The Court held that an assigned debt remains a 'debt' under Section 2(g) of the RDBFI Act, 1993. It set aside the Recovery Officer's order rejecting substitution and permitted the petitioner to file a fresh application for recovery.
Ext.P4 set aside; liberty granted to file a fresh application before the Recovery Officer.
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.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE
FRIDAY, THE 27TH DAY OF MAY 2016/6TH JYAISHTA, 1938
OP (DRT).No. 37 of 2016 (O)
---------------------------DRC NO. 721/SBI/BANGLORE IN TA NO. 1078/1997 OF DEBTS RECOVERY TRIBUNAL (KERALA AND LAKSHADWEEP)
PETITIONER :
M/S. KOTAK MAHINDRA BANK LTD., (A BANKING COMPANY WITHIN THE MEANIING OF THE BANKING REGULATION ACT,1949 AND REGISTERED UNDER THE COMPANIES ACT, 1956) HAVING ITS REGISTERED OFFICE AT 27,BKC,C-27 G.BLOCK, BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI - 400 051, AND BRANCH OFFICE ALL OVER INDIA, ONE SUCH BRANCH AT ERNAKULAM AT KANAKA DAMODAR NO. 40/9702-UA, VEEKSHANAM ROAD, ERNAKULAM, REP. HEREIN BY ITS AUTHORISED OFFICER, MR.DEEPU KRISHNA ACHARYA, AGED 34, S/O.A.K.MUKUNDAN.
BY ADVS.SRI.K.R.VINOD
MS.JENCY SUSAN JOSE SRI.V. SRI NATH
RESPONDENT(S) :
1. THE RECOVERY OFFICER OFFICE OF THE RECOVERY OFFICER, DEBTS RECOVERY TRIBUNAL (KERALA AND LAKSHADWEEP) 8TH FLOOR, KSHB BUILDING, PANAMPILLY NAGAR, KOCHI-36.
2. THE STATE BANK OF INDIA REP. BY ITS BRANCH MANAGER, RESIDENCY ROAD, BENGALURU – 560 025
3. M/S.BANGLORE COPPER PROFILES (P) LTD., 52/B, SARAKKI INDUSTRIAL LAY-OUT, J.P.NAGAR, III PHASE, BENGALURU-560078. REP. BY ITS MANAGING DIRECTOR.
R2 BY ADV. SRI.TOM K.THOMAS
THIS OP (DEBT RECOVERY TRIBUNAL) HAVING COME UP FOR ADMISSION ON 27-05-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
Mn
...2/-
OP (DRT).No. 37 of 2016 (O)
APPENDIX
PETITIONER(S)' EXHIBITS :
EXT.P1. THE COPY OF THE RESOLUTION PASSED AUTHORIZING MR.DEEPU ACHARYA TO REPRESENT THE BANK DATED 27.05.2015.
EXT.P4 THE COPY OF THE ORDER OF THE 1ST RESPONDENT DATED 18.11.2008.
RESPONDENT(S)' EXHIBITS : NIL
//TRUE COPY//
P.S. TO JUDGE
Mn
A.M. SHAFFIQUE, J.
=============
OP(DRT) No. 37 of 2016
===================
Dated this, the 27th day of May, 2016
J U D G M E N T
Petitioner challenges Ext.P4 by which the Recovery Officer rejected an application filed for substituting the petitioner as the applicant in DRC No.721 in TA 1078/97 pending before the Recovery Officer. The Recovery Officer proceeded on the basis that the definition of 'debt' in Section 2(g) of the Recovery of the Debts Due to the Bank and Financial Institutions Act, 1993 (for short “1993 Act) indicates that if the recovery certificate is assigned, the amount ceases to be a debt. Further, he formed an opinion that under the statute, there is no provision for assigning the recovery certificate.
under:
“(g) “debt” means any liability (inclusive of interest) which is claimed as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by
OP(DRT) No.37/16
-:2:-
the bank or the financial institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any civil court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on, the date of the application.”
Debt, therefore, includes assigned debt as well. The petitioner is also a Banking Company. Therefore, the Recovery Officer is not correct in forming an opinion that when there is an assignment, it ceases to be a debt. That apart, when determination of the amount is an Award, which is having the character of a decree, it is assignable under law. Recovery Officer has therefore committed serious error in not permitting substitution. At any rate, there is no necessity for the petitioner to proceed with the very same application filed by the Bank whereas they can file a fresh application after producing necessary documents to indicate that the Award passed by the Debts Recovery Tribunal has been assigned in their favour.
In the result, this original petition is allowed as under: (i) Ext.P4 is set aside.
OP(DRT) No.37/16
-:3:-
(ii) Petitioner is permitted to file a fresh application before the Recovery Officer for recovering the debt in terms of the provisions of the Act and the said authority shall consider and pass appropriate orders in accordance with law.
Sd/- A.M. SHAFFIQUE, JUDGE
Rp27/05/2016
//True Copy//
P.S to Judge
3 issues framed by the court
Whether an assigned debt ceases to be a 'debt' under Section 2(g) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
Whether the Recovery Officer can reject an application for substitution of the applicant based on the definition of 'debt' post-assignment.
Whether the petitioner is permitted to file a fresh application after assignment of the recovery certificate.
1 provisions across 1 enactments
M/S. KOTAK MAHINDRA BANK LTD.
THE RECOVERY OFFICER
THE STATE BANK OF INDIA
M/S.BANGLORE COPPER PROFILES (P) LTD.
A.M. SHAFFIQUE
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
