Raj Corporation And Anr. vs The Bank Of Baroda And Ors.
2004 Latest Caselaw 683 Bom

JUDGMENT

Palshikar, J.

1. By this petition, the petitioners M/s. Raj Corporation has challenged the order passed by Debt Recovery Tribunal as also the order passed by the Debt Recovery Appellate Tribunal, Bombay, both rejected the application of the original Plaintiff, the present petitioner - for return of the suit for lack of jurisdiction in the Debt Recovery Tribunal.

2. Suit No. 3233/96 was filed by the Respondent - Bank of Baroda on the Original Side of this court for exercise of its ordinary original civil jurisdiction. The suit was valued at Rs. 12 lacs and odd. The claim included the debts due to the bank from the petitioner on various counts.

3. The original defendants - present petitioners filedj1 an application before the DRT contending that the tribunal has no jurisdiction to try the suit, and therefore it is liable to be returned for presentation before the proper court. The main contention in this application was that the valuation of the suit as made by the plaintiff was incorrect. The suit has to be maximum for a sum of Rs. 7,92,157/-. The Plaintiff bank has unnecessarily inflated the suit claim and therefore it could not be tried by the Tribunal as the claim of the suit is below Rs. 10 lacs.

4. As per the requirement of Section 31, the suit which as filed in the Original Side of this court should transfer to the DRT, Bombay since the claim made in the suit was more than Rs. 10 lacs. The defendants - the present petitioner, claim that the amount of Rs. 12,83,617.64/- as claimed by the Plaintiff, was not correct figure and it could not be more than Rs. 7.92 lacs and therefore the suit should not be transfered to the Tribunal.

5. The Tribunal on consideration of the facts made on the point as submitted before it came to the conclusion that the suit was rightly transferred to the Tribunal, as the claim, as stated in the plaint was more than 10 lacs and hence Section 31 was squarely applicable. Therefore as a consequence, the application filed by the defendant was rejected.

6. The appeal carried by the defendant before the Appellate Tribunal carries no weight as the appellate authority was also of the opinion that the claim as stated by the Plaintiff in the suit was more than Rs. 10 lacs and therefore the suit was proper. Hence this petition.

7. The contention of the learned counsel appearing on behalf of the petitioner basically is that in view of the language of Section 2(g) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the Act), a suit has to be filed for alleged dues secured or otherwise or by the Bank or a financial institution. In the present case according to the defendant the amount due was Rs. 7.92 lacs and therefore the suit should not be entertained by the Tribunal. It would in the circumstances be necessary to consider the verbatim submission of the plaintiff in the original plaint. The valuation is stated in para 12 and 13 of the plaint. In para 12 it is contended that the valuation for the purposes of court fees and jurisdiction is Rs. 12,83,617.64 and amount of court fees was paid therein. Then in para 13 it is stated thus :

"Although the amounts were credited to the account of the Defendant Nos. 1 and 2 between 11-6-1992 and 21-6-1993 the fact that the Defendant Nos. 1 and 2 were not entitled to receive the amounts came to the knowledge of the Plaintiffs only in or about and of August, 1993. In any event the Plaintiffs state that the Plaintiffs suffered loss and damage when the Plaintiffs started making payments to the real holders of the said dividend warrants, interest warrants and/or refund orders. The said payment started from June, 1994. The Plaintiffs state that therefore the cause of action accrued to the Plaintiffs in June, 1994 and the entire claim of the Plaintiffs is therefore, in time."

8. The claim of the Plaintiff as stated in para 9 as also in para 13 is the money, alleged to be the dues to the bank by the defendants. Admittedly Rs. 7.92 lacs is due from the defendant to the Plaintiff as is his contention in the application. Whereas the bank contends in its plaint that certain sums of money deposited in the account of the defendants and that they wrongly utilised the same causing loss to the bank for which compensation with interest was paid and it is together with all this claim deposited with interest etc. is the sum of Rs. 12.83 lacs, which was claimed and court fee thereon was paid, and the suit accordingly stood transferred to the Tribunal.

9. The contention in brief is that compensation and interest thereon cannot be said to be the money due from the defendants to the Plaintiffs. Because that did not form part of any transactions between the Plaintiff and the Defendants and therefore could not be included in the claim. This application made by the defendants was rejected by the trial court and the appellate tribunal and the same contention is also raised before us. In our opinion there is no substance in this contention. Section 2(g) of the Act reads thus:

(g) "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 legally recoverable on the date of the application."

