MANU/SC/1330/2009

Equivalent/Neutral Citation: III(2009)BC 539(SC ), (2009)6C ompLJ400(SC ), 2009(4)C TC 74, 2009(II)C LR(SC )522, 2009 INSC 966,
JT2009(10)SC 199, (2009)8MLJ701(SC ), 2009(4)PLJR243, 2009(10)SC ALE360, (2009)8SC C 646, [2009]12SC R54

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 4796 of 2009 (Arising out of SLP (C) No. 24715 of 2008) and Transfer
Petition (Civil) Nos. 1195, 1196 and 1207-1209 of 2008
Decided On: 29.07.2009
Nahar Industrial Enterprises Ltd. and Ors. Vs. Hong Kong and Shanghai Banking
Corporation and Ors.
Hon'ble Judges/Coram:
S.B. Sinha and A.K. Ganguly, JJ.
Counsels:
For Appearing Parties: Abhishek Manu Singhvi, Ashok Desai, Shyam Divan, K.K.
Venugopal, Rakesh Dwivedi, R.F. Nariman and S. Ganesh, Sr. Advs., Nandini Gore, Diya
Kapur, Premtosh Mishra, Pragya Baghel, Lakshmi Ramachandran, Jatin Mongia, Advs. for
Manik Karanjawala, Sameer Parekh, H. Jayesh, Huzefa Nasikwala, Nitin Thukral, Arjun
Garg, Rukhmini Bobde, Ruchi Aggarwal, Advs. for Parekh & Co., B. Rajendran, I. Abrar,
V. Balaji, Parvesh Thakur, Advs. for Narendra Kumar, Advs.
Case Overruled/Partly Overruled by:
Bank of Rajasthan Ltd. Vs. VCK Shares & Stock Broking Services Ltd.
MANU/SC/1477/2022
Case Note:
Banking - Inherent Jurisdiction - Whether the High Court or this Court has the
power to transfer a suit pending in a Civil Court situated in one State to a
Debt Recovery Tribunal situated in another or not
Held, Only civil suits are subject matter of inter State transfer from one civil
court to another civil court - Sub-section (5) of Section 24 of CPC provides
that a suit or proceeding may be transferred from a Court which has no
jurisdiction to try it - The power to transfer one case from one court to
another or from one tribunal to another is to be exercised if exceptional
situation arises and not otherwise - Rules of procedures are intended to
provide justice and not to defeat it - Appeal disposed of [para 41, 158, 167]
Case Category:
MERCANTILE LAWS, COMMERCIAL TRANSACTIONS INCLUDING BANKING
JUDGMENT
S.B. Sinha, J.
1. Leave granted.
INTRODUCTION
2. Whether the High Court and/or this Court has the power to transfer a suit pending in

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a Civil Court situated in one State to a Debt Recovery Tribunal situated in another is the
question involved herein.
BACKGROUND FACTS
3 . We may notice the facts of the matter from Civil Appeal @ SLP (C) No. 24715 of
2008. It arises out of a judgment and order dated 15th September, 2008 passed by a
learned Single Judge of the High Court of Punjab and Haryana at Chandigarh in Transfer
Application No. 186 of 2008 whereby and whereunder the suit filed by the appellant and
pending before the Civil Judge (Junior Division), Ludhiana was transferred to the Debt
Recovery Tribunal-III at Mumbai.
4. Some of the parties to the lis before us are the banks or financial institutions within
the purview of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993
(1993 Act). The others are debtors of such banks or financial institutions. The parties
hereto entered into diverse agreements in terms whereof banks or the financial
institutions lent money to the debtors.
5 . Appellant entered into International Swaps and Derivatives Agreement with the
respondent. On 1.11.2006, the appellant and the respondent entered into globally used
market standard Master Agreement and Schedule published by ISDA (ISDA Master
Agreement) (hereinafter referred to as "Master Agreement") wherein the respondent
undertook derivative transactions for hedging or transformation of risk exposure.
6 . Under the said Master agreement i.e. the ISDA Agreement including the Schedule
thereto, the appellant had entered into ten transactions with the respondent and out of
those ten transactions, appellant has unwound (closed at the instance of the appellant
at a mutually agreed value) four transactions; one transaction got matured and one
expired due to occurrence of a contingent event. In all the six transactions, appellant
had received an aggregate sum of about Rs. 1,87,00,000/- (Rupees one crore eighty
seven lakhs only) from the respondent. In respect of 2 transactions Swap Reference:
NCW072009996 and Swap Reference: NCW 072009997 both dated 13th July, 2007, the
appellant has till date received Rs. 13,00,000 (Rupees Thirteen Lakhs Only) from the
respondent.
7 . As on 02.04.2008, four foreign exchange derivative transactions were outstanding
between the appellant and the respondent, dated 13.07.2007, 13.07.2007, 26.07.2007
and 30.07.2007.
8 . Appellant vide his letter of 03.04.2008 purported to disclaim, repudiate and reject
only two out of those four transactions, i.e., the transactions with trade dates 26th July
2007 and 30th July, 2007.
9. Appellant filed a suit in the Civil Court at Ludhiana seeking a declaration that foreign
exchange derivative contracts dated 26.7.2007 and 30.7.2007, entered into by and
between them were void as being illegal and violative of Foreign Exchange Management
Act, 2000 as well as the Circulars and Guidelines issued by the Reserve Bank of India,
and, thus, against public policy. The said suit was marked as Civil Suit No. 108 of 2008.
10. An application for grant of injunction was also filed. By reason of an order dated
5.4.2008, the learned Civil Judge directed both the parties to maintain status quo in
regard to the said two contracts, directing:

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 Lest the purpose be not defeated by delay, both the parties are directed to
maintain status quo (as on today) regarding the contracts involving the present
cases till 16.4.2008. Compliance under Order 39 Rule 3 CPC be made as per
rules. Plaintiffs shall also be duty bound to get the service effected on
defendants for date fixed Summons be also given dasti.
11. The said order of status quo is said to have been communicated to the respondent
on or about 8.4.2008.
1 2 . Respondent issued a notice dated 12.4.2008 upon the appellant terminating the
pending derivative transaction. Appellant contends that termination of the said
derivative transaction is in violation of the order of status quo passed by the learned
Civil Judge on 5.4.2008. Appellant responded to the said notice calling upon it to
withdraw the same.
13. On or about 15.4.2008, the respondent-bank filed an application before the Debt
Recovery Tribunal at Mumbai marked as OA No. 122 of 2008 along with an interim
application marked as Interim Application No. 125 of 2008 for recovery of dues under
the two remaining Foreign Exchange Derivative Contracts dated 13.7.2007.
1 4 . Meanwhile, the order of status quo passed on 5.4.2008 was extended by the
learned Civil Judge by an order dated 16.4.2008 till 23.4.2008. In the original
application filed by the respondent-bank, the Tribunal by an order dated 22.4.2008
restrained the appellant from alienating, or in any way creating third party interests in
its fixed assets in relation to the transactions which were not the subject matter of the
suit. Respondent-bank issued two letters on 24.4.2008 to the appellant calling upon it
to pay the amount due under the two transactions dated 26.7.2008 and 30.7.2008, and
on the same day filed another application before the Debt Recovery Tribunal for
recovery of dues under the said two foreign exchange derivative contracts.
1 5 . An application for clarification and/or modification of stay of the order dated
5.4.2008 was filed by the appellant before the civil judge which was heard on
13.5.2008 and 17.5.2008. The matter was adjourned to 29.5.2008.
IMPUGNED JUDGMENT
16. Respondent, however, filed transfer application before the High Court of Punjab &
Haryana on or about 27.5.2008 seeking transfer of proceedings pending before the Civil
Judge, Ludhiana to the Debts Recovery Tribunal, III, Mumbai. An application for
violation of the order of injunction was filed by the appellant before the Civil Court on
28.5.2008. By reason of the impugned order, a learned Single Judge of the High Court
allowed the said application transferring the suit filed by the appellant in the Ludhiana
court to the DRT tribunal, Mumbai in the form of a counter claim.
1 7 . The Banks and the Financial Institutions including Axis Bank have also filed
Transfer Petitions, said to be by way of abundant caution, before this Court under
Section 25 of the Code which are marked as TP (C) Nos. 1207-1209 of 2008 and 1195-
2008 & 1196-2008 respectively .
18. While issuing the notice in SLP (C) No. 24715 of 2008 this Court, by order dated
20.10.2008, directed:
Issue notice.

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 Mr. Sameer Parekh, Advocate accepts notice on behalf of the respondent.
As the question involved in this petition is a pure question of law, no counter
affidavit need be filled. Put up for final disposal on 2nd December, 2008. We
make it clear that on that day, this Court shall consider as to whether this
Court, in the peculiar facts and circumstances of this case, may exercise its
jurisdiction under Article 142 of the Constitution of India.
In the meantime, there shall be stay of the operation of the final judgment and
order dated 15.9.2008 of the High Court of Punjab & Haryana in Transfer
Application No. 186/2008 as also stay of the proceedings before the Debt
Recovery Tribunal, Mumbai in OA Nil of 2008 (Lodging No. 270).
The parties shall file written submissions before the next date of hearing.
ISSUES ARISING
1 9 . In the background of these facts, the following questions that arise for our
consideration are:
(I). Whether the High Court/Supreme Court has the power to transfer a suit
from a Civil Court to the DRT, keeping in mind,
a. The effect of a transfer from the Civil Court to the DRT is to oust the
jurisdiction of the civil court which cannot be done without express
statutory provisions.
b. Proceedings before DRT is sui generis & totally different from the
procedure in a Civil Court.
c. Power of transfer under CPC (Sections 22, 23, 24 and 25) is
inapplicable as these sections apply in a case where the transfer is from
one Court to another & DRT being not a Court.
d. The power to transfer under the DRT Act is restricted to cases filed
by Banks that were pending on the date when the Act came into force
and in respect of those cases in which DRT has jurisdiction.
(II). Whether the decision of this Court in Indian Bank v. ABS Marine Products
(P) Ltd. MANU/SC/2046/2006 : AIR2006SC1899 : (2006) 5 SCC 72, is
applicable in the case of transfer of a suit from the Civil Court to the DRT to be
tried as a counterclaim, and could a Coordinate two Judge Bench in State Bank
of India v. Ranjan Chemicals Ltd. and Anr. MANU/SC/4506/2006 :
(2007)1SCC97 : (2007) 1 SCC 97 have departed from the ratio thereof after
noticing it and without referring the matter to a larger bench of Three Judges?
(III) Even if the power to transfer exists, in the facts and circumstances of the
case, whether it ought to have been exercised.
(IV) Whether Article 142 is applicable to direct a transfer from a Civil Court to
DRT, especially when:
(i) The DRT Act does not bar the jurisdiction of the Civil Court to
entertain a suit against a bank and therefore powers under Article 142
ought not to be exercised to have such an effect.

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 (ii) Article 142 is not applicable where a statute occupies the field.
(iii) Power under Article 142 should be exercised only to prevent
injustice and do complete justice between the parties.
(V). Whether in the exercise of powers under Article 142, transfer of case ought
to be refused to do complete justice between the parties and the proceedings
before the DRT be stayed pending disposal of the suit.
SUBMISSIONS OF THE COUNSEL
20. Dr. A.M. Singhvi, Mr. S. Ganesh, Mr. Rohington Nariman and Mr. Rakesh Dwivedi,
learned senior counsel appearing on behalf of the appellants would contend:
1) The High Court had no power to transfer a pending Civil Suit to a Debt
Recovery Tribunal as the same was beyond its jurisdiction.
2) The High Court and/or the Supreme Court have no power to transfer a case
from a Civil Court to Debt Recovery Tribunal inasmuch as:
a) The effect of a transfer from Civil Court to Debt Recovery Tribunal
would oust the jurisdiction of the Civil Court which is impermissible in
law in absence of any express statutory provision.
b) Debt recovery proceeding is sui generis and provides for a totally
different procedure from the one followed under the Code of Civil
Procedure.
c) Power to transfer vested in the High Court or on this Court being
confined to Sections 22, 23, 24 and 25, the same cannot be applied for
the purpose of transferring a Civil Suit to Debt Recovery Tribunal, as
the latter is not a Civil Court.
d) The power to transfer under DRT Act must be confined in respect of
cases filed by banks which were pending on the date DRT Act came into
force.
e) This Court in Indian Bank v. ABS Marine (supra) having categorically
held that no suit could be transferred from a Civil Court to a Debt
Recovery Tribunal as a counter claim, keeping in view the scheme
contained in the said Act and the Code, the contrary view taken in
Ranjan Chemicals, (supra) cannot be held to be good law.
f) The provision of Section 23(3) of the Code being a procedural
provision, as has been held by this Court in Durgesh Sharma v.
Jayshree MANU/SC/4197/2008 : (2008)9SCC648 : (2008) 9 SCC 648,
High Court cannot be said to have any power/jurisdiction to transfer a
suit pending in a Civil Court, which is subordinate to it, to a Tribunal
which is not subordinate to the High Court.
g) Ranjan Chemicals having failed to appreciate that transfer of a suit
from the Civil Court to the Debt Recovery Tribunal without plaintiffs'
consent resulted in defeating the plaintiff's statutory right to approach
the Civil Court and furthermore resulted in ouster of the jurisdiction
thereof, neither of which could be ordered or directed without any

