C IN THE HIGH COURT OF KAPNATAKA AT BANGALORE DATED THIS THE K PflL BEFORE : THE HON’BLE MR,J!T3TICE TIRATE S,THAKUP aifl-ifl7, I 1. M/s,Jay Jee Service Stat on, Richmond Circle, Bangalore, by its Proprietor, Mr.Joseph Paramel,Major. 2. Mr.Joseph Paramel, as a Legal Heir of late Jima Papachen No., Clark Road, Richards Town, BANGALORE56O oor, .Peti toners, C By SrLS.Devadas, for s,Nyayitra,Adv,j AND: 1. s.Syndic’ate Bank Shoolay Brarnh, No CS, Residency Road, Bangaic re26, by it, Chief ‘tanager 2, Debts Recovery Tribunal, (Andhra Pradesh nd EarnataKa by its Registrar, Krishi Bhagvan, Hudson Circle, Nnpa n a Road, BANGALOE, By Sri,Radbesh Prabhi, for M/s,Tukaram S,Pai,for E1 ) \-1 — — This writ etition filed praying to .iash the order dated 14—7—1997 vide Annexure—D by R—2; etc., 141, BETWEEN :— 1. Dr,R,Morarka, s/c Ramkumar Morarka, M or, R/at No.24—D, Carmicheal Road, B1BAY 400 026. 2. Sushil R.Morarka, s/o Dr,LcaorarKa, Major, R/at No.24—B, Carinicbeal Road, B0!BAY — 400 026, .. .Petitioners. ( By Sri.Chaitanya Hegöde, Adv,, ) 1. Vijaya Bank, Hospet Branch, Hospet, Bell ary ‘istriot. 2. Tungabhadra Pulp & Board, Mills Li’nited, Munirabad (R,S,—583 234, K’ppal Taljk, by its ariin irector, 3 he Court of the Cjvj Judge, Hoet, at Hospet, Bellary Die tn t. —3- 4. Debts Recovery Tribunal, (Andhrapradesh & Karnataka) Krisbi Bhavan, Hudson Circle Nrupathunga Road, Ban alore — 560 002. ,.,Respondents. ( By Sri.Urval N,Ramadas,Adv,, for B—I ) Thi, writ petitIon filed praying to declare that the 2—4 has not jurisdiction to proceed with the 0.A.No,338/95 on its file; and direct R—4 to remit the records of 0.5. No.14/go received by it from the 3; etc., These writ petitions cing on for prly.hearing On ‘B’ group, the same having been heard and reserved for pronouncement of order, the Court made the following order : ORDER Common auestions of law arise for consideration in these two petitions which shall stand disposed cf by this common order, The questions slate to the true and correct interpretation of the provisIons of the Re covery of Debts Due to Banks & financial Institutions Act, 1993 and the Rules franed thereunder, The contro versy arises against te following backdrop. 2, 0,S,No,5063/92 was filed by the Syndicate Bank against te petitioners in W,P.No,21008/97 in the City Civil Court at Bangalore for the tecovery of a sum of Rs,13,38,263,45 in connection with two facilities “.4 extended to the said petitoner by way of loan and over draft against two sets of documents sepate1y executed for each one of te said fpcilities, Similarly O,3,No,14/QO, wa, filed te Resporent Vijaya Bank, against the petitioners in W,P,Nos.24613=14/97 claiming a decree for a aum of Rs,117,O,3949 on aeoant of two facilities one by way of Oven Loan Cash Credit and the other by way of Import letter of Credit facility, extended by the plaintiff/Bank to the petitioners, With the coining into force of the Recove”y of Debt, Due to Banks and 1 inancial Institutions Act, 1993, both the siits were transferred in teas of Sec.1 of the Act, to the Debt Recovery Tribunal, at Bangalore, where the sanv ere registered as OA,NoJ8/96 and 0,A.No.338/Q5 tespectively, 1 he petitioner ‘n W,P,No,21008/07 then mowd an LA, before the Tribunal, in which tey chall enged its jurisdiction to entertain and proceed with 0.AJlo,18/96 primaril) n the yn nd the c ntinuance o the proceedings before the fribunal, on transfer from the ivil Court, were hit by Rule 10 of the Debt Be o,er T buna (prnd re Thales, 199 he Tribna examined the question raised before it and by its order whi IC dated 14th July, 12r,/rejectnzthe ontentions urged n behalf of the pet tioners nt di,miased the l,A,filed . , 1 N by them, Aggrieved, W .P.No.21008/1997 has been filed by thetitioners assailing the validity of the said order ar for a declaration that the Tribunal is bound to follow the procedure prescribed by Rule 10(supra) even in suits that are transferred toit under Sec.31 of the Act. o the same effect is the prayer made in W.P.No,24613—24614/1997. 3, M/s,S,P,bhankar, and haitanya Hegde, Counsel appearing on behalf of the petitioners argued that Rule 10 of the )ett Recovery Tribunal (Procedure’j Rle,1QC, peitted the filing of an application based on a single caue of action only They urged th the Rule contained a prohibition against the filing of applications by the Bacs seeking a relief or reliefs, based on more than one of acti.on, This Rule against plural remedies, it was contended, implied that the application filed before the Tribunal, should not only be based on a single cause of action but the said cause must be in respect of a debt of more than R,iQ iakhs, That is because debts of ReJO Laths and above alone fall within the juris diction of the Tribunal in the absence of a notification under Sec,i(4) of the Act, mithcri.sing filing applications , , . 