TaxTMI 
TaxTMI 
2000 (9) TMI 928
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....Kundu, JJ. describing the said judgment as 'shocking'. The bench also observed : "It was as if a contract was being made attempted to be made out for the parties.... It is no part of the duty of the Court to make an agreement for the parties". 3. The Bench allowed appeal, awarding costs in a sum of Rs. 75,000. 4. As part of the compromise, the learned Single Judge had stayed another suit on mortgage [O.C. (Mortgage) suit No. 77 of 1991] filed by the bank. But the Division Bench set aside the entire compromise decree. 5. Thereafter, the suit No. 410 of 1985 filed by the appellant-bank stood restored before the learned Single Judge. In the meantime, the 'Recovery of Debts Due to Banks and Financial Institutions Act, 1993' (the 'Recovery Act, 1993') came into force in West Bengal. It is stated that it came into force in West Bengal on 27-4-1994. The debtor-company then filed an application T. No. 276 of 1999 that this suit by the bank should remain on the original side of the Calcutta High Court and be not transferred to the Tribunal under the Act. The contention was that on the crucial date, 27-4-1994, the suit was not pending on the original side but the appeal was pendi....
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....00 by Parliament) could not apply and as to why we should not hold that that suit also fell within the purview of the Act. The counsel submitted that that suit did not fall within the provisions of the Act. 11. The points that arise for consideration in the appeal are as follows : (1) Whether the suit No. 410 of 1985 by the Bank which was disposed by judgment dated 29-3-1994 and which judgment was set aside by the Bench on 11-8-1998 and remanded to the Single Judge, could not be treated as pending immediately before the commencement of the Act on 27-4-1994 (in West Bengal) and whether it could not be transferred to the Recovery Tribunal ? (2) What is the combined effect of sections 18 and 31 and of the Act on pending proceedings ? (3) Whether the pendency of suit No. 272 of 1985 filed by the debtor- company against the Bank for specific performance and for perpetual and mandatory injunctions raising common issues between parties in both these suits was a sufficient reason for retention of the Bank's suit No. 410 of 1985 on the original side of the High Court to be tried along with the Suit No. 272 of 1985 filed by the debtor- company ? (4) Whether the suit No. 272 of....
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.... proceeding 'pending before any Court immediately before the date of establishment of the Tribunal under the Act' shall stand transferred to the Tribunal. It is also true that under the proviso to section 31(1), appeals pending on the date do not stand transferred. The suit of the Bank was in fact, pending in appeal on 27-4-1994, and it is clear that this provision for transfer does not apply to an appeal pending as aforesaid before any Court. 16. But, it is now well-settled that an order of remand by the Appellate Court to the Trial Court which had disposed of the suit revives the suit in full except as to matters, if any decided finally by the Appellate Court. Once the suit is revived, it must, in the eye of the law, be deemed to be pending-from the beginning when it was instituted. The judgment disposing of the suit passed by the Single Judge which is set aside gets effaced altogether and the continuity of the suit in the Trial Court is restored, as a matter of law. The suit cannot be treated as one freshly instituted on the date of the remand order. Otherwise serious questions as to limitation would arise. In fact, if any evidence was recorded before its earlier disposal, it....
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....he Civil Court is bound to take judicial notice of the statute and hold that the suit-even after its remand-cannot be disposed of by it. 21. In some statutes the legislature no doubt says that no suit shall be 'entertained' or 'instituted' in regard to a particular subject-matter. It has been held by this Court that such a law will not affect pending actions and the law is only prospective. But, the position is different if the law states that after its commencement, no suit shall be 'disposed of' or 'no decree shall be passed' or 'no court shall exercise power or jurisdiction'. In this class of cases, the Act applies even to pending proceedings and has to be taken judicial notice by the Civil Courts. 22. A Constitution Bench of this Court in Shah Bhojraj Kuverji Oil Mills & Ginning Factory v. Subhash Chandra Yograj Sinha, AIR 1961 SC 1596 was considering a situation where a law was made ousting the jurisdiction of the Civil Court where a suit was pending. The words used in the statute were a landlord shall not be entitled to the recovery of possession of any premises....' These words were contained in the Bombay Rent, Hotel and Lodging House Rates Control Act, 1947. It was h....