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specific empowering provision in the statute.
h) It is well settled legal position that jurisdiction of the Civil Court can
only be ousted by a specific and unequivocal statutory provision or by
necessary implication.
i) Transfer of a suit to a Tribunal having no jurisdiction to decide the
issues raised by the plaintiff against the bank and/or financial
institution would affect the rights of the appellant. It would furthermore
affect its right of appeal, which is a right vested on the plaintiff on the
date of filing of the suit. The condition of pre-deposit being one of the
conditions for maintaining an appeal before the Appellate Tribunal, in
the event such a right of transfer is upheld, the same would amount to
burdening the right of appeal with certain conditions which the
Parliament never intended to confer. An unfettered right of appeal,
which is statutory would thus become fettered, without the intervention
of statute. Thus, what has not been done directly would be done
indirectly as a result of transfer.
j) The Bench deciding Ranjan Chemicals being a coordinate Bench to
the previous Bench deciding Indian Bank was bound to follow it, for
maintenance of judicial discipline. In the event of any disagreement,
the only course open to it was to refer the question to a larger Bench.
k) The suit filed by the appellant involved complicated questions of law
relating to interpretation of Section 45U and 45V of the Reserve Bank
of India Act, 1934 as also questions relating to fraud etc. These
questions cannot be satisfactorily decided by the Tribunal which does
not have expertise in such mattes.
l) In one of the cases, the suit has been filed on the Original Side of
the High Court of Madras with leave in terms of Clause 12 of the Letters
Patent and against an interlocutory order an intra court appeal filed
under Clause 15 thereof is pending, no order of transfer could have
been passed both in relation to the suit as also the appeal as neither
the Tribunal nor the Appellate Tribunal can be a substitute for the High
Court as also the Division Bench thereof.
m) In the Ludhiana suit application under Order XXXIX Rule 2A of the
Code having been pending in respect whereof the Tribunal did not have
jurisdiction, in the event an order of transfer is passed, would lead to a
great anomaly, as the suit must be transferred along with all incidental
or supplemental proceedings in respect whereof the Debt Recovery
Tribunal would have no jurisdiction under the Act.
n) Alternatively, it was argued that even if the power to transfer exists,
in the facts and circumstances of this case and in the interests of
justice, the same should not be exercised.
o) This Court also should not exercise its jurisdiction under Article 142
of the Constitution of India as the said Act does not bar the jurisdiction
of the Civil Court to entertain a civil case against a bank since the field
is occupied by the statute and it is a settled law that power under
Article 142 of the Constitution of India can be exercised only to prevent

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 injustice and to do complete justice between the parties.
21. Mr. Shyam Diwan and Mr. Ashok Desai, learned senior counsel appearing on behalf
of the respondent, on the other hand, contended:
a) Definition of 'debt' as contained in Section 2(g) of the Act means any liability
which is claimed as due from any person by a bank during the course of any
business activity undertaken by it and would bring within its purview any
agreement for enforcement whereof the bank should have no option but to
approach the Tribunal only.
b) When a particular claim made by a bank is a 'debt' within the meaning of the
provisions of the Act, it must be determined or adjudicated upon by the
Tribunal only and not by a Civil Court.
c) The allegation of 'Fraud', 'Misrepresentation', 'Undue Influence' or any other
defence, which are available to a borrower to contest the claim of the bank, can
be raised before the Tribunal itself and adjudicated upon and determined by the
Tribunal.
d) As both the suits pending before the Civil Court and/or the High Court as
also the petitions pending before the Tribunals arise out of the Master
Agreement entered into by and between the parties, the Tribunal having
jurisdiction would be entitled to determine the said questions.
e) Having regard to the scheme of the Act as also the provisions of the Code,
the Tribunal must be given an extended meaning so as to hold that the Tribunal
is in effect and substance a court and thus the High Court in exercise of its
jurisdiction under Section 24 of the Code and this Court in exercise of its
jurisdiction under Section 25 thereof have ample jurisdiction to transfer a suit
to the Tribunal.
f) In the event it is held that neither the High Court nor this Court have the
jurisdiction to direct such transfer, the borrowers would be free to file vexatious
preemptive suits and obtain order of injunctions which will cause hindrance to
the cause of administration of justice
g) Even if it is held that the High Court did not have jurisdiction to order such
transfer under Section 24 of the Code, it must be held to have inherent powers
under Section 151 thereof.
h) This Court in any event should exercise its jurisdiction under Article 142 of
the Constitution of India with a view to do complete justice between the parties
and to avoid an injustice to the cause of the administration of justice.
STATUTORY FRAMEWORK
RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993
22. Before dealing with the rival contentions of the parties, we must first set out the
relevant statutory provisions. The 1993 Act was enacted to provide for the
establishment of Tribunals for expeditious adjudication and recovery of debts due to
Banks and Financial Institutions and for matters connected therewith or incidental
thereto. The Statement of Objects and Reasons for enacting the said Act reads as under:

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 Banks and financial institutions at present experience considerable difficulties in
recovering loans and enforcement of securities charged with them. The existing
procedure for recovery of debts due to the banks and financial institutions has
blocked a significant portion of their funds in unproductive assets, the value of
which deteriorates with the passage of time. The Committee on the Financial
System headed by Shri M. Narasimham has considered the setting up of the
Special Tribunals with special powers for adjudication of such matters and
speedy recovery as critical to the successful implementation of the financial
sector reforms. An urgent need was, therefore, felt to work out a suitable
mechanism through which the dues to the banks and financial institutions could
be realized without delay. In 1981, a Committee under the Chairmanship of Shri
T. Tiwari had examined the legal and other difficulties faced by banks and
financial institutions and suggested remedial measures including changes in
law. The Tiwari Committee had also suggested setting up of Special Tribunals
for recovery of dues of the banks and financial institutions by following a
summary procedure. The setting up of Special Tribunals will not only fulfill a
long-felt need, but also will be an important step in the implementation of the
Report of Narasimham Committee. Whereas on 30th September, 1990 more
than fifteen lakhs of cases filed by the public sector banks and about 304 cases
filed by the financial institutions were pending in various courts, recovery of
debts involved more than Rs. 5622 crores in dues of Public Sector Banks and
about Rs. 391 crores of dues of the financial institutions. The locking up of
such huge amount of public money in litigation prevents proper utilisation and
recycling of the funds for the development of the country.
23. Section 2 is the interpretation section.
2 4 . Section 2(g) defines 'debt' to mean 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 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 and legally recoverable on, the date of
the application.
2 5 . Chapter II deals with establishment of Tribunals and Appellate Tribunals. Sub-
section (1) of Section 3 deals with establishment of Tribunal. Sub-section (2) provides
that the Central Government shall also specify, in the notification referred to in Sub-
section (1), the areas within which the Tribunal may exercise its jurisdiction for
entertaining and deciding the applications filed before it. Chapter III of the Act deals
with jurisdiction, powers and authority of Tribunals.
26. Section 17 reads as under:
Section 17 - Jurisdiction, powers and authority of Tribunals.--(1) A
Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers
and authority to entertain and decide applications from the banks and financial
institutions for recovery of debts due to such banks and financial institutions.
(2) An Appellate Tribunal shall exercise, on and from the appointed day, the
jurisdiction, powers and authority to entertain appeals against any order made,
or deemed to have been made, by a Tribunal under this Act.

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27. Section 18 bars the jurisdiction of all courts in relation to the matters specified in
Section 17 (except of the Supreme Court and of a High Court under Articles 226 and
227 of the Constitution). Chapter IV deals with the procedure of the Tribunals. Section
19 provides for an application by a bank or financial institution to recover any debt from
any person. Sub-section (8) of Section 19 enables a defendant to set up, by way of
counter-claim against the claim of the applicant, any right or claim in respect of a cause
of action accruing to the defendant against the applicant in addition to his right of
pleading a set-off under Sub-section (6). Sub-section (9) provides that such a counter
claim shall have the same effect as a cross-suit. Sub-section 22 of Section 19 empowers
the Presiding Officer of a Tribunal to issue a certificate under his signature on the basis
of an order of the Tribunal to the Recovery Officer for recovery of the amounts of debt
specified therein.
28. We may, however, notice that Section 19 of the Act was amended twice, - once by
Act 1 of 2000 which came into force w.e.f. 17.1.2000 and the second time by Act 30 of
2004 which came into force on and from 11.11.2004.
29. Section 22 provides for the procedure and powers of the Tribunal and Appellate
Tribunal, Sub-section (1) whereof reads as under:
Section 22 - Procedure and Powers of the Tribunal and the Appellate
Tribunal.--(1) The Tribunal and the Appellate Tribunal shall not be bound by
the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but
shall be guided by the principles of natural justice and, subject to the other
provisions of this Act and of any rules, the Tribunal and the Appellate Tribunal
shall have powers to regulate their own procedure including the places at which
they shall have their sittings.
30. Section 24 provides that the provisions of the Limitation Act, 1963 shall, as far as
may be, apply to an application made to a Tribunal.
31. Section 31 provides for transfer of pending cases. It reads, thus:
Section 31. Transfer of pending cases.--(1) Every suit or other proceeding
pending before any court immediately before the date of establishment of a
Tribunal under this Act, being a suit or proceeding the cause of action where on
it is based is such that it would have been, if it had arisen after such
establishment, within the jurisdiction of such Tribunal, shall stand transferred
on that date to such Tribunal:
Provided that nothing in this Sub-section shall apply to any appeal
pending as aforesaid before any court.
(2) Where any suit or other proceeding stands transferred from any court to a
Tribunal under Sub-section (1),--
(a) the court shall, as soon as may be after such transfer, forward the
records of such suit or other proceeding to the Tribunal; and
(b) the Tribunal may, on receipt of such records, proceed to deal with
such suit or other proceeding, so far as may be, in the same manner as
in the case of an application made under Section 19 from the stage
which was reached before such transfer or from any earlier stage as the
Tribunal may deem fit.

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CODE OF CIVIL PROCEDURE
32. We may, at this juncture, also notice some of the provisions of the Code of Civil
Procedure (Code), which are of relevance herein.
33. Section 2(2) defines a "decree" to mean the formal expression of an adjudication
which, so far as regards the Court expressing it, conclusively determines the rights of
the parties with regard to all or any of the matters in controversy in the suit and may be
either preliminary or final. It shall be deemed to include the rejection of a plaint and the
determination of any question within Section 144, but shall not include-- (a) any
adjudication from which an appeal lies as an appeal from an order, or (b) any order of
dismissal for default. An explanation is added to that definition which says a decree is
preliminary when further proceedings have to be taken before the suit can be
completely disposed of. It is final when such adjudication completely disposes of the
suit. It may be partly preliminary and partly final.
34. 'Judge' has been defined under Section 2(8) to mean the presiding officer of a Civil
Court. Section 2(14) defines an "order" to mean the formal expression of any decision
of a Civil Court which is not a decree.
35. Section 3 of the Code provides for hierarchy of courts in the following terms:
Section 3 - Subordination of Courts For the purposes of this Code, the District
Court is subordinate to the High Court, and every Civil Court of a grade inferior
to that of a District Court and every Court of Small Causes is subordinate to the
High Court and District Court.
36. The Code recognizes different courts, the "revenue court" being one of them. Sub-
section (2) of Section 5 provides that 'revenue court' would not be civil court.
3 7 . Section 9 of the Code empowers the Civil Court to try all suits of civil nature
excepting the suits of which their cognizance is either expressly or impliedly barred.
3 8 . Sections 10 and 11 thereof deal with stay of suit and res judicata. Section 12
provides for bar to further suit.
3 9 . The place of suing of a suit is dealt with under Sections 15 to 21. Section 22
provides for power to transfer suits which may be instituted in more than one court.
40. Section 23 of the Code reads as under:
Section 23-To what Court application lies.--(1) Where the several Courts
having jurisdiction are subordinate to the same Appellate Court, an application
under Section 22 shall be made to the Appellate Court.
(2) Where such Courts are subordinate to different Appellate Courts but to the
same High Court, the application shall be made to the said High Court.
(3) Where such Courts are subordinate to different High Courts, the application
shall be made to the High Court within the local limits of whose jurisdiction the
Court in which the suit is brought is situate.
41. Section 24 provides for the general power of transfer and withdrawal. Sub-section
(5) of Section 24 provides that a suit or proceeding may be transferred from a Court
which has no jurisdiction to try it. Sub-sections (1) and (5) of Section 25 provides for

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power of Supreme Court to transfer suits in the following terms:
25. Power of Supreme Court to transfer suits, etc.--(1) On the application
of a party, and after notice to the parties, and after hearing such of them as
desire to be heard, the Supreme Court may, at any stage, if satisfied that an
order under this section is expedient for the ends of justice, direct that any suit,
appeal or other proceeding be transferred from a High Court or other Civil Court
in one State to a High Court or other Civil Court in any other State.
xxx
(5) The law applicable to any suit, appeal or other proceeding transferred under
this section shall be the law which the Court in which the suit, appeal or other
proceeding was originally instituted ought to have applied to such suit, appeal
or proceeding.
42. Section 153B provides that trial must be held in an open court. Provisions of Order
XX Rule 1 provide not only that Civil Court must pronounce a judgment in open court
but it must also date and sign the same.
EFFECT OF AMENDMENTS
4 3 . The Debts Recovery Tribunal has been constituted for determining a specific
category of cases, namely - recovery of debts due to Banks and Financial Institutions. It
has wide powers. It may determine all the issues relating to or connected with the
recovery of debt due to banks and financial institutions. A fortiori all defences which
can ultimately be raised before it by the borrowers for contesting a claim of the Bank or
the Financial Institution can also be determined by it. Indisputably prior to amendments
of the Act before 2000 and 2004, a plea of set off or counter-claim was not available to
a debtor.
44. The question as to whether a High Court had power to transfer a counter claim to
the Debts Recovery Tribunal came up for consideration before Delhi High Court in Cofex
Exports Ltd. v. Canara Bank MANU/DE/0500/1997 : AIR1997Delhi355 : AIR 1997
Delhi 355, wherein the High Court opined that Debt Recovery Tribunal is not a court but
is a Tribunal having been created by a statute vested with a special jurisdiction to try
only applications by banks or financial institutions to recover any debt. Although having
regard to the provisions contained in Clauses (a) to (b) of Sub-section (2) of Section 22
of the Act it had all the trappings of a court but it was held not to be a court as such,
opining:
38. For reasons more than one, we are of the opinion that a set-off or a counter
claim cannot be entertained by a Debt Recovery Tribunal. [...] It has not been
conferred with jurisdiction to entertain counter-claim or plea of set-off by
reference to the provisions of Order 8 of the CPC. Entertaining a counter-claim
or a cross suit or a plea of set-off would not only be without jurisdiction but
also an exercise in futility inasmuch as the Tribunal would not adjudicate
thereupon nor pass a decree in favor of the defendant against the plaintiff. The
law creating Tribunal and conferring jurisdiction on it has not provided for set-
off or counter claim being entertained by it just as the Civil Procedure Code
does it for civil courts. If a counter claim was to be tried by Tribunal it may
have to go into disputes arising between the parties though not 'filling the same
character'. There may be disputes which by no stretch of imagination can be
tried by Tribunal. Claims preferred by bank or financial institutions are capable

