Holding

The expression ‘debt’ must be given its widest amplitude; the suit is for recovery of a debt and therefore falls within the exclusive jurisdiction of the Debts Recovery Tribunal.

Summary

United Bank of India filed a suit in the Calcutta High Court for recovery of a debt from one defendant and ancillary relief against two others. While the suit was pending, the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 came into force and, under Section 31, the suit was transferred to a Debts Recovery Tribunal (DRT). The defendants contended that the DRT lacked jurisdiction because the claim involved an undetermined amount and was essentially for damages, not a “debt”. The High Court agreed and set aside the DRT’s order. On appeal, the Supreme Court held that the term “debt” in Section 2(g) of the Act must be given its widest amplitude, covering any liability alleged as due from a bank in the course of its business, whether secured or unsecured, and that the entire plaint must be examined to determine jurisdiction. The Court concluded that the suit was essentially for recovery of a debt, so the DRT had exclusive jurisdiction under Sections 17(1) and 31. Consequently, the High Court’s order was set aside and the appeal allowed, directing the DRT to dispose of the suit.

Issues considered

The claim in the suit is a ‘debt’ within the meaning of Section 2(g) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
Whether the Debts Recovery Tribunal has exclusive jurisdiction to try the suit under Section 17(1) and Section 31 despite ancillary reliefs sought against other defendants.
The correctness of the High Court’s finding that an undetermined amount precludes DRT jurisdiction.

Legislation cited

Code of Civil Procedure, 1908s. 9
Recovery of Debts Due to Banks and Financial Institutions Act, 1993s. 17(1), s. 18, s. 2(g), s. 3(1), s. 31

Subjects

Recovery of debtsDebts Recovery Tribunaljurisdictiondefinition of debtSection 2(g)exclusive jurisdictioncivil proceduretransfer of suitancillary relief

Judgment

A UNITED BANK OF INDIA
v.
THE DEBTS RECOVERY TRIBUNAL AND ORS.

APRIL 8, 1999

B (G.B. PATTANAIK AND M.B. SHAH, JJ.]

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

C Sections 17(1), 3(1), 2(g), 18 and 31-Jurisdiction of Debts Recovery
Tribunal-Claims of Banks and Financial Institutions-Held, the entire
averments in the plaint should be examined to find out whether the claims
are such that it is possible to oust the jurisdiction of the tribunals-Expression
'debt' has to be given the widest amplitude and objects of the Act have t(),.
D be taken into consideration to' interpret the provisions of the Act-Hence,
suit filed by the appellant-bank for recovery of debt from one of the several
defendants and for certain ancillary and incidental relieft against other
defendants-Held, DRT had exclusive jurisdiction to try the suit-Civif
Procedure Code, 1908, Section 9. -
'

· E Prime object of the; Act-H:_ld, is the establishment of Tribunal for
expeditious adjudication and recovery of debts due to the banks and financial
---,..
institutions and for matter connected therewith or incidental thereto.

Words and phrases-Word "debt"-Meaning of-Jn the context of the
Recovery of Debts Due to Banks and Financial Institutions Act. 1993.
F Interpretation of statutes-External Aids-Dictionary meaning-Not
necessary when1 the term is already defined in the statu.te.

The appellant-bank filed a suit against three defendants in the High
Court for recovhy of debts from one of the defen~ants and certain ancillary f
G and incidental reliefs against the others. During the pendency of the suit the
Recovery of Debts Due to Banks and Financial Institutions Act, 1993 came
into being and by operation of Section 31 thereof, the suit stood transferred
to the Debts Recovery Tribunal constituted under the Act. The respondents
moved an application before the tribunal that it had no jurisdiction to try the
suit ln view of the nature of the reliefs prayed for and as such the plaint
H should be returned to the plaintiff to be filed in the High Court. The application
. 496
UNITED BANK OF INDIA" THE DEBTS RECOVERY TRIBUNAL 497

-
of the respondents was dismissed by the tribunal. The respondents thereafter, A
filed three separate applications before the High Court under Article 227
challenging the orders passed by the tribunal. The High Court allowed the
applications filed by the respondents on the ground that the claim was of an
undetermined amount and was therefore, not 'debt' as defined under 2(g) of
the Act. Hence this appeal.
B
Allowing this appeal, this Court

