Supreme Court of India

SITA RAM SINGHANIAversusBANK OF TOKYO-MITSUBISHI LTD. AND ORS.

Citation: 1999 INSC 241
Decided: 11 May 1999
Disposal: Dismissed
Bench: B N KIRPALS RAJENDRA BABU

Holding

The Allahabad High Court had no jurisdiction to stay DRT proceedings initiated in Madhya Pradesh, and such stays should not be granted as a matter of course.

Summary

The petitioner, Sita Ram Singhania, challenged a stay order granted by the Allahabad High Court in a suit filed by banks before the Debt Recovery Tribunal (DRT) under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The suit was instituted in the State of Madhya Pradesh, but the Allahabad High Court, a court of a different jurisdiction, had granted a stay of the DRT proceedings. The Supreme Court examined whether a High Court can, as a matter of course, stay DRT proceedings and whether the Allahabad High Court possessed jurisdiction over a case initiated in Madhya Pradesh. The Court held that granting a stay merely because the tribunal’s notification is challenged defeats the purpose of the DRT system, and that the Allahabad High Court lacked jurisdiction over the Madhya Pradesh proceedings. Consequently, the special leave petition was dismissed, affirming that the stay order was improper.

Issues considered

Whether the Allahabad High Court had jurisdiction to grant a stay of DRT proceedings initiated in Madhya Pradesh.
Whether a High Court should, as a matter of course, grant a stay of DRT proceedings when the tribunal’s notification is challenged.

Legislation cited

Recovery of Debts Due to Banks and Financial Institutions Act, 1993

Subjects

Debt Recovery Tribunaljurisdictionstay of proceedingsHigh Court jurisdictionRecovery of Debts Due to Banks and Financial Institutions Actspecial leave petition

Judgment

A                            SITA RAM SINGHANIA
                                           v.
               BANK OF TOKYO-MITSUBISHI LTD. AND ORS.

                                   MAY 11, 1999

B               [B.N. KIRPAL ANDS. RAJENDRA BABU, JJ.]


          Recovery of Debts Due to Banks' and Financial Institutions Act. 1993;

          Debi., Recovery Tribunal-Suit instituted by Bank-Grant of stay of
C recovery proceedings as a matter of course-Propriety of-Proceeding
    initiated in the State of Madhya Pradesh-Held Allahabad High Court has
    no jurisdiction.

          Petition(s) for Special Leave to Appeal (Civil) No. 6759/1999.

D        From the Judgment and order dated 09.04.1999 in CMWP 15012/99 of
    the High Court of Judicature at Allahabad.

          Ravinder Sethi, Sanjay Gupta and Rajeev Sharma for the Petitioner.
                                                                                       .)

          The Court made the following Order :
E
          We see no reason why the High Courts in such matters filed by the
    defendants in suits instituted by the banks before the Debt Recovery Tribunal
    should more or less as a matter of course grant stay of proceedings before
    the Tribunals. The very purpose of setting up the 'tribunals will be lost by
    granting stay merely because there is challenge to the notification constituting
F   the Tribunal. In the present case, the High Court has rightly come to the
    conclusion that as the proceedings were initiated in the State of Madhya
    Pradesh, the Allahabad High Court had no jurisdiction.

          The special leave petition is dismissed.

    T.N.A.                                                      Petition dismissed.




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