Law:

Section:

Banking Companies (Recovery of Loans, Advances Credits and Finances) Act (XV of 1997)-------S.9---Civil Procedure Code (V of 1908), O.XXXVII, Rr.1 & 2---Suit for recovery of amount---Father of appellants opened an account with Bank and appellants were also allowed to operate said account---Father of appellants died and appellants continued operating said account and at their request said account was converted in the name of company with the name and style of their late father and huge transactions were carried out in said account---Prior to death of father of appellants, a construction company/Principal Debtors was awarded a contract for development of a Housing Scheme and said Company/Principal Debtors furnished a Performance Guarantee in favour of Authority under control of which Housing Scheme was to be developed, which was issued by Bank on behalf of Principal Debtors---Father of appellants who at the relevant time was alive, stood guarantor for Principal Debtors and executed Guarantee Bond---Subsequently certain cheques issued by appellants were dishonoured by the Bank and on inquiry appellants were informed that suit amount had been deducted from their account on account of liability towards Principal Debtors as their late father stood guarantor thereof---Suit for recovery of said deducted amount filed by appellants having been dismissed by the District Judge, appellants filed appeal before High Court which was allowed and Bank was directed to make payment of amount deducted from account of appellants along with interest---On filing petition for leave to appeal, Supreme Court remanded case to High Court with direction to determine question of jurisdiction of Banking Court---Transaction i.e. the act of deduction of amount by Bank from account of appellants not falling within definition of 'Loan' or 'Finance' for which a suit under S.9 of Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 could be filed---Banking Court, in circumstances had no jurisdiction in the matter---Contention that since account in question was opened by late father of appellants, Bank had a lien over same, was repelled because neither late father of…

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