1. The appellants are defendants 2 and 1 respectively in O.A. 129/96 filed by the 1st respondcnt-Andhra Bank (hereinafter referred to as the respondent Bank) before the Debts Recovery Tribunal-I, Delhi (hereinafter referred to as 'DRT') against the appellants and the 2nd respondent herein. The appellants filed their interlocutory applications, namely I.A. 1/2000 for taking an additional affidavit by way of evidence; I.A. 2/2000 for taking cognizance of the counter-claim made by the defendants 1 and 2 in their written statement, and to allow them to lead evidence; and I.A. 3/2000 for summoning Mr. Suresh, the then Credit Manager and Mr. Varaprasad, the then Foreign Exchange Officer of the respondent-Bank for examination as witnesses in order to establish their counter-claim and their defence. All these three applications were disposed of by the learned Presiding Officer of the DRT by his common order dated 24.1.2002.I. A. 1/2000 was allowed, and the additional affidavit filed was taken on record. But I.A. 2/2000 for taking cognizance of the counter-claim was dismissed observing that at that stage the counter-claim cannot be allowed to be raised since the matter was at the stage of cross-examination of defence witnesses. I.A, 3/2000 was dismissed observing that since there is no counter-claim, the presence of the witnesses was not necessary, and that even otherwise, the appellants/defendants have to prove their case from their own evidence or from some other independent witness, but, cannot be allowed to call the Bank's officials.
2. Aggrieved by the dismissal of the I.As. 2 and 3/2000, the appellants/defendants have approached this Tribunal with this appeal.
Notice to the 2nd respondent was dispensed with at the request of the learned Counsel for the appellants. The learned Counsel for the 1st respondent-Bank slated that he was not filing any reply insasmuch as only question of law arises in the appeal.
3. I have heard the Counsel for both the sides, and perused the records.
4. The learned Counsel for the appellants contends that as early as in May 1997 itself the appellants/defendants filed the written statement raising a counter-claim, but, at that time there was no provision in the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as 'the Act') for entertaining the counterclaim, and, therefore, it could not be entertained at that time, but by an amendment to the Act provision has been made to enable the Tribunal to entertain the counter-claim in the proceedings before the DRT. He also points out that this amendment came into force with effect from 17.1.2000. The learned Counsel for the appellants/defendants contends that the counter-claim made in the written statement remained in the written statement as such without being deleted, and after the provision was introduced in the Act enabling the Tribunal to entertain the claim, the appellants/defendants filed two applications, i.e., I.A.2/2000 for taking cognizance of the counter-claim made in the written statement, and I. A. 3/2000 for calling the officials of the respondent-Bank (whose acts and omissions were responsible for causing loss to the appellants/defendants) as witnesses in order, to establish the counter-claim. As pointed out already, the learned Presiding Officer, dismissed these applications.
5. But, the learned Counsel for the 1st respondent-Bank contends that the counter-claim was rejected by the DRT on 26.5.1998 itself, and, therefore, it did not survive thereafter to be taken cognizance of. He further contends that after the amendment came into force on 17.1.2000, the appellants/defendants should have raised a new counter-claim. The learned Counsel for the appellants, on the other hand, contends that the counter-claim made in the written statement was never rejected, and still continues in the written statement. The learned Counsel for the 1st respondent-Bank also contends that this application for taking cognizance of the counter-claim should have been filed on the 1st hearing after 17.1.2000 whereas this application was filed only on 24.8.2000 before which there were two hearings, i.e. one on 29.2.2000 and the other on 26.4.2000. He, therefore, contends that this application was not maintainable, and the counter-claim could not be entertained.
6. In order to appreciate the rival contentions, it is necessary to examine the provisions of Sub-section (8) of Section 19 of the Act.
This sub-section was introduced by the amendment which took effect from 17.1.2000. Sub-section (8) of the Section 19 of the Act reads as follows: "A defendant in an application may, in addition to his right of pleading a set-off under Sub-section (6), set up, by way of counter-claim against the claim of the applicant, any right or claim in respect of a cause of action securing to the defendant against the applicant either before or after the filing of the application but before the defendant has delivered his defence or before the time limited for delivering his defence has expired, whether such counter-claim is in the nature of a claim for damages or not." 7. Therefore, we find that the cause of action for the counter-claim should have arisen either before or after the filing of the application (O.A.) but at any rate before the defendant had delivered his defence or before the time limited for delivering his defence has expired. The condition imposed by this section is only with regard to the date on which the cause of action arose. This sub-section does not stipulate that the counter-claim should be raised on the 1st hearing of the application (O. A.). This is quite in contrast to the provision contained in Sub-section (6) of Section 19 which enables a defendant to claim a set-off. Sub-section (6) of Section 19 provides that the defendant may at the 1st hearing of the application, but not afterwards unless permitted by the Tribunal, present a written statement containing the particulars of the debt sought to be set off. Therefore, it is only where the defendant wants a set-off, it has been provided in the Act that a written statement claiming set-off should be filed on the 1st hearing of the application unless permitted by the Tribunal.
