Holding

The High Court and Supreme Court lack jurisdiction to transfer a civil suit to a Debt Recovery Tribunal, as the tribunal is not a civil court and no statutory provision authorises such a transfer.

Summary

Nahar Industrial Enterprises Ltd entered into ISDA derivative contracts with Hong Kong & Shanghai Banking Corp. When disputes arose, Nahar filed a civil suit in Ludhiana seeking a declaration that the contracts were void and an injunction, while the bank filed an application before the Debt Recovery Tribunal (DRT) for recovery of dues. The Punjab & Haryana High Court transferred the civil suit to the DRT, prompting Nahar to appeal to the Supreme Court. The Court examined whether a civil suit could be transferred to a tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the Code of Civil Procedure, and held that the DRT is not a civil court and no statutory provision authorises such a transfer. It further ruled that transferring the suit would unlawfully curtail the plaintiff’s substantive rights, including the right of appeal, and that Article 142 could not be invoked. Consequently, the Supreme Court allowed the appeal and dismissed the transfer petitions, leaving the suit in the civil court.

Issues considered

The High Court and Supreme Court's power to transfer a civil suit pending in one state to a Debt Recovery Tribunal in another state.
Whether such a transfer would oust the jurisdiction of the civil court and the plaintiff's substantive rights.
The applicability of Sections 22, 23, 24 and 25 of the Code of Civil Procedure to transfers involving a tribunal.
The existence of any express power under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 to effect such a transfer.
The relevance of the Indian Bank v. ABS Marine Products decision and its applicability to the present facts.
The suitability of invoking Article 142 of the Constitution to order the transfer.
The appropriateness of refusing the transfer and staying the DRT proceedings in the interest of justice.

Legislation cited

Code of Civil Procedure, 1908s. 151, s. 2(2), s. 22, s. 23, s. 24, s. 25, s. 3, s. 4, s. 5, s. 9
Indian Penal Code, 1860s. 193, s. 196, s. 228
Limitation Act, 1963s. 14, s. 193, s. 196, s. 228
Motor Vehicles Act, 1988s. 173
Recovery of Debts Due to Banks and Financial Institutions Act, 1993s. 17, s. 18, s. 19, s. 22, s. 25, s. 2(g), s. 31

Subjects

transfer of suitdebt recovery tribunalcivil court jurisdictionRecovery of Debts Due to Banks and Financial Institutions ActCode of Civil ProcedureArticle 142legal fictioncounter‑claimset‑offtribunal vs courtappeal rightsjurisdictional conflict

Judgment

[2009] 12 S.C.R. 54

A NAHAR INDUSTRIAL ENTERPRISES LTD.
v.
~
HONG KONG & SHANGHAI BANKING CORPORATION
(Civil Appeal No. 4796 of 2009)
JULY 29, 2009
B
(S.8. SINHA AND ASOK KUMAR GANGULY, JJ.]

RECOVERY OF DEBTS DUE TO BANKS AND
FINANCIAL INSTITUTIONS ACT, 1993/CODE OF CIVIL
c PROCEDURE, 1908:

SECTIONS 17, 18, 19, 22, 25, 31/SECTIONS 3, 4, 5, 9,
16, 17, 18, 19, 20, 96, 100, 151, 195 AND ORDER XL/
RULES 1, 5.
D Suit - Whether High Court/Supreme Court has the power
to transfer a suit pending in Civil Court situated in one state
to a Debt Recovery Tribunal.
T

Held: The very fact that a legal fiction has been created
E and the Tribunal or the Appellate Tribunal deemed to be a
Civil Court for purposes of Section 195 and Chapter XXVI of
CPC, itself suggests that Parliament did not intend to take
away the jurisdiction of Civil Court - The legal fiction has a
limited application - Its scope and ambit cannot be extended
F - While exercising the power of transfer, the High Court and
Supreme Court would be curtailing the right of a suitor
indirectly which could not be done directly - It clearly
establishes that 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
G
of the plaintiff remain intact, no right taken away and no right
diluted - Where a matter has been expressly provided for in
the body of the Code, ordinarily inherent power shall not be·
resorted to - If a suit is to be transferred from a Civil Court to
H 54
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 55
KONG & SHANGHAI BANKING CORPN.

a Tribunal, the debtor would lose some rights including the A
right to prefer an appeal before a higher court in terms of
Section 96 to 100 CPC - There exists no express power of
transfer under the ORT Act which would be applicable to the
facts of the present case - Application before the Tribunal
would lie only at the instance of the bank or the financial B
institution for the recovery of its debt - Had the jurisdiction of
Civil Courts been barred in respect of counter claim also, the
statute would have said so and Sections 17 and 18 would have
been amended to introduce the provision of counter claim -
.... Banks and financial institutions cannot approach the Tribunal c
unless the debt has become due - In such a contingency civil
suit will lie - Debtor may file pre-emptive suits and obtain
orders of injunction but that cannot be a ground to completely
oust the jurisdiction of the Civil Court - Constitution of India,
Articles 226, 227.
D
CONSTITUTION OF /NOIA, 1950:

Articles 139A, 142 - Power under - Wide and extensive
- May be resorted to do complete justice - However,
conditions could be imposed - But the present case not a fit E
case to exercise jurisdiction under Article 142.

In the Appeal and Transfer Petitions, the question
involved was whether the High Court/Supreme Court has
the power to transfer a suit pending in Civil Court situated
in one State to a Debt Recovery Tribunal situated in F
another State.

Allowing the Civil Appeal and dismissing the Transfer
Petitions, the Court
G
HELD: 1. Indisputably, however, after the
amendments were carried out vide Amending Act 1 of
2000 and Amending Act 30 of 2004, the Debts Recovery
Tribunal would have jurisdiction to determine the claims
of set off and counter-claims. It may be that the bank or H
56 SUPREME COURT REPORTS (2009] 12 S.C.R.

A the financial institution in terms of the provisions of sub-
section (9) of Section 19 of the Recovery of Debts Due
to Banks and Financial Institutions Act, 1993, despite
such counter-claim being treated to be a cross-suits

-
would be entitled to raise a contention that the same
B 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
...
c other. [Para 9] [94-8-D]
Cofex Exports Ltd. vs. Canara Bank AIR 1997 Delhi 355;
Delhi High Court Bar Assn. v. Union of India, AIR 1995 Del
325 and Union of India v. Delhi High Court Bar Assn. (2002)
4 sec 275, referred to.
D
2.1. 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 t- ,.
of jurisdiction of the civil court vis-a-vis the Tribunal was
E 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 ~

F 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
G
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
H
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 57
KONG & SHANGHAI BANKING CORPN.

Indian Bank being a coordinate Bench. It could not have A
-~
taken a contrary view. It was not even held t'iat Indian
Bank was wrong far less plainly wrong. [Para 12] [103-8-
F]
2.2. In Ranjan Chemicals, the Court having not posed B
unto itself the aforementioned question, should have
considered the decision of a coordinate bench in Indian
Bank in that perspective. It must furthermore be noticed
J. that Indian Bank was clarifying Abhijit Tea. Conditions laid
down in paragraph 25 of Indian Bank must also, therefore,
be read in that context as otherwise, the same would lead
c
to misreading and misinterpreting the judgment. [Para 12]
[104-C-E]

Indian Bank v. ABS Marine Products (P) Ltd. (2006) 5
SCC 72; State Bank of India v. Ranjan Chemicals Ltd. and D
another, (2007) 1 SCC 97; United Bank of India, Calcutta v.
--f· Abhijit Tea Co. Pvt. Ltd. & Ors. (2000) 7 SCC 357; Union of
India v. Raghubir Singh, (1989) 2 SCC 754; Union of India
'' v. Godfrey Philips India Ltd., (1985) 4 SCC 369; Sub-
Committee of Judicial Accountability v. Union of India, (1992) E
4 SCC 97 and Central Board of Dawoodi Bohra Community
v. State of Maharashtra, (2005) 2 SCC 673, referred to.
,. 3.1. The provisions for transfer under the ORT Act
especially Section 31 which states that only suits or
F
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 G
provision for transfer under the ORT Act from a Court to
Tribunal. The respondents, therefore, do not and cannot
rely on any of the provisions of the ORT Act for
contending that the Court had any other power to direct
transfer. [Para 13] [106-8-0] H
58 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 3.2. There exists no express power of transfer under
the ORT Act 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 is required. [Para 13] [107 -A-8]
B
Raghunath Rai Bareja & Anr v. Punjab National Bank
& Anr, (2007) 2 SCC 230, referred to.

