NAHAR INDUSTRIAL ENTERPRISES LTD v. HONG KONG & SHANGHAI BANKING CORPORATION

8.1. The Civil Court indisputably has the jurisdiction to try a suit. If the suit is vexatious or otherwise not maintainable action can be taken in respect thereof in E terms of the Code. But if all suits filed in the Civil Courts, whether inextricably connected with the application filed before the ORT by the banks and financial institutions are transferred, the same would amount to ousting the jurisdiction of the Civil Courts indirectly. Suits filed by the F debtor may or may not be counter claims to the clairris fifed by banks or financial institutions but for that purpose consent of the plaintiff is necessary. It is furthermore difficult to accept the contentions of the respondents that the statutory provisions contained in section 17 and 18 of the ORT Act have ousted the jurisdiction of the civil court as the said provisions clearly state that the jurisdiction of the civil court is barred in relation only to applications from banks and financial institutions for recovery of debts due to such banks and financial G H .,_ i' ~ 64 SUPREME COURT REPORTS [2009] 12 S.C.R. A institutions. A civil court is entitled to decide the respective claims of the parties in a suit. It must come within the purview of the hierarchy of courts as indicated in Section 3 of the Code. It will have jurisdiction to determine all disputes of civil nature unless the same is B barred expressly by a statute or by necessary implication. The jurisdiction of the civil court would be ousted only in respect of the matters contained in Section 18 which has a direct co-relation with Section 17 thereof, that is to say that the matter must relate to a debt C payable to a bank or a financial institution. The application before the Tribunal would lie only at the instance of the bank or the financial institution for the recovery of its debt. Had the jurisdiction of the civil courts been barred in respect of counterclaim also, the statute would have said so and Sections 17 and 18 would have been amended the provision of introduce counterclaim. [Para 19] [125-E-H; 126-A-E] D \. .._

8.2. It must be rememl:iered that the jurisdiction of a civil court is plenary in nature. Unless the same is ousted, E expressly or by necessary implication, it will have jurisdiction to try all types of suits. [Para 19] [127-B-C]

8.3. The Act, although, was enacted for a specific ~ purpose but having regard to the exclusion of jurisdiction F expressly provided for in Sections 17 and 18 of the Act, it is difficult to hold that a civil court's jurisdiction is completely ousted. Indisputably the banks and the financial institutions for the purpose of enforcement of their claim for a sum below Rs. 10 lakhs would have to file civil suits before the civil courts. It is only for the claims of the banks and the financial institutions above the aforementioned sum that they have to approach the Debt Recovery Tribunal. It is also without any cavil that the banks and the financial institutions, keeping in view the provisions of Sections 17 and 18 of the Act, are G H r NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG KONG & SHANGHAI BANKING CORPN. 65 4 necessarily required to file their claim petitions before the A Tribunal. The converse is not true. Debtors can file their claims of set off or counter-claims only when a claim application is filed and not otherwise. Even in a given situation the banks and/or the financial institutions can ask the Tribunal to pass an appropriate order for getting 8 the claims of set-off or the counter claims, determined by a civil court. The Tribunal is not a high powered tribunal. It is a one man Tribunal. Unlike some Special Acts, as for example Andhra Pradesh Land Grabbing (Prohibition) A Act, 1982 it does not contain a deeming provision that the c Tribunal would be deemed to be a civil court. [Para 19] [130-A-E] .._

8.4. The liabilities and rights of the parties have not been created under the Act. Only a new forum has been created. The banks and the financial institutions cannot D approach the Tribunal unless the debt has become due. In such a contingency, indisputably a civil suit would lie. "' There is a possibility that the debtor may file preemptive suits and obtain orders of injunction, but the same alone, by itself cannot be held to be a ground to completely oust E the jurisdiction of the civil court in the teeth of Section 9 of the Code. Recourse to the other provisions of the Code will have to be resorted to for redressal of his individual grievances. It is also difficult to accept the contention that the civil court's jurisdiction is not in F consonance with the Act. [Para 19] [130-F-H; 131-A] y