HELD : 1.1. The Recovery of Debts due to Banks and Financial
Institutions Act, 1993 and the relevant provisions will have to be construed
bearing in mind the objects for which Parliament passed the enactment. The
prime object of the enactment is to provide for the establishment of tribunals C
for expeditious adjudication and recovery of debts due to banks and financial
.., institutions and for matters connected therewith or incidental thereto .
[501-C]

1.2. In the present case, the expression 'debt' has to be given widest
amplitude to mean any liability which is alleged as due from any person by D
a bank during the course of any business activity undertaken by the bank
either in cash or otherwise, whether secured or unsecured, whether pa:yable
under a decree or order of any court or otherwise and legally recoverable
on the date of the application. In ascertaining the question whether any
particular claim of any bank or financial institution would come within the E
purview of the tribunal created under the Act, the entire averments made by
the plaintiff under the plaint have to be looked into and then is has to be found
out whether notwithstanding the specially-created tribunals having been
constituted, the averments are such that it is possible to hold that the
jurisdiction of such a tribunal is ousted. So examining the averments made
in the plaint, it has to be held that the claim in question made by the plaintiff F
is essentially one for recovery of a debt due to it from the defendants and,
therefore, it is the Debts Recovery Tribunal which has the exclusive
jurisdiction to decide the dispute not the ordinary civil court. [504-B-D)

State of Punjab v. S. Rattan Singh, [1964) 5 SCR 1098, relied on.
Union of India v. Raman Iron Foundry, (1974) 2 SCC 231 and Kesoram
G
Industries and Cotton Mills Ltd. v. Commissioner of Wealth Tax, (1966) 2 CR
688, distinguished.

Webb v. Stenton, (1883) 11 Q.B.D. 518, 527, referred to.

2. Where an expression in any Act has been defined, the said expression H
498 SUPREME COURT REPORTS [1999] 2 S.C.R.

A

-
will have the same meaning and it is not necessary to find out what is the
general meaning of the expression. [503-D)

• CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2161-2163 of
1999.

B From the Judgment and Order dated 30.6.98 of the Calcutta High Court
in C.O. No. 820, 816 and 3374of1997.

G.L. Sanghi, Bhaskar P. Gupta, S.K. Mehta, Dhruv Mehta, Fazlin Anam
Shobha, Jaideep Gupta, C.R. Addy, G. Joshi, S. Bhowmick, Ranjam Mukherjee,
(Jaideep Gupta, Ms. Sangeeta Manda! and Ms. Versha Chowdhury for Fox
C Manda! & Co., for the appeaing parties.
The Judgment of the Court was delivered by

PATTANAIK, J. Leave granted.

D
--
The appellant, United Bank of India filed a suit in the High Court of
Calcutta which was registered as Suit No. 276of1991, claiming different reliefs
against the three defendants. While the suit was pending, the Parliament
enacted the Recovery of Debts Due to Banks and Financial Institutions Act,
1993 (hereinafter referred to as 'the Act') to provide for the establishment of
E tribunals for expeditious adjudication and recovery of debts due to Banks and
Financial Institutions and for matters connected therewith or incidental thereto.
The Act came into force on 24th of June, 1993. By operation of Section 31
of the Act, the suit in question stood transferred to the Debts Recovery
Tribunal, established under the Act and was renumbered as Transferred
Application No. 163 of 1996. The respondents moved an application before
F the tribunal, contending thereunder that the tribunal had no jurisdiction to
entertain suit in question in view of the nature of the reliefs prayed for and
as such, plaint should be returned to the plaintiff for being filed in the High
Court itself. The tribunal disposed of the applications filed by the defendants
holding that the tribunal has the jurisdiction to decide the claim of the
G plaintiff. The three defendants, thereafter filed three separate applications
under Article 227 of the Constitution of India, challenging the orders passed I
by the tribunal. By the impugned order, the High Court set aside the order
of the tribunal on a finding that under the Act, the tribunal gets jurisdiction
to entertain and decide applications from the banks and financial institutions
for recovery of debts due to such banks and financial institutions but the
H plaintiffs claim in question cannot be held to be a 'debt' as defined in Section
UNITED BANK OF INDIA v. THE DEBTS RECOVERY TRIBUNAL [PATTANAIK, J.] 499