4.1. Civil court is a body established by law for
administration of justice. Different kinds of law, however
c 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 find mention in Sections 4 and 5
D 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. [Para 15] [109-G-H; 110-A-B]
E
4.2. 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
F Code. [Para 15] [110-C-D]

4.3. Be that as it may, the word 'civil court' vis-'-vis a
court must be construed having regard to the text and
context of the statute. [Para 15] [111-D]
G
State of M.P. v. Anshuman Shukla, (2008) 7 SCC 487;
Bharat Bank Ltd. v. Employees of the Bharat Bank Ltd. 1950
SCR 459; P. Sarathy v. State Bank of India (2000) 5 SCC
355 and State of Madhya Pradesh and another v. Anushuman
H
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 59
KONG & SHANGHAI BANKING CORPN.

Shukla (2008) 7 SCC 487, referred to. A

5.1. A provision in the Code which is benev0lent in
character and sub serve the social justice doctrine in a
situation of that nature has been applied, but the same,
by itself would not make a Tribunal a civil court. No
8
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 C
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 D
differently structured and have been established to serve
totally different purposes. 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 E
it first. The continuance of its counter-claim is entirely
dependant on the continuance of the applications filed
by the Bank. -Before it no declarato"ry 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 F
of extending the right of counter-claim. Debt Recovery
Tribunal cannot pass a decree. It can issue only recovery
certificates. The power of the Tribunal to grant interim
order is attenuated with circumspection. [Para 16) [115-
C-H; 116-A-B] G

5.2. 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 H
60 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 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.
B 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. [Para 16] [116-8- ..
c E]
5.3. 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
D 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
E provisions of the Code of Civil Procedure and/or the
Evidence Act. [Para 16) [116-F-H; 117-A]

5.4. It is now trite law that jurisdiction of a court must
be determined having regard to the purpose and object
F 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 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
G
to, 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. [Para 16) [117-A-C]
H· 5.5. The High Court ordinarily can be approached in
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 61
KONG & SHANGHAI BANKING CORPN.

exercise of its writ jurisdiction under Article 226 or its A
,( 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 B
purposive construction, therefore, 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 statutes like the Andhra Pradesh Land
Grabbing Act where such a legal fiction has been raised. c
[Para 16] [117-H; 118-A-B]

5.6. 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 D
account of ambiguity. It is to be preferred when object and
purpose of the Act is required to be promoted. [Para 16]
' [118-C-D]

Bhagwati Devi v. Mis IS Goel, 1983 [ACJ 123); Kususm E
/gnats & Alloys v. Punjab National Bank, (2005) 12 SCC 358;
Rajasthan State Road Transport v. Poonam Pahwa, (1997)
6 SCC 100; Dolly Kantibhai Patel v. Batu Tukaram, (2001)
..,.,
9 SCC 723; Mohan Singh v. Saheb Singh, (2000) 9 SCC
~
. 403; Kah/on v. K Paramasivam, (2004) 13 SCC 564 and Ml F
' s Jai Shiva Cement v. Allahabad Bank, (JT) 2000 (8) SC 323,
distinguished.

New India Assurance Company Ltd. v Nusli Neville
Wadia and Another (2008) 3 SCC 279; Dilip S. Dahanukar
v. Kotak Mahindra Co. Ltd. and Another (2007) 6 SCC 528; G
1
South Eastern Coalfields Ltd. v. CCET, MP (2006) 6 SCC
340; Uco Bank v. Rajinder Lal Capoor (2008) 5 SCC 257 and
Sri Ram Saha v. State of West B.engal and Ors. JT 2004 (9)
f'S 136 : (2004) 11 SCC 497, held inapplicable.
H
62 SUPREME COURT REPORTS [2009] 12 S.C.R.

\

A Parmananda Pegu v. State of Assam, (2004) 7 SCC
779; Dataware Design Labs. v. State Bank of India, [2005]
12 Comp. Cas. 176 (Ker) at 184 and V. Laxminarasamma
v. A. Yadaiah (Dead) and Ors., 2009 (3) SCALE 685,
referred to.
B
United States v. Detroit Timber & Lumber Co., 200 U.
S. 321, 337, referred to.

6. The Tribunal was constituted with a specific
purpose as is evident from its statement of objects. The
c preamble of the Act also is a pointer to that too. 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
D 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 is barred only in respect of the matters
which strictly come within the purview of Section 17
E thereof and not beyond the same. The Civil Court,
therefore, will continue to have jurisdiction. [Para 17]
[119-E-G]
...
Industrial Credit and Investment Corpn. of India Ltd. v. •
Grapco Industries Ltd., (1999) 4 SCC 710, relied on.
F ~

7. 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
G not mean that even when the Presiding Judge or the
Presiding Officer of the Court exercises power conferred
--t
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
H Reference Court under the Land Acquisition Act, Election
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 63
KONG & SHANGHAI BANKING CORPN.

Tribunal or a Tribunal acting as a Motor Vehicles Accident A
1 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 B
aforementioned purpose the Presiding Officer must be
holding a Court which would otherwise come within the
purview of the hierarchy of the courts. [Para 18] [121-F-
--1 H; 122-A-B]

NP Balakrishanan v. P.M.R. Mariyumma, AIR 1997
c
Kerala 89; Mis. Brooke Bond India Ltd. v. Union of India and
others, AIR 2001 AP 526; Oevendra Somabhai Naik v. Mis.
Accurate Transheet Pvt. Ltd. AIR 2003 Gujarat 141; State
Bank of India v. Madhumita Construction (Pvt.) Ltd. And
others, AIR 2003 Cal 7 and Greater Bombay Coop. Bank Ltd. D
v. United Yam Tex {P) Ltd., (2007) 6 SCC 236, referred to .
.,_

8.1. 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 E
terms of the Code. But if all suits filed in the Civil Courts,
whether inextricably connected with the application filed
before the ORT by the banks and financial institutions are
i'
transferred, the same would amount to ousting the
jurisdiction of the Civil Courts indirectly. Suits filed by the F
debtor may or may not be counter claims to the clairris
fifed 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
G
of the ORT 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
H
64 SUPREME COURT REPORTS [2009] 12 S.C.R.

A institutions. 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
B barred expressly by a statute or by necessary
implication. 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 . _
C 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. 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
D
been amended to introduce the provision of
counterclaim. [Para 19] [125-E-H; 126-A-E]

8.2. It must be rememl:iered that the jurisdiction of a
civil court is plenary in nature. Unless the same is ousted,
E expressly or by necessary implication, it will have
jurisdiction to try all types of suits. [Para 19] [127-B-C]

8.3. The Act, although, was enacted for a specific ~
purpose but having regard to the exclusion of jurisdiction
F 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
G file civil suits before the civil courts. It is only for the
claims of the banks and the financial institutions above
r
the aforementioned sum that they have to approach the
Debt Recovery Tribunal. 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
H
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 65
KONG & SHANGHAI BANKING CORPN.

necessarily required to file their claim petitions before the A
Tribunal. The converse is not true. Debtors can file their
4
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 8
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)
A Act, 1982 it does not contain a deeming provision that the c
Tribunal would be deemed to be a civil court. [Para 19]
[130-A-E] .._

8.4. 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 D
approach the Tribunal unless the debt has become due.
In such a contingency, indisputably a civil suit would lie.
"' There is a possibility that the debtor may file preemptive
suits and obtain orders of injunction, but the same alone,
by itself cannot be held to be a ground to completely oust E
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
y individual grievances. It is also difficult to accept the
contention that the civil court's jurisdiction is not in F
consonance with the Act. [Para 19] [130-F-H; 131-A]

8.5. 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 G
ousted. 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
H
66 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 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
B the Code of Civil Procedure, 1908, 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
extend.ed. The Parliamentary statutes, like the Family
c Courts Act confer all the powers on Family Courts which >-
are essential for discharging the functions of Civil Court
under the Code of Criminal Procedure. This Court
accepts 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
0
court. Had the intention of the Parliament been so, it
could have expressly said so. Casus omissus, as is well
known, cannot be supplied. [Para 19] [131-8; 132-H; 133- _,
A-F]

E Dhulabhai v. State of M.P., (1968) 3 SCR 662; Dwarka
Prasad Agarwal v. Ramesh Chander Agarwal, (2003) 6 SCC
220; Nagri Pracharini Sabha v. Vth Addi. Distt. and Sessions
Judge, 1991 Supp (2) SCC 36; Ramesh Chand Ardawatiya
v. Anil Panjwani, (2003) 7 SCC 350; Rajasthan SRTC v. Zakir f
F Hussain, (2005) 7 SCC 447 and Vijay Kumar Sharma v. State
of Kamataka, (1990) 2 SCC 562, referred to.

