Hence, as indicated hereinabove, the sum and substance of
the case of the Plaintiff is that the Defendants i.e. Defendant Nos.1 and 2
have jointly conspired to grab the properties of the Plaintiff at throw away
prices to the loss of the Plaintiff. As indicated above, though the averments
revolving around the conduct of the Defendant No.1 are appearing in the
plaint significantly in the adjudication of the application filed under
Section 9A, no evidence was led by the Plaintiff. The Trial Court has
proceeded on a totally erroneous basis by accepting the averments made
in the plaint when the same have not been supported by any evidence led
by the Plaintiff. The averments which revolve around the conduct of the
Defendant No.1 could not have been accepted by the Trial Court without
the same being supported by any evidence of the Plaintiff. In so far as
Section 9A is concerned, it is well settled that the adjudication of the
preliminary issue framed under Section 9A is in the nature of a mini trial
as the decision rendered on the jurisdictional issue stands concluded and
is no more open for adjudication in the suit. The Trial Court did not
proceed on the basis that in the instant case the application was under
Section 9A but erroneously proceeded on the basis as if the application
was under Order VII Rule (11)(d) by accepting the averments in the plaint
and held that since it is the case of the Plaintiff that there is conspiracy, the
suit in question would fit within the exception carved out in Mardia
Chemicals Limited's case (supra) and would therefore be maintainable.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
CIVIL REVISION APPLICATION NO.386 OF 2015
ICICI Bank Limited
V
Anil Printers Limited
CORAM : R.M. SAVANT, J.
DATE : 8th OCTOBER, 2015
Citation:2016(5) ALLMR695
1. Admit. With the consent of the Learned Counsel for the
parties heard forthwith.
2. The Revisionary Jurisdiction of this Court is invoked against
the order dated 02.05.2015 passed by the Learned 7th Joint Civil Judge
Senior Division, Nashik, by which order the application Exh.19 filed by the
Applicant herein i.e. Defendant No.1 to the suit in question invoking
Section 9A of the CPC to question the jurisdiction of the Civil Court came
to be rejected and the Trial Court ruled that it has jurisdiction to try and
entertain the suit in question.
3. The facts which are necessary to be cited for the adjudication
of the above Civil Revision Application can in brief be stated thus. The
parties would be referred to as per their status in the suit. The Plaintiff i.e.
the Respondent No.1 herein is having a printing industry and has factories
in Satpur, Ambad and Gonde in Nashik District. The Plaintiff applied for
various loan facilities including Working Capital Credit Facility to the
Defendant No.1 i.e. Applicant herein. The Plaintiff was granted Working
Capital Credit Facility to the tune of Rs.6,00,00,000/ (In short “WC
Facility”), Non Fund Based Credit Facility by way of Letter of Credit (One
time) facility of Rs.30,00,00,000/ as a sub limit of Foreign Currency Term
Loan/External Commercial Borrowings (In short “LC Facility”) and
Derivative Facility of Rs.3,00,00,000/ (In short “Derivative Facility”). On
the Plaintiff committing default in making payment towards the various
loan facilities granted to it, the accounts of the Plaintiff with the
Defendant No.1 became irregular and were declared as NonPerforming
Assets (NPA) on 31.03.2011. The Defendant No.1 thereafter recalled the
entire loan facilities vide letter dated 18.01.2013 addressed to the Plaintiff
with a copy of the same marked to the Directors and Guarantors of the
Plaintiff. By the said letters/recall notices the Defendant No.1 called upon
the Plaintiff and its Directors and Guarantors and demanded payment of
the outstanding dues aggregating to Rs.43,68,83,887.30. A statutory
notice was thereafter issued under Section 13(2) of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002 (For short “SARFAESI Act”) came to be issued on 15.07.2013.
The outstanding dues from the Plaintiff as on 30.06.2013 were in the sum
of Rs.45,51,32,765.90. The Defendant No.1 thereafter took measures
under Section 13(4) of the SARFAESI Act in relation to which the Plaintiff
has filed a Securitization Application No.109 of 2014 and the same is
pending before the DRTII, Mumbai. The Defendant No.1 has filed
Original Application No.47 of 2014 under the Recovery of Debts Due to
Banks and Financial Institutions Act, 1993 (For short “RDDBFI Act”),
wherein the Plaintiff has not filed its Written Statement and the same is
pending before the DRTII, Mumbai. In so far as the outstanding dues are
concerned, the same as on 31.01.2014 are in the sum of
Rs.49,03,43,568.12.
4. It is after the notice dated 30.04.2014 came to be issued
under the SARFAESI Act that the Respondent No.1 herein filed Special
Civil Suit No.533 of 2014 in the Court of the Learned Civil Judge Senior
Division, Nashik. The reliefs sought in the said suit read thus :
“a. To order and decree that the Defendant No.1 shall pay
to the Plaintiff the sum of Rs.22,90,39,138.00 (Rupees
twenty two crores ninety lacs thirty nine thousand and one
hundred thirty eight only) and also to order and decree that
both the Defendants jointly and severally shall pay to the
Plaintiff the sum of Rs.100,00,00,000.00 (Rupees hundred
crores only) together with interest thereon @ 18% p.a.
from the date of this suit until final realization thereof.
b. To declare that the Defendant No.1 is not entitled to
recovery any amount from the Plaintiff.
c. To restrain the Defendant No.1, its officers, agents and
any persons claiming through them from selling,
transferring, alienating and or creating any sort of third
party interest in the said property under the scheduled
auction dated 30.12.2014 and or in any other future date
and auction as may be rescheduled thereafter.
d. Pending the final disposal of the present suit the
Plaintiff be granted with the interim and or adinterim
relief in terms of prayer clause (c).
e. Further to order and decree in respect of the amounts
by way of expenses incurred by the Plaintiff from the date
of filing of the suit till decree together with interest at 18%
p.a. and/or as may be ascertained and allowed at the time
of passing the decree from the Defendants jointly and
severally.
f. The Hon'ble Court be pleased to allow the Plaintiffs in
the interest of justice to add, alter or amend the present
suit and pleadings for properly establishing the facts therein
considering the circumstances prevailing then.
g. Any other relief deemed fit under the circumstances of
the case favouring the Plaintiff.”