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 of being disposed of by summary enquiry while claims preferred by other
persons would not be capable of being so disposed of. The principle of
convenience and the mechanics of litigation before Tribunal (as set out in the
Act) - both exclude set-off or counter claim being placed before the Tribunal. If
set-off, counter claims and cross suits were allowed to be raised before the
Tribunal the very object behind its creation will be lost.
45. In relation to the conflict of jurisdiction between the Civil Court and the Tribunal, it
was observed:
39. ...Finality shall attach to the findings arrived at and reached by each of the
two within its respective jurisdictional competence. Issues heard and decided
by the Tribunal shall operate as res judicata and shall bind the parties in the
suit before the civil court by virtue of explanation VIII to Section 11 Civil
Procedure Code . However, the civil court shall be free to decide such issues as
lie within its jurisdictional competence. If the civil court must decide an issue
seized by it and within its competence and if there be an unavoidable conflict
between the findings recorded by the civil court and by the Tribunal, the finding
of Civil Court would obviously override and supersede the findings recorded by
the Tribunal for a court is a court and tribunal is a tribunal; the former
adjudicates on trial, the later holds only a summary inquiry guided by principles
of natural justice as the Act provides.
46. It was, thus, held that the Tribunal is inferior to that of the Civil Court. The Court
summed up its conclusions, thus:
42. To sum up our answers to the questions referred to in para 7 above are:
1 . A suit the subject matter whereof lies within the jurisdictional
competence of the Tribunal cannot be refused to be transferred by a
civil court to the Tribunal merely because a cross suit or a counter
claim has been filed or preferred before the civil court.
2. A cross suit or cross claim or a plea in the nature of set-off cannot
be transferred to the Tribunal along with the suit with which it is
associated and which is liable to be transferred to the Tribunal.
3 . A plea of set-off raised in a suit filed by a bank or financial
institution cannot be tried by Tribunal nor would it enable the suit
being retained by civil court before it if the subject matter of suit lies
within the jurisdictional competence of tribunal otherwise.
4 7 . One of the questions which would arise, thus, for our consideration is whether
having regard to the amendment of Section 19 by reason of Act 1 of 2000 and Act 30 of
2004 empowering the Tribunal to determine a claim of set off and/or counter claim, and
whether Cofex Exports Ltd. (supra) is still good law.
4 8 . The Debts Recovery Act, as it originally stood, did not contain any provision
enabling a defendant in an application filed by the bank/financial institution to claim
any set-off or make any counterclaim against them. On that, among other grounds, the
Act was held to be unconstitutional by the Delhi High court in Delhi High Court Bar
Assn. v. Union of India AIR 1995 Delhi 325. During the pendency of appeal against the
said decision, before this Court, the Act was however amended by Act 1 of 2000 to
remove the lacuna by providing for set-off and counterclaims by defendants in the

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applications filed by banks/financial institutions before the Tribunal. The provisions of
the Act as amended were upheld by this Court in Union of India v. Delhi High Court Bar
Assn. MANU/SC/0194/2002 : [2002]2SCR450 : (2002) 4 SCC 275.
49. Indisputably, however, after the aforementioned amendments were carried out, the
Debts Recovery Tribunal would have jurisdiction to determine the claims of set off and
counter-claims. It may be that the bank or the financial institution in terms of the
provisions of Sub-section (9) of Section 19 of the Act, despite such counter-claim being
treated to be a cross- suits would be entitled to raise a contention that the same should
not be determined by the Tribunal. In the event such a contention has not been raised,
the Tribunal will have jurisdiction to pass a final judgment both on the claim of the
bank or the financial institution on the one hand and the cross-objections of the
borrower on the other.
THREE AUTHORITIES
ABHIJIT TEA
5 0 . United Bank of India, Calcutta v. Abhijit Tea Co. Pvt. Ltd. and Ors. reported in
MANU/SC/0551/2000 : AIR2000SC2957 : (2000) 7 SCC 357; has been relied on for
the proposition that even a claim for relief of specific performance, perpetual and
mandatory injunction being the subject matter of the suit by the respondent therein was
in the nature of counter claim. Therein, the following questions were framed:
(1) Whether the suit No. 410/1985 by the Bank which was disposed by
judgment dated 29-3-94 and which judgment was set aside by the Bench on
11-8-98 and remanded to the Single Judge, could not be treated as pending
immediately before the commencement of the Act on 27-4-94 (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/ 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. 410/85 on the original side
of the High Court to be tried alongwith the Suit No. 272/85 filed by the debtor
company?
(4) Whether the suit No. 272/85 filed by the debtor company was, in substance,
one in the nature of a "counter-claim " against the Bank and was one which
also fell within the special Act by reason of Section 19(8) to (11) of the Act (as
introduced by Amending Act 1/2000) and if that be so, whether it could still be
successfully pleaded by the respondent-company that the pendency of the
company's suit 272/85 was a ground for retention of Bank's suit No. 410/85 on
the original side of the High Court?
51. Applying the principles of purposive construction as well as having regard to the
statements of objects and reasons of the Act, it was held that if speedy disposal is the
purpose of the Act, in the event of the respondent's contention being accepted, the suit
would perpetually remain pending on the original side of the Calcutta High Court
because of the provisions contained in Section 18 of the Act, stating:

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 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.
52. It was opined:
38. In our view, the above pleas raised by the respondent company are all
inextricably connected with the amount claimed by the Bank. The plea of the
company is that interest is not to be charged or is to be charged at a lesser
rate, that installments are to be permitted and more monies should have been
advanced. In our view, these claims made by the Company in its suit 272/85
against the Bank amount to 'counter claim' and fall within Sub- Clauses (8) to
(11) of Section 19 of the Act (as introduced by Act 1/ 2000). The plea for
deduction of damages is in the nature of a 'set off' falling under Sub-clauses
(6) and (7) of Section 19.
53. Holding that the suit of specific performance of contract, perpetual and mandatory
injunction were in the nature of counter claim which comes within the purview of Sub-
section (8) of Section 19 of the Act, it was opined:
41. ...A permanent injunction directing the Bank not to charge interest because
of an alleged agreement in that behalf is likewise a plea that no interest is
chargeable. So far as the plea for further financial assistance is concerned, it is
also, broadly, in the nature of a 'counter-claim'. All these fall under Section
19(8) to (10). Again, the plea for deducting 'damages' though raised in the suit
is indeed broadly a plea of "set off" falling under Sub-clause (6) and (7) of
Section 19.
42. Both the suits, the one by the Bank against the respondent (suit 410/85)
and the other by the debtor against the Bank (suit 272/ 85) which raises claims
or pleas in the nature of set-off or counter- claim are interconnected. The
respondent's suit falls under Sub-clauses (6), (7) and (8) to (11) of Section 19,
as stated above. Our decision in regard to the real nature of suit 272/85 has
become necessary in the context of a plea by the debtor- company that the
company's suit 272/85 is liable to be retained in the civil Court and on account
of the plea that the connected suit by the Bank 410/85 is also to be retained.
Such a plea, as shown above, cannot be accepted. Thus, both the suits are suits
falling within the Act.
5 4 . Therein the company approached the appellant Bank for certain credit facilities.
However, by sanction advices the bank gave ad hoc sanction upto Rs. 5,00,000/-;
whereas according to the bank, the company could utilize the said credit facilities but
committed default in paying the amount of advance. The Bank filed an OA for recovery
thereof. The Bank also sanctioned a middle term loan and certain other credit facilities
but the sanctioned loan was not utilized. The company filed a suit for damages with
interest.
INDIAN BANK
55. In that case, the following questions were raised:
(i) Whether the subject-matter of the borrower's suit before the High Court and
the Bank's application before the Tribunal were inextricably connected?

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 (ii) Whether the provisions of the Debts Recovery Act mandate or require the
transfer of an independent suit filed by a borrower against a bank before a civil
court to the Tribunal, in the event of the bank filing a recovery application
against the borrower before the Tribunal, to be tried as a counterclaim in the
bank's application?
(iii) Whether the observation in Abhijit that the suit filed by the borrower
against the bank has to be transferred to the Tribunal for being tried as a
counterclaim in the applications of the bank, is to be construed as a principle
laid down by this Court, or as an observation in exercise of power under Article
142 in order to do complete justice between the parties?
56. The credit facilities and the packaging facilities were held to be not inextricably
linked with each other stating:
9. The issues that arose in the Bank's application was whether the borrower
failed to repay the sums borrowed and whether the Bank was entitled to the
amounts claimed. On the other hand, the issues that arose in the borrower's
suit were whether the Bank had promised/agreed to advance certain monies;
whether the Bank committed breach in refusing to release such loans in terms
of the sanction letter; whether the borrower failed to fulfil the terms and
conditions of sanction and therefore the Bank's refusal to advance, was
justified; and even if there was breach, whether the borrower suffered any loss
on account of such non- disbursement and if so whether the borrower was
entitled to the amounts claimed. While the claim of the Bank was for an
ascertained sum due from the borrower, the claim of the borrower was for
damages which required firstly a determination by the court as to whether the
Bank was liable to pay damages and thereafter assessment of quantum of such
damages. Thus there is absolutely no connection between the subject matter of
the two suits and they are no way connected. A decision in one does not
depend on the other. Nor could there be any apprehension of different and
inconsistent results if the suit and the application are tried and decided
separately by different forums. In the circumstances, it cannot be said that the
borrower's suit and the Bank's application were inextricably connected.
57. In the fact situation obtaining therein, the suit by the Bank and the suit of the
company against the Bank were found to be not inextricably connected, i.e. decision in
one would not affect the decision in the other.
58. Abhijit Tea was clarified to the effect that where the respective claims of the parties
were not inextricably connected, the transfer of a suit to the Tribunal can be only on the
basis of consent of the parties and not otherwise.
59. The first question was, thus, answered in the negative.
60. On the second question, the Court distinguishing the decision in Abhijit Tea Co. (P)
Ltd. and Ors. (supra) in regard to the question whether an independent suit of a
defendant in the bank's application can be deemed to be a counter claim and can be
transferred to the Tribunal, opined that the same would apply only where the following
conditions are satisfied, in the following words:
25. Though there appears to be some merit in the first respondent's
submission, we do not propose to examine that aspect. Suffice it to clarify that
the observations in Abhijit that an independent suit of a defendant (in the

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 bank's application) can be deemed to be a counterclaim and can be transferred
to the Tribunal, will apply only if the following conditions were satisfied:
(i) The subject-matter of the bank's suit, and the suit of the defendant
against the bank, should be inextricably connected in the sense that
decision in one would affect the decision in the other.
(ii) Both parties (the plaintiff in the suit against the bank and the bank)
should agree for the independent suit being considered as a
counterclaim in the bank's application before the Tribunal, so that both
can be heard and disposed of by the Tribunal.
In short the decision in Abhijit is distinguishable both on facts and law.
61. In regard to the effect of Sub-sections (6) to (11) of Section 14 of the amended
Act, it was observed:
16. ...The effect of Sub-sections (6) to (11) of Section 19 of the amended Act is
that any defendant in a suit or proceeding initiated by a bank or financial
institution can: (a) claim set-off against the demand of a bank/financial
institution, any ascertained sum of money legally recoverable by him from such
bank/financial institution; and (b) set-up by way of counterclaim against the
claim of a bank/financial institution, any right or claim in respect of a cause of
action accruing to such defendant against the bank/financial institution, either
before or after filing of the application, but before the defendant has delivered
his defence or before the time for delivering the defence has expired, whether
such a counterclaim is in the nature of a claim for damages or not. What is
significant is that Sections 17 and 18 have not been amended. Jurisdiction has
not been conferred on the Tribunal, even after amendment, to try independent
suits or proceedings initiated by borrowers or others against banks/financial
institutions, nor the jurisdiction of civil courts barred in regard to such suits or
proceedings. The only change that has been made is to enable the defendants
to claim set-off or make a counterclaim as provided in Sub-sections (6) to (8)
of Section 19 in applications already filed by the banks or financial institutions
for recovery of the amounts due to them. In other words, what is provided and
permitted is a cross-action by a defendant in a pending application by the
bank/financial institution, the intention being to have the claim of the
bank/financial institution made in its application and the counterclaim or claim
for set- off of the defendant, as a single unified proceeding, to be disposed of
by a common order.
62. It was held:
18. In this case, the first respondent does not wish his case to be transferred to
the Tribunal. It is, therefore, clear that the suit filed by the first respondent
against the Bank in the High Court for recovery of damages, being an
independent suit, and not a counterclaim made in the application filed by the
Bank, the Bank's application for transfer of the said suit to the Tribunal was
misconceived and not maintainable. The High Court, where the suit for damages
was filed by the Company against the Bank, long prior to the Bank filing an
application before the Tribunal against the Company, continues to have
jurisdiction in regard to the suit and its jurisdiction is not excluded or barred
under Section 18 or any other provision of the Debts Recovery Act.

