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2020 Supreme(Jhk) 750
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Ravi Ranjan, Sujit Narayan Prasad, JJ.
Niranjan Kumar Pandey, S/o Late Yugal Kishore Pandey - Appellant
Versus
The State of Jharkhand & Ors. - Respondent
L.P.A. No. 599 of 2018
Decided On : 22-01-2020
For the Appellant :Mr. Indrajit Sinha, Advocate
For the Respondent-State: Mr. Vijay Kant Dubey, A.C. to S.C. (L&C)-III
For the respondent-BOI:Mr. A. Allam, Sr. Advocate
Misappropriation by an employee does not constitute 'debt' under the Recovery of Debts and Bankruptcy Act, 1993.
Headnote:
Recovery of Debts and Bankruptcy Act, 1993 - Misappropriation - Section 31-A, Section 2(g)
Fact of the Case:
The Bank filed a money suit for recovery of misappropriated funds by an employee. The defendant challenged the jurisdiction of the Debt Recovery Tribunal under Section 31-A of the Act, 1993 and the classification of the claim as 'debt' under Section 2(g).
Finding of the Court:
The court held that the misappropriation by an employee did not constitute 'debt' as per Section 2(g) of the Act, 1993, and the proceeding before the Debt Recovery Tribunal was without jurisdiction.
Issues: Jurisdiction of the Debt Recovery Tribunal under Section 31-A and classification of the claim as 'debt' under Section 2(g)
Ratio Decidendi: The misappropriation by an employee did not fall within the definition of 'debt' as per Section 2(g) of the Act, 1993, and the proceeding before the Debt Recovery Tribunal was held to be without jurisdiction.
Final Decision: The writ petition and the appeal were allowed, and the impugned order and demand notices were quashed and set aside. The Bank was granted the liberty to file an execution case before the Civil Court of competent jurisdiction.
JUDGMENT :
Ravi Ranjan, J.
This appeal has been preferred by the writ petitioner assailing the decision dated 21.08.2018 passed by the learned Single Judge of this Court in W.P. (C) No. 4281 of 2017 dismissing the writ petition.
2. The factual matrix necessary to be discussed for consideration of lis, stands enumerated as under:
3. The Respondent no. 4-Bank of India, Hazaribagh Branch, (hereinafter referred to as the ‘Bank’ for sake of convenience) instituted Money Suit No. 9/1996 in the court of Sub-ordinate Judge-V, Hazaribagh for realization/recovery of a sum of Rs.6,89,380.08 along with interest @ 18.25% per annum to be calculated from the date of filing of suit till actual payment and also for realization of costs, charges and expenses etc.
4. The case of the plaintiff-Bank was that the defendant was the permanent employee of the plaintiff as “Special Assistant” posted in Hazaribagh Branch and was assigned the work relating to C.D. & T.D.R., S.B. payment relating to department including checking O.D., C.D., L.I.C., Supplementary Cash Books and other concerned Ledgers etc. However, the allegation of the Bank, which would be evident from the judgment of the Civil Court appended as Annexure-1, was that the defendant-appellant fraudulently misappropriated the money belonging to the plaintiff-Bank by forging and fabricating the records/books of the Branch. In order to misappropriate money for personal gains, he made several fraudulent entries in the Books of Account, papers and withdrew the amounts in a fictitious name from Hazaribagh Branch. In what manner it was done, has been detailed in the judgment of the Sub-ordinate Judge-V. The suit was filed in the year 1996. By that time, the Parliament had already enacted the Recovery of Debts and Bankruptcy Act, 1993 (hereinafter referred to as the “Act, 1993”) which came into force on 25th June, 1993. According to Section 1(4) of the Act, 1993, the provisions of the Act, 1993 were not applicable where the amount of debt due to any bank or financial institution or to a consortium of banks or financial institutions was less than Rs.10,00,000/- (Rupees Ten Lakh). Thus, obviously, money/recovery suit was not filed before the Debts Recovery Tribunal rather the same was filed before the Civil Court for recovery of Rs.6,89,380.08 as it was less than Rs. Ten Lakh. At the time when the suit was filed the State of Jharkhand was the integral part of the State of Bihar which came into existence on 15.11.2000 under the Bihar Re-organization Act, 2000.
5. Debt Recovery Tribunal, Patna was constituted vide Notification GSR No. 325(E) dated 24.01.1997 having territorial jurisdiction over the State of Bihar. However, the matter was perhaps not transferred to it under Section 31 of the Act, 1993 as the suit was filed for recovery of Rs.6,89,380.08 along with interest.
The suit was ultimately decided vide judgment dated 31.05.2007 by the Sub-ordinate Judge-V, Hazaribagh (Annexure-1) ex-parte in favour of the Bank. However, the decretal amount along with interest having raised to much higher than Rs. Ten Lakh, a petition was filed under Section 31-A of the Act, 1993 before the Presiding Officer, Debt Recovery Tribunal at Hazaribagh with a prayer to issue recovery certificate to the tune of Rs.38,19,089.32 together with interest and costs.
6. In the proceeding before the Debt Recovery Tribunal, the defendant appeared and filed show cause disclosing the fact that in the criminal case bearing Case No. C-119S/1994 having already been lodged by the C.B.I. against the judgment-debtor and which is still pending in the Court of Special Judge, C.B.I. at Ranchi, the defendant was languishing in Jail from 19.04.1999 to 21.06.2001. A stand was taken by the defendant-writ petitioner that he was not aware of the institution of the money suit and due to lack of knowledge he could not appear and the suit was heard ex-parte in his absence and unfortunately no appeal could be filed against the judgment and the decree.
7. Be th
