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2009(2) Bankmann 65
DRAT, DELHI
M.C. Jain, Chairperson
Bakhshish Kaur and Others –Appellants
versus
Union Bank of India –Respondent
Misc. Appeal No.70 of 2007
Decided on 17-9-2008
For the Appellant:Mr. Kamal Jeet Singh, Advocate.
For the Respondent-Bank:Mr. Gautam Gupta representing Mr. Aditya Madan, Advocates.
IMPORTANT POINT
DRT has been established to adjudicate the debts of the banks and financial institutions which are recoverable from the persons against whom they are claimed as outstanding. Inter se disputes of defendants and strangers can be decided only by Civil Court of competent jurisdiction.
Headnote:Recovery of Debts due to Banks and Financial Institutions Act, 1993—Sections 19, 2(g)—Application by respondent bank for recovery of its dues against four defendants—Application by strangers to recovery suit for impleadment—Dismissed—Appeal thereagainst—Held that DRT has been established to adjudicate the debts of banks and financial institutions which are recoverable from the persons against whom they are claimed as outstanding—Inter se disputes of defendants and strangers can be decided only by Civil Court of competent jurisdiction—Judged in right perspective, appellant and after his death his legal heirs were neither necessary nor proper parties to the original application pending before tribunal—Appellant and his legal heirs were never a party to transactions entered into bank and person arrayed as defendants in original application in connection with loan facilities advanced by bank—Hence tribunal below could not decide the question—Appeal having no merit, dismissed. (Paras 7, 8, 10 to 12)
M.C. Jain, Chairperson—This miscellaneous appeal was initially filed by one Mr. Angrej Singh. He died during the pendency of the appeal and his legal heirs have been substituted in his place as appellants. The assailed order is one dated 2.3.2007 passed by the Tribunal below dismissing Mr. Angrej Singh’s application for being impleaded as a party in the original application.
2. The relevant facts are stated briefly. The respondent-bank herein Union Bank of India has filed Original Application No. 86/2003 for the recovery of its dues against four defendants, namely, Asia Rubber Industries, Mr. Gurvinder Singh, Mr. Ajay Kumar and Mr. Diwan Chand. Defendant No. 2 came to be impleaded as the proprietor of the defendant No.1 whereas defendant Nos. 3 and 4 have been impleaded as guarantors/mortgagors. The recovery has been sought by selling the mortgaged and hypothecated properties. Mr. Angrej Singh averred before the Tribunal below that Plot No.8, Sardul Colony, Bikaner belonged to him and other legal owners and that he had never authorized anybody to mortgage the said property in connection of loan sanctioned to the defendant No.1 Asia Rubber Industries whose proprietor was Ex. Capt. Gurvinder Singh. Therefore, he had interest in the mortgaged property and prayed for an opportunity of hearing. Ex. Capt. Gurvinder Singh supported Mr. Angrej Singh, saying that the said property belonged to Mr. Angrej Singh along with other legal owners and that he was never authorized by the owners of the property in question to mortgage the same with the bank. He, therefore, had no objection to the impleadment of Mr. Angrej Singh as party to the original application. The property in question was mortgaged in favour of the bank by the said Ex. Capt. Gurvinder Singh.
3. The bank, however, opposed the application as not maintainable on the premise that the Tribunal below had no jurisdiction to decide or adjudicate a dispute between the defendants in the original application and the applicant Mr. Angrej Singh.
4. The application of Mr. Angrej Singh did not find favour with the Tribunal below and was dismissed. Aggrieved, Mr. Angrej Singh preferred this appeal. After his death, his legal heirs applied for being substituted in his place and have prosecuted the appeal on their substitution.
5. I have heard Mr. Kamal Jeet Singh, learned counsel for the appellants as well as Mr. Gautam Gupta, learned counsel for the respondent-bank and have considered the matter.
6. It is to be pointed out that as per Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short ‘the Debts Recovery Act’), where a bank or a financial institution has to recover any debt, it may make an application to the Tribunal concerned for recovery. The term ‘debt’ has been defined in Section 2 (g) of Debts Recovery Act as under:
“debt” means any liability (inclusive of interest) which is claimed as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by the bank or the financial institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any Civil Court or any arbitration award or otherwise or under a mortgage and subsisting on, and legal recoverable on, the date of the application.
7. The bank is dominus litis and proceeds against the persons from whom debt is recoverable. The learned Counsel for the appellants has argued that as legal heirs of Mr. Angrej Singh, they have an interest in the mortgaged property and unless they are afforded an opportunity of hearing after being impleaded as parties in the original application before the Tribunal below, the property cannot be ordered to be sold for repayment of the loan allegedly advanced to Asia Rubber Industries through its proprietor Ex. Capt. Gurvinder Singh.