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63. The question came up for consideration again in Ranjan Chemicals (supra), wherein
this Court, inter alia, held that having regard to the nature of the respective claims
arising out of the loan transactions, the Court can exercise its inherent jurisdiction when
it was just and proper to order a joint trial of the two causes as there is nothing in the
Act to show that the Tribunal is prevented from entertaining the claim made by the
borrower in his suit. Purporting to distinguish the decision in Indian Bank (supra), it
was held that as the claim of the company in the suit could have been maintained as a
counter claim in the application of the bank, there was no warrant for curtailing the
power of the court to order joint trial by introducing a restriction to the effect that it
could be ordered only if there was consent by both the parties, holding:
8. Their Lordships have held that the subject matter of the suit and the
proceeding before the Tribunal were in no way connected, but it appears to us
that the two litigations arise out of the same transaction or series of
transactions between the Bank and the Company. Even if, as observed by their
Lordships, a counter claim in the application by the Bank before the Tribunal
was not the only remedy available to the Company but an option was available
to the Company to sue, and the Company has exercised that option by filing a
suit, it does not in any manner affect the power of the Court to order a joint
trial of the application and the suit in the Debt Recovery Tribunal provided the
Debt Recovery Tribunal has jurisdiction to entertain the action of the Company.
What is relevant to note is that the claim of the Company in the suit could have
been maintained as a counter- claim in the application of the bank, even if it
did not arise out of the same cause of action. There is no warrant for curtailing
the power of the Court to order joint trial by introducing a restriction to the
effect that a joint trial can be ordered only if there was consent by both sides.
The power inherent in the Court on well accepted principles to order a joint
trial, does not depend upon the volition of the parties but it depends upon the
convenience of trial, saving of time and expenses and the avoidance of
duplicating at least a part of the evidence leading to saving of time and money.
64. It was opined:
11. A joint trial is ordered when a Court finds that the ordering of such a trial,
would avoid separate overlapping evidence being taken in the two causes put in
suit and it will be more convenient to try them together in the interests of the
parties and in the interests of an effective trial of the causes. This power
inheres in the Court as an inherent power. It is not possible to accept the
argument that every time the Court transfers a suit to another court or orders a
joint trial, it has to have the consent of the parties. A Court has the power in an
appropriate case to transfer a suit for being tried with another if the
circumstances warranted and justified it. In the light of our conclusion that the
claim of the company in the suit could be considered to be a claim for set off
and a counter claim within the meaning of Section 19 of the Act, the only
question is whether in the interests of justice, convenience of parties and
avoidance of multiplicity of proceedings, the suit should be transferred to the
Debt Recovery Tribunal for being tried jointly with the application filed by the
bank as a cross suit. Obviously, the proceedings before the Debt Recovery
Tribunal could not be transferred to the civil Court since that is a proceeding
before a Tribunal specially constituted by the Act and the same has to be tried
only in the manner provided by that Act and by the Tribunal created by that Act.
Therefore, the only other alternative would be to transfer the suit to the
Tribunal in case that is found warranted or justified.

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PRECEDENTIAL VALUE
65. The core question which would arise for our consideration is whether by reason of
a transfer the jurisdiction of the civil court can be taken away or otherwise conferred
upon the Tribunal? In Indian Bank and Ranjan Chemicals coordinate bench of this Court
took somewhat different views even thereupon. Whereas in Indian Bank it was held that
the transfer can be effected with consent, the said question was ignored in Ranjan
Chemicals. Whereas the question of jurisdiction of the civil court vis-a-vis the Tribunal
was uppermost in the mind of the Bench in Indian Bank, no significance was attached
thereto in Ranjan Chemicals. It proceeded on the basis that the joint trial would be
permissible if some of the issues are common and if some of the evidence to be let in is
also common especially when the two actions arise out of the same transactions or
series of transactions wherefor several Sub-sections of Section 19 of the Act had not
been adverted to. In Ranjan Chemicals the Court posed a wrong question unto itself,
namely the jurisdiction of the Tribunal vis-a-vis exclusion of jurisdiction of the civil
court. Indian Bank was decided upon taking into consideration all provisions of the Act
as also the Code. It entered into the niceties of the question. It referred to all the
binding precedents. It was a well considered decision. Ranjan Chemicals, therefore, was
building upon the decision in Indian Bank being a coordinate Bench. It could not have
taken a contrary view. It was not even held that Indian Bank was wrong far less plainly
wrong.
66. Submission of the learned Counsel appearing on behalf of the Bank that consent of
the parties would not be required in a case where the subject matter of the banker's suit
as also the suit of the debtor are inextricably connected, would have to be rejected. We
do not see any reason why both the conditions laid down in Indian Bank (supra) should
be read disjunctively and not conjunctively. The Division Bench used the words
"following conditions" which would clearly go to show that both of them are required to
be conjunctively read. We are not here concerned with the question whether the civil
suit filed by a debtor should be read as a counter-claim for the purpose of exercising
jurisdiction under Section 25 of the Code as in effect and substance we are concerned
with the jurisdiction of this Court to pass an order of transfer. If this Court has no
jurisdiction, the question of considering the plaint filed by the debtor as a counter-claim
in the suit filed by the Bank before the DRT would not arise.
67. In Ranjan Chemicals (supra), therefore, in our opinion, the Court having not posed
unto itself the aforementioned question, should have considered the decision of a
coordinate bench in Indian Bank (supra) in that perspective. It must furthermore be
noticed that Indian Bank (supra) was clarifying Abhijit Tea (supra). Conditions laid
down in paragraph 25 of Indian Bank (supra) must also, therefore, be read in that
context as otherwise, the same would lead to misreading and misinterpreting the
judgment.
68. We may notice some decisions of this Court as regards the binding nature of the
precedents of a coordinate Bench.
69. In Union of India v. Raghubir Singh MANU/SC/0619/1989 : [1989]178ITR548(SC)
: (1989) 2 SCC 754, this Court has held:
27. [...] It is in order to guard against the possibility of inconsistent decisions
on points of law by different Division Benches that the Rule has been evolved,
in order to promote consistency and certainty in the development of the law
and its contemporary status, that the statement of the law by a Division Bench

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 is considered binding on a Division Bench of the same or lesser number of
Judges. This principle has been followed in India by several generations of
Judges.
28. We are of opinion that a pronouncement of law by a Division Bench of this
Court is binding on a Division Bench of the same or a smaller number of
Judges, and in order that such decision be binding, it is not necessary that it
should be a decision rendered by the Full Court or a Constitution Bench of the
Court.
See also Union of India v. Godfrey Philips India Ltd. MANU/SC/0036/1986 :
[1986]158ITR574(SC) : (1985) 4 SCC 369.
7 0 . I n Sub-Committee of Judicial Accountability v. Union of India
MANU/SC/0007/1992 : AIR1992SC63 : (1992) 4 SCC 97, this Court has held:
5. ...Indeed, no co-ordinate bench of this Court can even comment upon, let
alone sit in judgment over, the discretion exercised or judgment rendered in a
cause or matter before another co- ordinate bench.
7 1 . I n Central Board of Dawoodi Bohra Community v. State of Maharashtra
MANU/SC/1069/2004 : AIR2005SC752 : (2005) 2 SCC 673, this Court has held:
12. Having carefully considered the submissions made by the learned Senior
Counsel for the parties and having examined the law laid down by the
Constitution Benches in the abovesaid decisions, we would like to sum up the
legal position in the following terms:
(1) The law laid down by this Court in a decision delivered by a Bench
of larger strength is binding on any subsequent Bench of lesser or
coequal strength.
(2) ...It will be open only for a Bench of coequal strength to express an
opinion doubting the correctness of the view taken by the earlier Bench
of coequal strength, whereupon the matter may be placed for hearing
before a Bench consisting of a quorum larger than the one which
pronounced the decision laying down the law the correctness of which
is doubted.
7 2 . We are in agreement with all the above observations of this Court. Ranjan
Chemicals was bound by the decision rendered in Indian Bank being a coordinate
Bench. It could not have taken a contrary view.
SECTION 31 OF DRT ISSUE:
7 3 . We may at this juncture notice the provisions for transfer under the DRT Act
especially Section 31 which states that only suits or proceeding pending before the
court immediately before the establishment of the Tribunal under the Act shall stand
transferred to the Tribunal. Section 31 admittedly does not apply to the facts and
circumstances of the present case. There is no dispute in this behalf. Moreover, it is
beyond any dispute that there exists no other provision for transfer under the DRT Act
from a Court to Tribunal. The respondents, therefore, do not and cannot rely on any of
the provisions of the DRT Act for contending that the Court had any other power to
direct transfer.

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74. In Indian Bank (supra) this Court noted thus:
15. [...] There is no provision in the Act for transfer of suits and proceedings,
except Section 31 which relates to suit/proceedings by a bank or financial
institution for recovery of a debt. It is evident from Section 31 that only those
cases and proceedings (for recovery of debts due to banks and financial
institutions) which were pending before any court immediately before the date
of establishment of a tribunal under the Debts Recovery Act stood transferred,
to the tribunal
7 5 . I n Raghunath Rai Bareja and Anr. v. Punjab National Bank and Anr.
MANU/SC/5456/2006 : (2007)2SCC230 : (2007) 2 SCC 230, this Court opined:
19. [...] Apart from Section 31, there is no other provision for transferring a
suit or other proceedings pending before any other court to tribunal. [...]
28. [...] whatever power there are of transfer of proceedings to the tribunal are
contained in Section 31 of the RBD Act, and no transfer is permissible dehors
Section 31.
76. Therefore there exists no express power of transfer under the DRT which would be
applicable to the facts of the present case. The provisions of the Act and the entire
statutory scheme being well-defined, no further elaboration on our part is required.
POWER IN THE COURT TO TRANSFER CASES UNDER SECTIONS 23, 24, AND 25
OF THE CODE.
77. The power of the High Court to issue a direction for transfer of a suit beyond its
territorial jurisdiction in terms of Sub-section (3) of Section 23 of the Act came up for
consideration recently in Durgesh Sharma v. Jayshree [supra]. Noticing the history of
the provisions relating to transfer to which we have adverted to heretobefore, it was
held:
46. Having considered the scheme of the Code as amended from time to time,
in our judgment, the law relating to transfer of cases (suits, appeals and other
proceedings) is well settled. It is found in Sections 22 to 25 of the Code and
those provisions are exhaustive in nature. Whereas Sections 22, 24 and 25 deal
with power of transfer, Section 23 merely provides forum and specifies the
court in which an application for transfer may be made. Section 23 is not a
substantive provision vesting power in a particular court to order transfer.
4 7 . In our considered opinion, where several courts having jurisdiction are
subordinate to one appellate court, an application for transfer may be made to
such appellate court and the court may transfer a case from one court
subordinate to it to another court subordinate to it. Likewise, where such courts
are subordinate to the same High Court, an application may be made and action
may be taken by the High Court transferring a case from one court subordinate
to it to any other court subordinate to that High Court. But where such courts
are subordinate to different High Courts, it is only the Supreme Court (this
Court) which may pass an order of transfer. In other words, if two courts are
subordinate to different High Courts, one High Court has no power, jurisdiction
or authority to transfer a case pending in any court subordinate to that High
Court to a court subordinate to other High Court. It is only the Supreme Court
(this Court) which may order the transfer.

