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PETITIONER: UNITED BANK OF INDIA, CALCUTTA

       Vs.

RESPONDENT: ABHIJIT TEA CO.PVT.LTD.  AND ORS.

DATE OF JUDGMENT:       05/09/2000

BENCH: M.  JAGANNADHA RAO  J.  & DORAISWAMY RAJU  J.

JUDGMENT:

M.  JAGANNADHA RAO, J. L....I..........T.......T.......T.......T.......T.......T..J      Leave granted.

    The  appellant Bank is the plaintiff in Suit  No.410/85 which  is  pending on the file of the Calcutta  High  Court. The  respondent-debtor is yet to file its written statement. By  31.12.98, an amount of Rs.31.13 crores is said to be due to  the  Bank.  Initially, in the above suit,  a  compromise decree  was passed by Ajit Kumar Sen Gupta, J.  on  29.3.94. It  was contended by the Bank that the compromise was  based upon a non-existent agreement.  On appeal, the said judgment was  set  aside  by a Division Bench of the  High  Court  on 11.8.98  consisting of Ajoy Nath Ray and Dipak Prakas Kundu, JJ.   describing the said judgment as "shocking".  The Bench also observed:

    "It was as if a contract was being made attempted to be made  out  for the parties ....It is no part of the duty  of the Court to make an agreement for the parties".

    The  Bench  allowed appeal, awarding costs in a sum  of Rs.75,000/-.

    As part of the compromise, the learned Single Judge had stayed  another  suit  on mortgage ( O.C.   (Mortgage)  suit No.77  of  1991) filed by the Bank.  But the Division  Bench set aside the entire compromise decree.

    Thereafter,  the  suit  No.410  of 1985  filed  by  the appellant  Bank  stood  restored before the  learned  Single Judge.  In the meantime, the ’Recovery of Debts Due to Banks and  Financial  Institutions Act, 1993’ (hereinafter  called the ’Recovery Act, 1993) came into force in West Bengal.  It is  stated  that  it  came  into force  in  West  Bengal  on 27.4.1994.   The  debtor Company then filed  an  application T.No.   276 of 1999 that this suit by the Bank should remain on  the original side of the Calcutta High Court and be  not transferred  to the Tribunal under the Act.  The  contention was  that  on the crucial date, 27.4.1994, the suit was  not pending  on  the  original side but the appeal  was  pending before  the  Division  Bench and that under  section  31(1), appeals  did not stand transferred to the Tribunal.  It  was pleaded  that  even though the appeal was later  allowed  on 11.8.98  and  the suit was remanded to the Single Judge,  it was not a suit "immediately pending" on the original side of

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the High Court before the crucial date i.e.  27.4.94, in the High   Court,  as  required  by   Section  31  of  the  Act. Therefore,  it  was  not covered by Section 31 of  the  Act. This  was  the  contention in the application filed  by  the respondent-company  seeking  retention  of the suit  on  the original side of the High Court of Calcutta.

    The  above application filed by the respondent- company was  allowed  by another learned Single Judge on 3.9.99  and the  Bank’s  suit  was directed to be retained in  the  High Court  on the basis that the Act did not apply.  By the same order,  the Registrar of the High Court was restrained  from transferring the suit to the Tribunal.

    Against  the  above  order dated 3.9.99, the  Bank  has preferred the present appeal by special leave.

    In  this  appeal,  Sri  Dhruv Mehta  appeared  for  the appellant-Bank  and  contended that the High Court erred  in not transferring the Bank’s suit 410/85 to the Tribunal.

    Elaborate  arguments  were addressed before us  by  Sri Shanti   Bhushan,   learned    Senior    counsel   for   the respondent-company  and  Dr.  Rajeev Dhawan, learned  Senior counsel  for  the  guarantor.   We  shall  deal  with  these contentions.

    An  additional  point has been raised before us by  the learned  Senior  counsel  for the  respondent  company,  Sri Shanti  Bhushan  that the debtor company had  earlier  filed suit  No.272 of 1985 against the Bank in the High Court  for specific  performance of an agreement with the Bank and  for perpetual  and mandatory injunctions and that that suit  was integrally  connected  with the Bank’s suit.  It was  argued that  inasmuch  as  a  suit  for  specific  performance  and mandatory  injunction  could not be transferred to the  Debt Recovery Tribunal, this suit filed by the Bank, namely, suit No.410/1985  must  also remain in the High Court.  We  asked learned  Senior  counsel  for the Company  and  the  learned Senior counsel for the guarantor as to whether the said suit by the company ( suit No.272/1985) was or was not a suit, in substance, in the nature of a ’counter-claim’ and if so, why sub-sections  (8)  to (11) of section 19 ( as introduced  by Act  1/2000 by Parliament) could not apply and as to why  we should  not hold that that suit also fell within the purview of  the Act.  Counsel submitted that that suit did not  fall within the provisions of the Act.

