High
Court of Madras
D.C.
Mangalraj
v.
Indian
Bank
M.
Thanikachalam, J.
A.
No. 438 of 2006 in C. S. No. 566 of 1993
March
24, 2006
Section 31, read with section 17, of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 - Transfer of pending cases - Respondent-bank filed a suit for recovery of certain amount against applicant - Court passed preliminary decree ex parte - Hence, instant application was filed under order XIV, rule 8, read with order IX, rule 13 of the Code of Civil Procedure, 1908, seeking to set aside ex parte decree - Respondent-bank raised objection that said application was not maintainable as court had no jurisdiction to decide application and if at all proceedings had to be transferred to Debt Recovery Tribunal because of amount involved exceeding Rs. 10 lakhs as per preliminary decree - Whether in terms of sections 17 and 18 read together, bar of jurisdiction is only for application filed for recovery of debts due to such bank and not for all applications in a suit already filed, and it cannot be taken as a blanket bar of jurisdiction in a pending suit before High Court - Held, yes - Whether suit or other proceeding pending before High Court which are liable to be transferred after date of constitution of Tribunal should relate to suit or proceeding and cause of action wherein it is based, that means, for claim or in other words, for recovery of amount as stated in section 17 - Held, yes - Whether since instant application was not aimed for recovery of debts due to any bank or it would not come on basis of original cause of action, viz., claiming amount application would not come within meaning of ‘proceeding’ as occurring in section 31, and in that view, transferring said application to Tribunal was not desirable - Held, yes - Whether, having regard to aforesaid, instant application would not come within four walls of either section 17 or 31 and, therefore, question of transferring proceeding to Tribunal would not arise - Held, yes
The respondent-bank filed a suit for recovery of certain amount against the applicant. The Court passed a preliminary decree ex parte. The instant application was filed under order XIV, rule 8, read with order IX, rule 13 of the Code of Civil Procedure, 1908, to set aside the ex parte decree. As there was an inordinate delay in filing the instant application to set aside the ex parte decree, the applicant had earlier filed an application for condonation of delay which was allowed despite objections. Now the respondent raised the objection that instant application was not maintainable, as the Court had no jurisdiction to decide the application and if at all the proceeding had to be transferred to the Debts Recovery Tribunal because of the amount involved, exceeding Rs. 10 lakhs as per preliminary decree.
HELD
If sections 17 and 18 are read conjointly, it is evident that the bar is only for the application filed for recovery of debts due to such bank and not for all the applications in a suit already filed and it can not be taken as a blanket bar of jurisdiction in a pending suit before the High Court. Even in a pending suit before the High Court, if the application is aimed for an interim relief or otherwise to recover the amount (debt), then alone it should come under section 17 inducing section 18, then clamping bar of jurisdiction, upon the court in the ordinary course, while dealing with the original suit, not otherwise. [Para 19]
The suit or other proceedings pending before the court which are liable to be transferred after the date of the constitution of the Tribunal, should relate to the suit or the proceeding and the cause of action wherein it is based, that means, for the claim or in other words, for the recovery of the amount as stated in section 17. Admittedly, the instant application was not aimed, for the recovery of debts due to any bank or it would not come on the basis of the original cause of action, viz., claiming the amount. Therefore, the instant application would not come within the meaning ‘proceeding’ as said in section 31 and in this view, transferring the said application to the Tribunal was not desirable, also it might not be legally sound. [Para 22]
Order IX, rule 13 of the Code of Civil Procedure, is very specific that the court which has passed an ex parte decree alone is competent to set aside the same. [Para 31]
To decide the ingredients required, the competent forum must be the court, which passed an order at ex parte decree and not the Tribunal, which may be conferred with the jurisdiction after the ex parte decree, considering the amount involved. A plain reading of the order IX, rule 13, also would make it clear that the Tribunal may not have jurisdiction to set aside the ex parte decree and only this court alone can exercise the jurisdiction, and give a finding, whether the ex parte decree could be set aside or not. [Para 32]
Thus, viewing the case from all possible angles from the proper perspective the instant application would not come within the four walls of either section 17 or 31 of the Act and, therefore, question of transferring the proceeding to the Tribunal would not arise for consideration. [Para 33]
In view of aforesaid, the instant application was to be allowed and the ex parte preliminary decree passed by the Court was to be set aside. [Para 34]
CASE REVIEW
Punjab National Bank v. Chajju Ram (2000) 28 SCL 42 (SC); Relied upon.