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78. Section 25 of the Code was considered to be containing both substantive as well as
procedural law. Section 23, on the other hand was held to be merely a procedural or
machinery provision. It was held that no order of transfer can be made thereunder,
stating:
...If the case is covered by Section 25 of the Code, it is only that section which
will apply for both the purposes, namely, for the purpose of making application
and also for the purpose of effecting transfer. On the contrary, reading of Sub-
section (3) of Section 23 of the Code in the manner suggested by the learned
Counsel for the respondent - wife would result in allowing inroad and
encroachment on the power of this Court not intended by Parliament. Section
23, therefore, in our considered view, must be read subject to Section 25 of the
Code. The decisions taking a contrary view do not lay down correct law. We,
therefore, overrule them....
WHETHER TRIBUNAL IS A CIVIL COURT
7 9 . The terms "Tribunal", "court" and the "civil court" have been used in the Code
differently. All "courts" are "Tribunals" but all "Tribunals" are not "courts". Similarly all
"civil courts" are "courts" but all "courts" are not "civil courts." It is not much in dispute
that the broad distinction between a "court" and a "Tribunal" is whereas the decision of
the "court" is final the decision of the "Tribunal" may not be.
80. The "Tribunal", however, which is authorized to take evidence of witnesses would
ordinarily be held to be a "court" within the meaning of Section 3 of the Evidence Act,
1872. It includes not only Judges and Magistrates but also persons, except Arbitrators,
legally authorized to take evidence. It is an inclusive definition. There may be other
forums which would also come within the purview of the said definition.
81. I n State of M.P. v. Anshuman Shukla MANU/SC/7678/2008 : AIR2008SC2454 :
(2008) 7 SCC 487, this Court while holding certain authorities to be a 'court' within the
meaning of the Evidence Act, noted thus:
1 9 . The definition of "courts" under the Evidence Act is not exhaustive see
Empress v. Ashootosh Chuckerbutty. Although the said definition is for the
purpose of the said Act alone, all authorities must be held to be courts within
the meaning of the said provision who are legally authorised to take evidence.
[...]
21. I n Brajnandan Sinha v. Jyoti Narain it has been held that any tribunal or
authority whose decision is final and binding between the parties is a court. In
the said decision, the Supreme Court, while deciding a case under the Court of
Enquiry Act held that a court of enquiry is not a court as its decision is neither
final nor binding upon the parties.
8 2 . The same, however, would not mean that only because a Tribunal has 'all the
trappings of a court', it would be a court. {See Bharat Bank Ltd. v. Employees of the
Bharat Bank Ltd. MANU/SC/0030/1950 : (1950)NULLLL J921SC : 1950 SCR 459 Para 7
and 27}.
83. Civil court is a body established by law for administration of justice. Different kinds
of law, however exists, constituting different kinds of courts. Which courts would come
within the definition of the civil court have been laid down under the Code of Civil
Procedure itself. Civil Courts contemplated under Section 9 of Code of Civil Procedure

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find mentioned in Sections 4 and 5 thereof. Some suits may lie before the Revenue
Court, some suits may lie before the Presidency Small Causes Courts. The Code of Civil
Procedure itself lays down that the Revenue Courts would not be courts subordinate to
the High Court.
84. We may notice that a learned Single Judge of the Calcutta High Court in State Bank
of India (supra) and a Division Bench of the Delhi High Court in Cofex Exports Ltd.
(supra) have held that the DRT is not a court and it exercises powers of a civil court
only in respect of limited matters.
85. Civil Courts are constituted under statutes, like Bengal, Agra and Assam Civil Courts
Act, 1887. Pecuniary and territorial jurisdiction of the civil courts are fixed in terms
thereof. Jurisdiction to determine subject matter of suit, however, emanates from
Section 9 of the Code. We would revert to the interpretation of the said provision vis-a-
vis the provisions of the Act a little later.
86. I n P. Sarathy v. State Bank of India MANU/SC/0422/2000 : (2000)IILL J661SC :
(2000) 5 SCC 355, this Court opined that although there exists a distinction between a
court and a civil court, but held that a Tribunal which has not merely the trappings of a
court but has also the power to give a decision or a judgment which has finality and
authoritativeness will be court within the meaning of Section 14 of the Limitation Act,
1963.
8 7 . In the context of Section 29(2) of the Limitation Act, 1963 the term 'court' is
considered to be of wide import.
88. However, there again even for that purpose exists a distinction between a court and
the civil court.
89. In P. Sarathy v. State Bank of India (Supra) this Court has held:
12. It will be noticed that Section 14 of the Limitation Act does not speak of a
"civil court" but speaks only of a "court". It is not necessary that the court
spoken of in Section 14 should be a "civil court". Any authority or tribunal
having the trappings of a court would be a "court" within the meaning of this
section.
13. ...in order to constitute a court in the strict sense of the term, an essential
condition is that the court should have, apart from having some of the
trappings of a judicial tribunal, power to give a decision or a definitive
judgment which has finality and authoritativeness which are the essential tests
of a judicial pronouncement.
90. We may, however, notice that in the context of applicability of Section 5 of the
Limitation Act in regard to Arbitration Tribunal which was constituted in terms of a
statutory provision has been referred to a three Judge Bench in State of Madhya Pradesh
and Anr. v. Anushuman Shukla MANU/SC/7678/2008 : AIR2008SC2454 :(2008) 7
SCC 487. Be that as it may, the word 'civil court' vis-'a-vis a court must be construed
having regard to the text and context of the statute.
TRANSFER OF CASES
91. Learned Senior Counsel Shri Divan cited before us certain precedents beginning
from Bhagwati Devi v. I.S. Goel MANU/SC/0526/1982 : 1983 ACJ 123; tillKususm

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Ignots & Alloys v. Punjab National Bank (2005) 12 SCC 358 to bring home the point
that this Court has regularly exercised power to transfer cases to and from Tribunals.
The Senior Counsel in all cited eight precedents in this behalf. Amongst them are
Rajasthan State Road Transport v. Poonam Pahwa MANU/SC/0770/1997 :
AIR1997SC2951 : (1997) 6 SCC 100;Dolly Kantibhai Patel v. Balu Tukaram
MANU/SC/2297/2000 : (2001)9SCC723 : (2001) 9 SCC 723;Mohan Singh v. Saheb
Singh : (2000) 9 SCC 403; and Kahlon v. K. Paramasivam (2004) 13 SCC 564 wherein
this Court exercised the power under Section 25 of the Code to transfer the case from
one Motor Vehicles Tribunal to another. Similarly Kusum Ignots (supra) and Jai Shiva
Cement v. Allahabad Bank JT 2000 (8) SC 323, are the decisions where the Supreme
Court exercised the power under Section 25 of the CPC to transfer the case from one
DRT to another.
92. These cases relate to transfer from one Tribunal to another Tribunal and not from a
civil court to the Tribunal. No legal principle can be culled out therefrom.
93. The Courts therein had not gone into the question whether the Tribunal is a civil
court or not. The provisions of the Code of Civil Procedure had not been adverted to.
The power of transfer under Section 25 of the Code was assumed sub silento without
any discussion.
94. We are in agreement with the submissions of learned senior counsel Dr. Singhvi
and Shri Rakesh Dwividi that those decisions are clearly distinguishable on the facts of
each case as they relate to transfer from one Tribunal to another and not from a civil
court to a Tribunal.
95. It has also been pointed out by Mr. Dwividi that reliance placed by Mr. Desai on the
cases cited by him and referred to herein is misleading as the Head Notes of those cases
are misleading. He argues that though the SCC refers to Section 25 of the CPC therein in
regard to the power of transfer of the court, however, the text of the judgments is silent
in regard thereto.
96. We may hereinafter may make reference to the Head Notes of a few of them. The
SCC Head Note to Kahlon (supra) reads as under:
Civil Procedure Code, 1908 - Section 25 - Motor accidents claim case filed by
petitioner in town of place of work - due to 100 per cent disablement due to
accident, petitioner quitting job and shifting back to home town - transfer of
claim case to home town of petitioner, allowed
97. Similarly, the SCC Head note of Mohan Singh (supra) reads:
Civil Procedure Code, 1908 -- Section 25 -- Motor accident claim petition --
Transfer of -- Petitioner residing in Delhi and most of the evidence related to
the case present in Delhi -- Amended provision of the statute providing that the
claim may be filed where the claimant resides -- On facts and circumstances of
the case, claim petition pending before Motor Accident Claims Tribunal,
Muzaffarnagar transferred to the Tribunal concerned at Delhi -- Motor Vehicles -
- Motor Vehicles Act, 1988, Section 166(2)
Also the Head note of Dolly Kantibhai Patel (supra) reads thus:
Civil Procedure Code, 1908 -- Section 25 -- Motor accident claim petition --
Transfer of -- Petitioner (claimant) going back to USA, where he was living

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 earlier -- Petitioner requiring transfer of claim from MACT, Nasik to Vadodara
(Gujarat) on the ground that his power-of-attorney holder was residing at
Vadodara and all other occupants of vehicle, who were involved in accident,
hailing from Vadodara -- Also the insurance company having its branch office at
Vadodara -- In view of above reasons, transfer of claim petition allowed as
prayed for
98. However on close scrutiny of the text of judgments of this Court, we find that no
reference therein has been made to Section 25 of the Code, or to any other provision
under which the said power is exercised. It must in this context be noted that Head
notes by the editors of a Reports are not a conclusive guide to the text of the judgment
reported. They are made only for the convenience of the readers as a short summary to
the text and for easy reference and at times they are misleading.
99. The United States Supreme Court in United States v. Detroit Timber & Lumber Co.
200 U. S. 321, 337.
In the first place, the headnote is not the work of the court, nor does it state its
decision,-though a different rule, it is true, is prescribed by statute in some
states. It is simply the work of the reporter, gives his understanding of the
decision, and is prepared for the convenience of the profession in the
examination of the reports.
1 0 0 . Reference may also be had to Parmananda Pegu v. State of Assam
MANU/SC/0696/2004 : 2004CriLJ4197 : (2004) 7 SCC 779, wherein it was stated:
2 1 . The decision of this Court in Chandrakant Chimanlal Desai v. State of
Gujarat has created some difficulty in understanding the law which is otherwise
so well settled. The learned Judges imported the observations which were made
i n Kashmira Singh v. State of M.P. in the context of evidentiary value of the
confession of co-accused and applied them to the case of retracted confession.
It appears that the learned Judges went by the headnote in the AIR6 which
opens up with the sentence: (AIR p. 159) "The confession of an accused
person...." However, in the text of the judgment it is crystal clear that the entire
discussion and the statement of law was only with reference to the confession
of the co-accused. While clarifying that the confession of the co-accused is not
evidence in the ordinary sense of the term as pointed out by the Privy Council,
this Court observed in Kashmira Singh case that such a confession cannot be
made the foundation of a conviction and can only be used in support of other
evidence.
22. In Chimanlal case the learned Judges, after referring to the headnote
portion of Kashmira Singh in AIR 1952 SC 159 proceeded to apply the test
applicable to the confession of the co-accused to a case of retracted confession.
23. In view of the error in comprehending the scope of the decision in
Kashmira Singh case the decision in Chimanlal case falls close to the category of
decisions rendered per incuriam.
101. Reliance has also been placed on a decision of this Court in Rajasthan State Road
Transport (supra) wherein a Motor Accident Claims Tribunal was held to be a civil court
purported to be on the basis of a decision in Bhagwati Devi (supra) wherein the
principles contained in Order XXIII of the Code had been held to be applicable to the
Motor Accident Claims Tribunal.

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102. A provision in the Code which is benevolent in character and sub serve the social
justice doctrine in a situation of that nature has been applied, but the same, in our
opinion, by itself would not make a Tribunal a civil court. No reason has been assigned
as to why a Tribunal has been considered to be a civil court for the purpose of Section
25 of the Act. The court appears to have proceeded on the basis that an appeal before
the High Court shall lie in terms of Section 173 of the Motor Vehicles Act, 1988 from an
Award passed by the Tribunal, thus showing that it is a part of the hierarchy of the civil
court. Motor Accident Claims Tribunal, thus, is a court subordinate to the High Court. No
appeal against the judgment of the Debt Recovery Tribunal lies before the High Court
unlike under the Motor Vehicles Act, 1988. The two Tribunals are differently structured
and have been established to serve totally different purposes.
103. If the Tribunal was to be treated to be a civil court, the debtor or even a third
party must have an independent right to approach it without having to wait for the Bank
or Financial Institution to approach it first. The continuance of its counter-claim is
entirely dependant on the continuance of the applications filed by the Bank. Before it no
declaratory relief can be sought for by the debtor. It is true that claim for damages
would be maintainable but the same have been provided by way of extending the right
of counter-claim.
1 0 4 . Debt Recovery Tribunal cannot pass a decree. It can issue only recovery
certificates. [See Sections 19(2) and 19(22) of the Act].
1 0 5 . The power of the Tribunal to grant interim order is attenuated with
circumspection. See Dataware Design Labs. v. State Bank of India (2005) 12 Comp.
Cas. 176 (Ker) at 184.
1 0 6 . Concededly in the proceeding before the Debt Recovery Tribunal detailed
examination; cross-examinations, provisions of the Evidence Act as also application of
other provisions of the Code of Civil Procedure like interrogatories, discoveries of
documents and admission need not be gone into. Taking recourse to such proceedings
would be an exception. Entire focus of the proceedings before the Debt Recovery
Tribunal centers round the legally recoverable dues of the bank.
107. Should we adopt the principle of purposive interpretation so as to hold that the
DRT would be a Civil Court? We have noticed hereinbefore that Civil Courts are created
under different Acts. They have their own hierarchy. They necessarily are subordinate to
the High Court. The appeals from their judgment will lie before a superior court. The
High Court is entitled to exercise its power of revision as also superintendence over the
said courts.
108. For the aforementioned purpose, we must bear in mind the distinction between
two types of courts, viz., civil courts and the courts trying disputes of civil nature. Only
because a court or a tribunal is entitled to determine an issue involving civil nature, the
same by itself would not lead to the conclusion that it is a civil court. For the said
purpose, as noticed hereinbefore, a legal fiction is required to be created before it
would have all attributes of a civil court. The Tribunal could have been treated to be a
civil court provided it could pass a decree and it had all the attributes of a civil court
including undertaking of a full-fledged trial in terms of the provisions of the Code of
Civil Procedure and/or the Evidence Act.
109. It is now trite law that jurisdiction of a court must be determined having regard to
the purpose and object of the Act. If the Parliament, keeping in view the purpose and
object thereof thought it fit to create separate tribunal so as to enable the banks and the

