Bid to Shift Rs. 100 Crore Case by Re-calculating Debt a "Delaying Tactic": DRAT
The DRAT directed the DRT to expedite the disposal of the original recovery application without undue adjournments, emphasizing that the issue of the exact calculation should be decided in the main proceedings
The Debts Recovery Appellate Tribunal (DRAT) has dismissed an appeal, holding that its challenge to the bank's calculation of penal interest was a delaying tactic and did not affect the jurisdiction of the Debt RecoveryTribunal (DRT) hearing the recovery suit.
Justice Anil Kumar Srivastava held that the appellant's attempt to force a re-casting of the loan account was an effort to reduce the claimed amount below the Rs. 100 crore threshold to have the case transferred out of DRT-III, Delhi, which has pecuniary jurisdiction over matters exceeding that amount.
Maha Hotels Projects Private Limited, the borrower argued that the bank's statement of account was not in compliance with the Supreme Court's judgment in Central Bank of India vs. Ravindra, which prohibits the capitalization of penal interest.
The respondent bank countered that it had already acknowledged an error and filed a revised statement of account, removing the capitalized penal interest as per the law. The DRAT found that even with the revised calculation, the outstanding debt would likely remain above Rs. 100 crore, thus maintaining the DRT's jurisdiction.
The Tribunal characterized the appellant's application as a "misconceived" attempt to delay the long-pending recovery proceedings and an "indirect mode of transfer" to a different forum.
The bench observed that “DRT has rightly observed that the jurisdiction of the Tribunal is to be determined on the date of filing of the O.A., under Section 19 of the Act. The issue of dues is to be decided by the Learned DRT in the pending OSA. Simply in order to drag on the proceedings, an application is moved by the Appellants which is highly miscönceived. Appellant is trying to take away the matter from DRT-III Delhi by adopting an indirect mode of transfer, Misc. Appeal Diary NO. 1694 of 2025-DRAT-Kolkata 12.”
Accordingly, the appeal was dismissed, and the DRAT directed the DRT to expedite the disposal of the original recovery application without undue adjournments, emphasizing that the issue of the exact calculation should be decided in the main proceedings.
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