    The  points that arise for consideration in the  appeal are as follows:

    (1)  Whether the suit No.410/1985 by the Bank which was disposed  by  judgment dated 29.3.94 and which judgment  was set aside by the Bench on 11.8.98 and remanded to the Single Judge,  could  not be treated as pending immediately  before the commencement of the Act on 27.4.94 ( in West Bengal) and whether  it  could  not  be   transferred  to  the  Recovery Tribunal?

    (2)  What is the combined effect of Sections 18 and  31 and of the Act on pending proceedings?

    (3)  Whether the pendency of suit No.272/1985 filed  by the debtor company against the Bank for specific performance and  for perpetual and mandatory injunctions raising  common

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issues  between parties in both these suits was a sufficient reason  for  retention of the Bank’s suit No.410/85  on  the original  side  of the High Court to be tried alongwith  the Suit No.272/85 filed by the debtor company?

    (4)  Whether  the  suit No.272/85 filed by  the  debtor company   was,  in  substance,  one  in  the  nature  of   a "counter-claim" against the Bank and was one which also fell within the special Act by reason of section 19(8) to (11) of the  Act ( as introduced by Amending Act 1/2000) and if that be so, whether it could still be successfully pleaded by the respondent-company  that the pendency of the company’s  suit 272/85  was a ground for retention of Bank’s suit  No.410/85 on the original side of the High Court?

    Points 1 and 2:

    Was  the  Suit 410/85 filed by the Bank pending  before the  Single Judge on 27.4.94?  That is the crucial question. That depends on the interpretation of Sections 18, 31 and 34 of the Act.

    In  the  judgment  of the High Court now  under  appeal before  us, the learned Single Judge held that when the  Act came  into force on 27.4.94, the suit was not pending before the  Single  Judge  as the compromise decree was  passed  on 29.3.94  and in fact the appeal against the said decree  was pending before the Division Bench till 11.8.98 and therefore the  suit  would not stand transferred to the Tribunal.   It was  assumed  that the suit would not get revived  from  its institution  and  that therefore it was not a  suit  pending ’immediately  before the date of establishment of a Tribunal under this Act" i.e.  27.4.94, as required by section 31(1). It  was  also  observed that thee proviso to  section  31(1) permitted  only appeals pending on that date to be  retained in the Civil Court (here the High Court) and that a remanded suit  was  not so saved by the proviso to section 31(1).   A similar  argument  was  advanced before us  by  the  learned Senior  counsel  appearing for the  respondent-company,  Sri Shanti  Bhushan  and  for  the guarantors,  by  Dr.   Rajeev Dhawan.

    Now Section 31(1) of the Act reads as follows:

    Section 31:  Transfer of pending cases:

    (1)  Every suit or other proceeding pending before  any court  immediately  before  the date of establishment  of  a Tribunal  under  this  Act, being a suit or  proceeding  the cause  of  action whereon it is based is such that it  would have been, if it had arisen after such establishment, within the  jurisdiction of such Tribunal, shall stand  transferred on that date to such Tribunal:

    Provided  that nothing in this sub- section shall apply to any appeal pending as aforesaid before any Court.

    (2) .................................."

    It  is  true that under sub-clause (c) of  Section  31, every   suit  or  proceeding   "pending  before  any   Court immediately before the date of establishment of the Tribunal under  the Act" shall stand transferred to the Tribunal.  It is  also  true  that  under the proviso  to  section  31(1),

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appeals  pending on the date do not stand transferred.   The suit  of the Bank was in fact, pending in appeal on 27.4.94. and  it  is clear that this provision for transfer does  not apply to an appeal pending as aforesaid before any Court.

