The Delhi High Court held that fraudulent overdrafts and unliquidated claims arising from bank fraud constitute a 'debt' under the RDDB Act, and criminal acquittal does not bar civil recovery claims.
The appellant's Interlocutory Application seeking dismissal of the Original Application under the RDDB Act was dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr. Justice Ashok Menon, Chairperson Misc. Appeal No. 217/2012
Between
Ramesh K. Bathija … Appellant/s V/s.
Punjab National Bank & Ors. …Respondent/s
Mr Bhushan Walimbe, i/b M/r Dharmendra D. Jadhav, Advocate for Appellant.
Mr Pankaj Vijayan, Advocate for Respondent No. 1 (PNB).
Mr Charles De’souza along with Mr Yash Kataria, i/b M/s Mahomedbhai & Co. Advocate for Respondent No. 3.
The appellant is aggrieved by the dismissal of his Interlocutory Application (I.A.) No. 828 of 2012 in Original Application (O.A.) No. 1368 of 2000 pending on the files of the Debts Recovery Tribunal-II, Mumbai (DRT). The appellant is the first defendant in the aforesaid O.A. that was initially filed for recovery of ₹18,17,83,133/- before the Hon’ble High Court of Bombay as Suit No. 394 of 1998 and later transferred to the DRT and refiled under the provision of the Recovery of Debts Due to Banks and Financial Institutions Act, 2002 (“RDDB Act”, for short).
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of the appellant, together with another similar application filed by the fourth defendant, the DRT dismissed the applications. The appellant is aggrieved and hence, in appeal.
The defendants Nos. 1 and 3 were account holders with the respondent bank. It is alleged in the O.A. that these defendants had in collusion with the second defendant who is an employee of the bank, fabricated and forged documents and transferred ₹76.87 lakhs to the account of the fourth defendant fraudulently. There was an overdraft account in the name of the first defendant which was enhanced from time to time to facilitate such fraudulent acts of transfer. A demand promissory note was also executed by the first defendant. Similarly, the third defendant also obtained an overdraft facility in his account. Defendants Nos. 1 to 3 allegedly devised plans of crediting the OD accounts in the name of defendants Nos. 1 and 3 by fabricating fraudulent documents. The bank came to know about such fraudulent acts of transfer based on fabricated documents at the time of reconciliation.
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the appellant and the bank. It is also submitted that the second defendant had earlier filed a similar application for exoneration from the claim and it was dismissed by the DRT. But on appeal before this Tribunal as Misc. Appeal No. 73 of 2004, the contentions of the second defendant were upheld. The bank filed Writ Petition No. 1508 of 2005 before Bombay High Court but the same was dismissed.
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admittedly provided with these facilities for which they entered into transactions with the bank. The Hon’ble High Court specifically observed that the recovery against them falls within the provisions of the said Act.
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consequence as the criminal court was not called upon to determine the pecuniary claim of the bank. The standard of proof required to establish fraud and misappropriation in a criminal case is much higher than in a civil suit where the claim is determined based on preponderance of probabilities and not proof beyond a reasonable doubt. It will also not be out of place to observe that the appellant has not even contested the claim in the O.A. by filing a written statement. The order of the Tribunal below cannot therefore be found fault with. The appeal has no merits and hence, stands dismissed.
Sd/-
Chairperson
mks-01
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3 issues framed by the court
Whether the claim for damages/loss and fraudulent overdraft facilitation falls within the definition of 'debt' under Section 2(g) of the RDDB Act.
Whether the appellant's acquittal in the criminal case bars the DRT from adjudicating the civil pecuniary claim based on preponderance of probabilities.
Whether the Tribunal correctly dismissed the appellant's plea for dismissal of the Original Application.
Colour shows how this judgement treated each authority
Solomon Jacob vs National Bank of India LtdReferred¶23
Solomon Jacob vs National Bank of India Ltd AIR 2017 Bom.118 · Who else cites this
United Bank of India vs. Debts Recovery Tribunal & OrsExplained¶23
United Bank of India vs. Debts Recovery Tribunal & Ors AIR 1999 SC 1381 · Who else cites this
Amit H. Jhaveri and Ano. vs. Bank of Baroda & Ors.Explained¶23
Amit H. Jhaveri and Ano. vs. Bank of Baroda & Ors. 2011 (1) Mh.L.J.55 · Who else cites this
M/s J U Mansukhani & Co. & Ano. vs. Presiding Officer & OrsExplained¶23
M/s J U Mansukhani & Co. & Ano. vs. Presiding Officer & Ors AIR 2000 Delhi 103 · Who else cites this
2 provisions across 1 enactments
Ramesh K. Bathija
Punjab National Bank
Ashok Menon
As recorded by the court registry
9 orders share this CNR
Judgements on the same questions, provisions and authorities, from every court
