The Bombay High Court (Aurangabad Bench) has dismissed a writ petition challenging the transfer of a recovery suit from the Commercial Court to the Debts Recovery Tribunal (DRT), Aurangabad. The case originated in 2007 when HDFC Limited filed a suit for recovery of over ₹3.14 crore against M/s Ashwini Trading Co. and others. While the suit was pending, HDFC Limited amalgamated with HDFC Bank Limited pursuant to an order of the NCLT in March 2023, resulting in all assets and liabilities including the suit vesting with HDFC Bank.
HDFC Bank sought transfer of the suit to the DRT under Sections 17 and 18 of the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act). The petitioner, a defendant in the suit, opposed, arguing that since the loan was originally advanced by HDFC Limited (a non-banking entity), the DRT lacked jurisdiction.
Justice Rohit W. Joshi rejected this contention, holding that the definition of “debt” under Section 2(g) includes liabilities claimed by a bank during the course of its business, even if the amount was originally advanced by a non-bank but later assigned or vested in a bank through amalgamation. The Court emphasized that Sections 17 and 18 of the RDB Act confer exclusive jurisdiction on the DRT for such matters and bar civil courts from adjudicating them. While Section 31 specifically deals with transfer of pending suits, the Court adopted a purposive interpretation to ensure the legislative intent of channelling bank debt recovery matters exclusively to the DRT is fulfilled.
Finding the transfer order lawful, the High Court upheld the Commercial Court’s decision and dismissed the writ petition without costs. The Court noted that
“(…)after amalgamation of original plaintiff (HDFC Limited) with the present plaintiff (HDFC Bank Limited), the DRT has jurisdiction over the subject matter of the suit and the suit is rightly transferred by the learned Commercial Court to DRT. The petition is, therefore, dismissed with no orders as to costs.”
The Court, however, continued the interim order for six weeks to allow the petitioner time to seek further remedies.
Appearances:
Mr. S.P. Shah, Advocate for the petitioner
Mr. S.V. Adwant a/w Mr. H.S. Adwant and Mr. Aarya Deshpande, Advocates for respondent No.1.
