LAXMIKANT v. BANK OF BAHRAIN & KUWAIT BSC, a Banking

Judgment

1. 2. Versus BANK OF BAHRAIN & KUWAIT BSC, a Banking Corporation incorporated in the State of Bahrain by an Amiri Decree of March, 1971 and having its Head office at 43, Government Avenue, P. O. Box No.597, Manama, 306, Bahrain and branch office at Joly Maker Chamber II, Ground Floor, 225, Nariman Point, Mumbai – 400 021 ASHIMA LIMITED , a Company incorporated under the Companies Act, 1956 and having its registered office at 310, Ashima House, Kavi Nanalal Marg, Ahmedabad - 380 006 and branch at 201 Tulsiani Chambers, 212, Nariman Point, Mumbai – 400021 ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ]….. Respondents Page 1 of 16 Pursuant to the speaking to minutes of order dated 24 February 2025, this judgment is corrected in terms of its edited version JUDGMENT WP-9344.24&WP-12708.24-II.DOCX ALONG WITH WRIT PETITION NO.12708 OF 2024 Bank of Bahrain & Kuwait B.S.C., A Banking Corporation Incorporated in The State of Bahrain by an Amiri Decree of March 1971 and having Its Head, Office At 43 government Avenue, P.

O. Box No.597 manama 306, Bahrain and Amongst Others A Branch Office at Jolly Maker Chamber II, Ground Floor, 225, Nariman Point, Mumbai – 400 021 through Mr. Guru Prasad Pantula the Power of Attorney Holder Versus ] ] ] ] ] ] ] ] ] ] ] ]….. Petitioner. 1] 2] HDFC Bank Limited A Limited Company Incorporated Under the Companies Act, 1956 And having its Office at 2nd Floor, Trade World New Building, Kamla Mills, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013 Ashima Limited A Company Incorporated under the Provisions of the Companies Act, 1956, and having its Registered Office at Texcellence Complex Khokara Mehmedabad, Ahmedabad – 380 021 Gujarat; And an Office at 201, Tulsiani Chambers, Nariman Point, Mumbai – 400 021 ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ] ]…..

Respondents. ______________________________________________________ Mr Virag Tulzapurkar, Senior Advocate a/w Mr. Sameer Pandit, Ms. Sarrah Khambati i/by Wadia Ghandy & Co. for the Petitioner in Writ Petition No.9344 of 2024. Page 2 of 16 Pursuant to the speaking to minutes of order dated 24 February 2025, this judgment is corrected in terms of its edited version JUDGMENT WP-9344.24&WP-12708.24-II.DOCX Dr. Birendra Saraf, Senior Advocate a/w Mr. Rajeev Pandey a/w Mr. Madhur Rai and Mr. Sachin Kanse i/by PRS Legal for the Petitioner in Writ Petition No.12708 of 2024 and for Respondent No.1 in Writ Petition No.9344 of 2024 Mr. Sameer Pandit a/w Ms. Sarrah Khambati i/by Wadia Ghandy & Co. for Respondent No.1 in Writ Petition No.12708 of 2024.

Mr. Veerendra Tulzapurkar, Senior Advocate a/w Mr. Shivam Bhagwati and Mr. Mufaddal Peparwala i/by Crawford Bayley & Co. for Respondent No.2 in Writ Petition No.9344 of 2024. Mr. Shivam Bhagwati a/w Mr. Mufaddal Peparwala i/by Crawford Bayley & Co. for Respondent No.2 in Writ Petition No.12708 of 2024. ______________________________________________________ CORAM M.S. Sonak & Jitendra Jain, JJ. Reserved on : 17 February 2025 20 February 2025 Pronounced on : JUDGMENT : (Per M. S. Sonak, J.) 1. 2.

Heard learned counsel for the parties. The learned counsel for the parties agree that both these Petitions can be disposed of by a common order.

3. Accordingly, we issue Rule in both these Petitions. The rule is made returnable immediately at the request of and with the consent of learned counsel for the parties.

