Delhi High Court
Kotak Mahindra Bank Limited vs Stiefel Und Schuh India Ltd. And ... on 9 January, 2009
Author: A.K.Sikri
Reportable
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO (OS) No. 369/2008 & CM No. 12448/2008
and
FAO (OS) No. 370/2008 & CM No. 12450/2008
% Reserved on : October 23, 2008
Pronounced on : January 09, 2009
Kotak Mahindra Bank Limited . . . Appellant
through : Mr. T.K. Ganju, Sr. Advocate
with Mr. B.L. Wali, Advocate
VERSUS
Stiefel Und Schuh India Ltd. & Ors. . . . Respondents
through : Mr. Sanjoy Kr. Ghose with
Ms. Rupali S. Ghosh, Advocates
for the respondent No.1/OL.
Mr. Deepak Dhingra with
Mr. Rajesh Kumar, Advocates
for the respondent Nos. 5, 7 & 8.
Mr. Kewal Singh Ahuja, Advocate
for the respondent No.6.
CORAM :-
THE HON‟BLE MR. JUSTICE A.K. SIKRI
THE HON‟BLE MR. JUSTICE MANMOHAN SINGH
1. Whether Reporters of Local newspapers may be allowed
to see the Judgment?
2. To be referred to the Reporter or not?
3. Whether the Judgment should be reported in the Digest?
A.K. SIKRI, J.
1. Before the promulgation of the Recovery of Debts Due to Banks and
Financial Institutions Act, 1993 (hereinafter referred to as the „RDB
Act‟), civil remedy in the form of civil suits in the ordinary civil court
was available the banks and financial institutions for recovery of the
debts due to them. With the aforesaid enactment, the Parliament
created special tribunal, known as Debts Recovery Tribunal (for
short, „DRT‟). The banks and financial institutions are now required
to institute proceedings against the debtors only before these DRTs
created under the RDB Act. It is because of the reason that under
Section 18 of the RDB Act, jurisdiction of civil courts to entertain such
proceedings has been specifically barred. Provision is also made even
in respect of existing cases pending in the civil courts. As per Section
31 of the RDB Act, every suit or every proceeding pending before
any court immediately before the establishment of a Tribunal under
that Act was to be transferred to the Tribunal. Thus, the Parliament
took care by not only creating bar on the jurisdiction of the civil
court or other authority to decide such matters, it also intended
transfer of cases pending before any court or authority to the DRTs.
Notwithstanding such a position contained in these two specific
provisions, viz. Sections 18 and 31 of the RDB Act, we are confronted
with a situation, solution whereof is not provided by any specific
provision in the RDB Act. It is, therefore, by the interpretative
process we are supposed to gather the intention of the Legislature to
answer the issue posed in this case.
2. Before we delineate the issue involved, it is necessary to spell out
factual backdrop in which such an issue has arisen.
3. State Bank of India Home Finance Ltd. (hereinafter referred to as the
predecessor of the appellant bank) had granted certain loans to the
respondent No.1 herein. To secure the said loans, the respondent
No.1 mortgaged its property with the appellant‟s predecessor. When
the amount, purportedly due, was not paid by the respondent No.1
to the predecessor of the appellant, it filed a suit for foreclosure of
the mortgage of immovable property and recovery of
Rs.2,53,76,136/- under Order XXXIV Rule 4 of the Code of Civil
Procedure (for short, „CPC‟) on the Original Side of this Court. This
suit was filed in the year 1996 and is registered as CS (OS) No.
2062/1996. By that time, the RDB Act had already come into force,
which is of the year 1993. However, since the predecessor of the
appellant was not a banking company or a financial institution, as
described in the said Act, it was supposed to take recourse to civil
proceedings before a civil court, which it did. Therefore, the civil
suit, as on the date when filed, was properly filed in this Court and
this Court had the requisite jurisdiction and competency to entertain
and decide the same.
4. The predecessor-in-interest of the appellant assigned the debt to State
Bank of India (SBI) on 17.2.2004, as part of its assignment of the
various assets owned by it. With such an assignment of debt in
favour of the SBI, the SBI moved IA No. 2269/2005 for its
substitution in place of the predecessor-in-interest of the plaintiff and
necessary orders in this application were passed, whereafter SBI
surfaced on the scene and prosecuted the suit.