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financial institutions to recover the debts expeditiously wherefor the provisions
contained in the Code of Civil Procedure as also the Evidence Act need not necessarily
be resorted to, in our opinion, by taking recourse to the doctrine of purposive
construction, another jurisdiction cannot be conferred upon it so as to enable this Court
to transfer the case from the civil court to a tribunal.
110. It is difficult to accept the submission of Mr. Diwan that if such an interpretation
is accepted, the same would remove the anomaly which would otherwise be present in
the cases where recovery is for a sum below Rs. 10 lakhs and for those where recovery
is for a sum of Rs. 10 lakhs or more. Parliament created such an anomaly, if any,
knowingly. Expeditious recovery of the debts above Rs. 10 lakhs is the object of the
Act. Casus omissus, if any, it is well-known cannot be supplied by the court.
111. In Raghunath Rai Bareja (supra), this Court has clearly held:
...Assuming there is a defect or an omission in the words used by the
legislature, the court cannot correct or make up the deficiency, especially when
a literal reading thereof produces an intelligible result....
112. Would the tribunal answer the description of the civil court must be considered
having regard to the provisions of the Act constituting civil court as also the provisions
of the Code of Civil Procedure?
113. We have held that the Tribunals are neither civil courts nor courts subordinate to
the High Court. The High Court ordinarily can be approached in exercise of its writ
jurisdiction under Article 226 or its jurisdiction under Article 227 of the Constitution of
India. The High Court exercises such jurisdiction not only over the courts but also over
the Tribunals. Appellate tribunals have been constituted for determining the appeals
from judgments and orders of the Tribunal. The principles of purposive construction,
therefore, in our opinion, are not attracted in the instant case. Had the Parliament
intended to make the Tribunals civil courts, a legal fiction could have been raised. There
are statues like the Andhra Pradesh Land Grabbing Act where such a legal fiction has
been raised. See V. Laxminarasamma v. A. Yadaiah (Dead) and Ors.
MANU/SC/0345/2009 : 2009(3)SCALE685 : 2009 (3) SCALE 685.
114. Whereas the doctrine of purposive construction is a salutary principle, the same
cannot be extended to a case which would lead to an anomaly. It can inter alia be
resorted to only when difficulty or doubt arises on account of ambiguity. It is to be
preferred when object and purpose of the Act is required to be promoted.
115. For the foregoing reasons, we are of the opinion that the decisions of this Court
laying down the principles of purposive interpretation, whereupon strong reliance has
been placed by Mr. Divan, viz., New India Assurance Company Ltd. v. Nusli Neville
Wadia and Anr. MANU/SC/0166/2008 : AIR2008SC876 : (2008) 3 SCC 279;Dilip S.
Dahanukar v. Kotak Mahindra Co. Ltd. and Anr. MANU/SC/1803/2007 : 2007CriL J2417
: (2007) 6 SCC 528; South Eastern Coalfields Ltd. v. CCET, MP MANU/SC/3378/2006 :
2006(200)ELT357(SC) : (2006) 6 SCC 340 and UCO Bank v. Rajinder Lal Capoor
MANU/SC/7393/2008 : (2008)IIILL J299SC : (2008) 5 SCC 257, cannot have any
application. On the other hand, if the principles of purposive interpretation are resorted
to, the same would amount to rewriting of the statute.
1 1 6 . I n Sri Ram Saha v. State of West Bengal and Ors. MANU/SC/0901/2004 :
AIR2004SC5080 : JT 2004 (9) SC 136 : (2004) 11 SCC 497, this Court held:

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 19. It is well-settled principle of interpretation that a statute is to be interpreted
on its plain reading; in the absence of any doubt or difficulty arising out of
such reading of a statute defeating or frustrating the object and purpose of an
enactment, it must be read and understood by its plain reading. However, in
case of any difficulty or doubt arising in interpreting a provision of an
enactment, courts will interpret such a provision keeping in mind the objects
sought to be achieved and the purpose intended to be served by such a
provision so as to advance the cause for which the enactment is brought into
force. If two interpretations are possible, the one which promotes or favours
the object of the Act and purpose it serves, is to be preferred. At any rate, in
the guise of purposive interpretation, the courts cannot rewrite a statute. A
purposive interpretation may permit a reading of the provision consistent with
the purpose and object of the Act but the courts cannot legislate and enact the
provision either creating or taking away substantial rights by stretching or
straining a piece of legislation.
See also D.P.P. v. Bhagwan (1970) 3 All ER 97.
CONCLUSION
1 1 7 . The Tribunal was constituted with a specific purpose as is evident from its
statement of objects. The preamble of the Act also is a pointer to that too. We have also
noticed the scheme of the Act. It has a limited jurisdiction. Under the Act, as it
originally stood, did not even have any power to entertain a claim of set off or counter-
claim. No independent proceedings can be initiated before it by a debtor. A debtor
under the common law of contract as also in terms of the loan agreement may have an
independent right. No forum has been created for endorsement of that right. Jurisdiction
of a civil court as noticed hereinbefore is barred only in respect of the matters which
strictly come within the purview of Section 17 thereof and not beyond the same. The
Civil Court, therefore, will continue to have jurisdiction. Even in respect of set off or
counter-claim, having regard to the provisions of Sub-sections (6) to (11) of Section 19
of the Act, it is evident:
a) That the proceedings must be initiated by the bank
b) Some species of the remedy as provided therein would be available therefor.
c) In terms of Sub-section (11) of Section 19, the bank or the financial
institution is at liberty to send a borrower out of the forum.
d) In terms of the provisions of the Act, thus, the claim of the borrower is
excluded and not included.
e) In the event the bank withdraws his claim the counter-claim would not
survive which may be contrasted with Rule 6 of Order VIII of the Code.
f) Sub-section (9) of Section 19 of the Act in relation thereto has a limited
application.
g) The claim petition by the bank or the financial institution must relate to a
lending/borrowing transaction between a bank or the financial institution and
the borrower.
h) The banks or the financial institutions, thus, have a primacy in respect of the

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 proceedings before the Tribunal.
i) An order of injunction, attachment or appointment of a receiver can be
initiated only at the instance of the bank or the financial institution. We,
however, do not mean to suggest that a Tribunal having a plenary power, even
otherwise would not be entitled to pass an order of injunction or an interim
order, although ordinarily expressly it had no statutory power in relation
thereto.
j) It can issue a certificate only for recovery of its dues. It cannot pass a
decree.
k) Although an appeal can be filed against the judgment of the Tribunal, pre-
deposit to the extent of 75 % of the demand is imperative in character.
l) Even cross-examination of the witnesses need not be found to be necessary.
m) Subject to compliance of the principle of natural justice it may evolve its
own procedure.
n) It is not bound by the procedure laid down under the Code. It may however
be noticed in this regard that just because the Tribunal is not bound by the
Code, it does not mean that it would not have jurisdiction to exercise powers of
a court as contained in the Code. 'Rather, the Tribunal can travel beyond the
Code of Civil Procedure and the only fetter that is put on its powers is to
observe the principles of natural justice.
S e e Industrial Credit and Investment Corporation of India Ltd. v. Grapco
Industries Ltd.
MANU/SC/0372/1999 : [1999]3SCR759 : (1999) 4 SCC 710.
The Tribunal, therefore, would not be a Civil Court.
TRIBUNAL WHETHER IS SUBORDINATE TO THE HIGH COURT:
118. The Court would be subordinate to High Court in terms of the provisions of the
Code only in the event it comes within the purview of the hierarchy of the court as
contained in Section 3 of the Act. This, however, does not mean that even when the
Presiding Judge or the Presiding Officer of the Court exercises power conferred upon it
under a statute still then it would not be a court subordinate to the High Court. A court
while adjudicating a dispute under the Employees State Insurance Act or a Reference
Court under the Land Acquisition Act, Election Tribunal or a Tribunal acting as a Motor
Vehicles Accident Claim Tribunal, while exercising revisional jurisdiction from an order
passed by the Executive Magistrate under the Code or exercising an appellate power
under special statutes like Municipal Acts would still be a court subordinate to the High
Court. However, for the aforementioned purpose the Presiding Officer must be holding a
Court which would otherwise come within the purview of the hierarchy of the courts.
1 1 9 . I n N.P. Balakrishanan v. P.M.R. Mariyumma MANU/KE/0017/1997 :
AIR1997Ker89 : AIR 1997 Kerala 89, the High Court has held:
In view of the discussions it is clear that even though Rent Control Court under
the Rent Control Act is a 'Court' and is not a persona designate it is not a Civil
Court for the purpose for the provisions of Section 115 of the CPC. Therefore,

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 against an interim order of the Rent Control Court no revision petition will lie.
We are not considering whether an appeal will lie against the interim order in
question or whether a petition under Article 227 of the Constitution is
maintainable.
120. I n Brooke Bond India Ltd. v. Union of India and Ors. MANU/AP/0910/2001 :
AIR2001AP526 : AIR 2001 AP 526, the Andhra Pradesh High Court has held:
The contention urged by the counsel for appellant that the Railway Claims
Tribunal is a civil Court cannot be accepted. Merely because Section 18(3) of
the Act provides that the Claims Tribunal, for the purpose of discharging the
functions under the Act, shall have the same powers as are vested in the civil
Court under the Code of Civil Procedure, 1908 and Section 25 provides that the
proceedings before the Tribunal shall be deemed to be 'judicial proceedings' as
contemplated under Sections 193, 210 and 228, IPC, they do not make the
Railway Claims Tribunal a 'Civil Court.
121. In Devendra Somabhai Naik v. Accurate Transheet Pvt. Ltd. MANU/GJ/0379/2002
: AIR 2003 Guj 141 the High Court has held:
No doubt, Article 137 deals with filling of applications, but then the
applications, which are contemplated to be filed, are the applications filed
before the civil Court. The appellant is also not successful in convincing this
Court to hold that the 'Copyright Board' is a 'Civil Court'. In view of the
aforesaid discussion, the present appeal fails. The Court has not found any
error in the order under challenge. The appeal is dismissed with no order as to
costs.
1 2 2 . I n State Bank of India v. Madhumita Construction (Pvt.) Ltd. and Ors.
MANU/WB/0298/2002 : AIR2003Cal7 : AIR 2003 Cal 7, the Calcutta High Court has
held:
13. ...On the other hand, it is a question as to whether this Court had
jurisdiction or not. If the DRT has exclusive jurisdiction and this Court ceases to
have jurisdiction, in that event, it is not a question of granting injunction
restraining the respondent Nos. 53 to 57 from proceeding with the same. But it
is a case whether this Court has jurisdiction to proceed with or not. If it has
jurisdiction, in that event, it can very much grant the injunction. If it has no
jurisdiction, it cannot do so. Even if it is assumed that Section 41(b) applies,
still then DRT as such is not a Court subordinate to this Court. It does not fall
within the hierarchy of the Courts as provided in the Bengal, Agra and Assam
Civil Courts Act, 1887. The Tribunal constituted under the DRT Act is not a
Court. It is a Tribunal having the trappings of a Court. A Tribunal with trappings
of Court cannot be equated with a Court as is understood from the expression
"Court". A Court is a body established by law for the administration of justice
by Judges or Magistrates. This definition may include a Tribunal as well.
Inasmuch as, it is also a body constituted or established by law for
administration of justice. But, when it comes to the distinction between Court
and Tribunal, then the Court as it understood is different from a Tribunal. The
word "Court", however, has not been defined anywhere in any law. Different
kinds of Courts have since been established under different laws. The hierarchy
of the Court as established under Bengal, Agra and Assam Civil Court Act are
Courts in respect of which the Code of Civil Procedure is applicable and the

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 jurisdiction is open. Section 4 and 5 CPC also spells out Courts in the context of
applicability of CPC. Under Section 9 of CPC. All suits of civil nature are triable
by a Court unless cognizance of a particular kind of suit is expressly or
impliedly barred. There are certain kinds of suits which are triable by revenue
Courts or Provincial or Presidencies Small Cause Court. The subordination of
the Courts is determined under Section 3, CPC on the basis of the provisions of
Code of Civil Procedure applicable to it having regard to the provisions
contained in Bengal, Agra and Assam Civil Courts Act.
1 2 3 . I n Greater Bombay Coop. Bank Ltd. v. United Yarn Tex (P) Ltd.
MANU/SC/7272/2007 : AIR2007SC1584 : (2007) 6 SCC 236, this Court has held:
76. Section 31 of the RDB Act clearly refers to transfer of "every suit or other
proceeding pending before any court". The word "court", in the context of the
RDB Act, signifies "civil court". It is clear that the Registrar, or an officer
designated by him or an arbitrator under Sections 61, 62, 70 and 71 of the
APCS Act, 1964 and under Section 91 and other provisions of Chapter IX of the
MCS Act, 1960 are not "civil courts".
77. I n Harinagar Sugar Mills v. Shyam Sundar Jhunjhunwala this Court held:
(AIR p. 1680, para 32)
By 'courts' is meant courts of civil judicature and by 'tribunals', those
bodies of men who are appointed to decide controversies arising under
certain special laws. Among the powers of the State is included the
power to decide such controversies. This is undoubtedly one of the
attributes of the State, and is aptly called the judicial power of the
State.
I n Rama Rao v. Narayan it was held that the nominee of Registrar appointed
under Section 95 of the Maharashtra Cooperative Societies Act, 1961 is not a
"court" within the meaning of Section 195 Cr PC.
In Kihoto Hollohan v. Zachillhu it was held that: (SCC p. 706, para 98)
'All tribunals are not courts, though all courts are tribunals.' The word
'courts' is used to designate those tribunals which are set up in an
organised State for the administration of justice.
I n Supreme Court Legal Aid Committee v. Union of India it was held: (SCC
p.745, para 14)
14. It is common knowledge that a 'court' is an agency created by the
sovereign for the purpose of administering justice. It is a place where
justice is judicially administered. It is a legal entity.
EXCLUSION OF JURISDICTION MUST BE EXPRESS
1 2 4 . The Civil Court indisputably has the jurisdiction to try a suit. If the suit is
vexatious or otherwise not maintainable action can be taken in respect thereof in terms
of the Code. But if all suits filed in the Civil Courts, whether inextricably connected with
the application filed before the DRT by the banks and financial institutions are
transferred, the same would amount to ousting the jurisdiction of the Civil Courts
indirectly. Suits filed by the debtor may or may not be counter claims to the claims filed

