IN THE HIGH COURTOF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH, JAIPUR.
S.B.CIVIL FIRST APPEAL NO. 390/2010
MAHESH KUMAR SHARMA AND OTHERS
BHERU LAL AND OTHERS
DATE OF JUDGMENT:- NOVEMBER 30th , 2011
HON’BLE MS.JUSTICE BELA M.TRIVEDI
Mr. Manish Sharma, for the appellants,
Mr. Shailesh Prakash Sharma for respondent Nos. 1 to 3,
Mr. G.K.Garg, Senior Advocate with
Ms. Anita Agrawal,for respondent Nos.4 & 5
None for respondent No. 6
BY THE COURT
The present appeal filed under Section 96 of the Civil Procedure Code is directed against the judgment and decree dated 4.9.2010, passed by the learned Additional District and Sessions Judge No. 7, Jaipur City, Jaipur, (hereinafter referred to as ‘ the Trial Court‘) in Civil Suit No. 21/2007(154/2007), whereby the Trial Court had rejected the plaint of the appellants(original plaintiffs) under the provisions contained in Order VII Rule 11 of C.P.C.
2. The short facts giving rise to the present appeal are that the appellants-plaintiffs filed the suit against the present respondents-defendants seeking declaration and permanent injunction as prayed for in para 29 of the plaint, in respect of the suit property bearing No. 13-A-13-B, situated opposite Laxmi Mandir, Tonk Road, Jaipur. In the said suit the defendant Nos. 4 and 5 submitted an application under Order VII Rule 11 C.P.C. seeking rejection of the plaint on the ground that the suit was barred under Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002( for short ‘the SARFAESI Act’) and also on the ground that the plaintiff had not paid the requisite court fees. The said application was resisted by the appellants/plaintiffs by filing the reply. The trial court after hearing the learned counsels for the parties and considering the averments made in the plaint as well as the documents on record allowed the said application of the respondent Nos. 4 and 5 filed under O. VII Rule 11, rejecting the plaint of the appellants plaintiffs. Being aggrieved by the said judgment and decree, the appellants have preferred the present appeal.
3. The learned counsel Mr. Manish Sharma for the appellants taking the Court to the impugned judgment passed by the trial court vehemently submitted that the trial court had taken into consideration the documents and other contentions raised by the concerned defendants, which were not part of the plaint. According to Mr. Sharma, the trial court could not have considered any other material except the averments made in the plaint, for the purposes of rejecting the plaint under Order VII Rule 11 (d) of the C.P.C. Mr. Sharma has relied upon the decisions of Apex Court in cases of SALEEM BHAI AND ORS. V. STATE OF MAHARASHTRA AND ORS.(2003)1 SCC 557, KAMLA AND OTHERS VS. K.T. ESHWARA SA AND OTHERS 2008(12)SCC 661 and in case of C. NATRAJAN VS. ASHIM AND ANOTHER 2007(14)SCC 183, in support of his said submission. The learned counsel Mr. Sharma also taking the Court to the averments made in the plaint vehemently submitted that the plaintiffs had asked for the relief against the defendant Nos. 1 to 3 seeking partition of the suit property and also seeking declaration that they had no right to mortgage the said property with the defendant No. 4 Bank and that the relief of injunction was only subsidiary or incidental to the main relief claimed in the suit and, therefore, by no stretch of imagination could it be said that the suit of the plaintiffs was barred by Section 34 of the SARFAESI Act. Placing heavy reliance upon the decision of the Apex Court in the case of MARDIA CHEMICALS LTD. AND OTHERS VS. UNION OF INDIA AND OTHERS (2004)4 SUPREME COURT CASES 311, Mr. Sharma has submitted that the jurisdiction of Civil Court could be invoked when the action of secured creditor was alleged to be fraudulent or its claim was untenable. According to Mr. Sharma the suit property being joint property of the plaintiffs and the defendant Nos. 1 to 3, the said defendants could not have mortgaged the same without the consent of the plaintiffs and hence the defendant Nos. 4 and 5 could not have taken the action in respect of the said property under the provisions contained in ‘the SARFAESI Act’. Mr. Sharma has also submitted that the defendant Nos. 4 and 5 had not followed the procedure of affixing the notice for auction sale of the disputed property and thereby had violated the provisions contained in the Rules framed under ‘ the SARFAESI Act’. Of course Mr. Sharma fairly contended that the plaintiffs had challenged the advertisement dated 9.9.2006 issued by the respondent Nos. 4 and 5 by filing Appeal under Section 17 of ‘the SARFAESI Act’ before the Debts Recovery Tribunal, seeking cancellation of the auction sale of the suit property and that the said appeal was dismissed by the D.R.T.
