State Bank of Hyderabad vs Baroda Peoples Co-Op Bank Ltd on 12 May 2026

**ORDER**

1. 1. It appears from the records and proceedings that the Applicant Bank had preferred Special Civil Suit No.966 of 1999 against Baroda People's Cooperative Bank Ltd. and others on or about 15.10.1999 in the Court of Ld. Civil Judge (Sr. Div.), Baroda, which was thereafter transferred to this Tribunal by virtue of provision under Section 31 of the RDDB Act and numbered as Transfer Application No.1206 of 2004 on or about 18.10.2004, claiming total amount outstanding towards for recovery of Rs.16,32,444/- from Defendants along with interest @17.85% from the date of the payment till realization from the entire properties of the Defendants along with costs of the suit and other consequential reliefs.

2. 2. The Defendant No.1 is a Cooperative Bank and whereas Defendant No.2 is a Cooperative Credit Society, Defendant Nos.3 to 37 are the members of Defendant No.2 society. It is submitted that Defendant No.1 being Cooperative Bank was doing the banking business and Defendant Nos.2 to 37 were customers of the Defendant No.1 bank, who opened the 2T.A. No.1206/2004

accounts of Defendant Nos.2 to 37. Defendant No.1 had presented various dividend warrants before the Applicant Bank. The said dividend warrants, as indicated in the table in para 4 of the Suit, were presented for collection before Clearing House on 22.10.1996, which were in favour of beneficiaries - Defendant Nos.3 to 37 through Defendant No.2. The amounts mentioned in dividend warrants were paid by the Applicant Bank on 22.10.1996. All the dividend warrants were sent by Applicant Bank to erstwhile State Bank of Hyderabad, Sanathnagar Branch, Hyderabad, for reimbursement as per the required procedure. The said branch bank of Hyderabad advised the Applicant Bank by letter dated 26.10.1996 that all the instruments (i.e., Dividend Warrants) submitted by Defendant No.1, which were presented for reimbursement are fake and bogus. Therefore, the Applicant had contacted the Defendant No.1 Bank in person and requested to freeze the accounts of Defendant Nos.2 to 37 because all the dividend warrants presented by them are fake and fraudulent and that they have obtained the amount of the dividend warrants presented, which are fake and fraudulent and that they have encashed the said fake and fraudulent instruments fraudulently. The Applicant Bank also informed Defendant No.1 bank by letter dated 26.10.1996 requesting for refund of the amount of dividend warrants and also informed that the Applicant Bank has lodged FIR before the concerned police station for fake and fraudulent dividend warrants.

3. In spite of above, the Defendant No.1 bank has not frozen account of Defendant Nos.2 to 37 and did not refund the amount of dividend warrants from the account of Defendant Nos.2 to 37 to the Applicant Bank. In spite of time and again requesting the Defendant No.1 to refund the amount and to furnish required information, however, Defendant No.1 failed and 3T.A. No.1206/2004

neglected to take any action. It is submitted that as per the instructions received from RBI, Urban Banks Department, Ahmedabad, the Applicant Bank approached the Defendant No.1 bank for refund of the amount of dividend warrants held by them against the execution of indemnity bond by the Applicant Bank. However, the Defendant bank failed and neglected to refund the amount of dividend warrants. Therefore, the Applicant Bank has filed the aforesaid Civil Suit against Defendant Nos.1 to 37 for recovery of Rs.16,32,444/- before the Court of Civil Judge (SD), Baroda.

4. In light of the aforesaid averments made by the Applicant Bank, it is pertinent to note that the purpose and object of the **Recovery of Debts Due to Banks and Financial Institutions Act, 1993** can be clearly derived from its title that it was introduced for recovery of debts due to Banks. Thus, all matters which are related to debts due to Banks are subject matter of the Act. The term "Debt" has been defined u/s. 2(g) of the RDB Act, which means any liability, including interest, due from any person by a Bank during the course of any business activity undertaken by the Bank under any law for the time being enforce.

5. Looking to the nature of transaction involved in the present case, as narrated hereinabove, the claim of refund of the amount of Dividend Warrants made by the Applicant Bank against the Defendants does not fall within the purview of the term "Debt" defined in Section 2(g) of the RDB Act. The amount claimed by the Applicant Bank in the present case from the Defendants is not the amount lent or advanced by the Applicant Bank to any of the Defendants. The alleged dues of the Applicant Bank in the present case are claimed on the basis of purported fraud. The Applicant Bank has already initiated proceedings under criminal law for the alleged fraud played against it.

4T.A. No.1206/2004

6. In view of the aforesaid facts and circumstances of the case, this Tribunal is of the opinion that the subject matter of the present case does not fall within the jurisdiction of Debt Recovery Tribunal under the provisions of RDB Act. Therefore, this Tribunal is not competent to hear and decide the present case on merits and it deserves to be sent back to the concerned Civil Court from where it was transferred to this Tribunal. Hence, the following order is passed:

**ORDER**

- • Registry is directed to send the entire R & P of T.A.No.1206/2004 to the Ld. District Judge, Baroda with a request to send it back to concerned Court of Ld. Civil Judge (Sr. Div.), Baroda for disposal in accordance with law, as this Debt Recovery Tribunal has no jurisdiction to entertain the dispute involved in the present case.

- • Transfer Application No.1206/2004 accordingly stands disposed of from the file of this Tribunal.

**(Pankaj Kumar Upadhyay) Presiding Officer DRT-II, Ahmedabad**

Saloni