5. In so far as the prayer clause (a) is concerned, the Plaintiff as
can be seen is seeking damages in the sum of Rs.22,90,39,138.90 and
Rs.100,00,00,000.00 for emotional distress and mental agony. The
foundation for which is sought to be laid in the plaint. The foundation for
the same is to the effect that the Plaintiff was in the process of negotiating
with the Defendant No.2 for the sale of the properties. However, in view of
the interference of the Defendant No.1 that the sale did not materialize
and it is alleged by the Plaintiff that the Defendants have committed the
acts, omissions and/or commissions under hatched conspiracy to grab the
said properties of the Plaintiff at throw away prices to the loss of the
Plaintiff whereby the Defendants shall gain illegally. In support of the said
case, the Plaintiff seeks to rely upon the Letters of Intent (LOIs) dated
17.06.2014 and 04.08.2014 of the Defendant No.2. Hence, the case of the
Plaintiff in respect of the said claim of Rs.22,90,39,138.90 and
Rs.100,00,00,000.00 is to the effect that the transaction did not
materialize on account of the officers of the Defendant No.1 who were
according to the Plaintiff interested in selling the property at throw away
price to the Defendant No.2. This appears to be the sum and substance of
the allegation of the Plaintiff in so far as the claim for the amount of
Rs.22,90,39,138.90 and Rs.100,00,00,000.00 is concerned.
6. Having regard to the frame of the suit and considering the
reliefs which have been sought, the Defendant No.1 filed the instant
application invoking Section 9A of the CPC and questioning the
jurisdiction of the Civil Court to try the suit on the touchstone of Section
34 r/w Section 18 and 19 of RDDBFI Act. The Trial Court by its order
dated 31.01.2015 framed the following two issues.
“1) Whether this Court has jurisdiction to entertain this Suit ?
2) What order ?”
7. The Trial Court considered the said application principally on
the ground that it is the case of the Plaintiff that the Defendant No.1 has
hatched civil conspiracy to grab the costly properties of the Plaintiff at a
throw away price and since the relief of damages and declaration cannot
be adjudicated by any of the Tribunal or Authority created under the
SARFAESI Act or under any other Act held that it has the jurisdiction to try
and entertain the suit. As indicated above, it is the said order dated
02.05.2015 which is taken exception to by way of the above Petition.
8. The Learned Counsel appearing on behalf of the Applicant i.e.
original Defendant No.1 Mr. Mayur Khandeparkar would contend that
having regard to the reliefs sought and especially the relief sought vide
prayer clause (b) and (c), the suit is exfacie barred by virtue of Section 34
of the SARFAESI Act. The Learned Counsel would contend that though it
was the case of the Plaintiff in the suit that a fraud was practiced by the
officers of the Defendant No.1 Bank, significantly no evidence was
adduced in the course of adjudication of the instant application filed
under Section 9A. The Learned Counsel would contend that the pleadings
if taken as a whole hardly make out a case of fraud, and a case for grant of
damages to the Plaintiff so as to maintain the suit before the Civil Court.
The Learned Counsel would contend that the case of the Plaintiff in the
plaint that it was negotiating with the Defendant No.2 and that the
transaction between the Plaintiff and the Defendant No.2 did not go
through on account of the conduct of the Defendant No.1 has to be
considered in the context of the fact that the asset is a secured asset and in
support of which Section 13(13) would be applicable. The Learned
Counsel would contend that the claim for damages has been merely
introduced in the suit so as to see to it that the suit is maintainable before
the Civil Court as otherwise the Plaintiff has admitted in the plaint that
the Defendant had not consented to the proposed transaction between the
Plaintiff and the Defendant No.2 on the ground that the outstanding dues
are more than Rs.45 crores.
9. Per contra, the Learned Counsel Mr. M. S. Karnik appearing
for the Respondent No.1/original Plaintiff would support the impugned
order, in so far as it holds that the Civil Court has jurisdiction. The Learned
Counsel would contend that the damages are sought on the basis that the
deal between the Plaintiff and the Defendant No.2 did not go through on
account of the Defendant No.1 and it is the case of the Plaintiff that the
Defendant No.2 backed out from the deal on account of the fact that the
Defendant No.2 in conspiracy with the officers of the Defendant No.1
wanted to grab the property at throw away price. The Learned Counsel
would seek to buttress his submission as regards the claim of damages on
account of the alleged fraud by drawing this Court's attention to the
Petitioners averments in the plaint. The Learned Counsel sought to
buttress his case that the transaction between the Plaintiff and the
Defendant No.1 was in the process of being finalized by placing reliance
upon the two LOIs dated 17.06.2014 and 04.08.2014.
10. Having heard the Learned Counsel for the parties, I have
considered the rival contentions. The vexed issue as to whether a suit filed
by a borrower in respect of the measures adopted under Section 13 of the
SARFAESI Act is maintainable before the Civil Court has once again
engaged the attention of this Court. The provisions of the SARFAESI Act
and the RDDBFI Act which are relevant in the context of the challenge
raised in the above Petition are Section 13(2), 13(4), 13(13), 34 and
Section 19(8) of the RDDBFI Act, the same are reproduced hereunder for
the sake of ready reference :
“13. Enforcement of security interest.
(1) .............................
(2) Where any borrower, who is under a liability to
a secured creditor under a security agreement, makes any
default in repayment of secured debt or any instalment
thereof, and his account in respect of such debt in classified
b the secured creditor as nonperforming asset, then, the
secured creditor may require the borrower by notice in
writing to discharge in full his liabilities to the secured
creditor within sixty days from the date of notice failing
which the secured creditor shall be entitled to exercise all
or any of the rights under subsection (4).
(3) ...............................
(4) In case the borrower fails to discharge his
liability in full within the period specified in subsection
(2), the secured creditor may take recourse to one or more
of the following measures to recover his secured debt,
namely :
(a) take possession of the secured assets of the
borrower including the right to transfer by way of lease,
assignment or sale for realising the secured asset;
[(b) take over the management of the business of the
borrower including the right to transfer by way of lease,
assignment or sale for realising the secured asset:
Provided that the right to transfer by way of lease,
assignment or sale shall be exercised only where the
substantial part of the business of the borrower is held as
security for the debt:
Provided further that where the management of whole of
the business or part of the business is severable, the
secured creditor shall take over the management of such
business of the borrower which is relatable to the security
for the debt;]
(c) appoint any person (hereafter referred to as the
manager), to manage the secured assets the possession of
which has been taken over by the secured creditor;
(d) require at any time by notice in writing, any
person who has acquired any of the secured assets from the
borrower and from whom any money is due or may
become due to the borrower, to pay the secured creditor, so
much of the money as is sufficient to pay the secured debt.