4. However, the learned Senior Counsel
Mr. G.k.Garg for the respondent Nos. 4 and 5 strenuously urged that the suit filed by the appellants plaintiffs before the trial court was not only barred under the provisions contained in Section 34 of ‘the SARFAESI Act’ and Section 18 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993( for short ‘the Act of 1993’), the same was sheer misuse of process of law. According to Mr. Garg, the trial court considering all the relevant material on record had allowed the application of the defendants under Order VII Rule 11 and the same does not call for interference of this Court. According to
Mr. Garg, appellants have also filed a suit for partition against the present respondent Nos. 1 to 3 and others in respect of the properties including the suit property in the court of Kotputli; which is pending and that the plaintiffs having failed to obtain any relief from the D.R.T. the present suit was filed misusing the process of law. Mr. Garg has also relied upon number of decisions of the Apex Court and other High Courts which will be dealt with, if necessary hereinafter.
5. The learned counsel Mr. Shailesh Prakash Sharma for respondent Nos. 1 to 3 has adopted the arguments of Mr. Garg and submitted that the appeal deserves to be dismissed. No body appears for the respondent No. 6, J.D.A, though duly served.
6. Before adverting to the rival contentions raised by the learned counsels for the parties, it would be appropriate to reproduce the relevant Provisions of Order 7 Rule 11 of C.P.C. more particularly clause(d) which reads as under:-
11. Rejection of plaint.-(1) The plaint shall be rejected in the following cases:-
(d)where the suit appears from the statement in the plaint to be barred by any law ;”
7. The relevant provisions of S. 34 of the SARFAESI Act and Section 18 of the Act of 1993 also are reproduced which read as under:-
“ 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).”
“18. Bar of Jurisdiction .- On and from the appointed day, no court or other authority shall have, or be entitled to exercise, any jurisdiction, powers or authority(except the Supreme Court, and a High Court exercising jurisdiction under articles 226 and 227 of the Constitution) in relation to the matters specified in Section 17.”
8. The said provision of Order VII, Rule 11(d) has been interpreted by the Apex Court in number of cases in which it has been held inter alia that for the applicability of the said provisions, the Court has to draw the conclusion only from the averments made in the plaint and no amount of evidence could be looked into at that stage. It has also been laid down that on a meaningful and not formal reading of the plaint, the Court should exercise the powers under O. VII R. 11 and that if clever drafting has created the illusion of a cause of action, it has to be nipped in the bud at the first hearing. To cite a few decisions are in case of Kamla and ors(supra), in the case of SALEEM BHAI AND ORS.(Supra),in the case of C. Natrajan(supra) , in the case of I.T.C. LTD. VS. DEBT RECOVERY TRIBUNAL AND OTHERS (1998)(2)S.C.C. 70, etc. It would be beneficial to reproduce the relevant portion of the said decisions, more particularly in case of Kamla(supra), in which it has been held as under:-
“Order 7 rule 11(d) CPC has limited application. For its applicability it must be shown that the suit is barred under any law. Such a conclusion must be drawn from the averments made in the plaint. What would be relevant for invoking Order 7 Rule 11(d) CPC are the averments made in the plaint. For that purpose, there cannot be any addition or subtraction. For the purpose of invoking the said provision, no amount of evidence can be looked into. The issues on merit of the matter which may arise between the parties would not be within the realm of the court at that stage.”
9. In the case of C.Natrajan (supra), it has been held as under:-
“An application for rejection of the plaint can be filed if the allegations made in the plaint even if given face value and taken to be correct in their entirety appear to be barred by any law. The question as to whether a suit is barred by limitation or not would, therefore, depend upon the facts and circumstances of each case. For the said purpose, only the averments made in the plaint are relevant. At this stage, the court would not be entitled to consider the case of the defence.”