5. As a matter of fact, even SBI assigned the debt in favour of Kotak
Mahindra Bank Ltd. (appellant herein) by a Deed of Assignment
dated 23.3.2006. The appellant applied for its substitution, which
was also done vide orders dated 26.7.2007. After its substitution,
the appellant wants transfer of the proceedings to the DRT. Its
submission is that with the assignment of the debt, since the
defendant in question is due to the appellant, which is a banking
company, it is only the DRT which has the requisite jurisdiction to
adjudicate the dispute. This plea on the part of the appellant,
however, has not enthused the learned Single Judge and, therefore,
the appellant‟s application for transfer (IA No. 1188/2008) stands
rejected by the order dated 13.5.2008. Not satisfied with the view
taken by the learned Single Judge, the appellant has filed FAO (OS)
No. 369/2008 against that order. The second appeal also arises out
of the same order passed in other suit where the appellant has
become successor-in-interest under the identical circumstances. It is
for this reason that both these appeals were heard together.
6. Common issue in these two appeals, thus, which needs consideration
is as to whether the civil court (i.e. the Delhi High Court in the
instant case) loses jurisdiction to entertain the suit and the matter
now comes under the exclusive domain of DRT which only has the
jurisdiction to entertain the matters.
7. Before taking note of the arguments of the respective parties, we
should reproduce the relevant provisions of the RDB Act as in the
light of those provisions the arguments would be better appreciated.
8. Section 2(g) of the RDB Act, which defines a „debt‟, reads as under :-
(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;
Section 17 deals with the jurisdiction of the DRT and is couched
in the following language :-
Jurisdiction, powers and authority of Tribunals
17. (1) A Tribunal shall exercise, on and from the appointed
day, the jurisdiction, powers and authority to entertain and
decide applications from the banks and financial institutions for
recovery of debts due to such banks and financial institutions.
(2) An Appellate Tribunal shall exercise, on and from the ap-
pointed day, the jurisdiction, powers and authority to
entertain appeals against any order made, or deemed to have
been made, by a Tribunal under this Act.
Section 18 and 31, to which reference has already been made,
and additionally relevant portion of Section 19, note whereof is also
required to be taken, are worded as under:-
"Bar of jurisdiction
18. On and from the appointed day, no court or other
authority shall have, or be entitled to exercise, any jurisdiction,
powers or authority (except the Supreme Court, and a High
Court exercising jurisdiction under articles 226 and 227 of the
Constitution) in relation to the matters specified in section 17.
Application to the Tribunal
19. (1) Where a bank or a financial institution has to recover
any debt from any person, it may make an application to the
Tribunal within the local limits of whose jurisdiction--
(a) the defendant, or each of the defendants where there
are more than one, at the time of making the application,
actually and voluntarily resides, or carries on business, or
personally works for gain; or
(b) any of the defendants where there are more than one, at
the time of making the application, actually and voluntarily
resides, or carries on business, or personally works for gain; or
(c) the cause of action, wholly or in part, arises :
[Provided that the bank or financial institution may, with the
permission of the Debts Recovery Tribunal, on an application
made by it, withdraw the application, whether made before or
after the Enforcement of Security Interest and Recovery of
Debts Laws (Amendment) Ordinance, 2004 for the purpose of
taking action under the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002
(54 of 2002), if no such action had been taken earlier under
that Act :
Provided further that any application made under the first
proviso for seeking permission from the Debts Recovery
Tribunal to withdraw the application made under sub-section
(1) shall be dealt with by it as expeditiously as possible and
disposed of within thirty days from the date of such
application:
Provided also that in case the Debts Recovery Tribunal refuses
to grant permission for withdrawal of the application filed
under this sub-section, it shall pass such orders after recording
the reasons therefor.]