9.1. 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
G 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
H the effect that questions of law must be there for the
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 67
KONG & SHANGHAI BANKING CORPN.
court's consideration. For the said purpose no pre- A
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, B
curtails party's right to maintain an appeal as a matter of
right. While saying so, this Court is 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, c
has been held to be directory. Order XLI Rule 1 is required
to be read with Order XLi Rule 5 thereof. [Para 20) [135-
C-F)
9.2. A civil suit may also be maintainable before
Original Side of the High Court in terms of the statutes D
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 Single
Judge of a High Court in a suit filed before it. In the event,
however, if a civil suit is transferred to the Debt Recovery E
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 F
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 G
intact, no right is taken away and no right is diluted. [Para
~ 20) [136-8-E]
Colonial Sugar Refining Company v. Irving, (1905) AC
369 (PC); Garikapati Veeraya v. N. Subbiah Chaudhry, -1957
SCR 488; Dilip S. Dahanukar v. Kotak Mahindra Co. Ltd. and H
68 SUPREME COURT REPORTS [2009] 12 S.C.R.

A Anr., (2007) 6 SCC 528; Sihor Nagar Palika Bureau v.
Bhabhlubhai Virabhai & Co., (2005) 4 SCC 1; Ma/wa Strips
Pvt. Ltd. v. Jyoti Limited {2009) 2 SCC 426 and Transmission
Corporation of A.P. v. Ch. Prabhakar and Ors .. (2004) 5 SCC
551, referred to.
B 10.1. 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,
c 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
D 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
E to take into consideration a large number of factors. Such
a power is to be exercised if exceptional situation arises
and not otherwise. [Para 21) [136-F-H;137-A-B]
10.2. The Plaintiff furthermore is the do minus litus. He .,
may institute a suit having regard to the provisions
F 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 a.ction in two
G different forums, he may choose one of them. A debtor
having regard to the provisions of the ORT 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
wotJld lose some rights including the right to prefer an
H appeal before a higher court in terms of Sections 96 and
NAHAR INDUSTRIAL ~TERPRISES LTD. v. HONG 69
KONG & SHANGH°AI BANKING CORPN.

100 of the Code of Civil Procedure. [Para 21] [139-A-D] A

10.3. This Court is also unable to persuade 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. The 8
rules of procedures are intended to provide justice and
not to defeat it. [Para 21] [140-E-F]

Padma Sen and Another v. The State of Uttar Pradesh
AIR 1961 SC 218; Manohar Lal Chopra v. Rai Bahadur Rao
Raja Seth Hirata/ AIR 1962 SC 527; Rajasthan State Road C
Transport Corporation and Anr. v. Bal Mukund Bairwa, 2009
(2) SCALE 428; Union of India and Another v. Delhi High
Court Bar Association and Others (2002) 4 SCC 275; Mis.
Ram Chand and Sons Sugar Mills Private Ltd. v. Kanhaya/al
Bhargava and Others AIR 1966 SC 1899; N. T. Veluswami D
Thevar v. G. Raja Nainar and others [AIR 1959 SC 422; Ml
s. Lakshmiratan Engineering Works Ltd. v. Asst.
Commissioner (Judicial) !., Sales Tax, Kanpur Range, Kanpur
and another AIR 1968 SC 488; Industrial Investment Bank
of India Ltd. v. Marshal's Power & Telecom (I) Ltd. and Another E
(2007) 1 SCC 106; Durga Hotel Complex v. Reserve Bank
of India and Others (2007) 5 SCC 120 and Durgesh Sharma
v. Jayshree, (2008) 9 sec 648, referred to.

11. Indisputably, the power of this Court under
Articles 139A and 142 of the Constitution of ln<:lia is a wide F
and extensive one. This Court may resort thereto to do
complete justice. While doing so, this Court would be

- entitled to impose conditions. This Court is of the opinion
that it may not be a fit case to exercise jurisdiction under
Article 142 of the constitution of India. [Para 22) [141-D- G
E; 142-8)
.J
Mardia Chemicals Ltd. and Others v. Union of India
(2004) 4 sec 311, referred to.
H
70 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 12. It is made 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.
This Court has no doubt that while determining the
_,,..
B respective claims of the parties and the nature thereof,
the tribunal shall comply with all the requirements of.faw.
[Para 23] [142-C-D]

Case Law Reference:

c (2006) 5 sec 12 referred to Para 5
(2001) 1 sec 97 referred to Para 5
(2008) 9 sec 648 referred to Para 6
AIR 1997 Delhi 355 referred to Para 9
D
AIR 1995 Del 325 referred to Para 9

(2002) 4 sec 215 referred to . Para 9 T

(2000) 1 sec 357 referred to Para 10
E
(1989) 2 sec 754 referred to Para 12
(1985) 4 sec 369 referred to Para 12
(1992) 4 sec 97 referred to Para 12
"
F (2005) 2 sec 673 referred to Para 12

(2007) 2 sec 230 referred to Para 13

(2008) 1 sec 487

G 1950 SCR 459
referred to
referred to
Para 15
Para 15 -
(2000) 5 sec 355 referred to Para 15

(2008) 1 sec 487 referred to Para 15

1983 [ACJ 123] distinguished Para 16
H
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 71
KONG & SHANGHAI BANKING CORPN

(2005) 12 sec 358 distinguished Para 16 A

-I (1997) 6 sec 100 distinguished Para 16

(2001) 9 sec 123 distinguished Para 16

" (2000) 9 sec 403 distinguished Para 16
Iii;:. B
(2004) 13 sec 564 distinguished Para 16
(JT) 2000 (8) SC 323 distinguished Para 16
(2008) 3 sec 219 held inapplicable Para 16
c
(2007) 6 sec 528 held inapplicable Para 16
(2006) 6 sec 340 held inapplicable Para 16
(2008) 5 sec 257 held inapplicable Para 16
JT 2004 (9) SC 136 : D

(2004) 11 sec 497

-
held inapplicable Para 16
... (2004) 1 sec 119 referred to Para 16
[2005] 12 Comp. Cas. E
176 (Ker) at 184 referred to Para 16
2009 (3) SCALE 685 referred to Para 16
y
200 u. s. 321, 337 . referred to Para 16
F
(1999) 4 sec 110 relied on Para 17
AIR 1997 Kerala 89 referred to Para 18
AIR 2001 AP 526 referred to Para 18
G
AIR 2003 Gujarat 141 referred to Para 18
AIR 2003 Cal 7 referred to Para 18
(2007) 6 sec 236 referred to Para 18
(1968) 3 SCR 662 referred to Para 19 H
72 SUPREME COURT REPORTS [2009] 12 S.C.R.

A (2003) 6 sec 220 referred to Para 19

1991 Supp (2) SCC 36 referred to Para 19 r

(2003) 1 sec 350 referred to Para 19

(2005) 1 sec 447 referred to Para 19
B
(1990) 2 sec 562 referred to Para 19

(1905) AC 369 (PC) referred to Para 20

1957 SCR 488 referred to Para 20
t
c (2007) 6 sec 528 referred to Para 20

(2005) 4 sec 1 referred to Para 20.

(2009) 2 sec 426 referred to Para 20
D (2004) 5 sec 551 referred to Para 20

AIR 1961 SC 218 referred to Para 21
• • ,.
AIR 1962 SC 527 referred to Para 21

E 2009 (2) SCALE 428 referred to Para 21

(2002) 4 sec 275 referred to Para 21

AIR 1966 SC 1899 referred to Para 21

AIR 1959 SC 422 referred to Para 21
F
AIR 1968 SC 488 referred to Para 21

(2007) 1 sec 1os referred to Para 21

(2001) 5 sec 120 referred to Para 21
G (2004) 4 sec 311 referred to Para 22

CIVIL APPELLATE JURISDICTION : Civil Appeal No.
4796 of 2009.
From the Judgment & Order dated 15.9.2008 of the High
H

•
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 73
KONG & SHANGHAI BANKING CORPN.