6 —6— of lesser amounts also. ‘he contention in other words was that a suit pending in... aw Civil Court on the date of the promulgation of the Act, could in terms of Sec,31, be transferred to the Tribunal onlr if the same satis fied the requirement of Thile 10, in that the suit was based on a single cause of action and the cause of acti. on was one which if it had arisen after the estab lishment of the Tribunal would be within its jurisdic tion, Since both tie suits with which we are concerned, in these writ petitions were according to the learned Counsel, based on more than one causes of action, the same could not have been either transferred by the 0 ivil Court Or tried by the Tribunal. 4, Counsel for the Respondents on the other hand contended that Rule 10 of the procedure Rules had no application to suits that had been instituted before the Competent Civil Courts prior to the promulgation of the Act, ucb suits it was contended constituted a class by: tcemselves, tich would by reason of Sec,31 stand tranE,ferred to the Tribunals established under the Act, if the debt claimed in the same was one triable by the said Tribunal, It was urged tiat the expression Cause of Action’ appearing in Sec,31 ought to be given a liberal V interpretation so as to include the sum, total of the 1ief which the plaintiff in the suit may have claimed against the defendant, no matter such relief arose in the context of more than one loan or other transactions between the ptiee, 5, In order to properly appreciate the contentions urged at the Bar it is necessary to briefly refe.r to the Scheme underlying the Act and some of the provisions contained therein, The Act it is apparent from a rea ding of its preamble is aimed at establishing Tribunals for an expeditious adjudication and recovery of debts due to Banks and financial Institutions. It provides a speedy remedy for resolving disputes arising out of loan and other financial transactions between such insti tutions and their borrowers, The provisions are however applicable only where the amount of debt due to any Bank or financial institution or to a consortium of Banks and financial institutions is not less than Rs,1O ial.he or such other amounts not less than Rs,1 iakhs, as the Central Governi..ent may by Notification specify, The term Debt’ is in turn defined by Sec.2(g) of the Act, to mean any liability (inclusive of interest) which is alleged to be due from aw person to a Bank or financial p \ a5.i. institution or to a consortium of Baits or financial institutions during the course of any business activity undertaken by the Bask or by the Financial Institutions snetner sucured or unseoured or whether payable under a Decree Or order of a 0 ivil Conrt or oTherwise and subsisting on the date of the application. Seo.17 of the Act, empoimrs the Tribunal from the azpointed date to exercise jurisdiction, por and authority to entere tam and decide applications from banks aid financial institutions for recovery of debt, due to guch Banks and Financial Institutions, whereas Sec.18 excludes the jurisdicton of the Civil Courts and other authorities, in regaid to matter specifiedin Sec.17. See.19 of the Sat, prascrbe., the procedsire to be folaowed by the Tribunal ant inter alia provides that a Bank of Financial Institution may make an atplication to the Tribunal, for the iscovery of any deot due from any person and t at sich an a,plk’ation shall te an ascii form and be ace apanied by such dociments a may be prescribed ½e second proviso to sub sec.(2) to Sec. 1 0 exoludet in its application to suits transferred u/s.3 1 . the provisions contaned in sib Ssc.