Debts Recovery Tribunals and Appellate Tribunals
ELLAQUAI DEHATI BANK vs MUHAMMAD MAQBOOL BHAT on 20 August 2026
TA/189/2023
JAMMU & KASHMIR GRAMEEN BANK (E-ELLAQUAI DEHATI
BANK) & ANR.
VS.
MOHAMMAD MAQBOOL BHAT
**20.08.2026**
Item No.253
Present: Mr. Vivek Verma, Counsel for the Applicant Bank.
Mr. S.P. Singh, Counsel for the Defendants.
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1. On 08.05.2019, Jammu & Kashmir Grameen Bank (e-Ellaquai Dehati Bank) had filed the suit for the Recovery of Rs.72.90Lacs against Mohammad Maqbool Bhat (defendant) in the Court of Principal District Judge, Srinagar.
2. The averments in the plaint are that the defendant was an employee of the Applicant Bank and had remained posted at the Chakura and Litter as Branch Manager. It is alleged that the defendant during his service as Branch Manager at Litter, resorted to reckless financing to a single family and there are 13 loans which were sanctioned and disbursed to the family members. On these facts, the Applicant filed the suit for Recovery of Rs.72.90Lacs with applicable interest and pendentlite per annum w.e.f. date of filing of the suit.
3. *Vide* order dated 25.02.2023, the Court of Additional District Judge, Srinagar transferred the suit from Srinagar to this Tribunal. The order passed by Additional District Judge, Srinagar 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 D.R.T. Accordingly, this suit was transferred to this Tribunal.
4. However, the perusal of the plaint would show that this suit has not been filed by the bank to recover any loan. In fact, as per the averments of the plaint, the bank has filed the suit against the defendant, who was its employee, to recover the misappropriated money.
5. Section 19 of Recovery of Debts Due to Banks and Financial Institution 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 Due to Banks and Financial Institution 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 of 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 upon 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 vs. Vijay Ramniklal Kapadia*" (AIR 1997 Guj.75) has held that fraud committed by an employee of the bank cannot or should not be construed as 'debt'. Further, the misappropriation of 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 has the jurisdiction to try this suit and not this Tribunal. Accordingly, the file of this suit is sent back to Court of Additional District Judge, Srinagar for proceeding in this matter as per law.
9. The Applicant Bank is directed to appear before the Additional District Judge, Srinagar, on **22.09.2026.**
Pronounced in open Court. Dated: 20.08.2026
Pr DRT-I, Chandigarh