8.5. On the ground of inconsistency in the procedures contained in the two Acts alone, the jurisdiction of the civil court cannot be said to have been G ousted. Sub-section (2) of Section 22 deals with { applicability of the provisions of the Code in a limited manner. Sub-section (3) raises a legal fiction that the proceeding before the Tribunal or the Appellate Tribunal shall be deemed to be a judicial proceeding within the H 66 SUPREME COURT REPORTS [2009] 12 S.C.R. A meaning of Sections 193 and 228 and for all the purposes of Section 196 of the Indian Penal Code, 1860. The very fact that a legal fiction has been created and the Tribunal or the Appellate Tribunal shall be deemed to be a civil court for purposes of Section 195 and Chapter XXVI of B the Code of Civil Procedure, 1908, itself suggests that the Parliament did not intend to take away the jurisdiction of the civil court. In any event, the said legal faction has a limited application. Its scope and ambit cannot be extend.ed. The Parliamentary statutes, like the Family c Courts Act confer all the powers on Family Courts which are essential for discharging the functions of Civil Court under the Code of Criminal Procedure. This Court accepts that disposal of a civil suit takes a long time. But indisputably remedy of summary and speedy trial by itself would not be sufficient to oust the jurisdiction of the civil court. Had the intention of the Parliament been so, it could have expressly said so. Casus omissus, as is well known, cannot be supplied. [Para 19] [131-8; 132-H; 133- A-F] 0 E Dhulabhai v. State of M.P., (1968) 3 SCR 662; Dwarka Prasad Agarwal v. Ramesh Chander Agarwal, (2003) 6 SCC 220; Nagri Pracharini Sabha v. Vth Addi. Distt. and Sessions Judge, 1991 Supp (2) SCC 36; Ramesh Chand Ardawatiya v. Anil Panjwani, (2003) 7 SCC 350; Rajasthan SRTC v. Zakir F Hussain, (2005) 7 SCC 447 and Vijay Kumar Sharma v. State of Kamataka, (1990) 2 SCC 562, referred to.

9.1. The Code not only contains procedural provisions but also substantive rights ; right of appeal is one of them. A forum of appeal is determined in terms of G the provisions of the Code having regard to the pecuniary jurisdiction of the Court as may be notified by the appropriate Government from time to time. A suitor has the right to maintain a first appeal. A second appeal also is maintainable before a High Court, subject of course to H the effect that questions of law must be there for the > _, f NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG KONG & SHANGHAI BANKING CORPN. 67 court's consideration. For the said purpose no pre- A deposit is required to be made, as is necessary in terms of the Act, that 75% of the awarded amount is required to be deposited, subject of course, to an order to the contrary, which may be passed by the Debt Recovery Appellate Tribunal. Such a right of conditional appeal, B curtails party's right to maintain an appeal as a matter of right. While saying so, this Court is not oblivious of the fact that in terms of Order XLI Rule 1 of the Code, in the event of passing of a money decree the amount is required to be deposited. The said provision, however, c has been held to be directory. Order XLI Rule 1 is required to be read with Order XLi Rule 5 thereof. [Para 20) [135- C-F) '

9.2. A civil suit may also be maintainable before Original Side of the High Court in terms of the statutes D under which the High Courts are constituted or in terms of the provisions of the Letters Patent. An intra court appeal is available against a decree passed by a Single Judge of a High Court in a suit filed before it. In the event, however, if a civil suit is transferred to the Debt Recovery E Tribunal, the plaintiff would be deprived of his right in relation to the procedural mechanism as contained in the Code as also the Evidence Act. His right of appeal would "' also stand curtailed. While exercising the power of transfer, the High Court and this Court would thus be F curtailing the right of a suitor indirectly which could not be done directly. It clearly establishes the Parliamentary intent that only civil suits are subject matter of inter State transfer from one civil court to another civil court. If such a power is exercised, all the rights of the plaintiff remain G intact, no right is taken away and no right is diluted. [Para ~ 20) [136-8-E] Colonial Sugar Refining Company v. Irving, (1905) AC 369 (PC); Garikapati Veeraya v. N. Subbiah Chaudhry, -1957 SCR 488; Dilip S. Dahanukar v. Kotak Mahindra Co. Ltd. and H 68 SUPREME COURT REPORTS [2009] 12 S.C.R.