(2) in so far as the ae elate to pajment f fee pregoribed therein. Sec,31 of the Act directs tat ever’ suit or other —9— proceeding pering before any Court irnm.ediately before the date of establishment of a Tribunal under the Act being a suit or proceeding the cause of action whereon it 15 based is euc h that it would have been ii it had ax isen after such e stabli snment within the jun silo— tion of such Tnitunal, shall, stand trsnsierred to the Tribunal, provide.d that arpeals pending before any Cou!’t snail not oe so trsnsferred Upon transfer of any such suit, or other oroceeolng, so far may be in the same manner as in the case cf a.n application made unoer Seo,19 from the staie which was reached before such t:r’anstr or iron amy earlier staje or even de—novo as the Tribunal may deed fit, 6, eierenoe mny also e mane at this stage to the Debt Recovery Tribunal (Prmoedure) lilies 1q23 framed by the Ce ntrsl overnment under Section 3E, of the Act, Rule 4 of the said Rules: provides that an al icstion snail be yresente< in the form annered to the Rules by the applicant in person or by h.is agent, whereas Rules — .snxft S S a 10 - 5, 6 and 7, regulate the presentation, scritiny, and the fee payble on such applications. Rules 8, and 9 relate to the contents and the documents required to accompany the application whereas Rule 10 which is thevery basIs of the contentions urged on behalf of te petitIoners relates to plural remedies and reads thus :— “—1Q— An applicant shall not .eek relief or reliefs based on more than a single cause of action in one sfr.gle application un less the relief.. s prayed for are consequential to one another,” 7, From a careful reading of the Rules, it would appear that the same do not uperate retrosectivel:, They rride the procedure that the applicant is re quired to follow while filing aprlications after the Tribunals are established, The Rules do not it is significant to note make any provision as regards the form, or the contents, of the plaints/suits that get transferred to the Tribunal in terms of Seo,31 of the Act, it is therefore safe to assume that all such suits are free from any procedural or other reiirements such as the forms prescribed f.or the applications, the filing of the documents with the same, or even the filing: 11 N — ii — of the renly and other docun•e s by the Resnondents, if suce teiIy and doornients sto”od arlesda filed before the Civil Court ooncerned. in other woids the procee— nural rules will have no snnloation to what is not instituted for the first time before the Tribunal and what is oeived from the conpetent Civil Court in terms of Seo.31. Such transferred suits would then oonstitute a olass by themselves to whioh requirements of the foss of the spplioations otherwise presoribed by the prooedure Thales, would hsae no spplioation, Relianoe by the Defendants upon the trovisions of itule 10, qua suits thatsre transferred from the ivil Courts was thus misnlaoed Let us now examine the issue from the stand point of dec.31. of the Act. A closer look Seo,31(2)(b) which empowers the Tribunal to deal with the trans ferred suits or other proceedings, would show that the Tribunal iE... while dealing with such oaseo, requirE.•d to do so, “so far as may be” n the same mamer, as n the ease of an application made under dec.19 from the stage which was reached before such transfer or from any earlier atae as it ma deed fit. The expre ssion ‘so far as ma’z be “ appearing in dec.31 (2Hb) would: in mm opinion imply upon tnxfr±TflflxtK — 13 — “ a suit or proceeding, cause of action woereon it is based is such that it would have been if it had arisen after such establishment within the jurisdic tion of uoh tribuna.l”, must be interpreted to mean a single cau..e of ticn cons.tituting the basis of the suit a& not two or more cause of action which may have been clubbed together by the plaintiff as was indeed permissible under the C,P.C., while seeking a decree. When so viewed, suits in which t.he plain tiff had set up lucre than one cause of action and thereby taken the debt claimed to Rs,1O lakhs or m.ore, could not accoztng to the Counsel be within the comprehension of dec.31 so as to be transferrable to the Tribunal, he expression “Cause of Action” has not been def:ined either by the Act or the Procedural Rules framed thereunder, Even the C, P.C., does not provide any definition to that expression. ihere is all the same a profusion of judicial authority a.s to the meaning that can.. be assigned to the expression, Generally speaking, the exoression has been understood to mean the bundle of facts tich the ola intiff must prove in support of his right to the judnent. LEe expression ,..14 •# — 14 — has a dual meaning, one relevant to the jurisdiotion of the Court and the, other to the basis of the claim. When seen in the context of the basis of a claim the expression has a restricted meaning whereas if used in relation to the jurisdiction of the Court, it en joys a wider meaning • In the restricted sense, it includes facts, constituting infringment of the right and is thus the cause which is the foundation of the suit whereas in the wider sense it includes the facts constituting the right itself, See JAHARIAL PAGALIA •v. UNION OP INDIA / AIR 1959 Cal. 273/. 