DRT Is Not Empowered To Hold An Enquiry And To Grant The Relief In Respect Of Numerous Subjects

Now let us examine, on what particular question(s) the DRT under Section 17 of the Act is empowered to hold an enquiry and to grant the relief in respect thereof?

 

Hon’ble Bombay High Court in Centurion Bank Ltd. vs Indian Lead Ltd. And Anr. {(2000) 100 Comp Cas 537 Bom; (1999-3) 101 Bom LR 556; Decided on 20 August, 1999} has, inter alia, held as follows.

“18. Having said so looking at the averments in the plaint, the suit is essentially based on an agreement which has been breached and subsequently terminated and consequently for recovery of the machinery, damages and unpaid instalments. In the instant case, therefore, the suit is substantially a suit not for recovery of debt, but for recovery of machinery and damages. Consequently, this court will have jurisdiction.

19. It has been pointed out that defendant No. 2 is a guarantor against whom the suit is only for recovery of money. The suit against the guarantor is not a suit for recovery of debt but for enforcement of the guarantee. The liability of the guarantor is joint and several with the principal debtor. Apart from proving that the contract was illegally terminated, damages will have to be proved for getting a relief against the guarantor. The suit against the guarantor in the facts of this case is maintainable before a civil court. The suit as filed is a suit substantially for the reliefs other than recovery of debt.

20. It is made clear that I have not considered nor decided the issue as to whether a suit independently on a guarantee can be filed against the guarantor alone before the Tribunal. In the present case, in so far as the guarantor herein is concerned, it has been decided on the facts of the present case.” (Emphasis supplied)

Thus, in the year 1999, Hon’ble Bombay High Court held that the suit against the guarantor is not a suit for recovery of debt but for enforcement of the guarantee and therefore, declined to transfer the suit to the DRT. It is pertinent to note here that although the court clarified (in para 20) that it has not considered nor decided the issue as to whether a suit independently on a guarantee can be filed against the guarantor alone before the Tribunal, but a doubt has certainly been created by the court on the area under discussion here.

DRT Has No Jurisdiction

























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