Court of Punjab & Haryana at Chandigarh in Transfer A
Application No. 186 of 2008.

WITH

T.P.(C) No. 1195 of 2008.
B
T.P. (C) No. 1196 of 2008, 1207-1209 of 2008.

Dr. A.M. Singhvi, Ashok Desai, Shyam Divan, K.K.
Venugopal, Rakesh Dwivedi, R.F. Nariman, S. Ganesh, Nandini
Gore, Diya Kapoor, Premtosh Mishra, Pragya Singh Baghel, c
Lakshmi Ramachandran, Jatin Mongia, (for Manik
Karanjawala), Sameer Parekh, H. Jayesh, Huzefa Nasikwala,
Nitin Thukral, Arjun Garg, Rukhmini Bobde, Ruchi Aggarwal (for
Parekh & Co.) B. Rajendran, I. Abrar, V. Balaji, Parvesh Thakur,
(for Narendra Kumar) for the appearing parties.
D
The Judgment of the Court was delivered by

S.B. SINHA, J.1. Leave granted.

INTRODUCTION
E
2. Whether the High Court and/or this Court has the power
to transfer a suit pending in a Civil Court situated in one State
.y to a Debt Recovery Tribunal situated in another is the question
involved herein.
F
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 G
J
in Transfer Application No.186 of 2008 whereby and
whereunder the suit filed by the appellant Jnd pending before
the Civil Judge (Junior Division), Ludhiana was transferred to
the Debt Recovery Tribunal-Ill at Mumbai.
H
74 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 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
B whereof banks or the financial institutions lent money to the
debtors.

Appellant entered into International Swaps and Derivatives
Agreement with the respondent. On 1.11.2006, the appellant
C 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.

D 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
E transaction got matured and one expired due to occurrence of
a contingent event. In ali 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
F 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.

As on 02.04.2008, four foreign exchange derivative
transactions were outstanding between the appellant and the
G respondent, dated 13.07.2007, 13.07.2007, 26.07.2007 and
30.07.2007.

Appellant vide his letter of 03.04.2008 purported to
disclaim, repudiate and reject only two out of those four
H transactions, i.e , the transactions with trade dates 26th July
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 75
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

2007 and 30th July, 2007. A
-I
Appellant filed a suit in the Civil Court at Ludhiana s:=eking
a declaration that foreign exchange derivative contracts dated
26.7.2007 and 30.7.2007, entered into by and between therr:
were void as being illegal and violative of Foreign Exchange B
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 markecT~s Civil Suit No.108 of 2008.

~ An application for grant of injunction was also filed. By
reason of an order dated 5.4.2008, the learned Civil Judge c
directetj both the parties to maintain status quo in regard to the
said two contracts, directing:

'• "Lest the purpose be not defeated by delay, both the
parties are directed to maintain status quo (as on today) D
regarding the contracts involving the present cases till
16.4.2008. Compliance U/O 39 R.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."
E
The said order of status quo is said to have been
communicated to the respondent on or about 8.4.2008.

Respondent issued a notice dated 12.4.2008 upon the
appellant terminating the pending derivative transaction. F
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.
G
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
Derivatil!e Contracts dated 13.7.2007. H
76 SUPREME COURT REPORTS (2009] 12 S C.R.

A 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
B third party interests in its fixed assets in relation to the
transactions which were not the st1bject matter of the suit.
Respondent-bank issued two letters on 24.4.2008 to the
appellant calling upon it to .iay the amount due under the two
transactions dated 26 7.2008 and 30.7 2008. and nn the same
c day filed another aoplication before the Debt Recovery Tr1burai
for recovery of dues under the said two foreign exchange
derivative contracts.

An application for clarification and/er modification of stay
of the order dated 5.4.2008 was filed by the appellant before
D the civil JUdge which was heard on 13.5.2008 and 17 5.2008
The matter was adjourned to 29.5.2008.

IMPUGNED JUDGMENT

E 4. 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. Ill, 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
F of the impugned order. a learned Single Judge of the High
Court allowed the said application transferr:ng trP. sui: filed oy
the appellant in the Ludhiana court to the ORT tribural Murnb;::i1
in the form of a counter claim.

G 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 .
H
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 77
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

While issuing the notice in SLP (C) No. 24715 of 2008 A
this Court, by order dated 20.10.2008, directed :-

"Issue notice.

Mr. Sameer Parekh, Advocate accepts notice on behalf
of the respondent. B

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.
c
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.
D
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). E

The parties shall file written submissions before the next
date of hearing."

ISSUES ARISING
F
5. 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
ORT, keeping in mind, G

a. The effect of a transfer from the Civil Court
to the ORT is to oust the jurisdiction of the
civil court which cannot be done without
express statutory provisions. H
78 SUPREME COURT REPORTS [2009] 12 S.C.R.

A b. Proceedings before ORT 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
B
sections apply in a case where the transfer
is from one Court to another & ORT being
not a Court.

d. The power to transfer under the ORT Act is
c 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
ORT has jurisdiction.

0 (II). Whether the decision of this Court in Indian Bank
v. ABS Marine Products (P) Ltd. [(2006) 5 SCC
72], is applicable in the case of transfer of a suit
from the Civil Court to the ORT to be tried as a •
counterclaim, and could a Coordinate two Judge
Bench in State Bank of India v. Ranjan Chemicals
E
Ltd. and another, [ (2007) 1 sec 97 1 have
departed from the ratio thereof after noticing it and
without referring the matter to a larger bench of
Three Judges?

F (Ill) 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
G
transfer from a Civil Court to ORT, especially when:

(i) The ORT 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
H
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 79
KONG & SHANGHAI BANKING CORPN. [S.8. SINHA, J.]
effect. A
~

(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 B
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 c
proceedings before the ORT be stayed pending
disposal of the suit.

SUBMISSIONS OF THE COUNSEL

6. Dr. A.M. Singhvi, Mr. S. Ganesh, Mr. Rohington D
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 E
was beyond its jurisdiction.

(2) The High Court and/orthe Supreme Court have no
power to transfer a case from a Civil Court to Debt
Recovery Tribunal inasmuch as :
F
(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. G
,
-i
(b) Debt recovery proceeding is sui generis and
provides for a totally different procedure
from the one followed under the Code of Civil
Procedure.
H
80 SUPREME COURi REPORTS [2009] 12 S.C.R.

A (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
B a Civil Court.

(d) The power to transfer under ORT Act must
be confined in respect of cases filed by
banks which were pending on the date ORT
Act came into force.
c
(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,
D 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
E
being a procedural provision, as has been
held by this Court in Durgesh Sharma v.
Jayshree, [(2008) 9 SCC 648], High Court
cannot be said to have any power/jurisdiction
to transfer a suit pending in a Civil Court,
F 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
G Court to the Debt Recovery Tribunal without
plaintiffs' consent resulted in defeating the
plaintiffs statutory right to approach the Civil
Court and furthermore resulted in ouster of
the jurisdiction thereof, neither of which could
H be ordered or directed without any specific
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 81
.'S-QNG & SHANGHAI BAfYKING CORPN. [S.S. SINHA, J.]
empowering provision in the statute. A
(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.
B
(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 c
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 D
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 E
become fettered, without the intervention of
statute. Thus, what has not been done
directly would be done indirectly as a result
~ of transfer.
F
Q) 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 G
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 H
82 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 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 matter.
B
(I) 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
c 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
._I
substitute for the High Court as also the
D 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
E 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
F 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
G interests of justice, the same should not be
exercised.

(o) This Court also should not exercise its
jurisdiction under Article 142 of the
H Constitution of India as the said Act does not
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 83
KONG & SHANGHAI BANKING CORPN. [S.S. SINHA, J.]

bar the jurisdiction of the Civil Court to A
_; 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 injustice and to do complete justice B
between the parties.

Mr. Shyam Diwan and Mr. Ashok Desai, learned senior
counsel appearing on behalf of the respond~nt, on the other
J. hand, contended:-
c
(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
D

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
E
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 contestthe claim of the F
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 G
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 question's.

(e) Having regard to the scheme of the Act as also the H
84 SUPREME COURT REPORTS [2009) 12 S.C.R.

A 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
B 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
c 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
D 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
~
.
E
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
F )".