There is no such restriction placed on the right of defendant to make a counter-claim.Shanti Rani Das Dewanjee v. Dinesh Chandra Day, "It has been held by this Court that right to file a counter-claim under Order 8 Rule 6-A of the Code of Civil Procedure is referable to the date of accrual of the cause of action. If the cause of action had arisen before or after the filing of the suit, and such cause of action continued up to the date of filing written statement or extended date of filing written statement, such counter-claim can be filed even after filing the written statement." 9. The decision in Mahender Kumar v. State of M.P., , is also to the same effect.
10. The provisions of Order 8 Rule 6-A of the Civil Procedure Code in this regard are the same as the provision contained in Sub-section (8) of Section 19 or the Act. Therefore, these decisions, though rendered with reference to the provisions of the Code of Civil Procedure, apply with equal force to a case arising under Sub-section (8) of Section 19 of the Act. Therefore, the contention of the learned Counsel for the respondent-Bank that the counter-claim should have been made on the 1st hearing, and in this case, on the first hearing, after amendment came into force, cannot be accepted. If the cause of action for raising the counter-claim had arisen before the filing of the written statement or before the expiry of the time limited for filing the written statement, then the counter-claim can be raised even after the filing of the written statement, and not necessarily on the 1st hearing of the application (O.A.) or on the 1st hearing after the amendment of the Act as in the case before us.
11. A perusal of the written statement filed by the appellants/defendants shows that the cause of action for the counter-claim made by them had arisen before the filing of the written statement. Therefore, this objection raised by the respondent-Bank cannot be accepted.
12. The next contention of the learned Counsel for the respondent-Bank is that the counter-claim was rejected by the learned Presiding Officer of the DRT on 26.3.1 998 and, therefore, there is no question of taking Cognizance of the counter-claim thereafter. But, the learned Counsel for the appellants, on the other hand, contends that the learned Presiding Officer had not rejected the counter-claim on 26.5.1998, but had only rejected an application filed on behalf of the defendants to amend the written statement. I have also perused the records of the DRT in this behalf, and I find that the contention of the learned Counsel for the appellants is correct. The learned Presiding Officer of the DRT has on that date only rejected the application filed for amendment of the written statement.
13. But, the learned Counsel for the appellants fairly points out the order passed by the learned Presiding Officer of the DRT on 23.5.1997 whereby the learned Presiding Officer had ordered to fix the case on 29.5.1997 for deciding whether the written statement has to be taken on record as the same had not been filed within the stipulated period.
With regard to this aspect also, I have perused the records of the DRT, I find from the orders dated 14.3.1997 that the learned Presiding Officer had directed the written statement to be filed within two weeks. That is why, on 23.5.1997, when the matter was taken up, the Counsel for the Bank had stated that the written statement was not filed within two weeks, as directed, and, therefore, the same may not be taken on record. As pointed out already, the learned Presiding Officer adjourned the matter to 29.5.1997 for deciding whether the written statement should be taken on record or not.
14. But, the learned Counsel for the appellants points out that the learned Presiding Officer of the DRT did not pass any order in this regard and contends that it should be deemed that the written statement has been taken on record. The learned Counsel for the respondent-Bank has not been able to point out any order by which the learned Presiding Officer of the DRT declined to take the written statement on record.
The question is whether the written statement should be deemed to have been taken on record. Inasmuch as there is no order in this regard specifically, this question has to be decided by the learned Presiding Officer of the DRT as to whether the written statement should be deemed to have been taken on record or whether it will be taken on record or whether the request to take the written statement on record should be declined. Since the counter-claim is contained in the written statement, taking cognizance of the counter-claim would arise if the learned Presiding Officer of the DRT decides this aspect one way or the other.
