JUDGMENT
C.N. Ramachandran Nair, J.
1. Petitioner is a nationalized Bank to which an amount of Rs. 6.94 lakhs is due from the 8th respondent in O.A.No. 66 of 2004 filed by the second respondent before the Debt Recovery Tribunal, Ernakulam. According to the petitioner the application filed by it under Section 19(2) of the Recovery Debts due to Banks and Financial Institutions Act, 1993, hereinafter called the “Act”, is returned by the Registrar of DRT on the ground that application is not maintainable by virtue of Section 1(4) of the Act, as the claim amount is less than Rs. 10 lakhs. Another objection raised for declining the application is that the petitioner is already impleaded in O.A.No. 66 of 2004 filed by the second respondent herein as additional 9th respondent. Eventhough appeal against rejection of application by the Registrar of the DRT is maintainable before the DRT under Rule 5 of the Debts Recovery Tribunal Procedure Rules, 1993, petitioner has approached this Court to avoid delay and to have an authoritative pronouncement on an issue arising in several cases concerning Banks. Having regard to the recurring nature and importance of the issue raised, an authoritative pronouncement is called for. Therefore this W.P. is entertained, overlooking the alternate statutory remedy available by way of appeal to the DRT. I have heard Sri. P.B. Sahasranaman, counsel appearing for the petitioner, Sri. C. Varghese Kuriakose, counsel appearing for the second respondent and Sri. John Varghese, SCGSC appearing for the first respondent.
2. In order to appreciate the nature of issue raised, Section 19(1) to (4) have to be gone into and for easy reference the said section is extracted hereunder:
19. Application to the Tribunal:–
(1) Where a Bank or a Financial Institution has to recover any debt from any person, it may make an application to the Tribunal within the local limits of whose jurisdiction:–
(a) the defendant, or each of the defendants where there are more than one, at the time of making the application, actually and voluntarily resides, or carries on business or personally works for gain; or
(b) any of the defendants, where there are more than one, at the time of making application, actually and voluntarily resides, or carried on business, or personally works for gain; or
(c) the cause of action, wholly or in part, arises
(2) Where a Bank or a Financial Institution which has to recover its debt from any person, has filed an application to Tribunal under Sub-section (1) and against the same person another Bank or Financial Institution also has a claim to recover its debt, then, the later Bank or Financial Institution may join the applicant bank or financial institution at any stage of the proceedings, before the final order is passed, by making an application to that Tribunal.
(3) Every application under Sub-section (1) or Sub-section (2) shall be in such form and accompanied by such documents or other evidence and by such fee as may be prescribed.
Provided that the fee may be prescribed having regard to the amount of debt to be recovered:
Provided further that nothing contained in this sub-section relating to fee shall apply to cases transferred to the Tribunal under Sub-section (1) of Section 31.
(4) On receipt of the application under Sub-section (1) or Sub-section (2) the Tribunal shall issue summons requiring the defendant to show cause within thirty days of the service of summons as to why the relief prayed for should not be granted.
On going through the scheme of the above provisions, I feel, a second application against the same defendant by another Bank or Financial Institution is maintainable before the DRT irrespective of the amount of claim, and the minimum amount required under Section 1(4) of the Act has no application in such cases. All what is required for maintaining a second application before the DRT under Section 19(2) of the Act by a Bank or Financial Institution is the pendency of an application filed by a Bank or Financial Institution under Section 19(1) of the Act where obviously the claim should be for the minimum amount covered by Section 1(4) of the Act. In other words, once an application is filed by a Bank or Financial Institution under Section 19(1) of the Act in conformity with Section 1(4) of the Act, a subsequent application by any other Bank or Financial Institution is maintainable under Section 19(2) even if the claim is less than the minimum amount stated in Section 1(4) of the Act. If a contrary interpretation is adopted, then the result will be that different Banks and Financial Institutions will have to file suits against the same defendant before different Civil Courts depending upon the limits of jurisdiction and in DRT. It is only to avoid multiplicity of litigation and to decide priority of claims of different Banks and Financial Institutions against the same defendant, consolidation of cases are provided under Section 19(2) of the Act. The only requirements are that applicant under Section 19(2) should be a Bank or Financial Institution and the claim should be against the same person against whom an application filed under Section 19(1) is pending before the DRT. Therefore if an application filed by a Bank or Financial Institution under Section 19(1) is maintainable, then all subsequent applications filed by any other Bank or Financial Institution against the same defendant are maintainable irrespective of the amount involved in the claim of the Bank or Financial Institution which makes later application under Section 19(2) of the Act. Therefore, the rejection of the petitioner’s application by the first respondent on account of claim of the petitioner being less than the amount mentioned in Section 1(4) of the Act is not correct or tenable.
3. An objection is raised by the second respondent that a second application under Section 19(2) is not maintainable unless the petitioner establishes that the security furnished to it is the same as the one furnished to the second respondent which has filed application under Section 19(1) of the Act. I am unable to accept this because Section 19(2) does not make it a condition that the security furnished to second, or subsequent Applicant–Bank or Financial Institution which files application under Section 19(2) of the Act should be the same as furnished to the Bank or Financial Institution which filed application under Section 19(1) of the Act. This is because a decree can be against the property mortgaged and against the debtor personally in which case decree can be executed against other assets as well. Therefore the purpose of consolidation of applications filed by Banks or Financial Institutions under Section 19(2) with the first application by another Bank or Financial Institution is to ensure passing of a common decree by the DRT against same defendant covering preferential claims of all the applicant–Banks and Financial Institutions. In other words, DRT is vested with exclusive jurisdiction under Section 19(1) and (2) to take care of the interests of ail the claimant-Banks and Financial Institutions against the same debtor. Therefore in order to file an application under Section 19(2) there is no requirement that the security offered for the claim amount should be the same as that of the security given for the claim amount covered in the application pending under Section 19(1) of the Act.
4. The next question raised is whether the inclusion of the petitioner as additional respondent in the O.A. filed by the second respondent under Section 19(1) is sufficient to protect the interests of the petitioner. What is contemplated under Section 19(2) is not to throw another Bank or Financial Institution in the defendant’s side along with the debtor. An applicant making a second application under Section 19(2) is in the same position as that of the first applicant under Section 19(1), though priority in disbursement of amount will depend upon which Bank or Financial Institution has first charge over the property. A defendant impleaded in the OA is entitled to make a counter claim, remit court fees and ask for a decree against the plaintiff. However, it is not permissible for a defendant to get a decree against another defendant in a counter claim. Going by Sub-section (3) of Section 19, there is a requirement of application under Section 19(2) being filed in the prescribed form accompanied by documents and other evidence in support of the claim and along with court fee. Therefore the inclusion of the petitioner as additional 9th defendant in the OA though amounts to no objection by the second respondent does not fit in the scheme of Section 19(2) and (3) of the Act. The petitioner has to be on the claimant’s side and the petitioner rightly filed application under Section 19(2) and (3) in the prescribed form accompanied by court fees and documents and evidence in support of its claim in terms of the Rules.
W.P. is therefore disposed of setting aside Ext.P4 with direction to the first respondent to accept the application filed by the petitioner under Section 19(2) of the Act, subject to compliance with Sub-section (3) of Section 19 in regard to remittance of court fee, documents and evidence and place the same before the DRT along with the pending application filed by the second respondent herein under Section 19(1) of the Act.