7. RECOVERY OF DEBTS DUE TO BANKS AND
FINANCIAL INSTITUTIONS ACT, 1993

Before dealing with the rival contentions of the parties, we
must first set out the relevant statutory provisions. The 1993 Act
G 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:
H
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 85
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.)

"Banks and financial institutions at present experience A
j considerable difficulties in recovering loans and
enforcement of securities chai:ged with them. The existing
prpcedure for recovery of de~s due to the banks and
financi<,il institutions has blocked a significant portion of
their funds in unproductive assets, the value of which 8
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 C
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 ctelay. In 1981, a
Committee under the Chairmanship of Sbri T. Tiwari had D
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 Specia~ Tribunals for
recovery pf dYeS of the banks and financial institutions by
following a summary procedure. The setting up of Special E
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 tha financial F
institutions were pending in various courts, rewvery of
del:!ts involved f110re than Rs.5622 crores in dues0f Public
Seetor Banks and about Rs.391 crores of dues of the
financial institutions. The locking up of such huge ~mount
of public money in litigation prevents proper utilisati~n and G
recycling of the funds for the development of the cottntry."
'
Section 2 is the interpretation section. '
Section 2(g) defines 'gebt' to mean any liability (incl~ive
H
86 SUPREME COURT REPORTS (2009] 12 S.C.R.

A 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
B 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.

Chapter II deals with establishment of Tribunals and
c 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
D applications filed before it. Chapter Ill of the Act deals with
jurisdiction, powers and authority of Tribunals.

Section 17 reads as under: .. ""'
"Section 17 - Jurisdiction, powers and authority of
E 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.
F
(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."
G 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
H
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 87
KONG & SHANGHAI BANKING CORPN. [S.S. SINHA, J.]

financial institution to recover any debt from any person. Sub- A
~
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 B
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. c
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 oh and from 11.11.2004.
D
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
E
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
F
Tribunal and the Appellate Tribunal shall have powers to
regulate their own procedure including the places at which
they shall have their sittings."

Section 24 provides that the provisions of the Limitation
Act, 1963 shall, as far as may be, apply to an application made G
, to a Tribunal.
I
Section 31 provides for transfer of pending cases. It reads,
thus:

"Section 31. Transfer of pending cases.-(1) Every suit H
88 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 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
B 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.

C (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
o 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 a!) in the
case of an application made under section 19 from
E the stage which was reached before such transfer
or from any earlier stage as the Tribunal may deem
fit."

CODE OF CIVIL PROCEDURE
F
8. We may, at this juncture, also notice some of the
provisions of the Code of Civil Procedure (Code), which are
of relevance herein.

Section 2 (2) defines a "decree" to mean the formal
G 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
H question within section 144, but shall not include-- (a) any
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 89
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

adjudication from which an appeal lies as an appeal frotn an A
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 B
partly final.

'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 C
Court which is not a decree.

Section 3 of the Code provides for hierarchy of courts in
the following terms :-

"Section 3 - Subordination of Courts D
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." E

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.
F
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.

Sections 10 and 11 thereof deal with stay of suit and res
judicata. Section 12 provides for bar to further suit. G

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.

Section 23 of the Code reads as under: H
90 SUPREME COURT REPORTS [2009] 12 S.C.R.

A "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
B
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
c within the local limits of whose jurisdiction the Court in which
the suit is brought is situate."

Section 24 provides for the general power of transfer and
withdrawal. Sub-section (5) of Section 24 provides that a suit
0 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 power of Supreme Court to transfer suits in the
following terms:

"25. Power of Supreme Court to transfer suits, etc.-(1)
E On the application of a party, and cifter 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
F from a High Court or other Civil Court in one State to a
High Court or other Civil Court in any other State.

xxx xxx xxx

(5) The law applicable to any suit, appeal or other
G 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."

H Section 1538 provides that trial must be held in an open
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 91
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

court. Provisions of Order XX Rule 1 provide not only that Civil p,
~ .\ Court must pronounce a judgment in open court but it must also
date and sign the same.

EFFECT OF AMENDMENTS

9. The Debts Recovery Tribunal has been constituted for B
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 c
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.
D
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. vs. Canara Bank [AIR 1997 Delhi 355) wherein the High
Court opined that Debt Recovery Tribunal is not a court but is E
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
F
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 G
j reference to the provisions of Order 8 of the CPC.
Entertaining a counter-claim Qr 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 H
92 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 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
8 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 of being
disposed of by summary enquiry while claims preferred by
c 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, coooter claims and cross suits were
allowed to be raised before the Tribunal the very object
D
behind its creation will be lost."

In relation to the conflict of jurisdiction between the Civil
Court and the Tribunal, it was observed:

E "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
F explanation VIII to S. 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
G
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."
H
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 93
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

It was, thus, held that the Tribunal is inferior to that of the A
.\ 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 B
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
..l preferred before the civil court .
c
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.
_.
D
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."
E
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
.A empowering the Tribunal to determine a claim of set off and/or
~· counter claim, and whether Cofex Exports Ltd. (supra) is still F
good law.

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
G
any counterclaim against them. On that, among other grounds,
J the Act was held to be unconstitutional by the Delhi High court
in Delhi High Court Bar Assn. v. Union of India, [AIR 1995 Del
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 H

..
94 SUPREME COURT REPORTS [2009] 12 S.C.R.

A counterclaims by defendants in the 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. [(2002) 4 SCC 275].

-
B 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
C 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
D of the borrower on the other.

THREE AUTHORITIES

ABHIJIT TEA
E 10. United Bank of India, Calcutta v. Abhijit Tea Co. Pvt.
Ltd. & Ors. reported in [(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
F 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
G 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)?
H
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 95
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

(2) What is the combined effect of Sections 18 and 31 and A
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
B
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 c
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 D
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?"

Applying the principles of purposive construction as well
E
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 Cour.t because of the
provisions .contained in Section 18 of the Act, stating :
F

"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." G

It was opined:

"38. In our view, the above pleas raised by the respondent
company are all inextricably connected with the amount
H
96 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 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 instalments 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
B 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."
c 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:

D "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
E 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.
l<.
42. Both the suits, the one by the Bank against the
F 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
G 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
H retained. Such a plea, as shown above, cannot be
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 97
K()NG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

accepted. Thus, both the suits are suits falling within the A
Act."

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 B
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
c
suit for damages with interest.

INDIAN BANK

- 11. In that case, the following questions were raised :

"(i) Whether the subject-matter of the borrower's suit
D
before the High Court and the Bank's application before
~
_. the Tribunal were inextricably connected?

(ii) Whether the provisions of the Debts Recovery Act
mandate or require the transfer of an independent suit filed E
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?
'·· F
(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
G
of power under Article 142 in order to do complete justice
~ between the parties?"

The credit facilities and the packaging facilities were held
to be not inextricably linked with each other stating :
H
98 SUPREME COURT REPORTS [2009] 12 S.C.R.

A "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
B 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,
c 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
D
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
E 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."
F
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.
G
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.
H The first question was, thus. answered in the negative.
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 99
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]
On the second question, the Court distinguishing the A
_, decision in Abhijit Tea ·co. (P) Ltd. & 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 B
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 obseNations in
Abhijit that an independent suit of a defendant (in the
c
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 D
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
E
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."

In regard to the effect of sub-sections (6) to (11) of Section
F

14 of the amended Act, it was obseNed :

"16 .... The effect of sub-sections (6) to (11) of Section 19 G
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 H
100 SUPREME COURT REPORTS [2009] 12 S.C.R.

A (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
B 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
c 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)
D
to (8) of Section 1~ 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
E 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."

F It was held :

"18. In this case, thEt first respondent does not wish his
case to be transferred to the Tribunal. It is, therefore, clear
that the suit filed by thi first respondent against the Bank
in the High Court for recovery of damages, being an
G
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,
H
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 101
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

long prior to the Bank filing an application before the A
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."
B
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
,I 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
c
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 D
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 E
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 F
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
G
and the suit in the Debt Recovery Tribunal provided the
4 Debt Recovery Tribunal has jurisdiction to entertain the
action of the Compan~What is relevant to note is that the
claim of the Com pa' y in the suit could have been
maintained as a counter-claim in the application of the
H
102 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 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
B 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."
c 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
D 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
E 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
F 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
G
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
H
I
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 103
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

only other alternative would be to transfer the suit to the A
Tribunal in case that is found warranted or justified."
,'
PRECEDENTIAL VALUE

12. The core question which would arise for our
consideration is whether by reason of a transfer the jurisdiction B
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 C
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 0
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 E
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. F
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.

