IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18th DAY OF JANUARY, 2019 BEFORE THE HON’BLE MR.JUSTICE ARAVIND KUMAR W.P.NO. 45333/2013 (GM-CPC) BETWEEN:
1 THE ASSET RECOVERY MANAGEMENT BRANCH CANARA BANK NO.38 & 39, 5TH CROSS I FLOOR, MALLESWARAM BANGALORE 560 003 REP. BY ITS AUTHORISED OFFICER 2 CANARA BANK HOBEGOWDANAGAR BRANCH WILSON GARDEN BANGALORE 560 027 REP. BY ITS BRANCH MANAGER ... PETITIONERS (BY SRI. M R SHAILENDRA, ADVOCATE) AND:
1 SRI C R JAYAPPA REDDY S/O LATE RAMAIAH REDDY AGED ABOUT 54 YEARS R/A MANJUNATHA NILAYA CHOLANAYAKANAHALLI R.T.NAGAR POST BANGALORE 560 032 2 SRI H.S.DEVARAJ S/O LATE D SHAMANNA AGED ABOUT 36 YEARS R/A SRI NANJAPPA GOWDA NILAYA 3RD MAIN ROAD, H.A.FARM POST, HEBBAL BANGALORE 24 3 MRS. E RUKMANI W/O LATE R ESWARA MURTHY AGED ABOUT 56 YEARS R/A NO.27, 11TH CROSS WILSON GARDEN BANGALORE 560 027 ... RESPONDENTS (BY SRI. J SANTHOSH PRASAD, ADVOCATE FOR SRI K.S.NAGARAJA RAO, ADVOCATE FOR R-1 & 2) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDER DATED 19.08.2013 PASSED ON THE APPLICATION BY XXXVII ADDL.CIVIL AND SESSIONS JUDGE, BANGALORE CITY ON THE APPLICATION FILED U/O VII R 11(D) CPC IN O.S.NO.217/2011 VIDE ANNEXURE-A.
THIS PETITION COMING ON FOR HEARING THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R Petitioners who are defendants in O.S.No.217/2011 are challenging the order dated 19.08.2013 passed on I.A.No.5 by XXXVII Additional City Civil and Sessions Judge, Bangalore City dismissing the application – I.A.No.5 filed under Order 7 Rule 11(d) CPC has been called in question.
2. I have heard the arguments of Sri M.R.Shashidhara, learned Advocate appearing for petitioners and Sri Santhosh Prasad, learned Advocate appearing for respondents-1 and 2.
3. Short point that arises for consideration in this petition is:
“Whether trial Court was right in rejecting the application filed by petitioners/defendants under Order 7 Rule 11(d) CPC?”
4. Parties are referred to as per their rank before trial Court.
5. Plaintiffs have filed suit O.S.No.217/2011 for declaration that notice dated 01.10.2010 issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘SARFAESI’ Act) by first defendant as invalid and not binding on the plaintiffs as it amounts to parallel proceedings in view of pendency of O.A.No.259/2006 before the Debt Recovery Tribunal, Bangalore.
6. On service of suit summons, defendants-1 and 2 appeared, filed their written statement and specific plea came to be raised by defendants contending interalia that suit is not maintainable in view of the embargo contained under Section 34 of SARFAESI Act. Application – I.A.No.5 was filed under Order 7 Rule 11(d) CPC read with Section 151 CPC for rejection of the plaint contending that Section 34 of SARFAESI Act would oust the jurisdiction of the trial Court to try such suits. Learned trial Judge, after considering the objections filed to said application, by impugned order, dismissed the said application on 19.08.2013 (Annexure-A) on the ground that right of the defendant-Bank over the suit property is to be adjudicated in the suit. Hence, this writ petition.
7. There is no dispute that defendant-Bank having filed an application in O.A.No.259/2006 under Section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 against the plaintiffs and others contending interalia that suit schedule property which is the subject matter of notice dated 01.10.2010 has been mortgaged by third defendant and plaintiffs are successors in interest of third defendant. In the said proceedings before Debt Recovery Tribunal, plaintiffs have been arrayed as defendants-4 and 5.
8. When the application is filed under Order 7 Rule 11(d) CPC, burden is on the applicant to establish as to the law which prohibits the Civil Court from adjudicating the suit.
9. Hon’ble Apex Court, in the case of T.ARAVINDANDAM vs T.V.SATYAPAL AND ANOTHER reported in AIR 1977 SC 2421 has held that a vigilant judge would be a complete answer for irresponsible suits. It has been further held that where an illusory cause of action is depicted in the plaint, such claim or suit is to be nipped at the bud. There may be myriad circumstances in which a plaint can be rejected under Order 7 Rule 11 CPC, however, burden would be heavily on the applicant to establish as to how such suit which is sought to be dismissed by rejection of plaint is expressly barred under any statute. It is needless to state that if it does not involve the exercise being undertaken by the Court for recording evidence or otherwise, express provision in a statute prohibits filing of suits or adjudication of the claims before the Civil Court, consequently, plaint is liable to be rejected.
10. For the purpose of examining the plea for rejection of plaint when raised under Order 7 Rule 11(d) CPC, it is only the plaint averments which will have to be considered and not the averments made in the written statement or affidavit supporting the application would be taken into consideration. In the event of averments made in the plaint itself, suggesting or disclosing that suit is expressly barred by any statute, proceeding with the said suit would be an exercise in futility as otherwise, it would amount in allowing jurisdiction being exercised by the Court which it does not have.
11. In the instant case, plaint averments would clearly disclose that defendants-1 and 2 having initiated the proceedings before Debt Recovery Tribunal by filing O.A.No.259/2006 and copy of said plaint has been produced as document No.23 which is part and parcel of the plaint in question. Thus, reading of the plaint averments would clearly disclose that there is an unequivocal admission on the part of the plaintiff themselves about pendency of O.A.NO.259/2006.
12. In the light of the aforesaid analysis of facts and law and when read along with Section 34 of the SARFAESI Act, it would clearly indicate that Civil Court will have no jurisdiction to entertain such suit or proceedings in respect of any matter which Debt Recovery Tribunal or Appellate Tribunal is empowered by or under the Act to determine the said issue. The issue raised by the plaintiffs in the suit in question being completely within the domain of Debt Recovery Tribunal and undisputedly, present plaintiffs also being a party to O.A.No.259/2006 (which is now said to have been disposed of by judgment dated 19.07.2017) and which is now said to be pending before Debt Recovery Appellate Tribunal, suit in question is not maintainable and it is purely barred under Section 34 of SARFAESI Act and as such, Order 7 Rule 11(d) CPC would squarely be attracted. In that view of the matter, point formulated herein above deserves to be answered in favour of the petitioners-defendants-1 and 2 and against respondents-plaintiffs.
13. In view of rejection of the plaint being a deemed decree under Section 2(2) of CPC, plaintiffs would have a remedy to file an appeal against the said order of rejection of the plaint. In that view of the matter, it would be apt and appropriate to direct the trial Court to pass necessary orders in this regard by setting aside the impugned order.
13. Hence, I proceed to pass the following:
ORDER (i) Writ petition is hereby allowed.
(ii) Order dated 19.08.2013 passed on I.A.No.5 by XXXVII Additional City Civil and Sessions Judge, Bangalore in O.S.No. 217/2011 is hereby set aside.
(iii) Application - I.A.No.5 filed under Order 7 Rule 11(d) CPC is hereby restored to the jurisdictional Court for being disposed/ allowed, keeping in mind observations made hereinabove.
SD/- JUDGE *sp