RAM  KISHAN

                    To expedite adjudication and recovery of debts due to banks and financial institutions (FIs) at the instance of Tiwari Committee (1984) appointed by the Reserve Bank of India, the government enacted the Debt Recovery Tribunal Act 1993 (DRT). Accordingly, DRTs and Appellate DRTs have been established at different places in the country. The various provisions of the DRT Act were legally questioned in different High Courts. These proceedings leading up to the Supreme Court resulted into various amendments to the said DRT Act.

One of the most important amendments has been by way of inclusion of ‘Set-off or Counterclaim‘. The borrowers are free to submit their counterclaims including set-offs to DRT or they can file their counter suits in  the civil courts. These provisions constitute an important defense for the bank borrowers.

The nationalized banks and other financial institutions are duty bound to follow the RBI Guidelines and Govt. policies. Any violation of these is regarded as breach of statutory duties. The said banks and financial institutions are duty bound to take care of the various needs of the borrowers. Further they are supposed to work  without any negligence or malafide intentions or motives, they are duty bound to work with reasonable foreseeability so that no injury is caused due to their wrongful acts or omissions.

These aspects are thoroughly covered under the Law of Torts. The word  ‘Tort‘ is derived from the Latin word  ‘Tortem‘ which means ‘Twisted Conduct‘.  The first reported use of the word  tort is in Boulton v Handy (1597). It now means a breach of some duty independent of contract giving rise to a civil cause of action and for which compensation is recoverable.

The first edition of the Indian book  ‘Law of Torts – by Ratanlal & Dhirajlal‘ was published in 1897 and its 23^rd  edition is published in 1997. The Law of Torts is fully applicable in the Indian Judicial System. So far the cases have been few in numbers. As the complexities in life grow and enlightened citizens exert their rights, the application of the Law of Torts will grow.

Our Supreme Court in the words of  Bhagwati C.J. has pronounced  -    “ We have to evolve new principles and lay down new norms which will adequately deal with new problems which arise in a highly industrialized economy. We can not allow our judicial thinking to be constricted by reference to the law as it prevails in England or for the matter of that in any foreign country. We are certainly prepared to receive light from whatever source it comes but we have to build our own jurisprudence.” – M.C. Mehta v Union of India, (1987) 1 SCC 395.

More recently Justice Sahai observed : “ Truly speaking entire law of torts is founded and structured on morality that no one has a right to injure or harm other intentionally or even innocently. Therefore it would be premitive to class strictly or close finally the ever-expanding and growing horizon of tortuous liability. Even for social development, orderly growth of the society and cultural refineness the liberal approach to tortuous liability by courts is more conductive “ – Jay Laxmi salt Works (P) Ltd. v State of Gujrat, (1994) 4 SCC 1.

The Law of Torts is widely applied in all walks of life in Europe and America. It is an effective instrument for ensuring standards of normal behaviour so that no injury is caused by one to another and each other’s rights and properties are respected. The people in developed countries are afraid of committing any violation otherwise they have to bear heavy damages. Recently  the jury in Los Angeles Superior Court USA has awarded a punitive damage of 3 billion dollars (more than Rs 14,000 crores) to be paid by Philip Morris Cos Inc (cigarette manufacturing company) to an individual Mr. Richard Boekin whose brain and lungs have been affected with incurable cancer.

In view of above facts and circumstances particularly in the context of growing globalization, the enlightened Indian public including borrowers should evaluate their injuries due to wrong doings of their bankers, officials of other financial institutions and government agencies. They should provide details to their advocates asking them to apply the principles of Law of Torts with continuing cause of action to establish the wrong doings and the injuries and claim full compensation for loss of earnings, reputation, mental tension, injury to their property including productive business property etc. by way of counterclaim.  

Consequent upon the amendment to the DRT Act providing for counterclaim and set-off, the borrowers should not be afraid of DRT. With the application of Law of Torts and Law of Damages and Compensation, the borrowers  should submit their counterclaims. If case has not been referred to DRT but injury has been caused, the borrowers should file their countersuits in civil courts.

 The writer i.e. Mr. Ram Kishan of DRT Legal Solutions has personal experience of contesting counter-damage-suits based on Law of Torts.

Our Client files damage suit of Rs. 1825 Crores against a bank and a financial institution in Chandigarh:- Our Client, an eminent Supreme Court Advocate (practice more than 25 years in Supreme Court) has filed a damage suit of Rs. 1825 Crores in Chandigarh on 13.01.05 against a bank and a financial institution. The said damage suit was drafted by us and it runs in 118 pages having documents of 537 pages. Mr Malik appreciated our legal concepts, our drafting and our knowledge and experience about application of law of torts to banking, industrial sickness, drt, counter-claim, securitisation act and calculations of damages.

ck to Top]