    But,  it is now well settled that an order of remand by the appellate Court to the trial Court which had disposed of the  suit revives the suit in full except as to matters,  if any,  decided finally by the appellate Court.  Once the suit is  revived, it must, in the eye of the law, be deemed to be pending  -  from the beginning when it was instituted.   The judgment  disposing  of the suit passed by the Single  Judge which  is  set  aside  gets   effaced  altogether  and   the continuity  of the suit in the trial court is restored, as a matter  of  law.  The suit cannot be treated as one  freshly instituted  on  the  date of the  remand  order.   Otherwise serious questions as to limitation would arise.  In fact, if any  evidence  was recorded before its earlier disposal,  it would   be  evidence  in  the   remanded  suit  and  if  any interlocutory orders were passed earlier, they would revive. In  the  case  of a remand, it is as if the suit  was  never disposed  of  (subject to any adjudication which has  become final,  in the appellate judgment).  The position could have been  different  if the appeal was disposed of once and  for all and the suit was not remanded.

    Applying  the above principle, we are of the view  that the  suit  410/85 filed by the Bank in 1985, even though  it was  disposed of by judgment dated 29.3.94, it stood revived with  continuity by the remand order passed by the  Division Bench  on  11.8.98,  and  cannot be  treated  as  a  freshly instituted  on 11.8.98 before the Single Judge but must,  in the eye of the law, be treated as pending on the crucial day i.e.  27.4.94.

    It was argued that on 27.4.94, the crucial date, if the appeal was pending before the Division Bench, the suit could not  have also been pending simultaneously.  The pendency of appeal  before  the  appellate  Court may be  the  de  facto position.   But, we are concerned here with the position  in law,  and  as to the effect of the remand order.   Once  the appeal  is allowed, the intermediate events - of disposal of the  suit  and  the  appeal - vanish into the  air  and  the continuity of the suit before the trial Court is restored.

    There  is  yet another important reason as to  why  the suit  must  be  held as one falling within  the  Act.   This reason  flows  from  Section 18 of the Act, which  reads  as follows:

    Section 18:  Bar of Jurisdiction:

    On  and  from  the  appointed day, no  court  or  other authority  shall  have,  or  be entitled  to  exercise,  any jurisdiction,  powers  or  authority (  except  the  Supreme Court,  and  a  High  Court  exercising  jurisdiction  under Articles 226 and 227 of the Constitution) in relation to the matters specified in Section 17."

    The  bar  of the said section, as we  shall  elaborate, applies and, in fact, Section 34 of the Act gives overriding effect to the provisions of the Act.

    Now, it is well settled that it is the duty of a Court, whether  it  is  trying original proceedings or  hearing  an

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appeal,  to  take  notice  of the change  in  law  affecting pending  actions and to give effect to the same.  (See  G.P. Singh, Interpretation of Statutes, 7th Ed.p.406).  If, while a  suit  is pending, a law like the 1993 Act that the  Civil Court  shall not decide the suit, is passed, the Civil Court is  bound  to take judicial notice of the statute  and  hold that  the suit - even after its remand - cannot be  disposed of by it.

    In  some statutes the legislature no doubt says that no suit  shall be ’entertained’ or ’instituted’ in regard to  a particular  subject matter.  It has been held by this  Court that  such a law will not affect pending actions and the law is  only prospective.  But, the position is different if the law  states  that after its commencement, no suit  shall  be "disposed  of"  or "no decree shall be passed" or "no  court shall  exercise  powers or jurisdiction".  In this class  of cases,  the Act applies even to pending proceedings and  has to be taken judicial notice of by the civil Courts.

    A  Constitution  Bench  of this Court in  Shah  Bhojraj Kuverji  Oil  Mills & Ginning Factory Vs.   Subhash  Chandra Yograj  Sinha  (  1962(2) SCR 159 ( AIR 1961  SC  1590)  was considering  a  situation where a law was made  ousting  the jurisdiction  of  the Civil Court where a suit was  pending. The  words used in the statute were ’a landlord shall not be entitled to the recovery of possession of any premises ....’ These  words  were contained in the Bombay Rent,  Hotel  and Lodging House Rates Control Act, 1947.  It was held that the provision  barring a decree to be passed applied to  pending suits  and applied at the time the decree was to be  passed. Another  Constitution Bench in Mst.  Rafiquennessa and  Anr. Vs.   Lal  Bahadur Chetri and Ors.  ( 1964(6) SCR 876 =  AIR 1964  SC  1511) held that the prohibition against passing  a decree  for  possession  would apply even at  the  appellate stage,  unless  of  course, appeals were  kept  outside  the impact  of  the new Act, as in the proviso to Section 31  of the  Act.   Even  the appellate Court has to apply  the  law ousting its jurisdiction.