(5) ….................
(6) ….................
(7) ….................
(8) ….................
(9) ….................
(10) ….................
(11) ….................
(12) ….................
(13) No borrower shall, after receipt of notice
referred to in subsection (2), transfer by way of sale, lease
or otherwise (other than in the ordinary course of his
business) any of his secured assets referred to in the notice,
without prior written consent of the secured creditor.
34. Civil Court not to have jurisdiction. No Civil Court
shall have jurisdiction to entertain any suit or proceeding in
respect of any matter which a Debts Recovery Tribunal or
the Appellate Tribunal is empowered by or under this Act
to determine and no injunction shall be granted by any
Court or other authority in respect of any action taken or to
be taken in pursuance of any power conferred by or under
this Act or under the Recovery of Debts Due to Banks and
Financial Institutions Act, 1993 (51 of 1993).
19. Application to the Tribunal.
(1) ........................
(2) …....................
(3) …....................
(4) …....................
(5) …....................
(6) …....................
(7) …....................
(8) A defendant in an application may, in addition
to his right of pleading a setoff under subsection (6), set
up, by way of counterclaim against the claim of the
applicant, any right or claim in respect of a cause of action
accruing to the defendant against the applicant either
before or after the filing of the application but before the
defendant has delivered his defence or before the time
limited for delivering his defence has expired, whether such
counterclaim is in the nature of a claim for damages or
not.”
11. At this stage, it would also be apposite to refer to the
judgment of the Apex Court in Mardia Chemicals Limited and others Vs.
Union of India and others reported in 2004(2) Mh.L.J. 1090 and
especially paragraph 51 of the said judgment which for the sake of ready
reference is reproduced hereinunder :
“51. However, to a very limited extent jurisdiction of the
Civil Court can also be invoked, where for example, the
action of the secured creditor is alleged to be fraudulent or
their claim may be so absurd and untenable which may not
require any probe, whatsoever or to say precisely to the
extent the scope is permissible to bring an action in the
Civil Court in the cases of English mortgages. We find such
a scope having been recognized in the two decisions of the
Madras High Court which have been relied upon heavily by
the learned Attorney General as well appearing for the
Union of India, namely V. Narasimhachariar (supra) P.135
at p. 141 and 144, a judgment of the learned single Judge
where it is observed as follows in para 22 :
“The remedies of a mortgagor against the mortgagee
who is acting in violation of the rights, duties and
obligations are two fold in character. The mortgagor
can come to the Court before sale with an injunction
for staying the sale if there are materials to show that
the power of sale is being exercised in a fraudulent or
improper manner contrary to the terms of the
mortgage. But the pleadings in an action for
restraining a sale by mortgagee must clearly disclose a
fraud or irregularity on the basis of which relief is
sought: 'Adams vs. Scott, (1859) 7 WR (Eng.) 213
(Z49). I need not point that this restraint on the
exercise of the power of sale will be exercised by
Courts only under the limited circumstances
mentioned above because otherwise to grant such an
injunction would be to cancel one of the clauses of the
deed to which both the parties had agreed and annul
one of the chief securities on which persons advancing
money on mortgages rely. (See Rashbehary Ghose Law
of Mortgages, Vol.II, Fourth Edn., page 784).”
12. The judgment of the Apex Court in Mardia Chemicals Limited's
case (supra) is an exposition in the Apex Court in so far as the SARFAESI
Act and the powers of the Tribunals under the said Act and the bar of
jurisdiction postulated in the said SARFAESI Act is concerned. The Apex
Court in paragraph 51 has stated that only in the cases where there is a
fraud alleged that a suit would be maintainable before the Civil Court.
13. It is in the said context that the facts of the present case
would have to be considered. As adverted to hereinabove, the main three
substantive reliefs sought in the suit are the damages of
Rs.22,90,39,138.00 and Rs.100,00,00,000.00 for emotional distress and
loss of reputation. The second prayer i.e. prayer (b) is to the effect that the
Defendant No.1 is not entitled to recover any amount from the Plaintiff
and vide prayer clause (c), the Plaintiff is claiming the relief that the
Defendant No.1, its officers, agents and any persons claiming through
them be restrained from selling, transferring, alienating and or creating
any sort of third party interest in the said property. In so far as prayer
clauses (b) and (c) are concerned, they are exfacie referable to the
measures taken under Section 13 and therefore, the suit in respect of the
said prayers is barred by Section 34. The Learned Counsel for the
Respondent No.1 Mr. M. S. Karnik though was at pains to justify the
maintainability of the suit was not able to justify the same having regard
to prayer clauses (b) and (c) with any deal of conviction. It is prayer
clause (a) which can be said to be the defining prayer on the touchstone of
which the issue as regards the maintainability of the suit as it were is to be
adjudicated. The foundation for claiming the amounts as mentioned in
prayer clause (a) i.e. Rs.22,90,39,138.00 and Rs.100,00,00,000.00 as per
the submission of the Learned Counsel for the Respondent No.1 Mr. M. S.
Karnik has been laid in the plaint. The gist of the said averments can be
referred to in brief. The relevant excerpts of the relevant paragraphs are
reproduced hereinunder for the sake of ready reference :
Paragraph No.7 : “Thus during August 2011 the
Defendant No.1 restructured the credit limits of the
Plaintiff and fictitiously released the amount of Rs.03.75
crores to the Plaintiff under the head Working Capital Term
Loan (WCTL). In fact these funds were not allowed to be
utilized by the Plaintiff as those were directed to be kept in
fixed deposits with them for the purpose of payment of
interest as may have been applied by the Defendant No.1 to
the loan accounts of the Plaintiff from time to time.”
“The entire exercise on the part of the Defendant No.1 is
nothing but an unsuccessful effort to dodge the RBI norms
and to maintain the balance sheet is good state to the
heavy costs of the Plaintiff.”
Paragraph No.8 : “Thereafter in its further efforts the
Plaintiff located a buyer engaged to an extent with similar
business activities and to whom Gonde unit of the Plaintiff
was most suitable. Thus the Defendant No.2 got introduced
to the Plaintiff.”
Paragraph No.9 : “The entire amount of the sale proceeds
were to be utilized by the Plaintiff towards the repayment
of the Defendant No.1 hence to an extent the Defendant
No.1 was also involved initially in the deal talks. However,
in between the Defendant No.1 took a stand that its
recoveries from the Plaintiff are to the extent of Rs.45.00
crores hence they did not consented to the deal as was to
be completed with Defendant No.2. In view of the
circumstances the repayment under settlement with the
Defendant No.1 was not possible hence the deal was
closed.”