Submission of the learned counsel appearing on behalf of G
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 H
104 SUPREME COURT REPORTS (2009] 12 S.C.R.

A 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
B 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
c the ORT would not arise.
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
D 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.
E
We may notice some decisions of this court as regards
the binding nature of the precedents of a coordinate Bench.

!n Union of India v. Raghubir Singh, [ (1989) 2 SCC 754
], this Court has held :-
F
"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
G of the law and its contemporary status, that the statement
of the law by a Division Bench 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.
H
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 105
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]
L

28. We are of opinion that a pronouncement of law by a 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." B

See also Union of India v. Godfrey Philips India Ltd.,
[(1985) 4 sec 369]

In Sub-Committee of Judicial Accountability v. Union of
India, [(1992) 4 SCC 97]. this Court has held :- c
"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. D
In Central Board of Dawoodi Bohra Community v. State
....,. .\ of Maharashtra, (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 E
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:
.l

(1) The law laid down by this Court in a decision
F
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, G
.J
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.
H
106 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 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.

8 SECTION 31 OF DRT ISSUE:
13. We may at this juncture notice the provisions for transfer
under the ORT 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
c 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 ORT Act from a Court to Tribunal. The respondents,
0 therefore, do not and cannot rely on any of the provisions of the
ORT Act for contending that the Court had any other power to
direct transfer. ~
....,..
In Indian Bank (supra) this court noted thus:
E "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
F 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"
..
G In Raghunath Rai Bareja & Anr. v. Punjab National Bank
& Anr, (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. [... ]
H
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 107
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

28. [ ... ] whatever power there are of transfer of A
... proceedings to the tribunal are contained in section 31 of
the RBD Act, and no transfer is permissible dehors section
31."

Therefore there exists no express power of transfer ~nder
B
the ORT 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 c
SECTIONS 23, 24, AND 25 OF THE CODE.

14. 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
D
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 E
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 F
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.
' .
47. In our considered opinion, where several courts having
G
jurisdiction are subordinate to one appellate court, an
f 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
H
'
108 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 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
B Court) which may pa . . s 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."
c
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
0 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
E
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
F
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
G
15. 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
H
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 109
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

"Tribunal" is whereas the decision of the "court" is final the A
-+ decision of the "Tribunal" may not be.

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,
B
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.

In State of M.P. v. Anshuman Shukla, (2008) 7 SCC 487, c
this Court while holding certain authorities to be a 'court' within
the meaning of the Evidence Act, noted thus:-

"19. The definition of "courts" under the Evidence Act is
not exhaustive (see Empress v. Ashootosh Chuckerbutty. D
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. In Brajnandan Sinha v. Jyoti Narain it has been held E
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 F
parties."

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. G
[1950 SCR 459] Para 7 and 27} .
.._
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 H
110 SUPREME COURT REPORTS [2009] 12 S.C.R.

A of Civil Procedure itself. Civil Courts contemplated under
Section 9 of Code of Civil Procedure find mention in Sections ,...
4 and 5 thereof. Some suits may·lie before the Revenue Court,
some suits may lie before the Pr,esidency Small Causes Courts.
The Code of Civil Procedure itself lays down that the Revenue
B Courts would not be courts subordinate to the High Court.

We may notice that a learned Single Judge of the Calcutta
High Court in State Bank of India (supra) and a Oi-..1ision Bench
of the Delhi High Court in Cofex Exports Ltd. (supra) have held
C that the ORT is not a court and it exercises powers of a civil
court only in respect of limited matters.

Civil Courts are constituted under statutes, like Bengal,
Agra and Assam Civil Courts Act, 1887. Pecuniary and
teri;itorial jurisdiction of the civil courts are fixed in terms thereof.
D J~rtsdiction 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.

E In P. Sarathy v. State Bank of India [(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 net merely the trappings of a court but has also the power
to give a decision or a judgment which has finality and ..t.
F authoritativeness will be court within the meaning of Section 14
of the Limitation Act, 1963.

In the context of Section 29(2) of the Limitation Act, 1963
the term 'court' is considered to be of wide import.

G However, there again even for that purpose exists a
distinction between a court and the civil court.

In P. Sarathy v. State Bank of India, (Supra) this Court has
held:-

H "12. It will be noticed that Section 14 of the Limitation Act
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 111
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

does not speak of a "civil court" but speaks only of a 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.
B
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."
c
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 D
Pradesh and another v. Anushuman Shukla [ (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 cont~~t of the
statute.
E
TRANSFER OF CASES

16. Learned Senior Counsel Shri Divan cited before us
> certain precedents beginning from Bhagwati Devi v. Mis IS
Goel, 1983 [ACJ 123], till Kususm lgnots & Alloys v. Punjab
National Bank, [(2005) 12 SCC 358] to bring home the point F
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 Rajas(han State
Road Transport v. Poonam Pahwa, [(1997) 6SCC_100]; Dolly
Kantibhai Patel v. Ba/u Tukaram, [(2001) 9 SCC 723]; Mohan G
~ Singh v. Saheb Singh, [(2000) 9 SCC 403]; and Kah/on 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 !gnats (supra) and Mis Jai Shiva Cement v. Allahabad H
112 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 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 ORT to another.

These cases relate to transfer from one Tribunal to another
Tribunal and not from a civil court to the Tribunal. No legal
8
principle can be culled out therefrom.

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
C transfer under Section 25 of the Code was assumed sub silento
without any discussion.

0
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.

It has also been pointed out by Mr. Dwividi that reliance
placed by Mr. Desai on the cases cited by him and referred to
E 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.
F
We may hereinafter may make reference to the Head
Notes of a few of them. The SCC rlead Note to Kah/on (supra)
reads as under:

"Civil Procedure Code, 1908 - S. 25 - Motor accidents
G 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"

H Similarly, the SCC Head note of Mohan Singh (supra)
-- NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]
113

reads: A
.j
"Civil Procedure Code, 1908 - S. 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
B
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, S.
166(2)"
c
Also the Head note of Dolly Kantibhai Patel (supra) reads
thus:

"Civil Procedure Code, 1908 - S. 25 - Motor accident D
claim petition - Transfer of - Petitioner (claimant) going
back to USA, where he was living 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
E
vehicle, who were involved in accident, hailing from
Vadodara - Also the insurance company having its
branch office at Vadodara - In view of above reasons,
,I,
transfer of claim petition allowed as prayed for"

However on close scrutiny of the text of judgments of this F
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 G
for the convenience of the readers as a short summary to the
4
text and for easy reference and at times they are misleading.

The United States Supreme Court in United States v.
Detroit Timber & Lumber Co., 200 U. S. 321, 337.
H
114 SUPREME COURT REPORTS [2009] 12 S.C.R.
I
,J

A "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
B profession in the examination of the reports."

Reference may also be had to Parmananda Pegu v. State
of Assam, [(2004) 7 SCC 779], wherein it was stated:

"21. The decision of this Court in Chandrakant Chiman/al
c 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 in Kashmira Singh v. State of M.P. in the context
of evidentiary value of the confession of co-accused and
D 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
E 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
F
foundation of a conviction and can only be used in support
of other evidence.

22. In Chiman/a/ case the learned Judges, after referring
to the headnote portion of Kashmira Singh in AIR 1952
G 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
H decision in Kashmira Singh case the decision in
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 115
KONG & SHANGHAI BANKING CORPN. [S.S. SINHA, J.]

Chimanlal case falls close to the category of decisions A
rendered per incuriam."
~

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
B
to be on the basis of a decision in Bhagwati Devi (supra)
wherein the principles contained in Order XXlll of the Code had
been held to be applicable to the Motor Accident Claims
Tribunal.

A provision in the Code which is benevolent in character c
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 D
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 E
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. F
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 G
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.
H
116 SUPREME COURT REPORTS [2009] 12 S.C.R. /
A Debt Recovery Tribunal cannot pass a decree. It can issue
only recovery certificates. [See Sections 19(2) and 19(22) of
the Act].

The power of the Tribunal to grant interim order is
attenuated with circumspection. {See Dataware Design Labs.
8
v. State Bank of India, {[2005] 12 Comp. Cas. 176 (Ker) at
184}.

Concededly in the proceeding before the Debt Recovery
Tribunal detailed examination; cross-examinations, provisions
C 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
D centers round the legally recoverable dues of the bank.