    If  indeed the contention of the learned Senior counsel for  the  respondents,  Sri Shanti Bhushan and  Dr.   Rajeev Dhawan  is  to  be accepted, a strange result  would  follow inasmuch  as, on a combined reading of Sections 18 and 34 of the Act, the suit can neither be transferred to the Tribunal nor can it be decided by the learned Single Judge in view of the  clear  prohibition in Section 18 of the Act.  If it  is not  to  be transferred to the Tribunal and if it is  to  be retained  in the Civil Court, without disposal as contended, then  there  will  be  a  stalemate.   It  has  to  be  kept perpetually  pending in the Civil Court and necessarily  the file  has to be consigned to the record room.  Or the plaint will  have to be returned for presentation before the proper court  or  Tribunal.  That was surely not the intendment  of the  Act  of 1993.  When this aspect was put to the  learned Senior counsel for the respondents, there was practically no answer.   It was, no doubt, faintly suggested by Dr.  Rajeev Dhawan that the bar in section 18 does not apply to remanded suits  but we are unable to agree.  As stated earlier,  they stand  revived in law with continuity and therefore the  bar under Section 18 clearly applies.

    The  above result is also reached by the application of the principle of purposive construction.

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    In   regard   to   purposive  interpretation,   Justice Frankfurter observed as follows:

    "Legislation  has  an  aim, it seeks  to  obviate  some mischief,  to  supply an inadequacy, to effect a  change  of policy,  to formulate a plan of government.  That aim,  that policy  is not drawn, like nitrogen, out of the air;  it  is evidenced  in  the language of the statute, as read  in  the light  of  other external manifestations of  purpose  ("Some Reflections  on the Reading of Statutes) 47 Columbia LR  527 at 538) (1947)"

    That  principle  has been applied to this very  Act  by this  Court recently in Allahabad Bank Vs.  Canara Bank ( JT 2000(4)  SC  411).  If the said principle is applied, it  is clear  that the provision in section 31 must be construed in such  a  manner that, after the Act, no suit by the Bank  is decided by the civil Court and all such suits are decided by the Tribunal.

    Today,  it is said that Rs.52,000 crores of monies  are due  to Banks and financial institutions from the borrowers. The  Act  of  1993 was indeed enacted to  provide  a  speedy remedy for the recovery of these monies and for taking these suits  out  of the purview of the civil Courts.   If  speedy disposal is the purpose of the Act, then if the respondent’s contention  is accepted, this suit 410/85 instead of getting transferred  to the Tribunal for expeditious disposal, would perpetually  remain  pending  on the original  side  of  the Calcutta High Court because of the prohibition in section 18 of  the  Act.  Surely, that would place the Bank in a  worse position  after the 1993 Act than before inasmuch as  before the  Act,  there was at least the possibility of the  Bank’s suit  being  decided by the civil Court on some future  day, however, remote.

    An argument was advanced by Dr.  Rajeev Dhawan that the proviso  to  section 31 retained appeals in the Civil  Court and  hence  the  suit  remanded in  appeal  would  also  get retained.   It  was also argued that there was  no  specific provision  regarding remanded suits and this was a case of a ’causus  omissus’ and the said omission in the statute could not  be  filled by judicial interpretation.   Otherwise,  it would   amount  to  judicial   legislation.   That  was  the argument.

    We  cannot agree with either contentions.  The remanded suit  cannot  remain  in the Civil Court with no  chance  of disposal.   Again, our decision that the restoration of  the suit   is  with  continuity  from   the  date  of   original institutions  of the suit does not amount to legislation but is  the result of the application of a fundamental principle of  law  applicable  to  the  civil  procedure.   It  cannot therefore  be  said  that  we   have  encroached  upon   the jurisdiction of the legislature.

    In  this context the following words of Justice  Holmes are apposite.  He said:

    "I recognise without hesitation that Judges do and must legislate,  but  they do so only interstitially;   they  are confined  from  molar to molecular motion" (1917)  (Southern Pacific Co.  vs.  Jensen 244 U.S.  205 at 221).

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    Again,  Justice Cardozo said that though the powers  of interpretation  of the Courts are narrow, yet they can  fill up gaps.  He said:

    "No  doubt, the limits for the Judge are narrower.   He legislates  only between gaps.  He fills the open spaces  in the  law"  (B.Cargozo,  The Nature of the  Judicial  Process (1921) at p.  131).