2(g) of the Act inasmuch as the claim is of an undetermined sum, which is A
required to be ascertained upon an inquiry to be conducted by the tribunal.
~
The High Court was also of the view that the suit as framed, is one for
damages and compensation which is required to be quantified before a decree
to be passed and such a suit will not be within the purview of the provisions
.... of the Act in question. With these conclusions, the applications of the
defendants having been allowed, the plaintiff has approached this court.
B

Mr. G.L. Sanghi, the learned Senior Counsel, appearing for the plaintiff-
appellant contends that the plaint read as a whole on the basis of averments
made and the reliefs sought for, it cannot be held to be a suit for damages
but on the other hand, it is essentially a suit for realisation of money due to c
a bank which has become due in course of the business activity undertaken
by the bank and as such it is a suit for recovery of a debt under Section 2(g)
of the Act and the High Court committed error in holding that the tribunal
had no jurisdiction. Mr. Sanghi, further contended that while deciding the
question as to whether the claim in question can be adjudicated upon by the
D
tribunal constituted under the Act, the substance of the matter has to be
looked into. According to Mr. Sanghi, a suit for recovery of debt from one
of the defendants does not cease to become so merely because certain
ancillary and incidental relief has been sought for against some other
defendants. Mr. Sanghi, lastly urged that the very purpose and object of the
Act will be frustrated if the suit in question is not allowed to be disposed of E
by the tribunal constituted under the Act and on the other hand is relegated
to the ordinary civil court as has been ordered by the High Court in the
impugned Judgment. According to Mr. Sanghi, the expression 'debt' in Section
2(g) is of wide amplitude and there should be no justification to give a
narrower meaning and thereby limiting the jurisdiction of the tribunal. F

- Mr. Gupta, the learned Senior Counsel, appearing for the defendants
on the other hand contended that the plaintiffs claim is one for damages and
compensation which would again be dependant upon the inquiry or receiving
information from the defendants 2 and 3 with regard to the refund pay orders
and the statement of accounts thereof. According to Mr. Gupta, howsoever G
.... wide the expression 'debt' in Section 2(g) of the Act may be, it will certainly
not encompass within itself the claim of the plaintiff-bank, as there has been
no borrowing from the plaintiff-bank by the defendant No. l and, therefore,
the High Court was fully justified in coming to the conclusion that the tribunal
has no jurisdiction to entertain the suit in question. H
500 SUPREME COURT REPORTS [1999] 2 S.C.R.

A In view of the rival stand of the parties, the short question that arises
for coosideration is, as to whether the said claim of the plaintiff can be said
to be a claim for recovery of debts due to the plaintiff as provided under
Section 17(1) of the Act. The answer to this question in tum would depend "
upon the meaning of the expression 'debt' as defined in Section 2(g) of the
B Act. Before we examine the two provisions referred to above, it is to be borne
in mind that the procedure for recovery of debts due to the banks and
financial institutions which was being followed, resulted in a significant
portion of the funds being blocked. To remedy the locking up of huge funds,
the Finance Minister introduced "The Recovery of Debts Due to Banks and
Financial Institutions Bill, 1993", which was passed by the Parliament and the
C Act has come into existence. The statement and objects of the Act as reflected
in the Bill introduced by the Minister in the Parliament may be extracted
hereunder in extenso :