Should we adopt the principle of purposive interpretation
so as to hold that the ORT would be a Civil Court? We have
noticed hereinbefore that Civil Courts are created under
E 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.

F 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
G 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-
H fledged trial in terms of the provisions of the Code of Civil
NAHAR INDUSTRIAL ENTERPRISES I-TD. v. HONG 117
KONG & SHANGHAI BANKING CORPN. [S.S. SINHA, J.]
Procedure and/or the Evidence Act. A

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 B
the banks and the 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
-1 of purposive construction, another jurisdiction cannot be
conferred upon it so as to enable this Court to transfer the case
c
from the civil court to a tribunal.

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 D
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 E
by the court.

In Raghunath Rai Bareja (supra), this Court has clearly
held:
" ... Assuming there is a defect or an omission in the words F
used by the legislature, the court cannot correct or make
up the deficiency, especially when a literal reading thereof

- produces an intelligible result. .. "

Would the tribunal answer the description of the civil court
must be considered having regard to the provisions of the Act
G

constituting civil court as also the provisions of the Code of Civil
Procedure?

We have held that the Tribunals are neither civil courts nor
courts subordinate to the High Court. The High Court ordinarily H

-
118 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 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
B 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 statutes like the Andhra Pradesh Land
c Grabbing Act where such a legal fiction has been raised. {See
V. Laxminarasamma v. A. Yadaiah (Dead) and Ors., [2009
(3) SCALE 685]}.

Whereas the doctrine of purposive construction is a
salutary principle, the same cannot be extended to a case which
D 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. •

E 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 Nus/i
Neville Wadia and Another [(2008) 3 SCC 279], Dilip S.
F Dahanukar v. Kotak Mahindra Co. Ltd. and Another [(2007)
6 SCC 528], South Eastern Coalfields Ltd. v. CCET, MP
[(2006) 6 SCC 340] and Uco Bank v. Rajinder Lal Capoor
[(2008) 5 sec 257], cannot have any application. On the other
hand, if the principles of purposive interpretation are resorted
G to, the same would amount to rewriting of the statute. -
In Sri Ram Saha v. State of West Bengal and Ors. [JT
2004 (9) SC 136 : (2004) 11 SCC 497], this Court held:

"19. It is well-settled principle of interpretation that a
H statute is to be interpreted on its plain reading; in the

-
}

NAHAR INDUSTRIAL ENTERPRISES LTD. v. -HONG 119
KONG & SHANGHAI BANKING CORPN. [S.B. ~INHA, J.]

absence of any doubt or difficulty arising out of such A
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 B
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 c
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
0
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 E

17. 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,
F
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 c;reated for
endorsement of that right. Jurisdiction of a civil court as noticed G
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 H
120 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 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.
B
(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
c 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.
D
(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
E
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 proceedings before the
F 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
G
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.
H Q) It can issue a certificate only for recovery of its
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 121
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

dues. It cannot pass a decree. A

(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.

(I) Even cross-examination of the witnesses need not B
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
c
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
D
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.'[ See Industrial Credit and
Investment Corpn. of India Ltd. v. Grapco
Industries Ltd., (1999) 4 SCC 710] E

The Tribunal, therefore, would not be a Civil Court.

TRIBUNAL WHETHER IS SUBORDINATE TO THE HIGH
COURT:
F
18. 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 G
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 H
122 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 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
s Officer must be holding a Court which would otherwise come
within the purview of the hierarchy of the courts.

In N.P. Balakrishanan v. P.M.R. Mariyumma, [AIR 1997
Kera la 89], the High Court has held : .

C "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 perc;ona designate it is not a Civil Court for
the purpose for the provisions of S. 115 of the CPC.
Therefore, against an interim order of the Rent Control
D 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 Art. 227 of the
Constitution is maintainable."

E In Mis. Brooke Bond India Ltd. v. Union of India and
others, [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
F 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 S. 25 provides that the
G 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'.

In Devendra Somabhai Naik v. Mis. Accurate Transheet
H
......'
"t:~
-,
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 123
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

Pvt. Ltd. [AIR 2003 Gujarat 141] the High Court has held:- A
j
"No doubt, Article 137 deals with filling of appiications, but
then the applications, which are contemplated to be filed,
are the appiications filed before the civil Court. The
appellant is also not successful in convincing this Court to
B
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.
--!
In State Bank of India v. Madhumita Construction (Pvt.) c
• Ltd. and others, [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 ORT has exclusive 0
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
E
that event, it can very much grant the injunction. If it hds no
jurisdiction, it cannot do so. Even if it is assumed that
Section 41(b) applies, still then ORT 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
F
Civil Courts Act, 1887. The Tribunal constituted under the
ORT 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 G
J. 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", H
..y

124 SUPREME COURT REPORTS [2009] 12 S.C.R

A 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
B Procedure is applicable and the 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.
..
c 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
D
Courts Act"

E
In Greater Bombay Coop. Bank Ltd. v. United Yam Tex
(P) Ltd., [(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
F 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. In Harinagar Sugar Mills v. Shyam Sundar
Jhunjhunwala this Court held: (AIR p. 1680, para 32)
G
"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
H decide such controversies. This is undoubtedly one of the
~:AHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 125
KONG & SHANGHAI BANKING CORPN. [S.S. SINHA, J.]

attributes of the State, and is aptly called the judicial power A
I of the State."

In Rama Rao v. Narayan it was held ttiat the nominee of
Registrar appointed under Section 95 of the Maharashtra
Cooperative Societies Act, 1961 is not a "court" within the B
meaning of Section 195 Cr PC.

In Kihoto Hollohan v. Zachillhu it was held that: (SCC
p. 706, para 98)
·j
" 'All tribunals are not courts, though all courts are c
tribunals.' The word 'courts' is used to designate those
tribunals which are set up in an organised State for the
administration of justice."
:~-

In Supreme Court Legal Aid Committee v. Union of India
D
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." E

EXCLUSION OF JURISDICTION MUST BE EXPRESS

1 19. 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. F
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 G
..( the claims filed 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
.-1.
statutory provisions contained in section 17 and 18 of the DRT
Act have ousted the jurisdiction of the civil court as the said H
126 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 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.

A civil court is entitled to decide the respective claims of
8
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 adi[cmced
C 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
D 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
E 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): ·
F
"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.
G 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
H other person against a bank for any relief.[ ... ]
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 127
KONG & SHANGHAI BANKING CORPN. (S.B. SINHA, J.]

16. [ ... ]What is significant is that Sections 17 and 18 have A
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. B
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.
c
In Dhu!abhai v. State of M.P., [(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: D
[ ... ] (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. E

Where there is no express exclusion the examination of
the remedies and the scheme of the particular Act to find
_j
\ out the intendment becomes necessary and the result of
the inquiry may be decisive. In the latter case it is F
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 G
with actions in civil courts are prescribed by the said
..1. statute or not.
'
~

(7) An exclusion of the jurisdiction of the civil court is not
'I'..
,(' readily to be inferred unless the conditions above set down
'' apply." H
128 SUPREME COURT REPORTS [2009] 12 S.C.R.

A In Dwarka Prasad Agarwal v. Ramesh Chander Agarwal,
[(2003) 6 sec 2201

"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
B
instant case, was concerned with tile 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
c the court would not be concerned even with the question
as to the title/ownership of the property."

.
Therein five principles were laid down stating :-

D "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
E
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
F
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, (2003) 6 SCC 151.) Even otherwise, the civil
court's jurisdiction is not completely ousted under the
Companies Act, 1956."
G
In Nagri Pracharini Sabha v. Vth Addi. Distt. and
Sessions Judge, [1991 Supp (2) SCC 36]

"2. A litigant having a giievance of a civil nature has,
independently of any statute, a right to institute a suit in the
H
,
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 129
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

civil court unless its cognizance is either expressly or A
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."

In Ramesh Chand Ardawatiya v. Anif Panjwani, [ (2003)
8
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 entertain a civil suit
of that class on availability of a few grounds. An exclusion C
of jurisdiction of the civil court is not to be readily inferred.
(See Dhulabhai v. State of M.P.) "

Power to create or enlarge jurisdiction is legislative in
character. Similarly, right of revision or appeal is normally a o
creature of statute. In Rajasthan SRTC v. Zakir Hussain,
[(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 E
Court in the case of A.R. Antulay v. R.S. Nayak, AIR
paras 40 to 42 wherein it is, inter alia, held and obseNed
as under: (SCC pp. 650-51, paras 38-40)

F
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 G
combined can enlarge the jurisdiction of a
court or divest a person of his rights of
revision and appeal.