    In  the present case, we do not have to legislate, even interstitially.

    There  is  yet  another  aspect of  the  matter.   Even assuming  that the suit was not pending ’immediately’ before the  establishment  of the Tribunal before the Single  Judge but  came  before him on remand after 27.4.94,  the  crucial date, and even assuming that the Registrar of the High Court could  not  have  transferred the suit to  the  Tribunal  on 27.4.94 as the appeal was pending before the Division Bench, it  would,  in  view of the prohibition in  section  18,  be necessary  for  the High Court to transfer the  Bank’s  suit under  Article  227  of  the Constitution of  India  to  the Tribunal.

    For  the aforesaid reasons, we hold that the  principle of  purposive interpretation is to be applied to sections 18 and  31 of the Act and that suit 410/1985 filed by the  Bank in  1985 and which stood remanded by the appellate Court  on 11.8.98  must in the eye of the law be deemed pending before the  Single Judge and that it would stand transferred to the Tribunal.   The  High  Court  was, therefore,  in  error  in retaining  the  same on the original side.  Points 1  and  2 decided in favour of the appellant.

    Points 3 and 4:

    As  stated  earlier,  learned senior  counsel  for  the respondents  contended  that the issues arising in the  suit 410/55  filed by the Bank are integrally connected with  the issues arising in the other Suit No.272 of 1985 filed by the respondent  company against the Bank and that the said  suit being  one  for  specific  performance,  and  perpetual  and mandatory injunctions could not be tried by the Tribunal and that  consequently,  the  suit  by the  Bank  410/85,  which contains  some  common issues must be retained in the  Civil Court (i.e.  the High Court).

    Learned  senior counsel was then asked by us as to what in reality was the "substance" of the suit 272 of 1985 filed by  the Company against the Bank and whether, it was  indeed one falling within the purview of the 1993 Act as amended by Act  1  of 2000?  The answer by the counsel was that it  was not.   We  shall  therefore  consider this  aspect  in  some detail.

    We  shall  first  refer  to the averments  of  the  1st respondent  in its suit 272 of 1985 filed against the  Bank. The plaint states that the plaintiff acquired the Tea estate from  Kamini Tea Co.  (Pvt.) ltd.  in or about April,  1979, under  a  registered deed, that initially the shares in  the plaintiff’s  company  were held by 1st and  2nd  plaintiffs,

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that at the instance of this Bank, the plaintiff 3 purchased the  shares  on 13.1.82, that in or about December 1981  and January  1982, it was "duly agreed" between the Bank and the Tea  Company  and the plaintiffs 3 and 4 and by plaintiff  2 that  (i)  ’defendant  would  not  charge  interest  on  its outstanding upto the season 1981-82 since July 1, 1981, (ii) that  the  said outstanding dues would be paid by  plaintiff company  at  Rs.   75,000 p.m., (iii) that  the  Bank  would extend  credit  facilities according to its needs  from  the season  1982-83,  which advance interest would be  recovered out  of  the proceeds of sale of Tea.  It was  also  alleged that  these  terms  would  appear   from  the  records   and correspondence  between the parties and also from the course of  conduct and/or dealings.  A dispute is also raised about the correctness of the amount claimed by the Bank as per its accounts.   It  was  pleaded  that   a  certain  amount   of Rs.1,55,951 paid by the Bank to workmen for 81-82 season had to be adjusted for 1981-82 which was a free-interest period, that  similarly credit had to be given for Rs.64,083.10  for the  season  1982-83, that the sum of Rs.7 lakhs  sanctioned for  1983-84  at  13%  interest   was  repayable  by  annual instalment  of  Rs.1  lakh from June 1984  and  that  excess interest  at rate 3% was charged, that interest for  1984-85 on  Rs.7 lakhs was to be at 15% p.a.  and not 18% p.a., that for the year 1985- 86, the Bank advanced Rs.  5.22 lakhs and was  charging  15%  and it illegally  stopped  or  suspended advances.  It was contended that the correct position of the amounts  due was shown in Schedule D of the plaint and  that on  the  arrears  due  upto 81-82, no  interest  was  to  be charged, the moratorium was unilaterally withdrawn on 8.4.85 by  the Bank, that interest could not have been charged from 1.7.81  to  31.3.85,  that the letter ’E’ of  the  plaintiff company agreeing to pay interest was void/voidable, that the demand  by  letter dated 11/12-4- 85  for  Rs.3,31,25,054.27 inclusive  of  interest upto 31.3.1985 was wrong, mala  fide and  inflated.  It was contended that the Bank guarantee for Rs.72,330 could not be encashed, that the defendant promised to render financial assistance and could not have stopped it and  that  the  principle of  promissory  estoppel  applied. Plaintiff  4 was a shareholder Director and plaintiffs 3 and 4  stood  guarantee only for lawful dues, it was said.   The plaint  then  referred to certain payments by the  plaintiff upto  a sum of Rs.14,25,000.  It was said that the plaintiff was  entitled  to specific performance of the  agreement  as pleaded  in  para  4  of  the  plaint  and  to  a  perpetual injunction  that  the Bank should not charge  interest  upto 1981-82  and  that  with  effect   from  1.7.81,  that  only Rs.75,000  per  month  could  be  recovered.   A   mandatory injunction  was  sought for further financial assistance  at less  than  Rs.10/-  per  Kg.  per  season  w.e.f.   1985-86 season,  for damages allegedly suffered by plaintiff and for rectification  of  accounts  and to declare  the  letter  of demand ’D’ dated 8.4.85 as void.

