IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Civil Revision No. 6135 of 2009 Date of decision: April 06, 2011 Bank of India .. Petitioner Vs. Gurmohan Singh Sandhu and others .. Respondents Civil RevisionNo.6136 of 2009 Bank of India .. Petitioner Vs. Manjit Singh and others .. Respondents. Coram: Hon'ble Mr. Justice A.N. Jindal Present: Mr. G.S. Anand, Advocate for the petitioner. Mr. G.S. Punia, Advocate for the respondent No.1. A.N. Jindal, J This judgment of mine shall dispose of two connected revision petitions No.6135-36 of 2009, having arisen out of the same judgment. However, the facts necessary for disposal of these petitions are taken up from Civil Revision No.6135 of 2009. The order dated 19.1.2009 passed by the Civil Judge (Jr. Division), Phagwara dismissing the application of the petitioner- defendant No.1 (herein referred as, 'the petitioner') for declining to grant the stay of the suit is under challenge. The factual background of the case is that the petitioner bank had allegedly granted cash credit facility to M/s Brahm Laboratories Limited. However, the said firm having turned incorrigible defaulter, the petitioner had filed original application for recovery of the outstanding dues. The respondents No.1 to 3 were arrayed as respondents No.4, 3 and 5 respectively and are the guarantors in respect of the cash credit facility Civil Revision No. 6135 of 2009 -2- *** granted to M/s Brahm Laboratories Limited in the said original application. The respondent No.4 is not party to the said original application. The said original application was filed before the Debt Recovery Tribunal, Chandigarh (for short, 'the DRT') for recovery of `6,61,56,375/- along with pendente lite and future interest against the defendants by sale of the assets of the property charged in favour of the petitioner bank. The said original application is pending before the DRT. It is further averred that the defendant No.1 filed a suit for declaration before the civil court at Phagwara against the bank of India i.e. petitioner in the original application challenging the simple mortgage deed dated 12.8.1997 purported to have been executed by Mr. R.P.S. Virk (defendant No.2 in the second suit) in respect of the property of the respondent No.1, in favour of the petitioner as the attorney who had entered into simple mortgage with the petitioner because he was not authorised to execute the mortgage deed and the mortgage deed is the result of fraud. The said subsequent suit is pending in the court of Additional Civil Judge (Sr. Division), Phagwara. In the said suit an application under Section 10 of CPC has been filed by the bank on the ground that since the suit for recovery is already pending between the parties including the guarantors as well as the mortgagees, therefore, the second suit was liable to be stayed. Since the main claim of the petitioner is based on the mortgage deed dated 12.8.1997 and the fate of the said mortgage deed would be decided in the petition before the DRT, therefore, the suit should have been stayed. The trial court dismissed the application while observing that though both the cases are based on the mortgage deed dated 12.8.1997, yet cause of action as well as the subject matter in both the suits are different. Arguments heard. Recovery of Debts Due to Banks and Financial Institutions Act, 1993, (herein referred as, 'the Act') under which the suit for recovery has been instituted before the DRT has overriding effect over any other enactment for the time being in force in view of Section 34 of the Act, which reads as under :- Civil Revision No. 6135 of 2009 -3- *** 34. Act to have over-riding effect.—(1) Save as provided under sub-section (2), the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act. (2) The provisions of this Act or the rules made thereunder shall be in addition to, and not in derogation of, the Industrial Finance Corporation Act, 1948 (15 of 1948), the State Financial Corporations Act, 1951 (63 of 1951), the Unit Trust of India Act, 1963 (52 of 1963), the Industrial Reconstruction Bank of India Act, 1984 (62 of 1984), the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) and the Small Industries Development Bank of India Act, 1989 (39 of 1989). Thus, from the reading of the aforesaid provisions, the suits covered by the Act, have been withdrawn from the purview of civil courts and were made triable by Debt Recovery Tribunal. It may further be observed that since the suit instituted by the petitioner is based on the mortgage deed dated 12.8.1997 which has been challenged by the respondent No.1 by way of civil suit for declaration before the civil court, therefore, the subsequent suit being the off shoot of the earlier suit cannot be said to be based on the new cause of action. The fate of the mortgage deed could be decided by the D.R.T. where the defendant could well set up the defence challenging the validity of the suit. Be that it may, the defendant has filed an independent suit to challenge the said mortgage deed which was the basis of the earlier suit. It is well settled by now that in cases where the decision of one suit which non-suits the other suit, it can be said that the matter in issue in both the suits is directly and substantially the same particularly when the subject matter in both the suits is the same. Civil Revision No. 6135 of 2009 -4- *** Thus, in the given circumstances of the case, it would be expedient in the interest of justice to stay the present suit till the previous suit, already filed by the Bank of India for recovery of the amount is decided. I have been informed by the learned counsel for the petitioner that the defendants have not appeared to contest the earlier suit. In this situation, this court has nothing to do. However, the respondents may have recourse the remedy as provided under the law. As such, the instant petition is accepted and the impugned order is set aside. April 06, 2011 (A.N. Jindal) deepak Judge