(2) Where a bank or a financial institution, which has to
recover its debt from any person, has filed an application to
the Tribunal under sub-section (1) and against the same person
another bank or financial institution also has a claim to recover
its debt, then, the later bank or financial institution may join
the applicant bank or financial institution at any stage of the
proceedings, before the final order is passed, by making an
application to that Tribunal.
xx xx xx
Transfer of pending cases
31. (1) Every suit or other proceeding pending before any
court immediately before the date of establishment of a
Tribunal under this Act, being a suit or proceeding the cause of
action whereon it is based is such that it would have been, if it
had arisen after such establishment, within the jurisdiction of
such Tribunal, shall stand transferred on that date to such
Tribunal :
Provided that nothing in this sub-section shall apply to any
appeal pending as aforesaid before any court.
(2) Where any suit or other proceeding stands transferred from
any court to a Tribunal under sub-section (1),--
(a) the court shall, as soon as may be after such transfer,
forward the records of such suit or other proceeding to the
Tribunal; and
(b) the Tribunal may, on receipt of such records, proceed to
deal with such suit or other proceeding, so far as may be, in
the same manner as in the case of an application made under
section 19 from the stage which was reached before such
transfer or from any earlier stage as the Tribunal may deem
fit."
9. It is not in dispute that the subject matter of the suit would be
covered by the definition of „debt‟ under Section 2(g) of the RDB
Act. It is also not in dispute that the appellant, who is the successor-
in-interest, would satisfy the requirement of the definition of the
„bank‟, as contained in Section 2(d)(ii) of the RDB Act. At the same
time, as far as the specific answer to the issue which has arisen in the
facts of this case is concerned, it has not gathered any direct answer
from the provisions of the RDB Act.
10. As mentioned above, Section 18 bars the jurisdiction of civil court.
However, it starts with the expression "On and from the appointed
date..." The appointed date is 24.6.1993. Therefore, any fresh legal
proceedings by the banking institution for recovery of its debt after
the appointed date cannot be filed in civil court and have to be
necessarily instituted before the DRT. In the instant case, the fact
remains, the original claimant was not a bank and, therefore, when
the suit was instituted after the appointed date on which the RDB Act
came into force, it is the civil court only which had the jurisdiction.
Such proceedings by the predecessor-in-interest could not have been
filed before the DRT. For that matter, as on that date, the DRT had
no jurisdiction to entertain such proceedings.
11. Section 31 of the RDB Act, on the other hand, deals with the transfer
of those suits or proceedings which were pending before any court
immediately before the establishment of a Tribunal under the RDB
Act, over which the Tribunal would have to exercise jurisdiction if
such action had to be initiated after its establishment. When the
Tribunal was created, present proceedings were not pending in the
civil court and, therefore, in stricto senso, the situation with which
we are confronted with is not contemplated by Section 31 of the
RDB Act.
12. In this scenario, the issue to be determined is as to how proceedings
are to be dealt with once they were properly instituted by filing a
suit in the civil court by a non-banking/non-financial institution, but
after the filing of the suit, debt is assigned to a banking institution.
13. The learned Single Judge has held that since it is neither a case of
barred jurisdiction under Section 18 nor a case where the suit is
pending on the date of establishment and is, therefore, needed to be
transferred, but the issue relates to „losing jurisdiction‟ over a matter
which the civil court originally had. In the opinion of the trial court,
the Parliament did not intend such cases to be transferred for the
following reasons contained in the impugned order:-
"6. Now a plain reading of Section 18 would suggest that the
plaintiff‟s contention appears to be sound and feasible. Yet, a
deeper analysis would belie the argument. Parliament intended
only one species of action, i.e. cases pending as on date of
establishment of the tribunal, under Section 31 to be transferred.