    From the above, it will be noticed that the plea of the Company is that there is an agreement not to charge interest and  that that agreement is to be enforced, that interest is not  liable  to be charged on arrears or interest cannot  be charged  at  a  higher rate, that only Rs.75,000  is  to  be recovered  per  month  and  that  the  damages  suffered  by plaintiff   are  to  be   deducted  and  further   financial assistance is to be given in future.

    In  our view, the above pleas raised by the  respondent company  are  all  inextricably connected  with  the  amount

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claimed  by  the  Bank.   The plea of the  company  is  that interest  is  not  to be charged or is to be  charged  at  a lesser  rate, that instalments are to be permitted and  more monies should have been advanced.  In our view, these claims made  by  the  Company in its suit 272/85 against  the  Bank amount to ’counter claim’ and fall within sub-clauses (8) to (11) of section 19 of the Act (as introduced by Act 1/2000). The plea for deduction of damages is in the nature of a ’set off’  falling  under sub-clauses (6) and (7) of section  19. Sub-clauses (6) to (11) of section 19 read as follows:

    "(6) Where the defendant claims to set- off against the applicant’s  demand  any  ascertained sum of  money  legally recoverable  by him from such applicant, the defendant  may, at  the first 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.

    (7) The written statement shall have the same effect as a  plaint  in a cross- suit so as to enable the Tribunal  to pass a final order in respect both of the original claim and of the set-off.

    (8)  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  accruing  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.

    (9)  A  counter-claim under sub-section (8) shall  have the same effect as a cross-suit so as to enable the Tribunal to  pass a final order on the same application, both on  the original claim and on the counter-claim.

    (10)  The  applicant  shall  be at liberty  to  fine  a written  statement  in  answer to the counter-claim  of  the defendant  within  such  period  as  may  be  fixed  by  the Tribunal.

    (11)  Where a defendant sets up a counter-claim and the applicant  contends that the claim thereby raised ought  not to  be  disposed  of  by  way of  counter-claim  but  in  an independent  action,  the applicant may, at any time  before issues  are settled in relation to the counter- claim, apply to  the Tribunal for an order that such counter-claim may be excluded,  and  the  Tribunal may, on the  hearing  of  such application make such order as it thinks fit."

    Sub-clause  (6) says that a ’set-off’, if claimed,  can be  adjudicated by the Tribunal.  Sub-clause (7) states that the written statement pleading a set-off shall have the same effect  as a plaint in a cross-suit to be adjudicated by the Tribunal.   Similarly, sub- clause (8) of section 19 permits a  defendant  to  make  a   ’counter-claim’  by  way  of  an application  and  sub-clause (9) of section 19  states  that such  a  ’counter-claim’  shall have the same  effect  as  a ’cross-suit’  so  as to enable the Tribunal to pass a  final order  on  the same application, both on the original  claim

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and on the counter claim as a ’cross-suit’.  Sub-clause (11) of  section  19  is  important and it permits  the  Bank  or financial   institution  to  apply  to  the  Tribunal   that particular  claim  raised by the debtor against the Bank  or financial  institution, as the case may be, ought not to  be disposed  of  by way of a counter-claim but that the  debtor must  be  directed  to  file  an  independent  action.   The Tribunal  would  then consider whether the debtor should  be directed to file an independent action in regard to any part of the debtor’s claim.