"Banks and financial institutions at present experience considerable
difficulties in recovering loans and enforcement of securities charged
D with them. The existing procedure for recovery of debts due to the·
banks and financial institutions has blocked a significant portion of
their funds in unproductive assets, the value of which deteriorates
with the passage of time. The Committee on the Financial System
headed by Shri M. Narasimham has considered the setting up of the
Special Tribunals with special powers for adjudication of such matters
E
and speedy recovery as critical to the successful implementation. of
the financial sector reforms. An urgent need was, therefore, felt to
work out a suitable mechanism through which the dues to the banks
and financial institutions could be realised without delay. In 1981, a
Committee under the Chairmanship of Shri T. Tiwari had examined the
F legal and other difficulties faced by banks and financial institutions
and suggested remedial measures including changes in law. The Tiwari
Committee had also suggested setting up of Special Tribunals for
recovery of dues of the banks and financial institutions by following
a summary procedure. 'the setting up of Special Tribunals will not
only fulfil a long-felt need, but also will be an important step in the
G
implementation of the Report ofNarasimham Committee. Whereas on
30th September, 1990 more than fifteen lakhs of cases filed by the
public sector banks and about 304 cases filed by the financial
institutions were pending in various courts, recovery of debts involved
more than Rs.5622 crores in dues of Pllblic Sector Banks and about
H Rs.391 crores of dues of the financial institutions. The locking up of
UNITED BANK OF INDIA v. THE DEBTS RECOVERY TRIBUNAL [PA TTANAIK ,J. J 501

such huge amount of public money in litigation prevents proper A
utilisation and recycling of the funds for the development of the
country.

The Bill seeks to provide for the establishment of Tribunals and
Appellate Tribunals for expeditious adjudication and recovery of debts
due to banks and financial institutions. Notes on clauses explain in B
detail, the provisions of the Bill."

The Act and the relevant provisions will have to be construed bearing
in mind the objects for which the Parliament passed the enactment. The prime
object of the enactment appears to be to provide for the establishment of
tribunals for expeditious adjudication and recovery of debts due to banks and f2
financial institutions and for matters connected therewith or incidental thereto.

The expression 'debt' has been defined in Section 2(g) to mean :

"Sec.2(g): 'debt' means any liability(inclusive of interest) which is
alleged as due from any person by a bank or a financial institution or D
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 whether payable
under a decree or order of any civil court or otherwise and subsisting E
on, and legally recoverable on, the date of the application.'.'

Section 3(1) provides for establishment of tribunal which reads as
under:

"Section3(1): The Central Government shall, by notification, establish F
one or more Tribunals, to be known as the Debts Recovery Tribunal,
to exercise the jurisdiction, powers and authority conferred on such
Tribunal by or under this Act."

Section 17(1) provides the jufisdiction, powers and authority of tribunal
which reads as under :
G
"Section 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 anq financial institutions".

Section 18 bars the jurisdiction of other courts and authority on and H
502 SUPREME COURT REPORTS . [1999] 2 S.C.R.

A from the appointed day to exercise any jurisdiction in relation to the matters
specified in Section 17.

Section 31 is the provision for transfer of pending cases which reads
as under :

B "Section 31: (1) Eve.ry suit or other proceeding prnding 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.
c
Provided that nothing in this sub-section shall apply to any
appeal pending as aforesaid before any court.

(2) Where any suit or other proceedings stands transferred from
any court to a Tribunal under sub-section
D
(1) (a) the court shall, as soon as may be after such transfer, forward
the records of such suit or other proceedings to the Tribunal;
and

(b) the Tribunal may, on receipt of such records, proceed to deal
E 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 or de-novo as the Tribunal may deem fit."

But we are not really very much concerned with the aforesaid provision
F since the suit in question had in fact been transferred to the tribunal. At this
stage it will be necessary to notice a few authorities cited at the bar. Mr.
Gapta, for the respondents relied upon the decision of this court iu Union of
India v. Raman Iron Foundry, [1974] 2 SCC 231, in support of his contention
that the plaintiffs claim cannot be held to be a debt within the meaning of
G Section 2(g) of the Act. In the aforesaid case, the issue before the court was
whether in view of Clause 18 of the General Conditions of Contract contained
in standard form of contract, can the Government exercise the right to retain
the money due to the contractor even before the claim against the contractor
is satisfied. Thus Clause 18 of the General Conditions of Contract was for
consideration and considering the same, the court repelled the stand of Union
H of India that it can retain the sum of the contractor, even before the claim of
UNITED BANK OF INDIA v. THE DEBTS RECOVERY TRIBUNAL [PATTANAIK,J.] 503

the Union against the contractor is adjudicated upon. We do not think that A
this decision is of any assistance for adjudicating the lis in question in the
case in hand.

