Bank Of India vs Ketan Parekh & Ors

3. Brief facts which are necessary for disposal of this appeal are that the respondent No.1 was declared as a notified party on 6.10.2001. Pursuant to the said notification, considering section 3(3) of the Act of 1992, all properties, movable and immovable stood attached simultaneously. The Custodian confirmed the attachment on 1.11.2001. The respondent No.2 - Oriental Bank of Commerce (hereinafter to be referred to as the Bank) filed an application being Original Application No.233 of 2002 against the respondent No.1. The respondent No.1 took out Miscellaneous Application for impleading the Custodian as a party. That application came to be rejected by order dated 16.3.2005. Aggrieved against the said order the respondent No.1 preferred an appeal before the Debts Recovery Appellate Tribunal (hereinafter to be referred to as the Appellate Tribunal). That appeal came to be rejected by order dated 19.8.2005.Against the order passed by the 2 Appellate Tribunal, a writ petition was filed before the High Court. It was contended by the respondent No.1 before the Debts Recovery Tribunal that the custodian under the Act of 1992 had to be joined as necessary party as the respondent No.1 had been declared as a notified party under the said Act. This was opposed by the Bank on the ground that the defendant No.2 has been sued merely as a guarantor and therefore, the provisions of the Act of 1992 were not attracted. It was submitted that Section 9A of the Act of 1992 would be attracted. This was opposed by the Bank on the ground that the provisions of Section 9A of the Act of 1992 were not attracted as the respondent No.1 was being sued in his personal capacity as guarantor and not as a mortgagor or pledger of the movable or immovable properties. The D.R.T. accepted the objection and rejected the petition of respondent No.1. Aggrieved against this order the matter was taken up before the Appellate Tribunal on the basis that the property of the respondent No.1 stood attached by the Custodian under the Act of 1992. Therefore, the Debts Recovery Tribunal had no jurisdiction to deal with the matter. The Appellate Tribunal held that the provisions of the Act of 1992 are not attracted and consequently, dismissed the appeal. Aggrieved against this order the present writ petition was filed before the Bombay High Court by respondent No.1. The Division Bench of the 3 Bombay High Court held that since the respondent No.1 was declared as a notified party all the properties stood attached pursuant to section 3 of the Act of 1992 and considering Section 9A of the said Act, it is the Special Court which will have jurisdiction so far as the notified party is concerned and as such the Division Bench of the High Court reversed the order passed by the Appellate Tribunal and held that the Special Court will have jurisdiction and not the Appellate Tribunal. Hence, the present appeal against the order passed by the Division Bench of the High Court of Bombay dated 17.1.2006.

expeditious adjudication and recovery of debts due to banks and financial institutions and for matters connected therewith or incidental thereto. "

10. As a result of our above discussion, the view taken by the Division Bench of the High Court of Bombay appears to be justified and there is no ground to interfere with the same. Consequently, the appeal is dismissed with no order as to costs.

.....................................J [A.K.MATHUR] ..............................