4. In Writ Petition No.9344 of 2024, the Petitioner – HDFC Bank Limited (HDFC), vide prayer clause (a) challenges Debt Recovery Appellate Tribunal’s common order dated 26 April 2024 (Impugned Order) disposing of Appeal Nos. 2 of 2018 and 32 of

2018. In alternative to prayer (a), the Petitioner, vide prayer clause Pursuant to the speaking to minutes of order dated 24 February 2025, this judgment is corrected in terms of its edited version JUDGMENT WP-9344.24&WP-12708.24-II.DOCX (b) seeks a declaration that the amount the Petitioner claims from the Respondents constitutes, a “debt” under Section 2(g) of the Recovery of Debts And Bankruptcy Act, 1993 (‘the said Act’) and for quashing of the Impugned Order. Further, in alternative to prayer clauses (a) and (b), the Petitioner, vide prayer clause (c), in addition to quashing the Impugned Order, seeks a direction to the Debts Recovery Appellate Tribunal to decide whether the Petitioner’s claim constitutes a debt within meaning of Section 2(g) of the said Act.

5. In Writ Petition No. 12708 of 2024, the Petitioner -Bank of Bahrain & Kuwait, B.S.C. (“BBK”) seeks a modification of the Impugned Order to the extent of directing the HDFC to release the amount of Rs.20,70,44,806.75/- along with accrued interest, lying in the No-Lien account with the HDFC to the BBK.

6. Since both the Petitions concerned with the Debts Recovery Appellate Tribunal’s (“DRAT”) Impugned Order, it is only appropriate that they are disposed of by a common judgment and order.

7. Mr. Virag Tulzapurkar, learned Senior Advocate for the HDFC, submitted that the Respondents’ Appeals against Debts Recovery Tribunal’s (“DRT”) order dated 26 October 2005 (Exhibit K) were withdrawn by the Respondents. Therefore, the finding in DRT’s order dated 26 October 2005 that the HDFC’s claim constituted a “debt” under Section 2(g) of the said Act attained finality. He submitted that event the DRAT directed adjudication of the HDFC’s original application “on merits”, which means whether the debt was indeed payable based on the evidence on record. He submitted that there is no justification for the DRAT not to rule on this specific issue in its Impugned Order. He submitted that this Pursuant to the speaking to minutes of order dated 24 February 2025, this judgment is corrected in terms of its edited version JUDGMENT WP-9344.24&WP-12708.24-II.DOCX was a case of failure to exercise jurisdiction warranting interference with the impugned order.

8. Mr Viraag Tulzapurkar, without prejudice, submitted that this matter did not involve any seriously disputed questions of fact. The entire material was before the DRAT. No case was made out for a remand. The settled principles regarding remand of matters were not followed by the DRAT. Accordingly, the Impugned Order be set aside and the DRAT be directed to decide all the issues in the Appeals instituted by the Respondents against the DRT’s order. Mr Viraag Tulzapurkar relied upon Arvind Kumar Jaiswal (D) THR. LR Vs. Devendra Prasad Jaiswal Varun1, Ashwinkumar K Patel Vs. Upendra J. Patel and others2, Municipal Corporation, Hyderabad Vs. Sunder Singh3 and S. P. Builders & Ors. Vs Chairperson, Debts Recovery Appellate Tribunal & ors4 in support of his contentions.

9. Dr Birendra Saraf, learned Senior Advocate for BBK, tendered a copy of the purshis in Miscellaneous Appeal No. 89 of 2006 and submitted that leave was sought to withdraw the Appeal with liberty to raise all contentions, including the contention of jurisdiction as to whether the HDFC’s claim constituted a debt before the DRT. He submitted that the DRAT by order dated 11 July 2014 disposing of Respondents’ Appeals allowed the Respondents to withdraw their Appeals by keeping open all contentions, including contentions going to the jurisdiction of the DRT to entertain HDFC’s original application. He submitted that the orders even directed the DRT to consider the matter on merits, uninfluenced by the earlier orders of the DRT. He therefore 1