H
130 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 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
B 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.
c 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.

D 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
E 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.
F 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.
G
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
H the Code. Recourse to the other provisions of the Code will
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 131
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

have to be r~sorted to for redressal of his individual grievances. A

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.

On the ground of inconsistency in the procedures contained B
in the two Acts alone, the jurisdiction of the civil court cannot
be said to have been ousted.

... Reliance has been placed by Mr. K.K. Venugopal, learned
senior counsel for the bank on Vijay Kumar Sharma v. State c
at Kamataka, (1990) 2 SCC 562, wherein this Court has held:-

"44. The court then referred to its earlier decision in
Oeepchand v. State of UP. and pointed out that in that
case the following principles were laid down to ascertain
whether there is repugnancy or not:
D

_, 1. Whether there is direct conflict between
the two provisions;

2. whether Parliament intended to lay down E
an exhaustive code in respect of the subject
matter replacing the earlier law;

3. whether the two laws occupy the same
field.
F
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".

It was further stated :-
G
j "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, H
132 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 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 stat1.Jte can be construed as remaining 1n effect as
a qualification of or exception to the later general law, since
B 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
c 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.

D
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
E felt that there was no need to repeal the said statute."

However, in that case itself it has been held that
repugnancy and inconsistency is synonymous.

Furthermore in a case of this nature where the banks itself •
F have filed applications for transfer, the jurisdiction of the civil
court must be presumed.

Submission of Mr. Desai that this Court can direct the
Tribunal to follow the provisions of the Code, in our opinion,
G
cannot be accepted. Such a direction would be in the teeth of
the provisions of the Act.

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
H contention. Sub-section (2) of Section 22 deals with
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 133
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

applicability of the provisions of the Code in a limited manner. A
J 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 B
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 Civil Procedure, 1908, 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 c
application. Its scope and ambit cannot be extended.

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.
D
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.
E
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
F
supplied.

VESTED RIGHT OF APPEAL

- 1.
20. 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
G

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
H

'
134 SUPREME COURT REPORTS [2009] 12 S.C.R.

A 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
B appeal to a superior tribunal which belonged to him as of right,
is a very different thing from regulating procedure"
-
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 !-
c 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.
....,..
D In Garikapati Veeraya v. N. Subbiah Chaudhry, [1957
SCR 488 ], this Court opined :-

"23. From the decisions cited above the following ~.

principles clearly emerge:
E (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.

F (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

G
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
H although it may be actually exercised when the adverse
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 135
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

judgment is pronounced such right is to be governed by A
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
B
only by a subsequent enactment, if it so provides expressly
or by necessary intendment and not otherwise."

[See also Dilip S. Oahanukar v. Kotak Mahindra Co. Ltd.
-\ and Anr., (2007) 6 sec 528]
c
The Code not only contains procedural provisions but also
substantive rights ; right of appeal is one of them. A forum of
cippeal 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 ~overnment from time to time. D
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
E
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
F
er§ not oblivious of the fact that in terms of Order XU Rule 1 of
thr? Cpg~. in the event of passing of a money decree the amount
is r~qµired to Pe deposited. The said provision, however, has
be13n held to be directory. Order XU Rule 1 is required to be
read with Order XU Rule 5 thereof. {See Sihor Nagar Palika
Bureau v. Bhabh/ubhai Virabhai & Co., [(2005) 4 SCC 1 ], G
J.. Malwa Strips Pvt. Ltd. v. ,Jyoti Lirnited [(2009) 2 sec 426]}

More recently in Transmission Corporation of A.P. v. Ch.
Prabhakar and Ors., (2004) 5 sec 551 this court similarly
opined: H
.•
136 SUPREME COURT REPORTS [2009] 12 S.C.R.

A ".... 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
B date the lis commences .... "

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
c decree passed by a learned Single Judge of a High Court in a
suit filed before it.

In the event, however, if a civil suit is transferred to the Debt
Recovery Tribunal, the plaintiff would be deprived of his right
-
~

D 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
E 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
F
21. 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
G 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
H contrary thereto would lead to advancement of justice and
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 137
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

prevent injustice. The power to transfer one case from one court A
~
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. B
In Padma Sen and Another v. The State of Uttar Pradesh
[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 XXXVlll, Rule 5, Order XXXIX, Rules 1(b) and
7 thereof, categorically held that the court has no inherent power
c
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:
D
"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 E
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
1'
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 F
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.
G
.[
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
H
138 SUPREME COURT REPORTS [2009] 12 S.C.R.

A for this purpose was therefore an order passed without
jurisdiction and was therefore a null and void order."

The said decision, we are not oblivious, has been
distinguished by this Court in Manohar Lal Chopra v. Rai
Bahadur Rao Raja Seth Hirata/ [AIR 1962 SC 527] in a case
8
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
c 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
D 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
E
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
F 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
G 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."
H
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 139
KONG & SHANGHAI BANKING CORPN. (S.B. SINHA, J.]
The Plaintiff furthermore is the dominus litus. He may A
J 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
-i
having regard to common law principle is entitled to maintain B
an action in two different forums, he may choose one of them.
[See Rajasthan State Road Transport Corporation and Anr.
v. Bal Mukund Bairwa, 2009 (2) SCALE 428]

A debtor having regard to the provisions of the ORT Act
' would not be entitled to maintain an action before the Tribunal. c
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.
D
Mr. Diwan, however, has strongly placed reliance upon
Union of India and Another v. Delhi High Court Bar
~
Association and Others [(2002)'Q4 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 E
keeping in view the provisions of Articles 323A and 3238 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. F
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 . G
.<_
Reliance has also been placed on Mis. Ram Chand and
Sons Sugar Mills Private Ltd. v. Kanhayalal Bhargava and
Others [AIR 1966 SC 1899] wherein it has been held:
H
140 SUPREME COURT l~EPORTS [2009] 12 S.C.R.

A "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
B 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 r.ecessary implication
c 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
D
suitable order to prevent the abuse of the process of the
Court."

We, however, are of the opinion that the principles laid
down therein cannot be said to have any application in the
E 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.

We are also unable to persuade ourselves to hold that the
F 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 G. Raja Nainar and others [AIR 1959 SC 422] and Mis.
Lakshmiratan Engineering Works Ltd. v. Asst. Commissioner
(Judicial) I., Sales Tax, Kanpur Range, Kanpur and another
[AIR 1.968 SC 488]. that the court must bear in mind that it would
not cause injustice to any of the parties thereby.

H Reliance has also been placed on Industrial Investment
NAHAR INDUSTRIAL ENTERPRISES LTD. v. HONG 141
KONG & SHANGHAI BANKING CORPN. [S.B. SINHA, J.]

Bank of India Ltd. v. Marshal's Power & Telecom (/) Ltd. and A
~ Another [(2007) 1 SCC 106] and Durga Hotel Complex v.
Reserve Bank of India and Others [(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 B
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.

We are not concerned-with such a contention herein. In any
c
event, in view of our findings that we are bound to follow Indian
Bank (supra), this argument has no force.
ARTICLE 142 ISSUE
D
22. 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.
E
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 F
banks and the financial institutions have their own remedies.
As 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. G
One of the contentions which have been raised is whether
the transactions under derivative agreements would come
within the purview of the ORT Act. Of course, a tribunal will have
a jurisdiction to decide the issue being a jurisdictional issue.
H
142 SUPREME COURT REPORTS [2009] 12 S.C.R.

A Furthermore, the company has alleged fraud and
misrepresentation.

This Court in Mardia Chemicals Ltd. and Others v. Union
of India [(2004) 4 sec 311] has also held that even in such
an event, the jurisdiction of the civil court can be invoked.
8
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.
c
DIRECTION

23. 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 -.
D 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
--
E no merit. They are dismissed accordingly with the
aforementioned observations.

Having regard to our finding that even Section 24 of the
Code of Civil Procedure cannot be taken recourse to, there
F cannot be any doubt whatsoever that the Punjab and Haryana
High Court could not have transferred the suit from the civil court
Ludhiana to ORT. 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.
G G.N.
Appeal allowed & Transfer petition dismissed.