Paragraph No.10 : “It is further submitted that due to
above adamant stand of the Defendant No.1 the deal could
not progress as envisaged therefore the Plaintiff once again
made efforts and in response to the hectic efforts on the
part of the Plaintiff, the Defendant No.2 agreed to improve
its earlier offer and thus quoted fresh LOI wherein the
Defendant No.2 agreed to purchase the assets of the
Plaintiff as above for total consideration of Euro 4.1 million
(Rs.33.00 crores approx.) which amount could have taken
care of the recoveries of the Defendant No.1 under one
time settlement (OTS).”
Paragraph No.11 : “However after having their meeting
with the Defendant No.1 the Defendant No.2 did not
remain in touch with the Plaintiff and even did not respond
to the calls of the Plaintiff. For the reasons best known to
the Defendant No.2 it did not come ahead to complete the
deal as agreed.”
Paragraph No.13 : “Subsequent to the issuance of notice
U/s 13(4) of The Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act,
2002 the Defendant No.1 invited public offers by
publishing a auction notice in local newspapers and in
response thereto the Defendant No.2 has collected the
tender forms and is in process of tendering its bid for the
said properties and intends to now acquire the assets of the
Plaintiff through bank instead of performing the LOI which
it had executed with the Plaintiff.”
Paragraph No.14 : “The Defendants have committed the
acts, omissions and/or commissions under hatched
conspiracy to grab the said properties of the Plaintiff at
throw away prices to the loss of the Plaintiff whereby the
Defendants shall gain illegally.”
14. Hence, as indicated hereinabove, the sum and substance of
the case of the Plaintiff is that the Defendants i.e. Defendant Nos.1 and 2
have jointly conspired to grab the properties of the Plaintiff at throw away
prices to the loss of the Plaintiff. As indicated above, though the averments
revolving around the conduct of the Defendant No.1 are appearing in the
plaint significantly in the adjudication of the application filed under
Section 9A, no evidence was led by the Plaintiff. The Trial Court has
proceeded on a totally erroneous basis by accepting the averments made
in the plaint when the same have not been supported by any evidence led
by the Plaintiff. The averments which revolve around the conduct of the
Defendant No.1 could not have been accepted by the Trial Court without
the same being supported by any evidence of the Plaintiff. In so far as
Section 9A is concerned, it is well settled that the adjudication of the
preliminary issue framed under Section 9A is in the nature of a mini trial
as the decision rendered on the jurisdictional issue stands concluded and
is no more open for adjudication in the suit. The Trial Court did not
proceed on the basis that in the instant case the application was under
Section 9A but erroneously proceeded on the basis as if the application
was under Order VII Rule (11)(d) by accepting the averments in the plaint
and held that since it is the case of the Plaintiff that there is conspiracy, the
suit in question would fit within the exception carved out in Mardia
Chemicals Limited's case (supra) and would therefore be maintainable.
15. Apart from this, a reference to the provisions of SARFAESI Act
would have to be made. As indicated, the Bank has filed Original
Application for recovery of the amount of Rs.22,90,39,138.00 and
Rs.100,00,00,000.00. If the Plaintiff has any grievance in respect of the
computation of the said amount or any matter related thereto, the Plaintiff
can file an application under the SARFAESI Act or even a counterclaim
under Section 19(8) of the RDDBFI Act. The Plaintiff for the reasons best
known to him has not done so and has preferred to file the suit in question
for the reliefs claimed. In so far the allegations of the Plaintiff are
concerned, even on a bare minimum inquiry being conducted in the
context of the averments in the plaint, primafacie the claim made by the
Plaintiff for damages on the basis of the said allegations seems to be
speculative in nature. Though the Plaintiff claims that the deal between
the Plaintiff and the Defendant No.2 was on the verge of materializing, the
fact cannot be lost sight of that the deal in respect of the secured assets
would not fructify without the consent of the Bank. In fact in terms of
Section 13(13) of the SARFAESI Act, no borrower shall, after receipt of
notice referred to in subsection (2), transfer by way of sale, lease or
otherwise (other than in the ordinary course of his business) any of his
secured assets referred to in the notice, without the prior written consent
of the secured creditor. The said provision therefore militates against the
case of the Plaintiff that the deal was materializing between it and the
Defendant No.2, the Plaintiff was in fact aware of the said fact as can be
seen from the averments made in paragraph 9 of the plaint extracted
above and hence, primafacie, this Court is of the view that the claim
made by the Plaintiff is speculative in nature. The averments in the plaint
hardly make out a case of the instant suit being covered by the exception
in Mardia Chemicals Limited's case (supra).
16. In so far as the judgment in Mardia Chemicals Limited's case
(supra) is concerned, this Court had occasion to consider the applicability
of the exception carved out in Mardia Chemicals Limited's case (supra). A
useful reference could be made to the judgment reported in 2015(4)
Mh.L.J. 699 in the matter of Authorised Officer, Kotak Mahindra Bank
Ltd., Pune Vs. Brahmo Construction Pvt. Ltd., Pune, wherein the factual
position can be said to be similar to the factual position prevailing in the
instant case as the suit was filed after the measure under Section 13 was
taken and the property in fact was auctioned. The auction purchaser had
filed the suit alleging a fraud on account of the nondisclosure of the
attachment of the Income Tax Department. In the facts of the said case this
Court had held that the suit was not maintainable. In the instant case, the
Trial Court without going into the relevant aspects has by merely relying
upon the averments in the plaint which have not even been substantiated
by any evidence led by the Plaintiff in the application under Section 9A
has held the suit to be maintainable. The order passed by the Trial Court
therefore suffers from an error of jurisdiction. The Trial Court has ruled
that it has the jurisdiction to try and entertain the suit, when it had none,
in view of Section 34 of the SARFAESI Act. The suit is therefore not
maintainable and is accordingly dismissed. The Civil Revision Application
is allowed to the aforesaid extent, with parties to bear their respective
costs.
17. Needless to state that the dismissal of the suit by the instant
order would not preclude the Plaintiff from adopting remedies under the
SARFAESI Act or the RDDBFI Act by filing appropriate proceedings. If any
such proceedings are filed the observations made in the instant order
which are in the context of maintainability of the suit would not come in
the way of the Plaintiff from prosecuting such proceedings.