10. In view of the above settled legal position and also in view of the bare reading of O. VII Rule 11(d) it clearly emerges that the Court is required to take into consideration the statements or the averments made in the plaint only for the purposes of deciding as to whether the suit is barred by any law or not. Hence let us examine the averments made in the plaint in the instant case. The appellants – plaintiffs have stated
inter alia in the plaint that the plaintiffs were in possession of the suit property as tenants since 1986 and that in 1989, the plaintiffs and the defendant Nos. 1 and 2 purchased the said property from their joint funds in the name of defendant No. 2, who happened to be the wife of defendant No. 1 and Bhabhi of the plaintiff No. 1. It was further averred inter alia that the defendant No. 4 was a Nationalized Bank and had taken action under the SARFASI Act in respect of the said property as the defendant no. 2 had allegedly mortgaged the said property with the defendant no. 4 Bank; that the defendant No. 4 had initiated the action by publishing a notice in the local daily on 9.9.06 for sale of the said property without serving any notice to the plaintiffs or affixing any notice on the suit property; that the said action of publishing the advertisement dated 9.9.2006 for auction sale was challenged by the plaintiff no. 1 before the D.R.T. under Section 17 of the ‘the SARFAESI Act’, in which relief for cancellation of the auction sale was asked for and that the said proceedings were pending before the said Tribunal. It was also averred that the allotment letter dated 11.3.1990 issued by the Society in favour of the defendant No.2 having not been registered the said allotment letter was illegal and liable to be set-aside. It was also averred that the plaintiffs, being in possession of the suit property since the last more than 12 years, had become owner by adverse possession. So far as the cause of action stated in the plaint is concerned, it was averred that the same had arisen for the first time on 9.9.2006 when the notice dated 9.9.2006 was published in the news paper on 10.9.2006 by the defendant No. 4 for the sale of suit property at the instance of the defendant no. 5. So far as the reliefs claimed in the plaint were concerned, the plaintiffs had sought declaration that the plaintiffs had share in the suit property as per the family settlement arrived at between the plaintiffs and the defendant Nos. 1 and 2. The plaintiffs had sought permanent injunction restraining the defendants from changing the nature and ownership of the suit property. The plaintiffs also sought declaration for setting aside the mortgage of suit property created in favour of the defendant No. 4 Bank and had also sought declaration for cancellation of allotment letter dated 11.3.1990.
11. From the aforesaid averments made in the plaint, it clearly emerges that the appellants plaintiffs under the guise of challenging the allotment letter dated 11.3.1990, issued in favour of the respondent No. 2 (original defendant no. 2) and under the guise of challenging the mortgage created by the respondent No. 2 in favour of the respondent No. 4 in respect of the suit property, had challenged the action of the respondent No. 4 Bank in issuing the notice dated 9.9.2006 published in the news paper for the sale of the suit property by auction, and thereby had challenged the action of the respondent Nos.4 and 5 taken by them under Section 13(4) of ‘the SARFAESI Act’. The appellants have specifically stated in para 27 of the plaint containing cause of action to the effect that the cause of action had arisen on 9.9.2006, on the respondent No.4
having published the notice in the news paper for the sale of the said property. It is further very significant to note that in para 10 and 18 of the plaint, the appellants had specifically stated that the said action of the respondent Nos. 4 and 5 of publishing the notice dated 9.9.2006 was already challenged by the appellant no. 1 before the Debts Recovery Tribunal under Section 17 of ‘the SARFAESI Act’ and the said proceedings were pending. It is a different thing that it was also not disputed by the learned counsel for the appellants that the said appeal filed by the appellants under Section 17 of ‘the SARFAESI Act’ has been dismissed by the D.R.T. subsequently. Even if the said subsequent event is not taken into consideration then also from the bare reading of the averments made in the plaint, it clearly transpires that the appellants had challenged the action of the respondent Nos. 4 and 5 taken under Section 13(4) of ‘the SARFAESI Act’ by filing the suit which was clearly barred under Section 34 of the said Act, in as much as, as per the said provision the Civil Court does not have the jurisdiction to entertain any suit or proceeding in respect of the matter for which the D.R.T. or the Appellate Tribunal is empowered by or under the Act to determine. As per the said provision the Civil Court also can not grant any injunction in respect of any action taken or to be taken in pursuance of the power conferred to the secured creditor by or under the said Act. It is also pertinent to note that Section 18 of the Act of 1993 also bars the jurisdiction of the Court and other authority to entertain or exercise any powers in relation to the matters specified in Section 17 of ‘the SARFAESI Act’. As stated earlier the appellants had already resorted to Section 17 of ‘the SARFAESI Act’ by filing proceedings before the D.R.T. challenging the said action of the respondent Nos. 4 and 5 in issuing the notice for sale of the suit property and, therefore, also the trial court did not have the jurisdiction to entertain the suit in respect of the suit property which was mortgaged with the bank by the respondent no. 2 and in respect of which the action under Section 13(4) was initiated by the respondent no. 4.