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by banks or financial institutions but for that purpose consent of the plaintiff is
necessary. It is furthermore difficult to accept the contentions of the respondents that
the statutory provisions contained in Section 17 and 18 of the DRT Act have ousted the
jurisdiction of the civil court as the said provisions clearly state that the jurisdiction of
the civil court is barred in relation only to applications from banks and financial
institutions for recovery of debts due to such banks and financial institutions.
125. A civil court is entitled to decide the respective claims of the parties in a suit. It
must come within the purview of the hierarchy of courts as indicated in Section 3 of the
Code. It will have jurisdiction to determine all disputes of civil nature unless the same
is barred expressly by a statute or by necessary implication. Although some arguments
have been advanced before us whether having regard to the provisions of Sections 17
and 18 of the Act the civil court jurisdiction is completely ousted, we are of the view
that the jurisdiction of the civil court would be ousted only in respect of the matters
contained in Section 18 which has a direct co-relation with Section 17 thereof, that is to
say that the matter must relate to a debt payable to a bank or a financial institution. The
application before the Tribunal would lie only at the instance of the bank or the financial
institution for the recovery of its debt. It must further be noted in this respect that had
the jurisdiction of the civil courts been barred in respect of counterclaim also, the
statute would have said so and Sections 17 and 18 would have been amended to
introduce the provision of counterclaim. We may in this context place on record the
following observations from Indian Bank (supra):
14. Section 9 of the Code of Civil Procedure provides that the courts shall have
jurisdiction to try all suits of a civil nature, excepting suits of which their
cognizance is either expressly or impliedly barred.
15. It is evident from Sections 17 and 18 of the Debts Recovery Act that civil
court's jurisdiction is barred only in regard to applications by a bank or a
financial institution for recovery of its debts. The jurisdiction of civil courts is
not barred in regard to any suit filed by a borrower or any other person against
a bank for any relief.[...]
16. [...]What is significant is that Sections 17 and 18 have not been amended.
Jurisdiction has not been conferred on the Tribunal, even after amendment, to
try independent suits or proceedings initiated by borrowers or others against
banks/financial institutions, nor the jurisdiction of civil courts barred in regard
to such suits or proceedings.
126. It must be remembered that the jurisdiction of a civil court is plenary in nature.
Unless the same is ousted, expressly or by necessary implication, it will have
jurisdiction to try all types of suits.
127. In Dhulabhai v. State of M.P. MANU/SC/0157/1968 : [1968]3SCR662 : (1968) 3
SCR 662, this Court opined:
35. [...] The result of this inquiry into the diverse views expressed in this Court
may be stated as follows:
[...] (2) Where there is an express bar of the jurisdiction of the court,
an examination of the scheme of the particular Act to find the adequacy
or the sufficiency of the remedies provided may be relevant but is not
decisive to sustain the jurisdiction of the civil court.

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 Where there is no express exclusion the examination of the remedies
and the scheme of the particular Act to find out the intendment
becomes necessary and the result of the inquiry may be decisive. In the
latter case it is necessary to see if the statute creates a special right or
a liability and provides for the determination of the right or liability and
further lays down that all questions about the said right and liability
shall be determined by the Tribunals so constituted, and whether
remedies normally associated with actions in civil courts are prescribed
by the said statute or not.
(7) An exclusion of the jurisdiction of the civil court is not readily to be inferred unless
the conditions above set down apply.
128. I n Dwarka Prasad Agarwal v. Ramesh Chander Agarwal MANU/SC/0449/2003 :
AIR2003SC2696 : (2003) 6 SCC 220.
19. A bare perusal of the aforementioned provisions leaves no manner of doubt
that thereby the jurisdiction of the civil court has not been ousted. The civil
court, in the instant case, was concerned with the rival claims of the parties as
to whether one party has illegally been dispossessed by the other or not. Such
a suit, apart from the general law, would also be maintainable in terms of
Section 6 of the Specific Relief Act, 1963. In such matters the court would not
be concerned even with the question as to the title/ownership of the property.
129. Therein five principles were laid down stating:
22. The dispute between the parties was eminently a civil dispute and not a
dispute under the provisions of the Companies Act. Section 9 of the Code of
Civil Procedure confers jurisdiction upon the civil courts to determine all
disputes of civil nature unless the same is barred under a statute either
expressly or by necessary implication. Bar of jurisdiction of a civil court is not
to be readily inferred. A provision seeking to bar jurisdiction of a civil court
requires strict interpretation. The court, it is well settled, would normally lean
in favour of construction, which would uphold retention of jurisdiction of the
civil court. The burden of proof in this behalf shall be on the party who asserts
that the civil court's jurisdiction is ousted. See Sahebgouda v. Ogeppa
MANU/SC/0257/2003 : [2003]3SCR90 : (2003) 6 SCC 151. Even otherwise,
the civil court's jurisdiction is not completely ousted under the Companies Act,
1956.
1 3 0 . I n Nagri Pracharini Sabha v. Vth Addl. Distt. and Sessions Judge
MANU/SC/0629/1990 : [1990]3SCR971 : 1991 Supp (2) SCC 36.
2. A litigant having a grievance of a civil nature has, independently of any
statute, a right to institute a suit in the civil court unless its cognizance is either
expressly or impliedly barred. The position is well-settled that exclusion of
jurisdiction of the civil court is not to be readily inferred and such exclusion
must be either expressly or implied.
1 3 1 . I n Ramesh Chand Ardawatiya v. Anil Panjwani MANU/SC/0387/2003 :
[2003]3SCR1149 : (2003) 7 SCC 350, this Court opined:
19. ...Where there is a special tribunal conferred with jurisdiction or exclusive
jurisdiction to try a particular class of cases even then the civil court can

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 entertain a civil suit of that class on availability of a few grounds. An exclusion
of jurisdiction of the civil court is not to be readily inferred. (See Dhulabhai v.
State of M.P.)
132. Power to create or enlarge jurisdiction is legislative in character. Similarly, right
of revision or appeal is normally a creature of statute. In Rajasthan SRTC v. Zakir
Hussain MANU/SC/0496/2005 : (2005)IIILL J786SC : (2005) 7 SCC 447, this Court has
held:
21. It is a well-settled principle of law as laid down by this Court that if the
court has no jurisdiction, the jurisdiction cannot be conferred by any order of
court. This Court in the case of A.R. Antulay v. R.S. Nayak AIR paras 40 to 42
wherein it is, inter alia, held and observed as under: (SCC pp. 650-51, paras
38-40)
39[41]. ... The power to create or enlarge jurisdiction is legislative in
character.... Parliament alone can do it by law and no court, whether
superior or inferior or both combined can enlarge the jurisdiction of a
court or divest a person of his rights of revision and appeal....
133. The Act, although, was enacted for a specific purpose but having regard to the
exclusion of jurisdiction expressly provided for in Sections 17 and 18 of the Act, it is
difficult to hold that a civil court's jurisdiction is completely ousted. Indisputably the
banks and the financial institutions for the purpose of enforcement of their claim for a
sum below Rs. 10 lakhs would have to file civil suits before the civil courts. It is only
for the claims of the banks and the financial institutions above the aforementioned sum
that they have to approach the Debt Recovery Tribunal.
134. It is also without any cavil that the banks and the financial institutions, keeping in
view the provisions of Sections 17 and 18 of the Act, are necessarily required to file
their claim petitions before the Tribunal. The converse is not true.
1 3 5 . Debtors can file their claims of set off or counter-claims only when a claim
application is filed and not otherwise. Even in a given situation the banks and/or the
financial institutions can ask the Tribunal to pass an appropriate order for getting the
claims of set-off or the counter claims, determined by a civil court. The Tribunal is not a
high powered tribunal. It is a one man Tribunal. Unlike some Special Acts, as for
example Andhra Pradesh Land Grabbing (Prohibition) Act, 1982 it does not contain a
deeming provision that the Tribunal would be deemed to be a civil court.
136. The liabilities and rights of the parties have not been created under the Act. Only
a new forum has been created. The banks and the financial institutions cannot approach
the Tribunal unless the debt has become due. In such a contingency, indisputably a civil
suit would lie.
137. There is a possibility that the debtor may file preemptive suits and obtain orders
of injunction, but the same alone, in our opinion, by itself cannot be held to be a
ground to completely oust the jurisdiction of the civil court in the teeth of Section 9 of
the Code. Recourse to the other provisions of the Code will have to be resorted to for
redressal of his individual grievances.
138. It is also difficult to accept the contention of leaned counsel for the banks that the
civil court's jurisdiction is not in consonance with the Act. We do not find the same to
be correct.

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139. On the ground of inconsistency in the procedures contained in the two Acts alone,
the jurisdiction of the civil court cannot be said to have been ousted.
140. Reliance has been placed by Mr. K.K. Venugopal, learned senior Counsel for the
bank on Vijay Kumar Sharma v. State of Karnataka MANU/SC/0368/1990 :
[1990]1SCR614 : (1990) 2 SCC 562, wherein this Court has held:
44. The court then referred to its earlier decision in Deepchand v. State of U.P.
and pointed out that in that case the following principles were laid down to
ascertain whether there is repugnancy or not:
1. Whether there is direct conflict between the two provisions;
2 . whether Parliament intended to lay down an exhaustive code in
respect of the subject matter replacing the earlier law;
3. whether the two laws occupy the same field.
141. The court then referred to Sutherland on Statutory Construction (Vol. 1 3rd edn.,
p. 486) on the question of "repeal of special and local statutes by general statutes".
142. It was further stated:
46. What is important from our point of view, is the view taken in that case
that when repugnancy is alleged between the two statutes, it is necessary to
examine whether the two laws occupy the same field, whether the new or the
later statute covers the entire subject matter of the old, whether legislature
intended to lay down an exhaustive code in respect of the subject matter
covered by the earlier law so as to replace it in its entirety and whether the
earlier special statute can be construed as remaining in effect as a qualification
of or exception to the later general law, since the new statute is enacted
knowing fully well the existence of the earlier law and yet it has not repealed it
expressly. The decision further lays down that for examining whether the two
statutes cover the same subject matter, what is necessary to examine is the
scope and the object of the two enactments, and that has to be done by
ascertaining the intention in the usual way and what is meant by the usual way
is nothing more or less than the ascertainment of the dominant object of the
two legislations.
....
48. ...The legislative intent is clear. Since, further, the Parliament had enacted
the later statute knowing fully well the existence of the earlier statute and yet it
did not expressly repeal it, it will be presumed that the Parliament felt that
there was no need to repeal the said statute.
143. However, in that case itself it has been held that repugnancy and inconsistency is
synonymous.
144. Furthermore in a case of this nature where the banks itself have filed applications
for transfer, the jurisdiction of the civil court must be presumed.
145. Submission of Mr. Desai that this Court can direct the Tribunal to follow the
provisions of the Code, in our opinion, cannot be accepted. Such a direction would be

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in the teeth of the provisions of the Act.
146. Reliance placed by the learned Counsel on Sub-section (2) of Section 22 of the
Act to contend that the provisions of the Code are applicable, in our opinion, militates
against the said contention. Sub-section (2) of Section 22 deals with applicability of the
provisions of the Code in a limited manner. Sub-section (3) raises a legal fiction that
the proceeding before the Tribunal or the Appellate Tribunal shall be deemed to be a
judicial proceeding within the meaning of Sections 193 and 228 and for all the purposes
of Section 196 of the Indian Penal Code, 1860. The very fact that a legal fiction has
been created and the Tribunal or the Appellate Tribunal shall be deemed to be a civil
court for purposes of Section 195 and Chapter XXVI of the Code of Criminal Procedure,
1973, itself suggests that the Parliament did not intend to take away the jurisdiction of
the civil court. In any event, the said legal faction has a limited application. Its scope
and ambit cannot be extended.
147. In Bharat Bank Ltd. (supra) it has clearly been held that although the labour court
may have all the trappings of a court, but it is still not a court. We may notice that
some of the Parliamentary statutes, like the Family Courts Act confers all the powers on
Family Courts which are essential for discharging the functions of Civil Court under the
Code of Criminal Procedure.
148. We accept that disposal of a civil suit takes a long time. But indisputably remedy
of summary and speedy trial by itself would not be sufficient to oust the jurisdiction of
the civil court. Had the intention of the Parliament been so, it could have expressly said
so. Casus omissus, as is well known, cannot be supplied.
VESTED RIGHT OF APPEAL
149. Another aspect of the matter also cannot be lost sight of. A plaintiff of a suit will
have a vested right of appeal. The said right would be determined keeping in view the
date of filing of the suit. Such a right of appeal must expressly be taken away. An
appeal is the "right of entering a superior court, and invoking its aid and interposition
to redress the error of the court below" and "though procedure does surround an appeal
the central idea is a right". The right of appeal has been recognized by judicial decisions
as a right which vests in a suitor at the time of institution of original proceedings. The
Privy Council in Colonial Sugar Refining Company v. Irving (1905) AC 369 (PC) noted
that " to deprive a suitor in a pending action of an appeal to a superior tribunal which
belonged to him as of right, is a very different thing from regulating procedure"
150. When a person files a civil suit his right to prosecute the same in terms of the
provisions of the Code as also his right of appeal by way of first appeal; second appeal
etc. are preserved. Such rights cannot be curtailed, far less taken away except by
reason of an express provision contained in the statute. Such a provision in the statute
must be express or must be found out by necessary implication.
1 5 1 . I n Garikapati Veeraya v. N. Subbiah Choudhry MANU/SC/0008/1957 :
[1957]1SCR488 : 1957 SCR 488, this Court opined:
23. From the decisions cited above the following principles clearly emerge:
(i) That the legal pursuit of a remedy, suit, appeal and second appeal
are really but steps in a series of proceedings all connected by an
intrinsic unity and are to be regarded as one legal proceeding.