[R.M. SAVANT, J]
the case of the Plaintiff is that the Defendants i.e. Defendant Nos.1 and 2
have jointly conspired to grab the properties of the Plaintiff at throw away
prices to the loss of the Plaintiff. As indicated above, though the averments
revolving around the conduct of the Defendant No.1 are appearing in the
plaint significantly in the adjudication of the application filed under
Section 9A, no evidence was led by the Plaintiff. The Trial Court has
proceeded on a totally erroneous basis by accepting the averments made
in the plaint when the same have not been supported by any evidence led
by the Plaintiff. The averments which revolve around the conduct of the
Defendant No.1 could not have been accepted by the Trial Court without
the same being supported by any evidence of the Plaintiff. In so far as
Section 9A is concerned, it is well settled that the adjudication of the
preliminary issue framed under Section 9A is in the nature of a mini trial
as the decision rendered on the jurisdictional issue stands concluded and
is no more open for adjudication in the suit. The Trial Court did not
proceed on the basis that in the instant case the application was under
Section 9A but erroneously proceeded on the basis as if the application
was under Order VII Rule (11)(d) by accepting the averments in the plaint
and held that since it is the case of the Plaintiff that there is conspiracy, the
suit in question would fit within the exception carved out in Mardia
Chemicals Limited's case (supra) and would therefore be maintainable.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
CIVIL REVISION APPLICATION NO.386 OF 2015
ICICI Bank Limited
V
Anil Printers Limited
CORAM : R.M. SAVANT, J.
DATE : 8th OCTOBER, 2015
Citation:2016(5) ALLMR695
1. Admit. With the consent of the Learned Counsel for the
parties heard forthwith.
2. The Revisionary Jurisdiction of this Court is invoked against
the order dated 02.05.2015 passed by the Learned 7th Joint Civil Judge
Senior Division, Nashik, by which order the application Exh.19 filed by the
Applicant herein i.e. Defendant No.1 to the suit in question invoking
Section 9A of the CPC to question the jurisdiction of the Civil Court came
to be rejected and the Trial Court ruled that it has jurisdiction to try and
entertain the suit in question.
3. The facts which are necessary to be cited for the adjudication
of the above Civil Revision Application can in brief be stated thus. The
parties would be referred to as per their status in the suit. The Plaintiff i.e.
the Respondent No.1 herein is having a printing industry and has factories
in Satpur, Ambad and Gonde in Nashik District. The Plaintiff applied for
various loan facilities including Working Capital Credit Facility to the
Defendant No.1 i.e. Applicant herein. The Plaintiff was granted Working
Capital Credit Facility to the tune of Rs.6,00,00,000/ (In short “WC
Facility”), Non Fund Based Credit Facility by way of Letter of Credit (One
time) facility of Rs.30,00,00,000/ as a sub limit of Foreign Currency Term
Loan/External Commercial Borrowings (In short “LC Facility”) and
Derivative Facility of Rs.3,00,00,000/ (In short “Derivative Facility”). On
the Plaintiff committing default in making payment towards the various
loan facilities granted to it, the accounts of the Plaintiff with the
Defendant No.1 became irregular and were declared as NonPerforming
Assets (NPA) on 31.03.2011. The Defendant No.1 thereafter recalled the
entire loan facilities vide letter dated 18.01.2013 addressed to the Plaintiff
with a copy of the same marked to the Directors and Guarantors of the
Plaintiff. By the said letters/recall notices the Defendant No.1 called upon
the Plaintiff and its Directors and Guarantors and demanded payment of
the outstanding dues aggregating to Rs.43,68,83,887.30. A statutory
notice was thereafter issued under Section 13(2) of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002 (For short “SARFAESI Act”) came to be issued on 15.07.2013.
The outstanding dues from the Plaintiff as on 30.06.2013 were in the sum
of Rs.45,51,32,765.90. The Defendant No.1 thereafter took measures
under Section 13(4) of the SARFAESI Act in relation to which the Plaintiff
has filed a Securitization Application No.109 of 2014 and the same is
pending before the DRTII, Mumbai. The Defendant No.1 has filed
Original Application No.47 of 2014 under the Recovery of Debts Due to
Banks and Financial Institutions Act, 1993 (For short “RDDBFI Act”),
wherein the Plaintiff has not filed its Written Statement and the same is
pending before the DRTII, Mumbai. In so far as the outstanding dues are
concerned, the same as on 31.01.2014 are in the sum of
Rs.49,03,43,568.12.
4. It is after the notice dated 30.04.2014 came to be issued
under the SARFAESI Act that the Respondent No.1 herein filed Special
Civil Suit No.533 of 2014 in the Court of the Learned Civil Judge Senior
Division, Nashik. The reliefs sought in the said suit read thus :
“a. To order and decree that the Defendant No.1 shall pay
to the Plaintiff the sum of Rs.22,90,39,138.00 (Rupees
twenty two crores ninety lacs thirty nine thousand and one
hundred thirty eight only) and also to order and decree that
both the Defendants jointly and severally shall pay to the
Plaintiff the sum of Rs.100,00,00,000.00 (Rupees hundred
crores only) together with interest thereon @ 18% p.a.
from the date of this suit until final realization thereof.
b. To declare that the Defendant No.1 is not entitled to
recovery any amount from the Plaintiff.
c. To restrain the Defendant No.1, its officers, agents and
any persons claiming through them from selling,
transferring, alienating and or creating any sort of third
party interest in the said property under the scheduled
auction dated 30.12.2014 and or in any other future date
and auction as may be rescheduled thereafter.
d. Pending the final disposal of the present suit the
Plaintiff be granted with the interim and or adinterim
relief in terms of prayer clause (c).
e. Further to order and decree in respect of the amounts
by way of expenses incurred by the Plaintiff from the date
of filing of the suit till decree together with interest at 18%
p.a. and/or as may be ascertained and allowed at the time
of passing the decree from the Defendants jointly and
severally.
f. The Hon'ble Court be pleased to allow the Plaintiffs in
the interest of justice to add, alter or amend the present
suit and pleadings for properly establishing the facts therein
considering the circumstances prevailing then.
g. Any other relief deemed fit under the circumstances of
the case favouring the Plaintiff.”