15. Therefore, for this purpose, the matter has to be remitted back to the DRT for disposal in accordance with law. Both parties will be entitled to put forward pleas in support of their respective contentions. It will be open to the appellants herein to urge that the written statement should be deemed to have been taken on record, and it will be open for the respondent-Bank to oppose this piea. Similarly, it will be open to the appellants to make a request to the DRT to take the written statement on record by moving an appropriate application in this behalf, if deemed necessary. If and when such a request is made, the respondent Bank will be entitled to oppose the same in accordance with law. The learned Presiding Officer of the DRT will consider the pleas put forward in this behalf by both the parties and decide this matter in accordance with law. If he decides that the written statement is deemed to have been taken on record or that it should be taken on record, then he will have to take cognizance of the counter-claim made in the written statement, subject to the right of the respondent-Bank to urge that the same is barred by limitation.
16. Another contention put forward by the learned Counsel for the respondent Bank is that the counter-claim made is barred by limitation, In this connection, he referred to the averments made in the written statement, a copy of which has been filed along with this appeal. In the written statement, the counter-claim has been separately made, giving details of the claim. In paragraph 5 of the counter-claim, there is reference to the two invoices dated 6.11,1992 and 9.11.1992. In paragraph 7, there is reference to two invoices both dated 7.1.1993. In paragraph 9, there is reference to the demurrage suffered by the appellants from 10.1.1993 to June, 1993 as also the second defendant going to the United Kingdom to convince the consignee to take delivery of the goods. In paragraph 12, there is reference to Fax messages dated 24.6.1993, 28.6.1993 and 29.6.1993 informing the Chief Manager of the respondent-Bank to release the documents, and that he would be responsible if the goods were auctioned. In paragraph 14, there is a reference to the deposit on 15.2.1994 of cheque received from one of the buyers, and about dishonour of the same. In paragraph 15, there is a reference to the request by the defendants/appellants seeking foreign exchange from the respondent-Bank for taking legal action on the ground that the foreign exchange could be obtained only from the Bank which had the account of the company, and the refusal by the respondent-Bank.
17. The learned Counsel for the respondent-Bank contends that it is evident that the cause of action for the counter-claim arose between 1992 and 1994 whereas the written statement containing the counter-claim was filed in May, 1997 and, therefore, it is barred by time. He, therefore, contends the counter-claim cannot be entertained.
But, the learned Counsel for the appellants contends that the question as to whether the counter-claim is barred by limitation or not has to be considered while considering the counter-claim itself on the basis of the materials to be placed by the appellants showing the relevant dates on which the cause of action arose for making the counter-claim.
According to him, the transaction was a continuous one, and materials will be placed to show that the counterclaim has been made in time. In this connection, he relied upon the decision of the Hon'ble Supreme Court in Shanti Rani Das Dewanjee v. Dinesh Chandra Day, (supra), where in it has been held as follows: "It has been sought to be contended by the learned Counsel for the appellant that in the instant case, the cause of action had arisen long before the institution of the said Civil Case No. 248 of 1982 and, therefore, the suit and counter-claim were barred under the Limitation Act. Such question was not raised before the Court below and, therefore, had not been gone into. It is, therefore, not necessary for this Court to decide the same because the question of limitation regarding the suit if raised will be decided after ascertaining the date of accrual of the cause of action on the basis of relevant materials to be placed on record. We are, therefore, not expressing any opinion on the said contention sought to be raised by the learned Counsel for the appellant, for the first time before this Court." 18. The learned Counsel for the appellants points out that the learned Presiding Officer of the DRT has not dismissed the application to take cognizance of the counter-claim on the ground that it is barred by limitation, and that the respondent-Bank has not filed a reply even to this appeal and, therefore, in these circumstances, the appeal should not be dismissed on the ground that the counter-claim is barred by limitation. He contends that the appellants should be allowed to place material to show before the DRT that the counter-claim is in time.
