recovery Tribunal was not maintainable as individual amount to be recovered was less than Rs. 10 lakhs — Preliminary Objection was liable to be upheld. (Paras 9 & 14)
Result : Petition allowed.
N. Paul Vasanthakumar, J. — Petitioner seeks to quash the order passed by the Debt Recovery Appellate Tribunal, Chennai, the first respondent herein, in IN-164/2007, against the order made in I.A. No. 207 of 2007 in O.A. No. 373 of 2003 on the file of the Debt Recovery Tribunal, Coimbatore, and to direct the first respondent to reject the Application in O.A. No. 373 of 2003.
2. The brief facts necessary for disposal of the Writ Petition as could be seen from the pleadings are as follows:
(a) Petitioner borrowed overdraft machinery loan from second respondent-Bank for his business purpose. Three persons, namely, C.V. Jose William, S. Mary and Benjamin Jacob have deposited the title deeds of their property as collateral security for the said loan. Petitioner has not borrowed any other loan from the second respondent, nor he stood as guarantor for any other loan with the second respondent.
(b) The said three persons, who stood as Guarantors have also given guarantee for sanction of the loan by M/s. J.M. Hardwares and Electricals and the petitioner has no connection with the said loan obtained by the said M/s. J.M. Hardwares and Electricals.
(c) The second respondent filed O.A. No.373 of 2003 before the Debt Recovery Tribunal, Coimbatore, for recovery of the loan amount and in the said Application, the second respondent clubbed the loan amounts borrowed by the defendants 1, 3 to 5 therein along with the petitioner’s loan amount. Petitioner was arrayed as third defendant in the said Application.
(d) The total outstanding loan amount of the petitioner is much less than Rs.10.00 lakhs. Similarly, it appears that the claim amount against the said M/s. J.M. Hardwares & Electricals is also less than Rs.10.00 lakhs as could be seen from the Application. However, the second respondent clubbed the alleged debts of different persons and totalled them so as to show that the amount due in the said Original Application is above Rs.10.00 lakhs, to make out the pecuniary jurisdiction before the Debt Recovery Tribunal.
(e) Petitioner filed I.A. No. 207 of 2003 in O.A. No. 373 of 2003 before the Debt Recovery Tribunal, Coim-batore, and prayed for dismissing the said Original Application as it is not maintainable before the Debt Recovery Tribunal as the claim amount even according to the Application against the petitioner, is only a sum of Rs.4,84,746/- and his loan is a separate one and his business is in no way connected with M/s. J.M. Hardwares & Electricals, against whom another due is claimed.
(f) Another ground taken in the Writ Petition is that though the said three persons stood as Guarantors for the loan obtained by the petitioner and the first defendant, the property which was given as collateral security for the loan obtained by M/s. J.M. Hardware & Electricals is ‘A’ schedule property and the property given as collateral security to the loan obtained by the petitioner by the said three persons is ‘B’ schedule property and therefore the two independent loan amounts obtained by two different persons cannot be clubbed together for the purpose of conferring pecuniary jurisdiction to the Debt Recovery Tribunal.
(g) The said I.A. No. 207 of 2007 was dismissed by the Debt Recovery Tribunal on 21.2.2007 by holding that the said prayer can be agitated at the time of arguments in the main Original Application itself. As against the said rejection of I.A. No. 207 of 2003 on 21.2.2007, petitioner has preferred Appeal before the Debt Recovery Appellate Tribunal, the first respondent herein and the first respondent dismissed the Appeal on 20.3.2007 and as against which the present Writ Petition is filed.
3. The learned counsel appearing for the petitioner submitted that unless the recovery amount exceeds Rs.10 lakhs, the Debt Recovery Tribunal has no pecuniary jurisdiction to entertain the Application and the petitioner having secured the loan, which has no connection with the other loan obtained by M/s. J & M Hardwares & Electricals, the Ba