Mr. Sanghi, the learned Senior Counsel, appearing for the appellant
relied upon the decision of this court in Ke"'Soram Industries & Cotton Mills
Ltd. v. Commissioner of Wealth Tax (Central) Calcutta, reported in, (1966] B
2 SCR 688, in support of his contention that the plaintiff's claim would be a
debt. In the aforesaid case, the court was considering as to what is the
meaning of the expression 'debt' as it was required to ascertain whether a
liability to pay income tax and super tax on the income of the accounting year
would be a 'debt' within the meaning of Section 2(m) of the Wealth Tax Act. C
This decision to our mind will be not of much assistance inasmuch as the
expression 'debt' has been defined in the Act in question though the general
meaning of 'debt' may be of a persuasive value in interpreting the expression
'debt' in the Act but it is too well settled that where an expression in any
Act has been defined, the said expression will have the same meaning and
is not necessary to find out what is the general meaning of the expression. D
In the aforesaid case, the court noticed as to how the word 'debt' was
interpreted in Webb v. Stenton, (1883) 11 Q.B.D., 518, 527, wherein it was held
a 'debt' is a sum of money which is now payable or will become payable in
the future by reason of a present obligation, debitum in presenti, solvendum
in future. After noticing a large number of authorities, the court also held that E
all the decisions agree that the meaning of the expression 'debt' may take
colour from the provisions of the concerned Act; it may have different states
of meaning, but the following definition is unanimously accepted; a debt is
a sum of money which is now payable or will become payable in future by
reason of a present obligation. •

In the case of State of Punjab v. S. Rattan Singh, (1964] 5 SCR 1098,
F
on which Mr. Sanghi has also relied upon, the question for consideration was
whether in view of Sections 4 and 11 of the Patiala Recovery of State Dues
Act, a civil court can have jurisdiction to decide if a person is a defaulter or
not. After examining the provisions of Sections 4 and 11 of the said Recovery
Act, this court came to hold :- G
"It is reasonable to conclude that the provisions of Section 4 of the
Act empower the head of the department to determine not only the
amount of State dues recoverable but also the liability of the alleged
defaulter to pay those debts. It follows, therefore, that in view of
provisions of Section 11 of the Act, no civil court can have jurisdiction H
504 SUPREME COURT REPORTS [1999] 2 S.C.R.

A to determine these two matters, such as determining the amount of
State dues recoverable and the liability of the alleged defaulter to pay
the amount."

In the case in hand, there cannot be any dispute that the expression
'debt' has to be given the widest amplitude to mean any liability which is
B alleged as dues from any person by a bank during the course of any business
activity undertaken by the bank either in cash or otherwise, ·;1hether secured
or unsecured, whether payable under a decree or order of any court or
otherwise and legally recoverable on the date of the application. In ascertaining
the question whether any particular claim of any bank or financial institution
would come within the purview of the tribunal created under the Act, it is
c imperative that the entire averments made by the plaintiff in the plaint have
to be looked into and then find out whether notwithstanding the specially
created tribunal having been constituted, the averments are such that it is
possible to hold that the jurisdiction of such tribunal is ousted. With the
aforesaid principle in mind, on examining the averments made in the plaint,
D we have no hesitation to come to the conclusion that the claim in question
made by the plaintiff is essentially one for recovery of a debt due to it from
the defendants and, therefore, it is the tribunal which has the exclusive
jurisdiction to decide the dispute and not the ordinary civil court. In this view
of the matter the High Court was in error to hold that the dispute in question
is not entertainable by the tribunal under Section 17 of the Act. We,
E accordingly set aside the impugned order- of the Calcutta High Court and
direct that the suit in question which stood transferred to· the tribunal,
constitu~ed under the Act and was registered as Transferred Application
No.163 of 1996 be disposed of by the tribunal in accordance with law. These
-
appeals are allowed but in the circumstances, without any order as to costs.
F Appeals allowed.
RKS.