Judgements of Supreme Court/ High Courts

Banking Regulation Act

Interest- Bank directed to keep specified amount in fixed deposits pursuant to High Court order-- Bank enjoyed benefits of amount, liable to pay interest for its utilization. Del 93 (DB)



Civil Procedure Code

Ouster of jurisdiction--- DRT has jurisdiction to hear and decide petition for setting aside ex- parte decree passed by Civil Court. Ori 43 (DB)

Recovery suit by bank---- Civil Court while considering objection ordered return of plaint for presenting it before Tribunal holding that it had no jurisdiction--- Bank had filed suit on advice of its legal advisors--- it cannot be therefore said that bank with any ulterior motive and to take some advantage, opted for longer procedure by filing civil suit. (NOC) 356 (Raj) (A)

Suit for recovery of its dues by financial institution-- it is not always necessary that plaintiff should be personally present before court-- Responsibility is of conducting counsel to take appropriate steps in such manner-- Default of lawyer-- Litigant should not be allowed to suffer. (NOC) 277 (Gau) (B)

Realization of secured assets--- Application by banks filed before DRT under DRT Act-- Taking recourse to NPA Act, 2002 by them-- Withdrawal of application pending before DRT in terms of S. 19 (1) of DRT Act-- Not a condition precedent SC 712 (A)

Attachment before judgment-- Life Insurance Policies of judgment Debtor-- Cannot be attached. (NOC) 997 (AP) (B)


Constituition of India

Art. 226-- P.I.L.--Petition targetting particular person-- Court should be cautious to see whether attack in guise of public interest is really intended to unleash a private vendetta, personal grouse or some other mala fide object. SC 758 (b)

Art.226-- P.I.L.-- Not to be entertained in service matters. SC 758 (C)

Art. 226-- Judicial Review-- Commercial transaction-- Enforcement of right emanating from contract-- Court cannot direct financial institution to enter into one time settlement with debtor/ sick company offering higher bid. Del 65 (DB) (b)

Recovery of secured assets-- Possession of secured assets/flat, by bank, taken not only in presence of independent witnesses, but also in presence of police personnel who accompanied authorised officer -- is not by applying force-- No fundamental rights u/ Art. 21 stands infringed. AIR 2007 CALCUTTA 105


RDDB Act

Suit for recovery-- Plea that excessive interest has been charged by banks-- RBI Rate with minimum of 12% with quarterly rests-- No proof to produce to show that interest charged was interests in defiance of said agreed rate-- Plea of excessive rate interest, not tenable-- suit decreed for balanced sum with interest at 12% p.a. (NOC) 298 (Chh)

Debt Recovery Proceedings-- against borrowers as well as guarantors-- Tribunal ordered recovery and sale of mortgaged property--certificate and mortgaged property of guarantor put to auction sale-- no benifit can be granted to borrower for one time settlement of NPA in terms of guidelines issued by RBI dt. 29.1.03-- the RBI guidelines for one time settlement are not applicable to the cases where already a decree/ order has been passed by the Court/ Tribunal as has been stated in clause (b) of the Circular dt. 11.11.03 of the RBI. MP 51 (DB) (A)

Recovery Proceedings--Auction sale of mortgaged property of defaulter/ guarantor-- Proclamation of sale drawn up after notice to guarantor u/R 2 of Sch. 2 of Income Tax Act-- Death of guarantor after recovery certificate is drawn up-- Proceedings continue against LR's of deceased defaulter-- No fresh notice is required to be served on his LR's to pay amount sought to be recovered-- Failure of Recovery Officer to pass an order in order sheet settling terms of proclamation-- No material irregularity in conducting sale of property-- Sale not liable to be set aside. MP 51 (DB) (B)

Powers of DRT-- Bank filing petition before DRT for withdrawal of proceedings on ground that dues were satisfied-- enquiry whether settlement, as entered into between bank and and its constituent was in accordance with law or not, would be beyond jurisdiction of DRT. AIR 2008 Patna 68

Conduct of auction-- Manner of-- merely because property to be auctioned belongs to the defaulter-- Recovery Officer has no right to sell property in manner suitable to him. (NOC) 1288 (MAD) (DB) (A)

Application to set aside sale-- ground non service of notice or irregularity conducting sale-- pre deposit of amount shown in proclamation of sale. not condition precedent. AIR 2008 (NOC) 1288 (MAD) (B)

Limitation Act

Recovery of loan-- Claim involving mortgaged property-- Loan advanced in the year 1991-- Petitioner gave his personal guarantee by mortgaging immovable property in 1991-- Cannot therefore contend that period of limitation for enforcing claim came to an end within 3 years-- Period of 12 years is to be considered for limitation period. Del 81 (DB) (B) / P&H 66 (DB)