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 (ii) The right of appeal is not a mere matter of procedure but is a
substantive right.
(iii) The institution of the suit carries with it the implication that all
rights of appeal then in force are preserved to the parties thereto till
the rest of the career of the suit.
(iv) The right of appeal is a vested right and such a right to enter the
superior court accrues to the litigant and exists as on and from the date
the lis commences and although it may be actually exercised when the
adverse judgment is pronounced such right is to be governed by the
law prevailing at the date of the institution of the suit or proceeding
and not by the law that prevails at the date of its decision or at the date
of the filing of the appeal.
(v) This vested right of appeal can be taken away only by a subsequent
enactment, if it so provides expressly or by necessary intendment and
not otherwise.
See also Dilip S. Dahanukar v. Kotak Mahindra Co. Ltd. and Anr.
MANU/SC/1803/2007 : 2007CriLJ2417 : (2007) 6 SCC 528.
152. The Code not only contains procedural provisions but also substantive rights ;
right of appeal is one of them. A forum of appeal is determined in terms of the
provisions of the Code having regard to the pecuniary jurisdiction of the Court as may
be notified by the appropriate Government from time to time. A suitor has the right to
maintain a first appeal. A second appeal also is maintainable before a High Court,
subject of course to the effect that questions of law must be there for the court's
consideration. For the said purpose no pre-deposit is required to be made, as is
necessary in terms of the Act, that 75% of the awarded amount is required to be
deposited, subject of course, to an order to the contrary, which may be passed by the
Debt Recovery Appellate Tribunal. Such a right of conditional appeal, in our opinion,
curtails party's right to maintain an appeal as a matter of right. While we say so, we are
not oblivious of the fact that in terms of Order XLI Rule 1 of the Code, in the event of
passing of a money decree the amount is required to be deposited. The said provision,
however, has been held to be directory. Order XLI Rule 1 is required to be read with
Order XLI Rule 5 thereof. {See Sihor Nagar Palika Bureau v. Bhabhlubhai Virabhai & Co.
MANU/SC/0315/2005 : (2005)4SCC1 : (2005) 4 SCC 1;Malwa Strips Pvt. Ltd. v. Jyoti
Limited MANU/SC/8489/2008 : AIR2009SC1581 : (2009) 2 SCC 426}
1 5 3 . More recently in Transmission Corporation of A.P. v. Ch. Prabhakar and Ors.
MANU/SC/0514/2004 : (2004)5SCC551 : (2004) 5 SCC 551 this Court similarly
opined:
....The right of appeal is a substantive right which is really a step in series of
proceedings all connected by an intrinsic unity and is to be regarded as one
legal proceeding and further being a vested right such a right to enter the
superior court accrues to the litigant and exists as on and from the date the lis
commences....
154. A civil suit may also be maintainable before Original Side of the High Court in
terms of the statutes under which the High Courts are constituted or in terms of the
provisions of the Letters Patent. An intra court appeal is available against a decree
passed by a learned Single Judge of a High Court in a suit filed before it.

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155. In the event, however, if a civil suit is transferred to the Debt Recovery Tribunal,
the plaintiff would be deprived of his right in relation to the procedural mechanism as
contained in the Code as also the Evidence Act. His right of appeal would also stand
curtailed. While exercising the power of transfer, the High Court and this Court would
thus be curtailing the right of a suitor indirectly which could not be done directly. It
clearly establishes the Parliamentary intent that only civil suits are subject matter of
inter State transfer from one civil court to another civil court. If such a power is
exercised, all the rights of the plaintiff remain intact, no right is taken away and no
right is diluted.
INHERENT JURISDICTION
156. Section 151 of the Code of Civil Procedure does not confer any extraordinary
jurisdiction on this Court. It saves the inherent power of all the civil courts, i.e., from
the trial judge to this Court. Thus, where a matter has expressly been provided for in
the body of the Code, ordinarily inherent power shall not be resorted to. The underlying
principle of Section 151 of the Code ordinarily would apply where the area is grey. It
indisputably confers incidental powers. It confers power on a court to do something
which in absence of any provision contrary thereto would lead to advancement of
justice and prevent injustice. The power to transfer one case from one court to another
or from one tribunal to another having jurisdiction of a different State is an
extraordinary jurisdiction. For exercising the said power, this Court has to take into
consideration a large number of factors. Such a power is to be exercised if exceptional
situation arises and not otherwise.
157. I n Padma Sen and Anr. v. The State of Uttar Pradesh MANU/SC/0065/1960 :
1961CriL J322 : AIR 1961 SC 218, this Court, having regard to the provisions contained
in Order XXVI, Rule 9 of the Code of Civil Procedure vis-'a-vis Order XXXVIII, Rule 5,
Order XXXIX, Rules 1(b) and 7 thereof, categorically held that the court has no inherent
power under Section 151 of the Code of Civil Procedure to appoint a Commissioner to
seize accounts books in the possession of the plaintiff upon an application by the
defendant that his apprehension that they would be tampered with, stating:
10. The defendants had no rights to these account books. They could not lay
any claim to them. They applied for the seizure of these books because they
apprehended that the plaintiff might make such entries in those account books
which could go against the case they were setting up in Court. The defendants'
request really amounted to the Court's collecting documentary evidence which
the defendants considered to be in their favour at that point of time. It is no
business of the Court to collect evidence for a party or even to protect the rival
party from the evil consequences of making forged entries in those account
books. If the plaintiff does forge entries and uses forged entries as evidence in
the case, the defendants would have ample opportunity to dispute those entries
and to prove them forgeries.
11. We are therefore of opinion that the Additional Munsif had no inherent
power to pass the order appointing a Commissioner to seize the plaintiff's
account books. The order appointing Sri Raghubir Pershad as Commissioner for
this purpose was therefore an order passed without jurisdiction and was
therefore a null and void order.
158. The said decision, we are not oblivious, has been distinguished by this Court in
Manohar Lal Chopra v. Rai Bahadur Rao Raja Seth Hiralal MANU/SC/0056/1961 :

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AIR1962SC527 : AIR 1962 SC 527, in a case for grant of injunction stating that Rules 1
and 2 of Order XXXIX of the Code of Civil Procedure is not exhaustive, stating:
22. In the above case, this Court did not uphold the order of the civil court, not
coming under the provisions of Order 26, appointing a commissioner for seizing
the account books of the plaintiff on the application of the defendants. The
order was held to be defective not because the Court had no power to appoint a
commissioner in circumstances not covered by Section 75 and Order 26, but
because the power was exercised not with respect to matters of procedure but
with respect to a matter affecting the substantive rights of the plaintiff. This is
clear from the further observations made at p. 887. This Court said:
The question for determination is whether the impugned order of the
Additional Munsif appointing Sri Raghubir Pershad Commissioner for
seizing the plaintiff's books of account can be said to be an order which
is passed by the Court in the exercise of its inherent powers. The
inherent powers saved by Section 151 of the Code are with respect to
the procedure to be followed by the Court in deciding the cause before
it. These powers are not powers over the substantive rights which any
litigant possesses. Specific powers have to be conferred on the Courts
for passing such orders which would affect such rights of a party. Such
powers cannot come within the scope of inherent powers of the Court
in matters of procedure, which powers have their source in the Court
possessing all the essential powers to regulate its practice and
procedure.
1 5 9 . The Plaintiff furthermore is the dominus litus. He may institute a suit having
regard to the provisions contained in Sections 16 to 20 of the Code of Civil Procedure in
any civil court within whose jurisdiction inter alia a cause of action arises. If the
jurisdiction of the civil court is not barred or if he having regard to common law
principle is entitled to maintain an action in two different forums, he may choose one of
them. [See Rajasthan State Road Transport Corporation and Anr. v. Bal Mukund Bairwa
MANU/SC/0181/2009 : (2009)IIILLJ177SC : 2009 (2) SCALE 428.
160. A debtor having regard to the provisions of the DRT Act would not be entitled to
maintain an action before the Tribunal. If a suit is to be transferred from a civil court to
a tribunal, he would loose some rights including the right to prefer an appeal before a
higher court in terms of Sections 96 and 100 of the Code of Civil Procedure.
161. Mr. Diwan, however, has strongly placed reliance upon Union of India and Anr. v.
Delhi High Court Bar Association and Ors. MANU/SC/0194/2002 : [2002]2SCR450 :
(2002) 4 SCC 275, wherein it was observed that the tribunals have become an essential
part of the judicial system in the country. Such observations were made keeping in view
the provisions of Articles 323A and 323B of the Constitution of India. The logical
extension of the said observations would not lead to a conclusion that the tribunals are
either civil courts or this Court would be entitled to exercise its inherent power for
transfer of a civil suit to a tribunal.
162. We may place on record that in Durgesh Sharma (supra) this Court has clearly
held that the provisions of Sections 22 to 25 of the Code of Civil Procedure are
exhaustive in nature. If that be so, inherent power of the court could clearly not be
invoked.
163. Reliance has also been placed on Ram Chand and Sons Sugar Mills Private Ltd. v.

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Kanhayalal Bhargava and Ors. MANU/SC/0263/1966 : [1966]3SCR856 : AIR 1966 SC
1899, wherein it has been held:
Having regard to the said decisions, the scope of the inherent power of a court
under Section 151 of the Code may be defined thus: The inherent power of a
court is in addition to and complementary to the powers expressly conferred
under the Code. But that power will not be exercised if its exercise is
inconsistent with, or comes into conflict with, any of the powers expressly or by
necessary implication conferred by the other provisions of the Code. If there are
express provisions exhaustively covering a particular topic, they give rise to a
necessary implication that no power shall be exercised in respect of the said
topic otherwise than in the manner prescribed by the said provisions. Whatever
limitations are imposed by construction on the provisions of Section 151 of the
Code, they do not control the undoubted power of the Court conferred under
Section 151 of the Code to make a suitable order to prevent the abuse of the
process of the Court.
164. We, however, are of the opinion that the principles laid down therein cannot be
said to have any application in the instant case as it would bear repetition to state that
by reason thereof the court would not be entitled to denude a suitor of his right of
appeal and other substantive rights.
165. We are also unable to persuade ourselves to hold that the right of transfer of a
case being procedural in nature should be construed liberally. By reason thereof,
substantive right of a party cannot be taken away. While accepting that the rules of
procedures are intended to provide justice and not to defeat it as has been held by this
Court in N.T. Veluswami Thevar v. G. Raja Nainar and Ors. MANU/SC/0094/1958 :
AIR1959SC422 : AIR 1959 SC 422 andLakshmiratan Engineering Works Ltd. v. Asst.
Commissioner (Judicial) I., Sales Tax, Kanpur Range, Kanpur and Anr. AIR 1968 SC 488
: MANU/SC/0309/1967 : [1968]1SCR505 , that the court must bear in mind that it
would not cause injustice to any of the parties thereby.
166. Reliance has also been placed on Industrial Investment Bank of India Ltd. v.
Marshal's Power & Telecom (I) Ltd. and Anr. MANU/SC/8627/2006 : (2007)1SCC106 :
(2007) 1 SCC 106 and Durga Hotel Complex v. Reserve Bank of India and Ors.
MANU/SC/1302/2007 : AIR2007SC1467 : (2007) 5 SCC 120. Both the aforementioned
cases have been determined by a Bench which has decided Ranjan Chemicals (supra).
Those cases related to the contentions raised before the Banking Ombudsman. The
Bench held that the appellants therein could make all their claims before the DRT while
defending the claim of the bank, including the ones he had put forward before the
Banking Ombudsman.
167. We are not concerned with such a contention herein. In any event, in view of our
findings that we are bound to follow Indian Bank (supra), this argument has no force.
ARTICLE 142 ISSUE
1 6 8 . Indisputably, the power of this Court under Articles 139A and 142 of the
Constitution of India is a wide and extensive one. This Court may resort thereto to do
complete justice. While doing so, this Court would be entitled to impose conditions.
169. Whether such a power should be exercised or not is the question. The principal
submission made on behalf of the Bank is that the suit is pre-emptive in nature. It may
be so but then the banks and the financial institutions have their own remedies. As

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adequate remedy is available to them in law, ordinarily, the same should be directed to
be followed. A case of very exceptional nature must be made out for invoking the
extraordinary constitutional jurisdiction of a court.
170. One of the contentions which have been raised is whether the transactions under
derivative agreements would come within the purview of the DRT Act. Of course, a
tribunal will have a jurisdiction to decide the issue being a jurisdictional issue.
Furthermore, the company has alleged fraud and misrepresentation.
1 7 1 . This Court in Mardia Chemicals Ltd. and Ors. v. Union of India
MANU/SC/0323/2004 : AIR2004SC2371 : (2004) 4 SCC 311, has also held that even
in such an event, the jurisdiction of the civil court can be invoked.
172. Several other issues of complicated nature may arise before the civil court. We,
therefore, are of the opinion that it may not be a fit case where we should exercise our
jurisdiction under Article 142 of the constitution of India.
DIRECTION
173. However, we make it clear that having regard to the pleadings of the parties as
also the purpose and object for which the Tribunal has been constituted, it should
proceed to dispose of the bank's claims expeditiously. We, however, have no doubt
whatsoever in our mind that while determining the respective claims of the parties and
the nature thereof, the tribunal shall comply with all the requirements of law. We,
therefore, are of the opinion that the transfer applications have no merit. They are
dismissed accordingly with the aforementioned observations.
174. Having regard to our finding that even Section 24 of the Code of Civil Procedure
cannot be taken recourse to, there cannot be any doubt whatsoever that the Punjab and
Haryana High Court could not have transferred the suit from the civil court Ludhiana to
DRT. Civil Appeal arising out of SLP (C) No. 24715 of 2008 is, therefore, allowed.
However, in the facts and circumstances of the case, there shall be no order as to costs.
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