Neither Section 17 nor Section 18 anywhere provide, nor does
any other provision of the Act, state whether acquisition of a
debt, and an attendant competently instituted litigation such as
a recovery suit, would be subject to transfer. Here, the original
creditor-plaintiff was clearly no bank or financial institution
entitled to invoke provisions of the Act; this suit was therefore
competent and maintainable. It is only a supervening or
intervening event which has raised this controversy, whereby
the assignee plaintiff has acquired the asset (i.e. the debt of the
first defendant). It could well be that this might be later
assigned to another entity, which may not be a bank or
financial institution. If the plaintiff‟s logic were to be accepted,
in such event, the matter would have to be sent back to a civil
court. Obviously, such anomalous situations were not
contemplated by Parliament. Another aspect; if Parliament had
intended that in the eventuality banks acquired or became
assignees of debts which were subject to competently instituted
litigation, and such litigation were to be transferred to the
tribunal, such an intention would have been more explicit. It is
well settled that courts should not readily infer ouster of
jurisdiction of civil courts, unless there are express provisions or
an inescapable implication is shown (Dhulabhai v. State of M.P.
AIR 1969 SC 78; Premier Automobiles Ltd. v. Kamlekar
Shantaram Wadke (1976) 1 SCC 496; Bata Shoe Co. Ltd. v. City
of Jabalpur Corpn (1977) 2 SCC 472 Munshi Ram v. Municipal
Committee, Chheharta (1979) 3 SCC 83 and Raja Ram Kumar
Bhargava v. Union of India (1988) 1 SCC 681).
14. Challenging the aforesaid order, the submission of learned counsel
for the appellant was that once it is accepted that the claim is a debt
under Section 2(g) of the RDB Act and the appellant (who is the
plaintiff now in the suit) is a banking institution, then after the
promulgation of the Act, the adjudication of the said claim can only
be by the DRT established under the RDB Act. He argued that
intention was manifest by the conjoint reading of Sections 17,18,19 &
31 of the RDB Act. In no uncertain terms, the Legislature intended
that on the creation of DRTs, civil court shall not entertain such
proceedings. Even, provision in the form of Section 31 of the RDB
Act to transfer all pending cases, which clearly signifies the intention
of the Legislature, viz. on the establishment of the Tribunal under the
Act, even pending cases will not be adjudicated upon by the civil
courts as exclusive jurisdiction was conferred upon DRTs stipulating
the scope of its jurisdiction under Section 17 of the RDB Act. For
support, he referred to the following judgments :-
(i) United Bank of India, Calcutta v. Abhijit Tea Co. Ltd. & Ors.
(2000) 7 SCC 357
(ii) Allahabad Bank v. Canara Bank & Anr.,
AIR 2000 SC 1535
15. Learned counsel for the respondent, on the other hand, in addition
to falling back on the reasons given by the trial court, submitted that
act of transfer of debt was a private act between the two parties,
namely, the appellant and its predecessors, without any involvement
of the respondent No.1. Such a private act cannot clothe jurisdiction
on DRT. He also submitted that even with the creation of special
tribunals and confirmation of exclusive jurisdiction upon them,
jurisdiction of civil courts remain under certain circumstances as
ouster of jurisdiction of civil courts is not to be readily inferred. A
situation which is not contemplated and dealt with under the RDB
Act should not be allowed by drawing inferences. His further
submission was that the only material aspect was that the suit, when
filed in this court, was validly filed and, therefore, the civil court had
the jurisdiction to entertain the suit. It could lose jurisdiction only
when the circumstance was specifically provided under the RDB Act.
He also referred to the judgment of the Supreme Court in Ramesh
Chand Ardawatiya v. Anil Panjwani, AIR 2003 SC 2508, wherein the
Court had laid down the principle that jurisdiction of civil court
would not get totally excluded even if exclusive jurisdiction is
conferred on special tribunals and further that jurisdiction of the civil
court is to be raised at an earlier stage. This principle finds in para 19
of the said judgment, which is extracted below :-
"19. We find, as would be dealt with hereinafter, the first two
pleas devoid of any merit, but partial merit in the last plea. As
to the first submission, we find that the Civil Court does not
suffer from any inherent lack of jurisdiction. Where there is a
special Tribunal conferred with jurisdiction or exclusive
jurisdiction to try particular class of cases even then the Civil
Court can entertain a civil suit of that class on availability of a
few grounds. An exclusion of jurisdiction of Civil Court is not
to be readily inferred. (See Dhulabhai etc. v. State of Madhya
Pradesh and Anr. - (1963) 3 SCR 662). An objection as to the
exclusion of Civil Court's jurisdiction for availability of
alternative forum should be taken before the Trial Court and at
the earliest failing which the higher Court may refuse to
entertain the plea in the absence of proof of prejudice."