N.I. Act

Dishonour of more than one cheques-- Dishonour of each cheque giving rise to seperate cause of action subject to condition that seperate notices are issued in respect of each cheque-- Transactions cannot be held to be single transaction attracting provisions of Sec. 219 of Cri. P.C.-- Separate trial permissible.
(NOC) 418 (Bom) (DB) (A)

Demand notice-- sent under certificate of posting returned with endorsement "not claimed"-- is deemed to be served. (NOC) 942 (Kar) (B)

Dishonour of cheque-- only drawer of cheque can be held liable for the offence-- joint account holder who was not drawer of cheque cannot be held liable with aid of S. 141 (NOC) 1301 (P&H)

Dishonour of cheque--- complaint alleging-- must be signed & verified by complainant-- complaint signed & verified by special power of attorney holder of complainant-- cannot be regarded as complaint-- said defect could not be cured due to death of complainant meanwhile-- special power of attorney holder not being payee of cheque or holder there of in due course complaint filed by him liable to be dismissed. (NOC) 1290 (Bom) (A)

Dishonour of cheque-- cognizance of complaint-- lack of territorial jurisdiction of Court to entertain complaint-- no ground to quash complaint.
(NOC) 1299 (Mad) (B)

Registration Act

Suit for recovery of money/ loan-- Unregistered mortgage deed executed by defendants in favour of plaintiff-- Admissible, only for limited purpose of proving loan amount. (NOC) 339 (MAD)

Sale of secured assets in public auction-- ended in issuance of sale certificate as per R. 9 (7) of Security Interest (Enforcement) Rules (2003), in favour of auction purchaser-- sales becomes absolute and title vests in auction purchaser-- such a sale certificate does not require registration.
Mad 108 (DB) (A)

SARFAESI Act

NPA Act is additional remedy to DRT Act-- Together they constitute one remedy-- Thus doctrine of election does not apply. SC 712 (B)

Demand notice u/s 13 issued by solicitor on instructions of secured creditor is valid-- Reason being, decision to give notice is already taken by client himself and lawyer merely conveys the decision. Cal 49 (DB)

Secured asset is an immovable property-- Appointment of enforcement agencies (agency of muscle man) to make recovery, permissible-- Enforcement agency with past criminal record cannot be employed. MP 68

Bar of civil suit in respect of debt recovery proceedings-- Borrower without filing objections to Sec. 13(2)-- Notice issued by secured creditor/ bank , filed civil suit seeking injunction restraining bank from trespassing/ transferring property-- Civil suit is not maintainable-- Fact that Sec.13(2) notice did not disclose details of amount is no ground to file civil suit. Ker 64

Possession of property taken, under-- Bank taking such possession is secured creditor-- Would have precedence over claim of Excise department (Crown's debt), in absence of specific provision of 'first charge' in Central Excise Act as well as customs Act. AIR 2007 (Madras) 118 (FB)

Eviction of tenants in occupation of Secured Assets-- Permissible-- Expression "encumbrances" used in R. 9 (9) of Securitisation Rules-- Would take in occupation of tenant. AIR (Ker) 114 (DB)

Classification of debt as NPA-- to be carried out in accordance with guidelines issued by RBI-- authority of the secured creditor to be classify such debt as NPA cannot be questioned. Cal 88 (B)

Enforcement of Security Interest-- property in dispute was in possession of GIIC u/s 29 of Financial Corporation Act-- entrustment of property by GIIC to secured creditors for disposal of property-- auction of property by secured creditor cannot be said to without authority. A.I.R 2008 Guj 79

Crown's preferential priority over secured assets-- Excise Dept. vias vis secured creditors/ Banks-- Central Excise Dept. cannot claim precedence over claim of secured creditors/ banks. A.I.R. 2008 Kar 70

Stamp Duty

Stamp duty is chargeable on basis of market valueof property conveyed by instrument-- Not on basis of amount mentioned in Civil Court's decree.
ALL 39 (SB) (A)

Evidence Act

Opinion of handwriting expert-- Expert opinion would merely be an aid to Court to arrive at a conclusion-- Such an opinion is not binding and it is optional for Court to accept or reject. (NOC) 897 (Cal) (A)

Documentary Evidence-- Proof-- Suit by bank for recovery of loan amount-- Extracts of account produced on record-- Not bearing certification under Banker's Book Evidence Act-- Cannot be read in evidence. AIR 2008 Bombay 81

Banking Regulation Act

One time settlement scheme-- guidelines relating to OTS scheme issued by RBI-- are not statutory in nature-- cannot be enforced by issuing writ of mandamus
(NOC) 1209 (AP)

Reserve Bank of India Act

Revised guidelines issued by Reserve Bank-- are purely executive instructions and having no statutory force-- not creating any right in favour of borrowers-- issuance of mandamus by High Court directing bank to declare respondents account as NPA and to apply said RBI guidelines-- Not Proper.
SC 1339 (B)