2002 (9) TMI 772 - HC - Companies Law

Tribunal Upholds Defendants' Counterclaim Rights Under Amended Act

The Court held that the Debts Recovery Tribunal had jurisdiction to entertain counter claims following amendments to the Recovery of Debts Due to Banks ... Application to Tribunal Issues Involved:Transfer of suit to Debts Recovery Tribunal under Recovery of Debts Due to Banks and Financial Institutions Act, 1993 - Jurisdiction of Tribunal to entertain counter claims - Impact of subsequent amendments to the Act.Analysis:The case involved the transfer of a suit from the High Court to the Debts Recovery Tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The defendants had filed a counter claim in the original suit before the High Court, challenging the suit claim and seeking to have their counter claim heard. However, the Tribunal initially declined to consider the counter claim, stating it was based on a separate cause of action outside the Tribunal's jurisdiction. The defendants argued that their counter claim, filed before the Act came into force, should be heard along with the suit to avoid prejudice and ensure a fair trial. They also highlighted the commonality of documents supporting both their defense and counter claim.Subsequent amendments to the Act, particularly Section 19, expanded the Tribunal's powers to adjudicate on counter claims and objections raised by the bank. The amended provisions allowed for a comprehensive consideration of both the main claim and any counter claims, ensuring a more efficient and just resolution of disputes. The Court acknowledged the significance of these amendments, which empowered the Tribunal to address counter claims and objections effectively, thereby eliminating the need for a separate forum to hear such claims.In light of the amended provisions granting the Tribunal authority to adjudicate on counter claims, the Court concluded that the defendants' right to present their defense, including the counter claim, should be upheld. The Court directed the Debts Recovery Tribunal to expedite the proceedings related to the transferred suit, emphasizing the importance of timely resolution given the matter's vintage. The judgment underscored the Tribunal's enhanced jurisdiction to consider counter claims and objections under the amended Act, ensuring a more streamlined and equitable resolution of disputes within the Tribunal's purview.