19. As pointed out already in paragraph 15 of the written statement relating to the counter-claim, it has been mentioned that the defendants wanted foreign exchange to take legal proceedings against the defaulting party, and that this request was refused by the respondent-Bank. It has been urged that, therefore, the appellants could not take action against the defaulting parly, resulting in a loss of more than Rupees 41/2 lakhs due to the gross inaclion on the part of the Bank. So, it cannot, at this stage, be held that the last date on which cause of action arose, was 15.2.1994. The defendants will be entitled to place material to show that the cause of action arose on a subsequent date also due to the negligence or refusal of the Bank to allow foreign exchange for prosecuting the defaulting party. The appellants would be entitled to place such other materials also to show that the counter-claim has been made in time. Therefore, the question whether the counter-claim is barred by limitation or not, cannot be decided at this stage. The question of limitation being a mixed question of fact and law, all materials will have to be urged and placed on record in this behalf. As pointed out already, the learned Presiding Officer of the DRT has not declined the request of the appellants/defendants to take cognizance of the counter-claim on the ground that it is barred by time. He has only rejected the request on the ground that the counter-claim cannot be raised at the stage of cross-examination of the defendants' witnesses. Further, the respondent-Bank has not filed any reply to this appeal also raising the question of limitation. In these circumstances, I am of the view that this aspect has to be decided by the DRT while considering and deciding the counter-claim itself depending upon the pleadings and the materials placed before it in this behalf. The appellants/defendants would be entitled to place materials to show that the counter-claim is in time.
Respondent-Bank will be entitled to put forward the plea that the claim is barred by limitation. The learned Presiding Officer of the DRT shall also give an opportunity to the respondent-Bank to file a reply to the counter-claim and then dispose it of in accordance with law, and in the light of the observations contained in this order.
20. The learned Counsel for the appellants also contends that the provisions of Subsection (8) of Section 19 of the Act have retrospective operation, but the same is questioned by the learned Counsel for the respondent-Bank. It will be open to the appellants and respondent-Bank to put forward their respective contentions in this behalf before the DRT, and the learned Presiding Officer will have to decide the same, inasmuch as the question of taking cognizance of the counter-claim itself has been remitted back to the DRT for disposal in accordance with law.
21. Therefore, the impugned order rejecting the request or the appellants/defendants to take cognizance of the counter-claim has to be set aside and the matter has to be remitted back to the DRT for fresh disposal.
22. So far as the other application for calling two officers of the Bank as witnesses is concerned, the same has been rejected by the learned Presiding Officer of the DRT on the ground that since the counter-claim is not entertained, there was no necessity to call these witnesses. He has also observed that the appellants/defendants will have to prove their case by calling their own witnesses or independent witnesses, and that they cannot call the Bank's officials as their witnesses. This view of the learned Presiding Officer of the DRT cannot be sustained in view of the fact that I have remitted back the application filed by the appellants/defendants for taking cognizance of the counter-claim, to the DRT for fresh disposal. This application for summoning the witnesses will have also to be decided one way or the other, depending upon the fact whether the counter-claim is taken cognizance of or not. But, at any rate, the request cannot be declined on the basis that the defendants cannot call the officers of the Bank as their witnesses. The contention of the appellants is that these officers were responsible for the loss. Therefore, if the appellants/defendants want to call them as their witnesses, there cannot be any objections on the ground that they are officers of the Bank. Therefore, the order rejecting the application of the defendants to call these officers as witnesses, has also to be set aside, and remitted back to the DRT for fresh disposal.
23. Of course, the appellants have not paid the entire Court fees due on the counterclaim made. The learned Counsel for the appellants states that the Court fees due on the counter-claim will be paid before the DRT.24. In view of the discussions made above, the appeal is allowed, setting aside the impugned order dated 24.1.2002 insofar as if relates to IA No. 2/2000 and IA No. 3/2000 wherein the appellants/defendants have made the request for taking cognizance of the counter-claim, and for summoning certain witnesses. These applications are remitted back to the DRT concerned for fresh disposal in accordance with law, and in the light of the observations contained in this order.
25. Before the learned Presiding Officer of the DRT takes up these applications for hearing, the appellants/defendants shall pay the requisite Court fees on the counter-claim made by them. Only thereafter, the learned Presiding Officer shall take up these applications for consideration.
26. The learned Presiding Officer shall also give an opportunity to the respondent-Bank to file replies opposing these applications, if necessary. After affording opportunity of hearing to both sides, the learned Presiding Officer shall dispose of these two applications in accordance with law, and in the light of the observations contained in this order.
27. The learned Presiding Officer will decide whether the written statement of the appellants shall be deemed to have been taken on record or has to be taken on record. If he decides this point in favour of the appellants, then he shall take cognizance of the counterclaim, give opportunity to the respondent-Bank to file reply to the counter-claim, and then decide it in accordance with law; and in the light of the observations made herein.
28. The parties, through their Counsel, are directed to appear before the DRT concerned on 27.5.2003 for taking further directions in this matter without waiting for a notice from the DRT concerned.
29. A copy of this order be furnished to both sides, and also be forwarded to the concerned DRT. Records of the DRT be sent back to the DRT immediately.