11. My noble brother Raveendran ‘1’., also had an occasion to refer to the judicial pronouncement on the subject in SMT.GERTY SUVARNA & ANOTHER a. UNION OP INDIA & OTHERS /W.P.No.25898/1997/ decided on 16th of October 1997 where an objection regarding main tainability of an application before the Tribunal was raised in near slmil& circumstances on tla basis of Rule 10 of the Procedure Rules. This Court ob served that tie expression “Cause of ActIon” kn different meaning in different contexts twxtksxtttm N a a in different ciroiaatancee. Its meaning ma: be restric— c capendi ouc ted wide,/eanflss* c ntraotual and even contextual. The use of words “Single Ceuse of Action” in male 10, was tield to be in the context of regulating tte merrier of f hug the applications before the Tribunal for re— covery of amounts due to Banks and Pinancial Institutions aid the words “Seeking relief or eel iefs based or more the—n a single cause of action” were held to have been used in ‘tl4io’i to ta b-°s S ti claim and not the jurisdicton of the Tribunal. When seen in the light of the above, the expreeion “Cause of Action” used in Section 31, falls in the 2nd category. The ecpression tas been used in that provision in the context of the lurid ietion of the Tribunal a’ not in the restricted sense in which it is used in Rule 10. The emphasis in 9ec.31 is on the “Cause of Action” being within the Jurisdiction of the Tribunal which signifies that the expresi on has been seed n the wider context f deter mining the Jurisdiction of the Tribunal and not in the narrower sense of Wing the bis f the suit. 12. Three situations may arise in relation to the suite that are transferred n Wire of Seo.31 namely; 1) suits in which more than one causes of action have been 5oined by the plaintiff but the debt claimed on — 16 — the basis of each one of such causes of action is th— in the jurisdiction of the Tribunal being more than Rs,1O iakhs or such other amount as the Central Govern ment may by a Notification specify, In such cases, there would be no difficulty either in the transfer of the suits Or trial thereof by the Tribunals for the debt claimed as also the cause of action e both with in the jurisdiction of the Tribunal, if the same had arisen after the establishment of the Trbunale, Merely because the plaintiff bad joined more than one causesof action in the suit each one out of which if the same had would he arisen after the establishment of the tribunal,/± within the urisdiotion of the t ribunal, would not either render the transfer or the trial of the transferred suit by the Tribunal invalid, in the absence of any provision in the Act or the rules requiring the plaintiff or the Tribunal to split the causes of action for separate trials; 2) he second category is of cases in which one of the causes of tion joined by the plaintiff in the civil suIt is tbin the jurisdiction of the Tribunal but the rest being for lesser amounts are note Even in such cases in the absence of any provision which may require the Tribunal to reject the plaint or direct te splitting of the cause of actIon for separate trials, ,17 V the transfer of the entire suit including the causes of action which hve been joined and whi ‘ may not other Wise flave been within the jurisdiction of the Tribunal would be permissible. The third cateory comrrIee caseS where the bts claimed on the basis of different transactions individually are for amoune less than the one prescribed under Sec,1(4) of the Act, but cumulatively go beyond the amoint prescribed by the said provision, he real difficulty is encountered not o only in thts class of cases for it is here that , a the CO e rirp ‘expression “Cause of action” n Sec,31 assumer impor even tance but/ the question whether different trans actions constitute one single cause of tion arises for determination. A liberal interoretation notwith standing if what is joined in the suit are distinctly different causes of action each one of which is for a debt less than the amount prescribed under Sec,1(4), such a suit may not be transferable simoly because the total amount claimed Is f or an amount beyond the mzn1mm, ven fi widest interoretat ons of the term cause of aetion cannot support, the arment that the jurisdiction of the ribunal to try the game ahoil be dEterm med by reference to the sum total of the