    In our view, the Company’s suit 272/85 in so far claims a  relief for specific performance, perpetual and  mandatory injunctions,  it  is  in  substance  in  the  nature  of   a counter-claim  under  sub-clauses (8) to (10) of section  19 and  are  in  the nature of a counter-claim.  The  plea  for deduction  of damages is in the nature of a set-off  falling within  section  19(6)  and  (7).    Both  are  equated   to cross-suits.   If  a  set-off or a counter claim  is  to  be equated  to  a cross suit under section 19, afortiori  there can  be  no difficulty in treating the cross-suit as one  by way  of set-off and counter claim, and as proceedings  which ought  to be dealt with simultaneously with the main suit by the  Bank.   In  fact, the Bank has not objected to  such  a course.   Indeed, section 19(11) says that if any particular counter-claim raised in the suit 272/85 cannot be decided by the  Tribunal while deciding the Bank’s suit, the  defendant may   apply  to  the  Tribunal   for  exclusion  of  such  a counter-claim.   But such a question does not arise in  this case.  In our view, in the context, the word ’counter-claim’ in  section 19(8) to (11) which is equated to a  cross-suit, includes  a claim even if it is made in an independent  suit filed  earlier.   An agreement not to charge  interest,  the specific  performance  of which is claimed is nothing but  a plea  that the Bank could not charge interest.  A  permanent injunction directing the Bank not to charge interest because of  an  alleged agreement in that behalf is likewise a  plea that  no  interest  is chargeable.  So far as the  plea  for further  financial  assistance  is concerned,  it  is  also, broadly, in the nature of a ’counter-claim’.  All these fall under  section 19(8) to (10).  Again, the plea for deducting ’damages’ though raised in the suit is indeed broadly a plea of "set off" falling under sub-clause (6) and (7) of section 19.

    Both  the  suits,  the  one by  the  Bank  against  the respondent (suit 410/85) and the other by the debtor against the  Bank (suit 272/85) which raises claims or pleas in  the nature  of set-off or counter-claim are interconnected.  The respondent’s  suit falls under sub- clauses (6), (7) and (8) to  (11)  of section 19, as stated above.  Our  decision  in regard  to  the  real  nature  of  suit  272/85  has  become necessary  in  the context of a plea by  the  debtor-company that  the company’s suit 272/85 is liable to be retained  in the  civil  Court  and  on  account of  the  plea  that  the connected  suit  by the Bank 410/85 is also to be  retained. Such a plea, as shown above, cannot be accepted.  Thus, both the suits are suits falling within the Act.

    We,  therefore,  direct  the Bank’s suit 410/85  to  be transferred  by  the Registrar, Calcutta High Court  to  the appropriate  Tribunal  under  the  Act.    So  far  as   the debtor-company’s  suit 272/85 is concerned, action has to be taken  likewise by the Registrar in the light of our finding which finding has become necessary in view of the contention

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on  behalf  of  the debtor company before us,  as  explained above.

    For  the aforesaid reasons, we hold under Point 3  that the  pendency of the company’s suit 272/85 in the High Court is  not a ground for retaining the Bank’s suit 410/85 in the Calcutta  High  Court.  The suit 272/85 filed by the  debtor company  is also a suit to be necessarily tried only by  the Tribunal.   The pendency of the Company’s suit 272/85 in the High  Court is no reason for keeping the Bank’s suit  410/85 in  the  High  Court.   The  suit 410/85  is  liable  to  be transferred  to  the Tribunal.  Incidentally, we  also  hold that even suit 272/85 is to be tried only by the Tribunal.

    The appeal is allowed.  The order of the learned Single Judge  is  set  aside  and suit 410/85  is  directed  to  be transferred  by  the Registrar, High Court to the  Tribunal. In  the  light of our finding as to the real nature  of  the company’s  suit 272/85, it will be for the Registrar of  the High  Court  to  pass  appropriate  orders.   We  hope  that appropriate orders will be passed in relation to suit 272/85 expeditiously, at any rate, within one month from today.

    We  direct  the respondent-company to file its  written statement  in  suit 410/85 within one month from today.   We also direct the Tribunal to dispose of both the suits within a  period of six months from today, the suits being very old suits of 1985.  There will be no order as to costs.