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....n Allahabad Bank v. Canara Bank 2000 AIR SCW 1347. If the said principle is applied, it is clear that the provision in section 31 must be construed in such a manner that, after the Act, no suit by the Bank is decided by the Civil Court and all such suits are decided by the Tribunal. 27. Today, it is said that Rs. 52,000 crores of monies are due to Banks and Financial Institutions from the borrowers. The Act of 1993 was indeed enacted to provide a speedy remedy for the recovery of these monies and for taking these suits out of the purview of the Civil Courts. If speedy disposal is the purpose of the Act, then if the respondent's contention is accepted, this suit 410 of 1985 instead of getting transferred to the Tribunal for expeditious disposal, would perpetually remain pending on the original side of the Calcutta High Court because of the prohibition in section 18 of the Act. Surely, that would place the Bank in a worse position after the 1993 Act than before inasmuch as before the Act, there was at least the possibility of the Bank's suit being decided by the Civil Court on some future day, however, remote. 28. An argument was advanced by Dr. Rajeev Dhawan that the proviso t....
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....e Appellate Court on 11-8-1998 must in the eye of the law be deemed pending before the Single Judge and that it would stand transferred to the Tribunal. The High Court was, therefore, in error in retaining the same on the original side. Points 1 and 2 decided in favour of the appellant. Points 3 and 4 : 34. As stated earlier, the learned senior counsel for the respondents contended that the issues arising in the suit 410 of 1955 filed by the Bank are integrally connected with the issues arising in the other Suit No. 272 of 1985 filed by the respondent-company against the Bank and that the said suit being one for specific performance, and perpetual and mandatory injunctions could not be tried by the Tribunal and that consequently, the suit by the Bank 410 of 1985 which contains some common issues must be retained in the Civil Court (i.e., the High Court). 35. The learned senior counsel was then asked by us as to what in reality was the 'substance' of the suit 272 of 1985 filed by the Company against the Bank and whether, it was indeed one falling within the purview of the 1993 Act as amended by Act 1 of 2000? The answer by the counsel was that it was not. We shall therefore....
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....nclusive of interest upto 31-3-1985 was wrong, mala fide and inflated. It was contended that the Bank guarantee for Rs. 72,330 could not be encashed, that the defendant promised to render financial assistance and could not have stopped it and that the principle of promissory estoppel applied. Plaintiff 4 was a shareholder Director and plaintiffs 3 and 4 stood guarantee only for lawful dues, it was said. The plaint then referred to certain payments by the plaintiff upto a sum of Rs. 14,25,000. It was said that the plaintiff was entitled to specific performance of the agreement as pleaded in para 4 of the plaint and to a perpetual injunction that the Bank should not charge interest upto 1981-82 and that with effect from 1-7-1981, that only Rs. 75,000 per month could be recovered. A mandatory injunction was sought for further financial assistance at less than Rs. 10 per kg. per season with effect from 1985-86 season, for damages allegedly suffered by plaintiff and for rectification of accounts and to declare the letter of demand 'D' dated 8-4-1985 as void. 37. From the above, it will be noticed that the plea of the company is that there is an agreement not to charge interest and th....
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....-claim of the defendant within such period as may be fixed by the Tribunal. (11) Where a defendant sets up a counter-claim and the applicant contends that the claim thereby raised ought not to be disposed of by way counter-claim but in an independent action, the applicant may, at any time before issues are settled in relation to the counter-claim, apply to the Tribunal for an order that such counter-claim may be excluded, and the Tribunal may, on the hearing of such application make such order as it thinks fit." 40. Sub-section (6) says that a 'set-off' if claimed, can be adjudicated by the Tribunal. Sub-section (7) states that the written statement pleading a set-off shall have the same effect as a plaint in a cross-suit to be adjudicated by the Tribunal. Similarly, sub-section (8) of section 19 permits a defendant to make a 'counter-claim' by way of an application and sub-section (9) of section 19 states that such a 'counter-claim' shall have the same effect as a 'cross-suit' so as to enable the Tribunal to pass a final order on the same application, both on the original claim and on the counter-claim as a 'cross-suit'. Sub-section (11) of section 19 is important and it per....
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.... by the debtor-against the Bank (suit 272 of 1985) which raises claims or pleas in the nature of set-off or counter-claim are interconnected. The respondent's suit falls under sub-sections (6), (7) and (8) to (11) of section 19, as stated above. Our decision in regard to the real nature of suit 272 of 1985 has become necessary in the context of a plea by the debtor-company that the company's suit 272 of 1985 is liable to be retained in the Civil Court and on account of the plea that the connected suit by the Bank 410 of 1985 is also to be retained. Such a plea, as shown above, cannot be accepted. Thus, both the suits are suits falling within the Act. 43. We, therefore, direct the Bank's suit 410 of 1985 to be transferred by the Registrar, Calcutta High Court to the appropriate Tribunal under the Act. So far as the debtor-company's suit 272 of 1985 is concerned, action has to be taken likewise by the Registrar in the light of our finding which finding has become necessary in view of the contention on behalf of the debtor-company before us, as explained above. 44. For the aforesaid reasons, we hold under Point 3, that the pendency of the company's suit 272 of 1985 in the High C....