ciCima basel on 11 the calses of action \\ .1* a 18 a available against the defendant no matter each such cause of action is unconnected with tie other a would not have been triable by the Tribunal if the sane hat arisen after its establishment. This is however subject to the Caveat, that the cause 5 of action joined in the suit are different. This difference must be real and not just superficial. Just because the borrower has taken more than one facilities or executed more than one sets of documents may not be conclusive of the matter. Such transactions or series of transa actions may be no more than links in the chain of an over all scheme which the Bank or the Financial Insti tution may have agreed to or conceived irs zelation to a particular project or businees. Whether or not, there to the defendant would fore different facilities extended/constitute different transactions independent of each other so to give rise to different causes of action will have to be judged *a,fla4atXaflW’the facts and circimietances of each a case. It ie too broad a proposition to say that execution of separate documents or grant of separate banking faci— litiee can in no situation constitute one single cause of action. Take for instance, a case in which th bank or the financial institution grants a loan on the basis of a Project Report submitted to it for the purchase of ...19 a — 19 — land and machinery. Any such loan may be a:. part of an over—all or a broader finsncal scheme or arrangement, whereunder the Bank may also undertake to grant 80 over draft facility for enabling the enterpreneur to carry or an vance on his business,ky way of working capital, The two transactions even though apparently independent may have an intrinsic co—relation with each other for one may be granted for the success of the other. In any such situation just because o sets of documents have been executed or two transactions have taken—place at two different points of time mw not by itself give rise to two causes of action, When viewed in the wider perspective such transactions may constitute one single cause of action capable of being brought before the Tri bunal in a single action for recovery of the debt claimed, Suffice it to say that the question Miether two or more than two different transactions ccnsti— tute one cause of action shall have to be viewed in the conxt of the averments made in the plaint and the co—relation which is established between such transactions so as to give rise to a single cause of action, It is te that in SMT,GERTY SUVRNAs case (supra) dealt with by this Court, the cause 5 of action were held to be different by this Court as different — 20 documents had been executed at different points of time in favour of the Bank. But that was because there was no question of one facility granted to the petitioner having any connection with the other. One of the faci lities was a housing loan whereas the other was a secured loan for the purchase of a Car and thus wholly un connected with each other. It was in that context that the two transactions evidenced by o sets of documents at two different points of time were considered to be independent of each other giving rise to different causes of action. A joint petition was all the same held maintainable because the security provided by way of a mortgage common to the two transactions, The enforcement of one liability was held to the consequen tial to the other having regard the provisions to Sec tion 67A of the Transfer of property Act and there fore , permissible under Rule 10, Phat was also a case of fresh Institution before the Tribunal and not a suit transferred from the Civil Court, 13. In th..e present two cases, the suit filed against the petitioner In ,P.Nos,24613—14/97 falls In the first category namely cases ere both the cause of action joined in the suit (assuming that the transactions cons tituting the basis of the suit gave rise to different .. .21 — 21 — causes of action) are for amounts more than Rs.1O laicha ad therefore would have been within the jurisdiction of the Tribunal if they had arisen after its estab— lishnent The transfer of the said suit or it trial by the Tribunal cannot therefore be found fault with, 14, In so far as W.P.No.21008/1997 i concerned, the total debt claimed in the same is Rs,1,38,363—45 which has its genesis in two facilities granted to the peti tioners one by way of loan and the other by way of an over—draft facility. While the petitioners argued that the two facilities re independent of