16. As pointed out by us in the beginning, the particular fact situation
with which we are confronted with is not postulated specifically
under the provisions of the Act. However, if one is to give due
regard to Section 18 read with Section 31 of the RDB Act, the
manifest intention of the Legislature was to exclude the jurisdiction of
the civil court in relation to those matters which are triable by DRT.
For conferring jurisdiction of the DRT, the necessary conditions
which are to be fulfilled are the following :-
(a) claim is a „debt‟ under the provisions of Section 2(g) of the
RDB Act; and
(b) the claimant is a bank under the provisions of Section 2(d)(ii)
of the RDB Act.
If these two conditions are satisfied, DRT assumes jurisdiction
under Section 17 of the RDB Act as from the appointed date, it is the
DRT which has to exercise the jurisdiction, power and authority to
entertain and decide applications from the bank and financial
institutions for recovery of debts due to them. Such a jurisdiction is
exclusive, as held by the Apex Court in Allahabad Bank v. Canara
Bank (supra) in the following terms :-
" 22. We hold that the provisions of Sections 17 and 18 of the
RDB Act are exclusive so far as the question of adjudication of
the liability of the defendant to the appellant Bank is
concerned.
(ii) execution of Certificate by Recovery Officer: Is his
jurisdiction exclusive
23. Even in regard to 'execution', the jurisdiction of the
Recovery Officer is exclusive. Now a procedure has been laid
down in the Act for recovery of the debt as per the certificate
issued by the Tribunal and this procedure is contained in
Chapter V of the Act and is covered by Sections 25 to 30. It is
not the intendment of the Act that while the basic liability of
the defendant is to be decided by the Tribunal under Section
17, the Banks/ Financial Institutions should go to the Civil
Court or the Company Court or some other authority outside
the Act for the actual realisation of the amount. The certificate
granted under Section 19(22) has, in our opinion, to be
executed only by the Recovery Officer. No dual jurisdictions at
different stages are contemplated. Further, Section 34 of the
Act gives overriding effect to the provisions of the RDB Act.
That Section reads as follows:
Section 34(1): Act to have over-riding effect-
(1) Save as otherwise provided in Sub-section (2), the
provisions of this Act shall effect notwithstanding anything
inconsistent therewith contained in any other law for the time
being in force or in any instrument having effect by virtue of
any law other than this Act.
(2) The provisions of this Act or the rules made thereunder
shall be in addition to, and not in derogation of, the Industrial
Finance Corporation Act, 1948 (15 of 1948), the State Financial
Corporations Act, 1951 (63 of 1951), the Unit Trust of India
Act, 1963 (52 of 1963), The Industrial Reconstruction Bank of
India Act, 1984 (62 of 1984) and the Sick Industrial Companies
(Special Provisions ) Act, 1985(1 of 1986).
The provisions of Section 34(1) clearly state that the RDB Act
overrides other laws to the extent of 'inconsistency'. In our
opinion, the prescription of an exclusive Tribunal both for
adjudication and execution is a procedure clearly inconsistent
with realisation of these debts in any other manner.
24. There is one more reason as to why it must be held that
the jurisdiction of the Recovery Officer is exclusive. The Tiwari
Committee which recommended the Constitution of a Special
Tribunal in 1981 for recovery of debts due to Banks and
Financial Institutions stated in its Report that the exclusive
jurisdiction of the Tribunal must relate not only in regard to
the adjudication of the liability but also in regard to the
execution proceedings. It stated in Annexure XI of its Report
that all "execution proceedings" must be taken up only by the
Special Tribunal under the Act. In our opinion, in view of the
special procedure for recovery prescribed in Chapter V of the
Act, and Section 34, execution of the certificate is also within
the exclusive jurisdiction of the Recovery Officer.
25. Thus, the adjudication of liability and the recovery of the
amount by execution of the certificate are respectively within
the exclusive jurisdiction of the Tribunal and the Recovery
Officer and no other Court or authority much less the Civil
Court or the Company Court can go into the said questions
relating to the liability and the recovery except as provided in
the Act. Point 1 is decided accordingly."