10. Therefore according to the definition of the word "debt" as appearing in the Act, it means any liability inclusive of interest which is claimed as due by any person to a bank. It is the contention of the bank therefore that Rs. 12.83 lacs is a debt due from the defendants. Because according to the bank it is a liability which is claimed by the bank as due from the defendant and the same includes the liability admitted by the defendants as also the loss and compensation claimed by the bank. There is no room therefore in the definition of the debt for exclusion of a sum which the bank as Plaintiff thinks is a debt or a liability due to it from the defendants. What is liable to be decreed on appreciation of the pleadings and evidence led by the parties, would be determined by the tribunal. It is not necessary that the tribunal must decree the entire claim. It will be always within the jurisdiction of the tribunal to decree the sum lessor than Rs. 10 lacs. Therefore we are unable to accept the argument that because after ultimate analysis of the evidence and pleadings, the tribunal would grant decree only for Rs. 7.29 lacs and therefore it has no jurisdiction. In this context, it would be necessary to note the provisions of the Civil Procedure Code, what are the particulars which must be contained in a plaint and the statement of the value an the subject matter of the suit for the purposes of jurisdiction and court fees. That statement is therefore a statement of facts made in the plaint which is to be controverted or admitted by the defendant by his written statement. The issue has to be struck where there is a denial of the averments or regarding statement of the value and the subject matter, for the purposes of jurisdiction and the issue must arise for adjudication as to whether valuation for the purposes of jurisdiction is proper or not. The Section 21 of the C.P.C. states "objections to jurisdiction" of a court has to be taken at an earliest possible opportunity and in all cases where issues are settled. This provision therefore postulate acceptance as prima facie correct and the statement made regarding valuation for the purposes of jurisdiction. The issue can squarely arise, and it has to be decided in the circumstances so required as a preliminary issue. Therefore there cannot be any dispute that statement of the plaintiff regarding valuation of the claim for the purpose of jurisdiction has to be accepted as primafacie correct.

11. In the instant case the claim is for Rs. 12.83 lacs as made by the bank. The burden of proof is upto bank and the bank is entitled to a decree for the said sum. If it fails to prove that the money due to it from the defendants is not Rs. 12.83 lacs but any other sum less than what is claimed by the bank, will be entitled to establish for such amount as found due by the court on evidence. This power of the court to grant only proved claim cannot preampted by a prayer that the claim is wrongly valued which has to be proved as a fact.

12. Infact the Supreme Court of India has in very clear terms explained what is (SIC) term debt occurring in the Act. This decision is which is as under:

"According to the definition, the term 'debt' means liability which is alleged as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions. It should have arisen 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. The liability to be discharged may be in cash or otherwise. It would be immaterial whether the liability is secured or unsecured or whether it is payable under a decree or an order of any civil Court or otherwise. However, it should be subsisting and legally recoverable on the date on which proceedings are initiated for recovering the same.

13. According to Supreme Court, therefore, a debt means the liability which is alleged a due from any person by a bank, which should have arisen during the course of any business activity undertaken by the bank. In the instant case the contentions in paras 8, 10 and 13 discloses that the compensation claimed by the bank as also other monies due as alleged by the bank arises during the course of business transactions between the bank and the defendants. It is therefore obvious that what has been claimed by the bank in the suit is debt as defined by Section 2(g) of the Act. However reliance on this very judgment was placed by the learned counsel appearing on behalf of the defendants particularly what is stated in para 7 where the Supreme Court has observed that a debt or liability should be subsisting and legally recoverable on the date on which proceedings are initiated for recovering the same.

14. According to the learned counsel the compensation was not due and it could not be legally recovered at the time when the suit was filed. Conversely according to the bank it is entitled to compensation and has entitled for a decree for the sum so claimed. What is meant by term subsisting and legally recoverable is the sum or money or liability which is not barred as recovery by any law operating at the time when the claim is made. For example a debt due to the bank 15 years ago which has become time barred, cannot be claimed along with other debts which are subsisting and legally recoverable. What is contemplated by a term subsisting and legally recoverable is the subsistence of the date of suit and legally recoverable under any law for time being in force. By no stretch of imagination it can be said that the claim by the bank is the claim subsisting till it is disproved by cogent evidence. That being the legal position, we see no reason why the order by the tribunals below requires any interference. In the result, the petition fails and it is dismissed with costs of Rs. 750/-.