Indian Bank appeal on Calcutta HC dismissed: SC

New Delhi, Apr 23: The Supreme Court has declared that directions issued by this court under Article 142 of the Constitution of India to do complete and proper justice should not be treated as law laid down by the highest court of the country.

Laws laid down by the Supreme Court through its judgments is binding on courts in the country including high courts under Article 141 of the Constitution of India.

The clarification aimed at clearing confusion came in a judgment dated April 18 passed by a bench comprising Mr. Justices A.R Lakshmanan and R.V. Raveendran.

The court while dismissing an appeal of Indian Bank challenging Calcutta high court judgment turning down the bank's plea for transfer of borrower company's suit for damages from high court to the Debt Recovery Tribunal (DRT) declared that DRT does not have jurisdiction to try independent suits filed by private persons against the banks or financial institutions.

The Bank had filed an application before DRT for recovery of Rs.

30,67,820.04 with interest on Aug. 21,1995 after the respondent company M/s ABS Marine Products Pvt. Ltd. defaulted in refunding the loan amount.

The respondent had filed a suit for damages against the bank to the tune of Rs. 25,38,58,000 in the high court in January 1995 for not disbursing the agreed loan of Rs.90 lakhs sanctioned on Dec.

9,1991.

The bank sought the transfer of the suit for damages to DRT on the plea that it was in an off set claim and it can be decided by the Tribunal along with Bank's application for recovery.

The apex court while upholding the high court judgment said, ''Civil court's jurisdiction is barred only in regard to applications by a bank or a financial institution for recovery of its debts, The jurisdiction of civil courts is not barred in regard to any suit filed by a borrower or any other person against a bank for any relief.'' The borrower company in suit for damages had claimed Rs.

11,33,22000 towards loss of profit,Rs. 10 crores for loss of goodwill and reputation, Rs. 3.50 crores as damages on account of inflation and difference in foreign exchange rates etc.

UNI