5. In so far as the prayer clause (a) is concerned, the Plaintiff as
can be seen is seeking damages in the sum of Rs.22,90,39,138.90 and
Rs.100,00,00,000.00 for emotional distress and mental agony. The
foundation for which is sought to be laid in the plaint. The foundation for
the same is to the effect that the Plaintiff was in the process of negotiating
with the Defendant No.2 for the sale of the properties. However, in view of
the interference of the Defendant No.1 that the sale did not materialize
and it is alleged by the Plaintiff that the Defendants have committed the
acts, omissions and/or commissions under hatched conspiracy to grab the
said properties of the Plaintiff at throw away prices to the loss of the
Plaintiff whereby the Defendants shall gain illegally. In support of the said
case, the Plaintiff seeks to rely upon the Letters of Intent (LOIs) dated
17.06.2014 and 04.08.2014 of the Defendant No.2. Hence, the case of the
Plaintiff in respect of the said claim of Rs.22,90,39,138.90 and
Rs.100,00,00,000.00 is to the effect that the transaction did not
materialize on account of the officers of the Defendant No.1 who were
according to the Plaintiff interested in selling the property at throw away
price to the Defendant No.2. This appears to be the sum and substance of
the allegation of the Plaintiff in so far as the claim for the amount of
Rs.22,90,39,138.90 and Rs.100,00,00,000.00 is concerned.
6. Having regard to the frame of the suit and considering the
reliefs which have been sought, the Defendant No.1 filed the instant
application invoking Section 9A of the CPC and questioning the
jurisdiction of the Civil Court to try the suit on the touchstone of Section
34 r/w Section 18 and 19 of RDDBFI Act. The Trial Court by its order
dated 31.01.2015 framed the following two issues.
“1) Whether this Court has jurisdiction to entertain this Suit ?
2) What order ?”
7. The Trial Court considered the said application principally on
the ground that it is the case of the Plaintiff that the Defendant No.1 has
hatched civil conspiracy to grab the costly properties of the Plaintiff at a
throw away price and since the relief of damages and declaration cannot
be adjudicated by any of the Tribunal or Authority created under the
SARFAESI Act or under any other Act held that it has the jurisdiction to try
and entertain the suit. As indicated above, it is the said order dated
02.05.2015 which is taken exception to by way of the above Petition.
8. The Learned Counsel appearing on behalf of the Applicant i.e.
original Defendant No.1 Mr. Mayur Khandeparkar would contend that
having regard to the reliefs sought and especially the relief sought vide
prayer clause (b) and (c), the suit is exfacie barred by virtue of Section 34
of the SARFAESI Act. The Learned Counsel would contend that though it
was the case of the Plaintiff in the suit that a fraud was practiced by the
officers of the Defendant No.1 Bank, significantly no evidence was
adduced in the course of adjudication of the instant application filed
under Section 9A. The Learned Counsel would contend that the pleadings
if taken as a whole hardly make out a case of fraud, and a case for grant of
damages to the Plaintiff so as to maintain the suit before the Civil Court.
The Learned Counsel would contend that the case of the Plaintiff in the
plaint that it was negotiating with the Defendant No.2 and that the
transaction between the Plaintiff and the Defendant No.2 did not go
through on account of the conduct of the Defendant No.1 has to be
considered in the context of the fact that the asset is a secured asset and in
support of which Section 13(13) would be applicable. The Learned
Counsel would contend that the claim for damages has been merely
introduced in the suit so as to see to it that the suit is maintainable before
the Civil Court as otherwise the Plaintiff has admitted in the plaint that
the Defendant had not consented to the proposed transaction between the
Plaintiff and the Defendant No.2 on the ground that the outstanding dues
are more than Rs.45 crores.
9. Per contra, the Learned Counsel Mr. M. S. Karnik appearing
for the Respondent No.1/original Plaintiff would support the impugned
order, in so far as it holds that the Civil Court has jurisdiction. The Learned
Counsel would contend that the damages are sought on the basis that the
deal between the Plaintiff and the Defendant No.2 did not go through on
account of the Defendant No.1 and it is the case of the Plaintiff that the
Defendant No.2 backed out from the deal on account of the fact that the
Defendant No.2 in conspiracy with the officers of the Defendant No.1
wanted to grab the property at throw away price. The Learned Counsel
would seek to buttress his submission as regards the claim of damages on
account of the alleged fraud by drawing this Court's attention to the
Petitioners averments in the plaint. The Learned Counsel sought to
buttress his case that the transaction between the Plaintiff and the
Defendant No.1 was in the process of being finalized by placing reliance
upon the two LOIs dated 17.06.2014 and 04.08.2014.
10. Having heard the Learned Counsel for the parties, I have
considered the rival contentions. The vexed issue as to whether a suit filed
by a borrower in respect of the measures adopted under Section 13 of the
SARFAESI Act is maintainable before the Civil Court has once again
engaged the attention of this Court. The provisions of the SARFAESI Act
and the RDDBFI Act which are relevant in the context of the challenge
raised in the above Petition are Section 13(2), 13(4), 13(13), 34 and
Section 19(8) of the RDDBFI Act, the same are reproduced hereunder for
the sake of ready reference :
“13. Enforcement of security interest.
(1) .............................
(2) Where any borrower, who is under a liability to
a secured creditor under a security agreement, makes any
default in repayment of secured debt or any instalment
thereof, and his account in respect of such debt in classified
b the secured creditor as nonperforming asset, then, the
secured creditor may require the borrower by notice in
writing to discharge in full his liabilities to the secured
creditor within sixty days from the date of notice failing
which the secured creditor shall be entitled to exercise all
or any of the rights under subsection (4).
(3) ...............................
(4) In case the borrower fails to discharge his
liability in full within the period specified in subsection
(2), the secured creditor may take recourse to one or more
of the following measures to recover his secured debt,
namely :
(a) take possession of the secured assets of the
borrower including the right to transfer by way of lease,
assignment or sale for realising the secured asset;
[(b) take over the management of the business of the
borrower including the right to transfer by way of lease,
assignment or sale for realising the secured asset:
Provided that the right to transfer by way of lease,
assignment or sale shall be exercised only where the
substantial part of the business of the borrower is held as
security for the debt:
Provided further that where the management of whole of
the business or part of the business is severable, the
secured creditor shall take over the management of such
business of the borrower which is relatable to the security
for the debt;]
(c) appoint any person (hereafter referred to as the
manager), to manage the secured assets the possession of
which has been taken over by the secured creditor;
(d) require at any time by notice in writing, any
person who has acquired any of the secured assets from the
borrower and from whom any money is due or may
become due to the borrower, to pay the secured creditor, so
much of the money as is sufficient to pay the secured debt.
