* THE HON’BLE JUSTICE MOUSHUMI BHATTACHARYA AND THE HON’BLE JUSTICE B.R.MADHUSUDHAN RAO % 13—06—2025 # M/s. Sarvaraya Textiles Employees Group Gratuity Trust and other … Petitioners vs.

$ The Debt Recovery Tribunal – II, rep. by its Registrar, Hyderabad and other … Respondents !Counsel for the Petitioners: M/s. Bharadwaj Associates ^ Counsel for Respondent No.2: Sri Srinivas Chitturu

? Cases referred:

(1998) 8 SCC 1 AIR 1964 SC 477 (2013) 10 SCC 136 (1989) 4 SCC 1 (2024) 4 S.C.R. 541 : 2024 INSC 297 (2010) 6 SCC 193 IN THE HIGH COURT FOR THE STATE OF TELANGANA HYDERABAD * * * *

WP.No.12009 OF 2019 Between:

M/s. Sarvaraya Textiles Employees Group Gratuity Trust and other … Petitioners And The Debt Recovery Tribunal – II, rep. by its Registrar, Hyderabad and other … Respondents JUDGMENT PRONOUNCED ON: 13.06.2025 THE HON’BLE JUSTICE MOUSHUMI BHATTACHARYA AND THE HON’BLE JUSTICE B.R.MADHUSUDHAN RAO

1. Whether Reporters of Local newspapers may be allowed to see the Judgments? : No

2. Whether the copies of judgment may be Marked to Law Reporters/Journals? : Yes

3. Whether His Lordship wishes to see the fair copy of the Judgment? : Yes _____________________ B.R.MADHUSUDHAN RAO,J THE HON’BLE JUSTICE MOUSHUMI BHATTACHARYA AND THE HON’BLE JUSTICE B.R.MADHUSUDHAN RAO WP.NO.12009 OF 2019 ORDER: (per Justice B.R.Madhusudhan Rao)

1. The Writ of Certiorari is filed by the petitioners to quash the judgment passed by the respondent No.1 in OA.No.2832 of 2017, dated 31.05.2019.

2. Respondent No.2 - Life Insurance Corporation of India (hereinafter referred to as LIC henceforth) has filed OA.No.2832 of 2017 (Old OA.No.1381 of 1999 of DRT-1, Hyderabad) under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short ‘the Act, 1993’) for recovery of Rs.44,04,025/- from the defendants/petitioners herein jointly and severally together with costs and future interest @ 14% per annum with quarterly rests from the date of filing O.A. till the date of realization.

3. LIC has examined Sri R.Murali, Assistant Secretary (L & HPF) as AW.1, got marked Exs.A1 to A27. Defendants have examined Sri S.B.P.S. Krishna Mohan, Managing Director of defendant No.2-

company as DW.1.

4.1. The Tribunal after going through the evidence and documents has allowed the O.A. directing the defendants jointly and severally liable to pay to the Applicant Corporation a sum of Rs.44,04,025/- with future interest @ 14% per annum simple from the date of filing the O.A. till the date of realization. The Applicant Corporation is entitled to proceed against the properties of the defendants towards the realization of its debt and also entitled for costs, directed to issue recovery certificate accordingly.

4.2. The Tribunal came to a conclusion that the over drawn amount falls within the definition of ‘debt’ as defined in Section 2(g), the applicant falls within the meaning of ‘Financial Institution’ as defined under Section 2(h)(i) and that the Tribunal has jurisdiction to try the O.A. under Section 19 of the Act, 1993.

5.1. Learned counsel for the petitioners submits that there is no debt between LIC and the petitioners in terms of Section 2(g) and question of recovery of debt under RDDB Act, 1993 is without jurisdiction. Alleged excess amount is neither a debt nor a liability and except on the principle of unjust enrichment/Restitution the question of initiation of a recovery proceeding for such an amount would not lie not only in DRT but also in Civil Court even under Section 72 of Contract Act, 1872.

5.2. Counsel submits that the DRT has recorded perverse findings since there is no quantification and itemization of the claim amount by LIC and at any rate the claim is totally misdirected against the petitioners when the excess payment has been made to the retiring employees, who are not before the DRT, and no amount much less excess amount was ever paid to the petitioners company even as per the pleadings in the OA and there cannot be any recovery proceedings agai