O.A. No. 3198 of 2000. Case: Union Bank of India Vs Standard Chartered Bank and Anr.. Mumbai Debt Recovery Tribunals

Case NumberO.A. No. 3198 of 2000
CounselFor Appellant: Ismail Nasikwala, Adv., i/b., N.I. Bakali, Adv. and For Respondents: Satish Shetye, Adv., i/b., Wadia Ghandhy and Co. and Sahani, Adv., i/b., Hooseini Doctor and Co.
JudgesK.J. Paratwar, Presiding Officer
IssueRecovery of Debts Due to Banks and Financial Institutions Act, 1993 - Section 2
CitationIV (2006) BC 23
Judgement DateMarch 07, 2006
CourtMumbai Debt Recovery Tribunals


K.J. Paratwar, Presiding Officer

  1. This legal battle between the Bankers for Rs. 12,21,974.31 with interest arises in the following manner.

  2. One Dalal K. Mangaldas had current account with the applicant's Bhat Bazar Branch. On 3.4.1993 a cheque No. 842033 for Rs. 11,29,889.20 drawn by him favouring G.B. and Co. was deposited for the clearance through the defendant No. 2 with the applicant. It was returned since dishonoured as the account did not have sufficient funds. On 12.4.1993, the said cheque was presented for second time again through the defendant No. 2. This time also the cheque was returned to the drawer since sufficient funds were not in the account. The cheque came to be again presented on 20.5.1993 but this time through the defendant No. 1. The account did not have sufficient balance which was why it was returned on 25.5.1993 by defendant No. 2 with covering memo dated 22.5.1993 stating that it had not presented the cheque. In the meanwhile the applicant's account with the clearing Bank was debited on assumption that the cheque was cleared and the defendant No. 1 Bank made payment to G.B. and Co. The applicant Bank requested both the defendant Banks to make payments but, they disowned their liability.

  3. The applicant has averred that on inquiries it was informed that the cheque was presented by the 1st defendant. The return by the applicant Bank of the cheque to the 2nd defendant is said to be due to negligence on the part of both the defendants. The negligence of 2nd defendant was non-cancellation of its stamps probably while returning the dishonoured cheque to G.B. & Co. The 1st defendant's negligence was also that it did not cancel the defendant No. 2's stamps while presenting the cheque. Moreover, it had not affixed encoding/encoding was not visible. Had the defendants not been negligent as above, the applicant would not have returned the cheque to the 2nd defendant and the ensuring payment on presumption that the cheque is cleared would not have been made. Therefore, this O.A.

  4. The defendant No. 1 in written statement (Exh. 16) has at the outset raised objection to subject wise jurisdiction of this Tribunal on the ground that the claim does not constitute debt within the meaning of Section 2(g) of Recovery of Debts Due to Banks and Financial Institutions Act, 1993. On this ground the 1st defendant has also made application (Exh. 11) for re-transferring the O.A. to the Hon'ble High Court of Judicature at...

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