17. Immediately after Section 17, provision is created for bar of
jurisdiction of other courts in the form of Section 18 of the RDB Act.
This section is very strongly worded and it provides a negative
covenant and mandates that no court or other authority shall have
any jurisdiction, power or authority in relation to the matters
specified in Section 17. To amplify this intention, it also mandates
that no court or authority shall even be entitled to exercise any
jurisdiction, power or authority in relation to the matters specified in
Section 17 of the RDB Act. Thus, after the Act came into force civil
court or other authority neither has the jurisdiction, power or
authority, nor is entitled to exercise any such jurisdiction, power or
authority in respect of those matters which are covered by Section 17
of the RDB Act.
It is the interpretation of this provision, along with Section 31,
which came up before the Supreme Court in Abhijit Tea Co. (supra).
In para 11 of the said judgment, four questions were formulated
which had arisen for consideration in the said appeal. The said case
related to a suit which was filed prior to coming into force of the
provisions of the Act as it was instituted in the year 1985 and the
Court had held that, on remand by the Division Bench to the Single
Judge, it is not the date of remand but the date of initial institution
that would be relevant. At the same time, the Court also considered
the combined effect of Section 18 and 31 of the RDB Act, on which
Issue No.2 was delineated. While answering this issue, the Court
made very pertinent observations which would be a pathfinder for
us. These are contained in the following paras :-
"23. If indeed the contention of the learned Senior counsel for
the respondents, Sri Shanti Bhushan and Dr. Rajeev Dhawan is
to be accepted, a strange result would follow inasmuch as, on
a combined reading of Sections 18 and 34 of the Act, the suit
can neither be transferred to the Tribunal nor can it be decided
by the learned Single Judge in view of the clear prohibition in
Section 18 of the Act. If it is not to be transferred to the
Tribunal and if it is to be retained in the Civil Court, without
disposal as contended, then there will be a stalemate. It has to
be kept perpetually pending in the Civil Court and necessarily
the file has to be consigned to the record room. Or the plaint
will have to be returned for presentation before the proper
court or Tribunal. That was surely not the intendment of the
Act of 1993. When this aspect was put to the learned Senior
counsel for the respondents, there was practically no answer. It
was, no doubt, faintly suggested by Dr. Rajeev Dhawan that
the bar in Section 18 does not apply to remanded suits but we
are unable to agree. As stated earlier, they stand revived in law
with continuity and therefore the bar under Section 18 clearly
applies.
24. The above result is also reached by the application of the
principle of purposive construction.
25. In regard to purposive interpretation, Justice Frankfurter
observed as follows:
"Legislation has an aim, it seeks to obviate some
mischief, to supply an inadequacy, to effect a change of
policy, to formulate a plan of government. That aim,
that policy is not drawn, like nitrogen, out of the air; it is
evidenced in the language of the statute, as read in the
light of other external manifestations of purpose ("Some
Reflections on the Reading of Statutes) 47 Columbia LR
527 at 538) (1947)."
26. That principle has been applied to this very Act by this
Court recently in Allahabad Bank v. Canara Bank AIR 2000 SC
1535. If the said principle is applied, it is clear that the
provision in Section 31 must be construed in such a manner
that, after the Act, no suit by the Bank is decided by the civil
Court and all such suits are decided by the Tribunal.
xx xx xx
32. There is yet another aspect of the matter. Even assuming
that the suit was not pending 'immediately' before the
establishment of the Tribunal before the Single Judge but came
before him on remand after 27.4.94, the crucial date, and even
assuming that the Registrar of the High Court could not have
transferred the suit to the Tribunal on 27.4.94 as the appeal
was pending before the Division Bench, it would, in view of
the prohibition in Section 18, be necessary for the High Court
to transfer the Bank's suit under Article 227 of the Constitution
of India to the Tribunal.
