THE JAMMU AND KASHMIR BANK LIMITED vs SH. NAZIR AHMAD MALIK on 19 June 2026

TA No. 321 of 2023

Jammu and Kashmir Bank Limited

Versus

Nazir Ahmad Malik

Dated: 19.06.2026

Item No. 95

Present: Mr. Sanjay Sagar proxy for Mr. Vivek Verma, Counsel for the Applicant Bank. None for the defendant.

On 27.07.2013, Jammu and Kashmir Bank Limited (J&K Bank) had filed the suit for the recovery of Rs. 25,23,270/- against Nazir Ahmad Malik (defendant), in the court of Principal District Judge, Baramulla, Kashmir.

2. The averments in the plaint are that the defendant was in the service of the Bank and he had remained posted at Achbal Branch, Sopore from 31.07.2008 to 06.06.2013 when he was terminated from the service of the Bank for acts of omission and commission. It is alleged that on 06.06.2013, defendant left the branch in the afternoon on the pretext of meeting some relatives outside the branch after locking the cash cabin. The defendant did not report back. Despite search and efforts to trace the defendant, he could not be located. The defendant's cabin was opened in the presence of all staff members and it was found that there was deficiency in the cash to the tune of Rs. 25,23,270/-. Out of this amount, the defendant had prepared pay slips amounting to Rs. 18.74 lacs, creditable to various account holders, from whom he had received the cash but not deposited in their respective accounts. Thus, the defendant misappropriated the sum of Rs. 25,23,270/-. On these facts, J&K Bank filed the present suit for the recovery of Rs. 25,23,270/- with interest @ 18.50% per annum with monthly rests against the defendant.

3. *Vide* order dated 25.09.2023, Principal District Judge, Baramulla, transferred this suit from Baramulla to this Tribunal. The order passed by Principal District Judge, Baramulla, states that in view of the provisions of

Section 1, 18 and 31 of The Recovery of Debts Due to Banks and Financial Institution Act, 1993 and notification No. S.O 4321 (E), this case can be tried only by the DRT. Accordingly, this suit was transferred to this Tribunal.

4. However, a perusal of the plaint would show that this suit was not filed by the bank to recover any loan. In fact, as per the averments of the plaint, the bank had filed this suit against the defendant, who was its employee, to recover the misappropriated amount by the defendant.

5. Section 19 of The Recovery of Debts and Bankruptcy Act, 1993 states that where a person or a financial institution has to recover any **debt** from any person, it may make an application to the Tribunal within the local limits of whose jurisdiction etc.

6. Section 2(g) of The Recovery of Debts and Bankruptcy Act, 1993 states that 'debt' means any liability (inclusive of interest) which is claimed as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions **during the course of any business activity undertaken by the bank or the financial institution** or the consortium under any law for the assigned, or whether payable under a decree or order of any civil court etc.

7. In view of the above provisions, this Tribunal has the jurisdiction to adjudicate only those cases, wherein the bank has advanced any money to somebody who fails to repay the same. The Hon'ble Gujarat High Court also in *Bank of India versus Vijay Ramniklal Kapadia A.I.R. 1997 Guj. 75* has held that fraud committed by any employee of the bank cannot or should not be construed a 'debt'. Further, misappropriation of the amount of the bank by its employee and recovery thereof by way of the suit can never be construed as a 'debt'.

8. In view of this, I am of the considered view that it is only the civil court which ~~was~~ the jurisdiction to try this suit and not this Tribunal. Accordingly, the file of this case is sent back to Principal District Judge, Baramulla for proceeding in the matter as per law.

9. Bank is directed to appear before the Principal District Judge, Baramulla, on **21.07.2026**.

Pronounced in open court Dated: 19.06.2026 Manoj

DRT-I, Chandigarh