Debt Recovery Appellate Tribunal - Madras
Kothari Industrial Corporation Ltd. vs Kotak Mahindra Bank Ltd. And Anr. on 21 July, 2006
Equivalent citations: 2(2007)BC26
JUDGMENT
K. Gnanaprakasam, J. (Chairperson) Kotak Mahindra Bank Ltd. filed an application before the D.R.T. to substitute themselves as applicant in the Original Application in the place of existing applicant, viz. I.C.I.C.I. Bank Ltd. and the same was allowed by the D.R.T. by order dated 2nd February, 2006. Aggrieved by the same, the appellant, who is the respondent No. 1 in the Original Application has preferred this miscellaneous appeal.
I have heard the learned Advocate for the appellant and the respondents and also perused the appeal papers.
1. Kotak Mahindra Bank Ltd., the respondent No. 1 herein, in the affidavit filed in support of the petition, has stated that the debt due to the respondent No. 2, namely I.C.I.C.I. Bank Ltd. from the appellant has been assigned to them, which was confirmed by the agreement dated 20th April, 2005 and as per the said agreement, the respondent No. 1 has become the full and absolute owner and the only person legally entitled to receive the debt due from the appellant with effect from 31st March, 2005, and therefore, sought the leave of the Tribunal to substitute themselves in the place of the respondents, in the Original Application proceedings.
2. The appellant resisted the said petition on the ground that the alleged assignment is not legal. The debt in question being a loan secured by agricultural lands, the RDDBFI Act does not apply to the debt by virtue of Section 31(i) of SRFAESI Act, which specifically bars the application of the RDDBFI Act in respect of security interest created in agricultural lands. It is also contended that the respondent No. 1 has not produced the deed of assignment dated 31st March, 2005 and in the absence of the same, the assignment cannot at all be accepted. It is also further contended that the alleged deed of assignment is subject to stamp duty and registration, and it must be a valid one, and in the absence of the said document, it is not possible to come to the conclusion, that there was any valid assignment or not. But, however, D.R.T. allowed the petition.
3. The learned Advocate for the respondents submitted that there were certain other proceedings between Kothari Industrial Corporation Ltd., the appellant herein and I.C.I.C.I. Ltd. in CS 204/2005 before the High Court of Bombay and judgment in that case was delivered on 6th July, 2005. As against the same, Kothari Industrial Corporation Ltd., preferred S.L.P. (Civil) No. 17992/2005 before the Supreme Court of India and in that matter as an application was taken out by Kotak Mahindra Bank Ltd. to substitute itself in the place of I.C.I.C.I. Ltd.. and the same was allowed by the Supreme Court by order dated 5th September, 2005. As such, the substitution of Kotak Mahindra Bank Ltd. in the place of I.C.I.C.I. Ltd. has already been permitted by the Supreme Court and the same cannot be further reopened and the appellant is precluded from constructive res judicata, and relied upon the case of Indira Bai Patel v. B.A. Patel .
4. But, on the other hand, the learned Advocate for the appellant would submit that the substitution made before the Supreme Court was in respect of I.C.I.C.I. Ltd., but whereas, in the present case, the respondent No. 2 is the I.C.I.C.I. Bank Ltd., and therefore, the Bank is a different entity, and the substitution in the place of Bank was not made and it has got to be made in accordance with law as provided under Section 5 of the SRFAESI Act. The respondent No. 1 has not chosen to file the assignment deed dated 31st March, 2005, but whereas they rely upon the confirmation agreement only. That in the absence of the assignment deed, it is not possible to decide the validity or otherwise of the assignment.
5. It is further contended by the learned Advocate for the appellant that at the time when the application was filed for substitution before the Supreme Court, the subject was only in respect of the compromise entered into between the parties and there was no issue, whether the assignment made by the I.C.I.C.I. Bank in favour of Kotak Mahindra Bank Ltd. was legal and valid. As, this issue was not raised in the earlier proceedings, it would not amount to res judicata. Section 11 of CPC deals with res judicata which stales.
No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court.
A fair reading of this section would reveal that the issue raised in the present case must have been raised as an issue in the earlier case, and the same should have been heard and finally decided by such Court. In our case, no issue with regard to the validity of the assignment was raised before the Supreme Court, and therefore, the arguments advanced on behalf of the respondents with regard to res judicata, cannot be accepted.
6. But, now, when the deed is questioned, it is the duty of the respondents to establish that it is a valid document and it was done as per Section 5 of SRFAESI Act. If the assignment is not valid, Kotak Mahindra Bank Ltd. is not entitled to prosecute or act on behalf of the I.C.I.C.I. Bank Ltd.
7. In the light of what has been submitted on behalf of the appellant, we cannot completely ignore the arguments advanced on behalf of the appellant, and I am of the view that the issue raised requires consideration. In the said circumstances, the appellant is permitted to raise all his objections and defence by way of filing reply statement to the substitution ordered by the Tribunal, and the D.R.T.-1, Chennai shall frame a specific issue, "whether the substitution of the respondent No. 1, namely, Kotak Mahindra Bank Ltd. in the place of I.C.I.C.I. Bank Ltd. is valid" and decide the said issue along with other issues at the time of disposal of the Original Application No. 23 of 2005.
8. The appeal is disposed of accordingly.