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Issues: (i) whether a mistaken credit and consequent obligation to repay amounted to a "debt" within the meaning of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993; and (ii) whether the Debts Recovery Tribunal had jurisdiction to entertain and decide the dispute arising from the claim.
Issue (i): whether a mistaken credit and consequent obligation to repay amounted to a "debt" within the meaning of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
Analysis: The expression "debt" was treated as wide enough to include a liability in money terms that is ascertained or ascertainable, subsisting, and legally recoverable. The Court held that where money is received under a mistaken credit and is knowingly retained, the recipient is under an obligation to repay, and the situation may also give rise to a constructive trust and fiduciary obligation to make restitution. The liability was therefore not viewed as a mere dispute outside the statutory definition, but as a monetary obligation capable of adjudication.
Conclusion: The obligation arising from the mistaken payment was a "debt" and a subsisting, legally recoverable liability within the statutory definition.
Issue (ii): whether the Debts Recovery Tribunal had jurisdiction to entertain and decide the dispute arising from the claim.
Analysis: The Act was construed as creating a forum for expeditious adjudication of claims by banks and financial institutions, with jurisdiction extending to questions that fall within the statutory definition of debt. The Court emphasised that, for deciding jurisdiction on transfer, the plaint averments, not the defence, are decisive. Since the plaint itself alleged a liability in money terms in favour of a financial institution, the claim was held to fall within the Tribunal's adjudicatory power, leaving the Tribunal to decide the merits uninfluenced by the High Court's observations.
Conclusion: The Debts Recovery Tribunal had jurisdiction to try the claim.
Final Conclusion: The impugned transfer order was upheld, and the appeal failed because the dispute was held to fall within the Tribunal's statutory jurisdiction.
Ratio Decidendi: For purposes of transfer and adjudication under the Act, a monetary liability alleged in the plaint, including one arising from mistaken payment and capable of restitution, constitutes a "debt" if it is subsisting and legally recoverable, and jurisdiction is to be determined from the plaint averments.
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