12. It was sought to be submitted by learned counsel Mr. Sharma for the appellants that the Hon. Supreme Court in the case of MARDIA CHEMICALS LTD. AND OTHERS VS. UNION OF INDIA AND OTHERS (2004) 4 SCC 311, had carved out certain exceptions in which the Civil Court could exercise its jurisdiction. Mr. Sharma has relied upon para 51 of the said decision which reads as under:-
“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 his claim may be so absurd and untenable which may not require any prove 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 AIR at pp 141,144 a judgment of the learned Single Judge where it is observed as follows in para 22:(A.I.R. P 143).
“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 v. Scott (1859) 7 WR 213 ,(249). I need not point out 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 moneys on mortgages rely. (See Ghose, Rashbehary: Law of Mortgages, Vol. II, Fourth Edn., p. 784)”
13. There can not be any disagreement to the proposition of law propounded by the Hon’ble Supreme Court , however, in the instant case, there is no averment made in the plaint alleging the action of the secured creditor i.e. Bank to be fraudulent or its claim to be untenable and absurd. It is needless to say that in order to invoke such exception as carved out in the above stated paragraph of the decision, a specific plea with regard to the fraudulent action on the part of the secured creditor was required to be taken by the appellants in the suit which they had not taken and therefore, the observations made in the said para are of no help to the appellants. On the contrary it clearly transpires that the plaintiffs under the guise of claiming other reliefs of declaration and injunction qua respondent Nos. 1 and 2 had by clever drafting, challenged the action of the respondent Nos. 3 and 4 taken under ‘the SARFAESI Act’. Mr. Garg learned counsel for the respondent Nos. 4 and 5 had rightly relied upon the judgment of Hon’ble Supreme Court in the case of T. ARIVANDANDAM VS. T.V. SATYA PAL AND ANOTHER (1977)4 Supreme court cases 467 to buttress his submissions that a meaningful reading of the plaint is required to be taken into consideration. The relevant observations made by the Apex Court in the said decision are reproduced as under:-
“We have not the slightest hesitation in condemning the petitioner for the gross abuse of the process of the court repeatedly and unrepentently resorted to. From the statement of the facts found in the judgment of the High Court, it is perfectly plain that the suit now, pending before the First Munsif’s Court, Bangalore, is a flagrant misuse of the mercies of the law in receiving plaints. The learned Munsif must remember that if on a meaningful- not formal-reading of the plaint it is manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue, he should exercise his power under Order VII, Rule 11, C.P.C. taking care to see that the ground mentioned therein is fulfilled. And, if clever, drafting has created the illusion of a cause of action, nip it in the bud at the first hearing by examining the party searchingly under Order X, C.P.C. An activist Judge is the answer to irresponsible law suits. The trial Courts would insist imperatively on examining the party at the first hearing so that bogus litigation can be shot down at the earliest stage. The Penal Code is also resourceful enough to meet such men,(Cr. XI) and must be triggered against them. In this case, the learned Judge to his cost realised what George Bernard Shaw remarked on the assassination of Mahatma Gandhi:
“It is dangerous to be too good.”
14. In view of the above this Court has no hesitation in holding that the suit filed by the appellants was not only barred under Section 34 of ‘the SARFAESI Act’ read with Section 18 of the Act of 1993 but also was sheer abuse of process of law and hence the plaint was liable to be rejected under Order VII Rule 11(d) of C.P.C. , which the trial court has rightly rejected. It is true that the trial court has taken into consideration the other material over and above the averments made in the plaint which was not permissible, nonetheless the conclusion arrived at by the trial court does not call for any interference in this appeal. It is also true that the appellants/plaintiffs had claimed certain reliefs against the respondent no. 1 and 2 also as regards their share in the suit property. However, without entering into the merits of the said relief,
suffice is to say that the present suit filed against the respondent Nos. 4 and 5 challenging their action taken under ‘the SARFAESI Act’ was barred by law and therefore, the entire plaint was liable to be rejected in view of Order VII, Rule 11(d), of the C.P.C.
15. In that view of the matter, this Court does not find any merit in the present appeal and the same deserves to be dismissed. The appeal accordingly is dismissed.