(5) ….................
(6) ….................
(7) ….................
(8) ….................
(9) ….................
(10) ….................
(11) ….................
(12) ….................
(13) No borrower shall, after receipt of notice
referred to in subsection (2), transfer by way of sale, lease
or otherwise (other than in the ordinary course of his
business) any of his secured assets referred to in the notice,
without prior written consent of the secured creditor.
34. Civil Court not to have jurisdiction. No Civil Court
shall have jurisdiction to entertain any suit or proceeding in
respect of any matter which a Debts Recovery Tribunal or
the Appellate Tribunal is empowered by or under this Act
to determine and no injunction shall be granted by any
Court or other authority in respect of any action taken or to
be taken in pursuance of any power conferred by or under
this Act or under the Recovery of Debts Due to Banks and
Financial Institutions Act, 1993 (51 of 1993).
19. Application to the Tribunal.
(1) ........................
(2) …....................
(3) …....................
(4) …....................
(5) …....................
(6) …....................
(7) …....................
(8) A defendant in an application may, in addition
to his right of pleading a setoff under subsection (6), set
up, by way of counterclaim against the claim of the
applicant, any right or claim in respect of a cause of action
accruing to the defendant against the applicant either
before or after the filing of the application but before the
defendant has delivered his defence or before the time
limited for delivering his defence has expired, whether such
counterclaim is in the nature of a claim for damages or
not.”
11. At this stage, it would also be apposite to refer to the
judgment of the Apex Court in Mardia Chemicals Limited and others Vs.
Union of India and others reported in 2004(2) Mh.L.J. 1090 and
especially paragraph 51 of the said judgment which for the sake of ready
reference is reproduced hereinunder :
“51. However, to a very limited extent jurisdiction of the
Civil Court can also be invoked, where for example, the
action of the secured creditor is alleged to be fraudulent or
their claim may be so absurd and untenable which may not
require any probe, whatsoever or to say precisely to the
extent the scope is permissible to bring an action in the
Civil Court in the cases of English mortgages. We find such
a scope having been recognized in the two decisions of the
Madras High Court which have been relied upon heavily by
the learned Attorney General as well appearing for the
Union of India, namely V. Narasimhachariar (supra) P.135
at p. 141 and 144, a judgment of the learned single Judge
where it is observed as follows in para 22 :
“The remedies of a mortgagor against the mortgagee
who is acting in violation of the rights, duties and
obligations are two fold in character. The mortgagor
can come to the Court before sale with an injunction
for staying the sale if there are materials to show that
the power of sale is being exercised in a fraudulent or
improper manner contrary to the terms of the
mortgage. But the pleadings in an action for
restraining a sale by mortgagee must clearly disclose a
fraud or irregularity on the basis of which relief is
sought: 'Adams vs. Scott, (1859) 7 WR (Eng.) 213
(Z49). I need not point that this restraint on the
exercise of the power of sale will be exercised by
Courts only under the limited circumstances
mentioned above because otherwise to grant such an
injunction would be to cancel one of the clauses of the
deed to which both the parties had agreed and annul
one of the chief securities on which persons advancing
money on mortgages rely. (See Rashbehary Ghose Law
of Mortgages, Vol.II, Fourth Edn., page 784).”
12. The judgment of the Apex Court in Mardia Chemicals Limited's
case (supra) is an exposition in the Apex Court in so far as the SARFAESI
Act and the powers of the Tribunals under the said Act and the bar of
jurisdiction postulated in the said SARFAESI Act is concerned. The Apex
Court in paragraph 51 has stated that only in the cases where there is a
fraud alleged that a suit would be maintainable before the Civil Court.
13. It is in the said context that the facts of the present case
would have to be considered. As adverted to hereinabove, the main three
substantive reliefs sought in the suit are the damages of
Rs.22,90,39,138.00 and Rs.100,00,00,000.00 for emotional distress and
loss of reputation. The second prayer i.e. prayer (b) is to the effect that the
Defendant No.1 is not entitled to recover any amount from the Plaintiff
and vide prayer clause (c), the Plaintiff is claiming the relief that the
Defendant No.1, its officers, agents and any persons claiming through
them be restrained from selling, transferring, alienating and or creating
any sort of third party interest in the said property. In so far as prayer
clauses (b) and (c) are concerned, they are exfacie referable to the
measures taken under Section 13 and therefore, the suit in respect of the
said prayers is barred by Section 34. The Learned Counsel for the
Respondent No.1 Mr. M. S. Karnik though was at pains to justify the
maintainability of the suit was not able to justify the same having regard
to prayer clauses (b) and (c) with any deal of conviction. It is prayer
clause (a) which can be said to be the defining prayer on the touchstone of
which the issue as regards the maintainability of the suit as it were is to be
adjudicated. The foundation for claiming the amounts as mentioned in
prayer clause (a) i.e. Rs.22,90,39,138.00 and Rs.100,00,00,000.00 as per
the submission of the Learned Counsel for the Respondent No.1 Mr. M. S.
Karnik has been laid in the plaint. The gist of the said averments can be
referred to in brief. The relevant excerpts of the relevant paragraphs are
reproduced hereinunder for the sake of ready reference :
Paragraph No.7 : “Thus during August 2011 the
Defendant No.1 restructured the credit limits of the
Plaintiff and fictitiously released the amount of Rs.03.75
crores to the Plaintiff under the head Working Capital Term
Loan (WCTL). In fact these funds were not allowed to be
utilized by the Plaintiff as those were directed to be kept in
fixed deposits with them for the purpose of payment of
interest as may have been applied by the Defendant No.1 to
the loan accounts of the Plaintiff from time to time.”
“The entire exercise on the part of the Defendant No.1 is
nothing but an unsuccessful effort to dodge the RBI norms
and to maintain the balance sheet is good state to the
heavy costs of the Plaintiff.”
Paragraph No.8 : “Thereafter in its further efforts the
Plaintiff located a buyer engaged to an extent with similar
business activities and to whom Gonde unit of the Plaintiff
was most suitable. Thus the Defendant No.2 got introduced
to the Plaintiff.”
Paragraph No.9 : “The entire amount of the sale proceeds
were to be utilized by the Plaintiff towards the repayment
of the Defendant No.1 hence to an extent the Defendant
No.1 was also involved initially in the deal talks. However,
in between the Defendant No.1 took a stand that its
recoveries from the Plaintiff are to the extent of Rs.45.00
crores hence they did not consented to the deal as was to
be completed with Defendant No.2. In view of the
circumstances the repayment under settlement with the
Defendant No.1 was not possible hence the deal was
closed.”