33. For the aforesaid reasons, we hold that the principle of
purposive interpretation is to be applied to Sections 18 and 31
of the Act and that suit 410/1985 filed by the Bank in 1985 and
which stood remanded by the appellate Court on 11.8.98 must
in the eye of the law be deemed pending before the Single
Judge and that it would stand transferred to the Tribunal. The
High Court was, therefore, in error in retaining the same on
the original side. Points 1 and 2 decided in favour of the
appellant."
18. If transfer is not allowed and suit is to remain in this Court, by reason
of Section 18 of the RDB Act, this Court shall not have jurisdiction,
power or authority to decide the suit nor it can exercise any such
jurisdiction, power or authority. That would result in the stalemate
of the proceedings, as contemplated by the Apex Court in para 23 of
the aforesaid judgment. In fact, in para 32, the Supreme Court made
observations visualizing almost identical fact situation which prevails
in this case. As per the Apex Court, even when there is no specific
provision in the RDB Act to deal with such a situation, power is to be
exercised under Article 227 of the Constitution for transferring the
matter to the Tribunal.
19. The case of Ramesh Chand Ardawatiya (supra), as relied upon by the
respondent No.1, would not be of any aid to the respondent No.1.
That was a case where civil suit was filed by the plaintiff. Apart from
other contentions, the defendant has raised the plea of jurisdiction of
the civil court on the ground that Section 75 and 137 of the
Rajasthan Co-operative Societies Act, 1965 provided for special
tribunal, i.e. arbitration, through which disputes could be
adjudicated. It was found that as per Section 75 disputes between
the members, past members and persons claiming through members
or members of the society or society and its committee, etc. could be
decided. However, in that case the Court found that there was
nothing to show that the defendant was also a member of the society
or was claiming through a member. The Court also found that the
plaintiff did not have any dispute with another member of the
society or the society itself. Therefore, such a dispute was not
covered by any of the clauses mentioned in sub-section (1) of Section
75 of the Societies Act. In this backdrop, it was also held that those
disputes which are not covered by Section 75 of the Act could be
decided by a civil court. In the present case, however, all the
ingredients to cloth DRT with the necessary jurisdiction, as contained
in Section 17 of the Act, stand satisfied.
20. No doubt, it is a case of „losing‟ jurisdiction on a later date.
However, it is precisely the same position which is contemplated by
Section 31 of the RDB Act, al biet, on passing of the said Act. Before
the enactment, suits in the civil courts were competent. However,
the civil courts lost jurisdiction to entertain even pending suits in
view of the provision like Section 31 of the RDB Act providing for
transfer of the pending suits.
21. These appeals are accordingly allowed. Impugned orders dated
13.5.2008 passed in the two suits are set aside. The Registry is
directed to transfer the record to the DRT. Parties shall appear
before the DRT on 11th February 2009.
The applications also stand disposed of.
(A.K. SIKRI)
JUDGE
(MANMOHAN SINGH)
JUDGE
January , 2009
nsk
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO (OS) No. 370/2008 & CM No. 12450/2008
% Reserved on : October 23, 2008
Pronounced on : January 09, 2009
Kotak Mahindra Bank Limited . . . Appellant
through : Mr. T.K. Ganju, Sr. Advocate
with Mr. B.L. Wali, Advocate
VERSUS
Stiefel Und Schuh India Ltd. & Ors. . . . Respondents
through : Mr. Sanjoy Kr. Ghose with
Ms. Rupali S. Ghosh, Advocates
for the respondent No.1/OL.
Mr. Deepak Dhingra with
Mr. Rajesh Kumar, Advocates
for the respondent Nos. 5, 7 & 8.
Mr. Kewal Singh Ahuja, Advocate
for the respondent No.6.
CORAM :-
THE HON‟BLE MR. JUSTICE A.K. SIKRI
THE HON‟BLE MR. JUSTICE MANMOHAN SINGH
1. Whether Reporters of Local newspapers may be allowed
to see the Judgment?
2. To be referred to the Reporter or not?
3. Whether the Judgment should be reported in the Digest?
A.K. SIKRI, J.
For orders, see FAO (OS) No. 369/2008.
(A.K. SIKRI)
JUDGE
(MANMOHAN SINGH)
JUDGE
January 09, 2009
nsk
