LexSTATE BANK OF INDIA THR. GENERAL MANAGER versus NATIONAL HOUSING BANK & ORS.
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[2013) 13 S.C.R. 1074 A STATE BANK OF INDIA THR. GENERAL MANAGER B v. NATIONAL HOUSING BANK & ORS. (Civil Appeal No. 2155 .of 1999) JULY 31, 2013 [R.M. LO[;>HA, J. CHELAMESWAR AND MADAN 8. LOKUR, JJ.] Special Court (Trial of Offences Relating to Transactions c in Securities) Act, 1992 -Recovery suit - Special Court established under the Act passed decree - Propriety of the . decree - Held: Not proper - Plaintiff did not adduce any evidence in support of its pleadings and merely tendered certain documents but did not bother to prove them inspite 0 of caution by the Special Court - Course adopted by the Special Court of looking into the correspondence between the parties, which had not been proved not permissible in law - Though the Special Court was not bound by the CPC, it did not relieve it from the obligation to follow the Evidence Act - E Further, the Special Court erred in extensively relying upon the second interim report of the Jankiraman Committee - Janakiraman Committee is not even a statutory body authorised to collect evidence in the legal sense - Report o~ Janakiraman Committee is not evidence within the meaning of Evidence Act which the Special Court was bound to follow F - Suit required to be dismissed on ground that no evidence was led by the plaintiff to establish its case - The plaintiff approached the Special Gourt with unclean hands by suppressing relevant material - There was sheer abuse of the legal process - Decree set aside in toto - Evidence Act, G 1872. Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 - s.9A :... Jurisdiction of the Speci9I Court - Recovery suit - Procedure required to be followed in H 1074 -+ STATE BANK OF lNDIA THR. GEN. MANAGER v. 1075 NATIONAL HOUSING BANK ; the cases of set off or counter claim as contemplated u/Order A VIII CPC not followed by Special Court in the instant case - Propriety - Held: Special Court was authorised by law to adjudicate the claim of defendant without being shackled by the procedural fetters imposed under CPC - U/s.9-A(4) of the Act, the Special Court is not bound by the procedure laid B down by.CPC but shall be guided by the principles of natural justice and has the power to regulate its own procedure - Code of Civil Procedure, 1908 - 0. VIII. f The National Housing Bank (plaintiff bank) drew a c cheque on the Reserve Bank of India in favour of the State Bank of Saurashtra (defendant no.1-bank). Subseq·uently, the plaintiff bank sought delivery of Bank Reciepts· (BRs)ISecurities or ·return of amo!,mt. The first defe~dant bank denied the existence of any "outstanding D transaction" .between the two and its liability to issue -<'. ~ither a B.R. or deliver any securities or refund of the amount as claimed by the plaintiff bank. The plaintiff Bank filed suit b.efore .the Special Court established under the Special Court (Trial of. Offences relating to transactions in Securities) Act, 1992. E The Special'.Court partially accepted the 'counter claim' made by the second defendant-- a notified person under Section 3(2) of the Special Court Act and decreed partly· in fa'Vour of plaintiff bank. The first part of the F decree was in favour.of the plaintiff bank and the second· part virtually in favour of the second defendant, though, !h~ ulthnate ·direction in this regard was that the plaintiff- should pay certain amounts to the fifth defendant who is '*: the statutory custodian of the 2nd defendant's property G under the Special Court Act. The plaintiff preferred appeal being aggrieved by the judgment of th~ Special Court. The 1st defendant also preferred an appeal aggrieved by the decree directing the payr:nent to the plaintiff. Disposing of the appeals, the Court H 1076 SUPREME COURT REPORTS (2013] 13 S.C.R. A HELD:1. The procedure that is required to be'· followed in the cases of set off or counter claim is detailed under Order VIII of the Code of Civil Procedure. It does not appear that the procedure contemplated under Order VIII of the Code is followed in the ir:istant case. However, a under Section 9-A(4) of the Act, the Special Court is not bound by the procedure laid down by the Code but sh~tl be guided by the principles of natural justice and has the power to regulate its own procedure; Under Section 9- A(1) of the Act, the Special· Court has all jurisdiction to c adjudicate any matter or claim 'arising out of a transaction
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