IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. OF 2008

[Arising out of S.L.P.(C) No.7744 of 2006]

Bank of India

Appellant

Versus

Ketan Parekh & Ors.

Respondents

J U D G M E N T

A.K. MATHUR, J.

1.

Leave granted.

2.

This appeal is directed against the order dated

17.1.2006 passed by the Division Bench of the Bombay High

Court whereby the Division Bench has held that since the

property of the respondent No.1 has been seized under the

Special Courts( Trial of Offences Relating to Transactions

in Securities) Act,1992 (hereinafter to be referred to as

the Act of 1992), the Debts Recovery Tribunal had no

jurisdiction to grant a declaration that the properties of

1

a notified person stand charged and the certificate against

such properties cannot be executed by the Recovery Officer

under the Recovery of Debts Due to Banks and Financial

Institutions Act, 1993 (hereinafter to be referred to as

the Act of 1993) and the financial institution would have

to move the Special Court in respect of the property

attached.

3.

Brief facts which are necessary for disposal of

this appeal are that the respondent No.1 was declared as a

notified party on 6.10.2001. Pursuant to the said

notification, considering section 3(3) of the Act of 1992,

all properties, movable and immovable stood attached

simultaneously. The Custodian confirmed the attachment on

1.11.2001. The respondent No.2 – Oriental Bank of Commerce

(hereinafter to be referred to as the Bank) filed an

application being Original Application No.233 of 2002

against the respondent No.1. The respondent No.1 took out

Miscellaneous Application for impleading the Custodian as a

party. That application came to be rejected by order dated

16.3.2005. Aggrieved against the said order the respondent

No.1 preferred an appeal before the Debts Recovery

Appellate Tribunal (hereinafter to be referred to as the

Appellate Tribunal). That appeal came to be rejected by

order dated 19.8.2005.Against the order passed by the

2

Appellate Tribunal, a writ petition was filed before the

High Court. It was contended by the respondent No.1

before the Debts Recovery Tribunal that the custodian under

the Act of 1992 had to be joined as necessary party as the

respondent No.1 had been declared as a notified party under

the said Act. This was opposed by the Bank on the ground

that the defendant No.2 has been sued merely as a guarantor

and therefore, the provisions of the Act of 1992 were not

attracted. It was submitted that Section 9A of the Act of

1992 would be attracted. This was opposed by the Bank on

the ground that the provisions of Section 9A of the Act of

1992 were not attracted as the respondent No.1 was being

sued in his personal capacity as guarantor and not as a

mortgagor or pledger of the movable or immovable

properties. The D.R.T. accepted the objection and rejected

the petition of respondent No.1. Aggrieved against this

order the matter was taken up before the Appellate Tribunal

on the basis that the property of the respondent No.1 stood

attached by the Custodian under the Act of 1992.

Therefore, the Debts Recovery Tribunal had no jurisdiction

to deal with the matter. The Appellate Tribunal held that

the provisions of the Act of 1992 are not attracted and

consequently, dismissed the appeal. Aggrieved against this

order the present writ petition was filed before the Bombay

High Court by respondent No.1. The Division Bench of the

3

Bombay High Court held that since the respondent No.1 was

declared as a notified party all the properties stood

attached pursuant to section 3 of the Act of 1992 and

considering Section 9A of the said Act, it is the Special

Court which will have jurisdiction so far as the notified

party is concerned and as such the Division Bench of the

High Court reversed the order passed by the App