Calcutta High Court
Icici Bank Ltd vs Incab Industries Ltd on 16 May, 2018
Equivalent citations: AIRONLINE 2018 CAL 347
Author: Soumen Sen
Bench: Soumen Sen
ORDER SHEET
GA No.941 of 2018
With
CS No.128 of 2003
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
ICICI BANK LTD.
Versus
INCAB INDUSTRIES LTD.
BEFORE:
The Hon'ble JUSTICE SOUMEN SEN
Date : 16th May, 2018.
Appearance:
Mr. N. Srinivas, Adv.
Mr. A. Guha, Adv.
Mr. Debdut Mukherjee, Adv.
Ms. Shivangi Thard, Adv.
The Court : This is an application by the plaintiff for transfer of the suit to the Debts Recovery Tribunal-I for adjudication of the debt involved in the proceedings under the provisions of the RDB Act, 1993.
The application appears to have been necessitated by reason of amendment being carried out to Section 2(h) of the Recovery of Debts and Bankruptcy Act, 1993 on 1st September, 2016 by which the definition of 'financial institution' has been expanded to include a claim by debenture trustee. It is not in dispute that the plaintiff has filed a suit as a debenture trustee. At the time of institution of the suit the plaintiff could not have approached the Debts Recovery Tribunal as the Tribunal would have lacked jurisdiction to entertain the suit. The suit was properly instituted before this Court. The question arises as to whether the plaintiff could continue with the suit in view of the amendment being carried out to the definition in Section 2(h) of the RDB Act. Under the amended provision, financial institution means a debenture trustee registered with the Board and appointed for secured debt securities. The opposition to this application is 2 that since the suit was not pending when the Act came into operation, Section 31 of the Debts Recovery Act, 1993, as was the original name of the said Act, would not apply. It is submitted that only those suits and proceedings that were pending at the time of coming into force of 1993 Act are to be transferred to the Debts Recovery Tribunal. The instant suit cannot be said to be pending within the meaning of Section 31 of the Debts Recovery Act and accordingly, this suit cannot be transferred.
The learned counsel appearing on behalf of the defendant has relied upon a decision of the Hon'ble Supreme Court in 'Raghunath Rai Bareja and Another vs. Punjab National Bank and Others' reported at (2007) 2 SCC 230 and submitted that the Hon'ble Supreme Court, on interpretation of Section 31 of the Debts Recovery Act, 1993 in relation to the execution proceeding, held that the order transferring the execution petition to the Debts Recovery Tribunal was without jurisdiction because Section 31 states that only the suits or other proceedings pending before the Court immediately before the establishment of the Tribunal under the Act shall stand transferred to the Tribunal. It is submitted that since the Tribunal was established in 1993 and no proceeding was pending before any Court on the date when the Tribunal was established, no transfer could take place under Section 31 of the 1993 Act.
In the instant case, the question is of ouster of jurisdiction by legislative amendment to the original Act. The Tribunal assumed jurisdiction only with regard to the matters specified in the Act. Any amendment to the said Act by way of expanding its horizon would automatically denude the Court of its jurisdiction. The example that immediately comes to my mind is the decision of the Hon'ble Supreme Court in 'United Bank of India vs. Debts Recovery Tribunal, Calcutta' reported at (1998) 2 SCC 70 where the issue arose before the Calcutta High Court whether the definition of debt includes damages. Now that the definition has been amended and includes damages, such ambiguity no more exists. However, the Hon'ble Supreme Court on interpretation of the original definition of 'debt' held that debt includes damage and accordingly, the jurisdiction of the High Court was held to be taken away by such legislation. The instant 3 proceeding is in the nature of an original proceeding. The object and purpose of the Act is to have a specialized Tribunal fully dedicated to decide matters arising out of debt, the definition of which was expanded from time to time. The expanded definition of 'debt' and 'financial institution' as it stands denudes this Court of jurisdiction as the Court by reason of such amendment is no more having the jurisdiction to decide the instant suit. An execution proceeding is a separate proceeding. The purpose and object of the Act would be defeated if interpretation given by the defendant is accepted. The suit which otherwise could have been tried by this Court originally, in my view, could not be continued in view of amendment of section 2(h) whereby the Tribunal is given exclusive jurisdiction to try lis of a debenture trustee for enforcement of its right and recovery of the sum as debt.
Under such circumstances, this application is allowed. There shall be an order in terms of prayer (a).
The Department is directed to send the original record of the suit of CS No.128 of 2003 to the Debts Recovery Tribunal-I for adjudication after retaining loco copies of the original record within four weeks from the date of communication of this order to the Department.
In view of this order, CS No.128 of 2003 shall not be shown as pending. GA No.941 of 2018 is, accordingly, disposed of. However, there shall be no order as to costs.
(SOUMEN SEN, J.) B.Pal