Paragraph No.10 : “It is further submitted that due to
above adamant stand of the Defendant No.1 the deal could
not progress as envisaged therefore the Plaintiff once again
made efforts and in response to the hectic efforts on the
part of the Plaintiff, the Defendant No.2 agreed to improve
its earlier offer and thus quoted fresh LOI wherein the
Defendant No.2 agreed to purchase the assets of the
Plaintiff as above for total consideration of Euro 4.1 million
(Rs.33.00 crores approx.) which amount could have taken
care of the recoveries of the Defendant No.1 under one
time settlement (OTS).”
Paragraph No.11 : “However after having their meeting
with the Defendant No.1 the Defendant No.2 did not
remain in touch with the Plaintiff and even did not respond
to the calls of the Plaintiff. For the reasons best known to
the Defendant No.2 it did not come ahead to complete the
deal as agreed.”
Paragraph No.13 : “Subsequent to the issuance of notice
U/s 13(4) of The Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act,
2002 the Defendant No.1 invited public offers by
publishing a auction notice in local newspapers and in
response thereto the Defendant No.2 has collected the
tender forms and is in process of tendering its bid for the
said properties and intends to now acquire the assets of the
Plaintiff through bank instead of performing the LOI which
it had executed with the Plaintiff.”
Paragraph No.14 : “The Defendants have committed the
acts, omissions and/or commissions under hatched
conspiracy to grab the said properties of the Plaintiff at
throw away prices to the loss of the Plaintiff whereby the
Defendants shall gain illegally.”
14. Hence, as indicated hereinabove, the sum and substance of
the case of the Plaintiff is that the Defendants i.e. Defendant Nos.1 and 2
have jointly conspired to grab the properties of the Plaintiff at throw away
prices to the loss of the Plaintiff. As indicated above, though the averments
revolving around the conduct of the Defendant No.1 are appearing in the
plaint significantly in the adjudication of the application filed under
Section 9A, no evidence was led by the Plaintiff. The Trial Court has
proceeded on a totally erroneous basis by accepting the averments made
in the plaint when the same have not been supported by any evidence led
by the Plaintiff. The averments which revolve around the conduct of the
Defendant No.1 could not have been accepted by the Trial Court without
the same being supported by any evidence of the Plaintiff. In so far as
Section 9A is concerned, it is well settled that the adjudication of the
preliminary issue framed under Section 9A is in the nature of a mini trial
as the decision rendered on the jurisdictional issue stands concluded and
is no more open for adjudication in the suit. The Trial Court did not
proceed on the basis that in the instant case the application was under
Section 9A but erroneously proceeded on the basis as if the application
was under Order VII Rule (11)(d) by accepting the averments in the plaint
and held that since it is the case of the Plaintiff that there is conspiracy, the
suit in question would fit within the exception carved out in Mardia
Chemicals Limited's case (supra) and would therefore be maintainable.
15. Apart from this, a reference to the provisions of SARFAESI Act
would have to be made. As indicated, the Bank has filed Original
Application for recovery of the amount of Rs.22,90,39,138.00 and
Rs.100,00,00,000.00. If the Plaintiff has any grievance in respect of the
computation of the said amount or any matter related thereto, the Plaintiff
can file an application under the SARFAESI Act or even a counterclaim
under Section 19(8) of the RDDBFI Act. The Plaintiff for the reasons best
known to him has not done so and has preferred to file the suit in question
for the reliefs claimed. In so far the allegations of the Plaintiff are
concerned, even on a bare minimum inquiry being conducted in the
context of the averments in the plaint, primafacie the claim made by the
Plaintiff for damages on the basis of the said allegations seems to be
speculative in nature. Though the Plaintiff claims that the deal between
the Plaintiff and the Defendant No.2 was on the verge of materializing, the
fact cannot be lost sight of that the deal in respect of the secured assets
would not fructify without the consent of the Bank. In fact in terms of
Section 13(13) of the SARFAESI Act, no borrower shall, after receipt of
notice referred to in subsection (2), transfer by way of sale, lease or
otherwise (other than in the ordinary course of his business) any of his
secured assets referred to in the notice, without the prior written consent
of the secured creditor. The said provision therefore militates against the
case of the Plaintiff that the deal was materializing between it and the
Defendant No.2, the Plaintiff was in fact aware of the said fact as can be
seen from the averments made in paragraph 9 of the plaint extracted
above and hence, primafacie, this Court is of the view that the claim
made by the Plaintiff is speculative in nature. The averments in the plaint
hardly make out a case of the instant suit being covered by the exception
in Mardia Chemicals Limited's case (supra).
16. In so far as the judgment in Mardia Chemicals Limited's case
(supra) is concerned, this Court had occasion to consider the applicability
of the exception carved out in Mardia Chemicals Limited's case (supra). A
useful reference could be made to the judgment reported in 2015(4)
Mh.L.J. 699 in the matter of Authorised Officer, Kotak Mahindra Bank
Ltd., Pune Vs. Brahmo Construction Pvt. Ltd., Pune, wherein the factual
position can be said to be similar to the factual position prevailing in the
instant case as the suit was filed after the measure under Section 13 was
taken and the property in fact was auctioned. The auction purchaser had
filed the suit alleging a fraud on account of the nondisclosure of the
attachment of the Income Tax Department. In the facts of the said case this
Court had held that the suit was not maintainable. In the instant case, the
Trial Court without going into the relevant aspects has by merely relying
upon the averments in the plaint which have not even been substantiated
by any evidence led by the Plaintiff in the application under Section 9A
has held the suit to be maintainable. The order passed by the Trial Court
therefore suffers from an error of jurisdiction. The Trial Court has ruled
that it has the jurisdiction to try and entertain the suit, when it had none,
in view of Section 34 of the SARFAESI Act. The suit is therefore not
maintainable and is accordingly dismissed. The Civil Revision Application
is allowed to the aforesaid extent, with parties to bear their respective
costs.
17. Needless to state that the dismissal of the suit by the instant
order would not preclude the Plaintiff from adopting remedies under the
SARFAESI Act or the RDDBFI Act by filing appropriate proceedings. If any
such proceedings are filed the observations made in the instant order
which are in the context of maintainability of the suit would not come in
the way of the Plaintiff from prosecuting such proceedings.
[R.M. SAVANT, J]
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