Suits With Basic Relief Of Challenging Decree Passed By DRT Not Maintainable: SC

The Supreme Court has observed that the suits with the basic relief of challenging the decree passed by the Debts Recovery Tribunal (DRT) are not maintainable.

In this case, the suits were filed challenging the decree passed by the DRT. The Bank filed applications to reject the plaints in exercise of powers under Order 7 Rule 11(d) of the Code of Civil Procedure on the ground that considering the provisions of Recovery of Debts due to Banks and Financial Institutions Act, 1993, more particularly Sections 18, 19 and 20 of the Act, the suits are not maintainable. The Trial Court and later the High Court dismissed the applications.

Therefore, the issue considered by the Apex Court bench in the appeal filed by the bank was whether the suits filed by the plaintiffs were liable to be rejected in exercise of powers under Order 7 Rule 11(d) of the CPC or not?

Allowing the appeal, the bench comprising of Justice Uday Umesh Lalit, Justice Indira Banerjee and Justice MR Shah noted the judgment in Punjab National Bank v. O.C. Krishnan and others, (2001) 6 SCC 569. Which had held that, without exhaustion of the remedies under the RDDBFI Act, the High Court ought not to have exercised its jurisdiction under Article 227. It observed:

” without exhausting the remedy of appeal provided under the RDDBFI Act, the suits with the basic relief of challenging the decree passed by the DRT were liable to be dismissed, as observed and held by this Court in the case of O.C. Krishnan and others (supra).”
The bench observed that since the plaints are vexatious, frivolous, meritless and nothing but an abuse of process of law and court, it s is a fit case to exercise the powers under Order 7 Rule 11 (d) of the CPC. It added:

“Be that as it may, considering the pleadings/averments in the suits and the allegations of fraud, we are of the opinion that the allegations of fraud are illusory and only with a view to get out of the judgment and decree passed by the DRT. We are of the opinion that therefore the suits are vexatious and are filed with a mala fide intention to get out of the judgment and decree passed by the DRT.”

HC asks ‘Fin minister sleeping?’ over DRT not functioning

Mumbai: The Bombay High Court expressed annoyance today over the non-functioning of the Debts Recovery Tribunal (DRT), whose premises here were closed following a fire over a month ago, and sought to know “if the finance minister of the country was sleeping” over the shutdown of a key body.

The court said while Mumbai was considered the financial capital of the country, the city-based DRT, which dealt with debt-recovery cases involving banks, financial institutions and their customers, was non-functional for over a month.
A division bench of justices A S Oka and Riyaz Chagla made the critical remarks while hearing a petition filed by the Debts Recovery Tribunal Bar Association, seeking a direction to the Union government to allot another space for the tribunal’s office in south Mumbai.
The DRT, located in the Scindia House building at Ballard Estate in south Mumbai, has been non-functional since a fire broke in the building on June 2.
The court sought to know from the Union government by when it would identify an alternative place for the tribunal.

“The government should be doing all this on their own, instead of the issue coming before us and the court passing orders,” Justice Oka observed.
“In the financial capital of the country, the Debts Recovery Tribunal is not functioning…Is the finance minister sleeping?” Justice Oka said.
The court posted the petition for further hearing on July 25 and asked the Centre to identify another place to house the tribunal by then.