Referred to Larger Bench II: Suits of Borrower Against Banks

It is always interesting to note References to a Larger Bench, ones especially made on account of ‘difference’ of opinions amongst Equal Bench Strengths. Eventually, it is flocculation of law of the land; per incuriam decisions stand filtered, retaining still its historical significance. Which SC Judge is known to have scripted, most number of per incuriam decisions? Which decision of SC stood only for 9 months before being characterized as per incuriam? These are all interesting questions. Devender Pal Singh Bhullar, (2013) 6 SCC 195 authored by Hon’ble Justice G.S. Singhvi, decided on 12th April, 2013, was said to have not declared law of the land in Shatrughan Chauhan, (2014) 3 SCC 1, decided on 21st January, 2014. Once a per incuriam decision is identified, more often than not, it is found to be revelatory of deeper stories. For example, see Senior Advocate, Mr. T.R. Andhyarujina’s comments on Bhullar in Chapter 17 of Roy’s “The Hanging of Afzal Guru: The Strange Case of The Attack on The Indian Parliament”. ‘Referred to Larger Bench‘ promises to be an interesting series.

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There is consensus on the point of law, once a bank or a financial institution has applied for recovery of its loan against a borrower under The Recovery of Debts Due to Banks and Financial Institutions Act, 1993, a suit containing a counter-claim or claiming a set-off filed by the borrower can be heard and tried before Debt Recovery Tribunal alone [United Bank of India v. Abhijit Tea Co. Pvt. Ltd., (2000) 7 SCC 357]. In Indian Bank v. ABS Marine Products (P) Ltd., (2006) 5 SCC 72 it was held, nonetheless, independent suits or proceedings can be initiated by a borrower before a Civil Court, which are not inextricably connected to the bank’s suit before DRT. Civil Court’s jurisdiction is not barred in that respect. The incremental reasoning of Marine Products has been put to question by several. Can the borrower’s independent suit be filed before a Civil Court or is the independent suit liable to be transferred and tried by DRT along with the bank’s suit for recovery of its loan? Referred to Larger Bench by Two-Judge Bench in Bank of Rajasthan Ltd. v. VCK Shares and Stock Broking Services Ltd., 2014 (10) SCALE 643.