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2021 Supreme(Kar) 102
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ABHAY S. OKA, SACHIN SHANKAR MAGADUM, JJ.
Bank of Baroda – Appellant
Versus
Dr. Bavaguthu Raghuram Shetty – Respondent
COMAP NO. 26 to 28 of 2020
Decided on : 17-04-2021
For the Appellant :Shri Udaya Holla, for Shri. Dharmendra Chatur and Shri. Rahul Prasad, Advocates
For the Respondent:Shri Shashikiran Shetty, Senior Advocate for Shri Sandeep Lahiri, Advocate)
Point of law: Procedure is a handmaid of justice. It cannot be used to defeat the substantive rights. Though the defendants were called upon to do so by a notice, they refused to furnish any details of their other properties. Therefore, the description of the said properties could not be incorporated in the plaint. That was no ground to deny the relief. The first defendant cannot be allowed to take an advantage of his wrong by relying upon the procedural Rules.
Headnote:
Commercial Courts Act, 2015 - Section 13(1A) - Civil Procedure Code,1908 - Order XLIII Rule 1(r) and Section 104 - Clauses (a) and/or (c) of Section 20 - Applications for interim relief - Relief sought in the plaint - No relief prayed for recovery of money - Plaintiff bank has sanctioned various credit facilities/loans to the said companies and to said entities - Details thereof have been set out in paragraph 5 of plaint - Clean demand loan facility has also been extended by plaintiff to first defendant - Pointed out in plaint first defendant and entities controlled by him are under distress and are under investigation by multiple Authorities including agencies abroad - Details of the proceedings Taken against first defendant have been set out in plaint - defendant acknowledged liability to pay to plaintiff and agreed to provide all-out comfort” and secure his liability by providing several immovable properties available to him he executed a letter of undertaking with Negative Lien and creation of mortgage - Second defendant joined first defendant in execution of Negative Lien Letter which has been registered with Central Registry of Securitization Asset Reconstruction and Security Interest of India.
Finding of the Court: Obligation of first defendant to disclose details of all other movable and immovable properties held by him - He is under an obligation not to sell or transfer the same without consent of plaintiff bank - There is no manner of doubt that a prima facie case was established by the plaintiff - Obvious considering the extent of amounts payable by the companies/entities of first defendant and the first defendant in his capacity of the borrower and guarantor balance of convenience is in favour of plaintiff - It goes without saying that irreparable loss will be caused to plaintiff which is nationalised bank, if injunction is not granted.
Result: Ordered accordingly
JUDGMENT :
FACTS:
By Commercial Appeal No.26 of 2020 preferred under the provisions of Section 13 (1A) of the Commercial Courts Act, 2015 read with Rule 1 (r) of Order XLIII of the Code of Civil Procedure, 1908 (for short ‘the said Code’), the appellant therein who is the original plaintiff has taken an exception to the judgment and order dated 28th August 2020 passed by the learned Judge of the Commercial Court at Bengaluru. By the said judgment and order, I.A.Nos.I and II filed by the plaintiff Bank in Commercial Suit being Commercial Original Suit No.1 of 2020 have been partly allowed. The appeal takes an exception to that part of the impugned judgment and order by which a part of the relief claimed on I.A.Nos.I and II was rejected. Commercial Appeal Nos.27 and 28 of 2020 have been preferred by the appellants therein who are the original defendants for challenging the same judgment and order. For the sake of convenience, the parties are hereafter referred by their status before the Trial Court, that is to say, plaintiff and defendants
2. The first defendant is a businessman who is stated to have multiple businesses spread over the world including India, United Arab Emirates, United Kingdom and United States of America etc. The second defendant is the wife of the first defendant and both the defendants are the residents of City of Bengaluru. It is pleaded in the plaint that the first defendant controls various companies/entities, having their branches at Abu Dhabi, Oman and Mumbai etc. It is stated in the plaint that the plaintiff bank has sanctioned various credit facilities/loans to the said companies and to the said entities. The details thereof have been set out in paragraph 5 of the plaint. Clean demand loan facility has also been extended by the plaintiff to the first defendant. The case made out in the plaint is that as on 5th May, 2020, the plaintiff had advanced an aggregate sum of Indian Rs.2077,44,00,000 (Rupees Two Thousand Seventy Seven Crores and Forty Four Lakhs) to the first defendant and the companies/entitles controlled by him.
3. In paragraph 9 of the plaint, the plaintiff has set out the details of the personal guarantees executed by the first defendant in favour of the plaintiff. The details of the said personal guarantees are as under:
“a. Personal Guarantee dated 28.02.2010, executed by Defendant No.1 to secure the repayment obligations of NMC specialty Hospital LLC, Dubai for various credit facilities obtained from plaintiff’s Abu Dhabi Branch (“Personal Guarantee – NSHLLC”).
b. Personal Guarantee dated 25.03.2016, executed by Defendant No.1 to secure the repayment obligations of BRS Ventures & Holdings Limited for various syndicated credit facilities through Citibank N.A. and others (including the plaintiff) (“Personal Guarantee-BRSV”).
c. Personal Guarantees dated 14.09.2017 and 23.11.2017, executed by Defendant No.1 to secure the repayment obligations of Neo Pharma LLC for various credit facilities obtained from the Plaintiff’s DIFC and Abu Dhabi Branches respectively (“Personal Guarantees – NPLLC”).
d. Personal Guarantee dated 26.09.2017, executed by Defendant No.1 to secure the repayment obligations of NMC Healthcare LLC (Oman) for various credit facilities obtained from the plaintiff’s Oman Branch (“Personal Guarantee – NHLLC, Oman”).
e. Personal Guarantee dated 19.06.2019 executed by Defendant No.1 to secure the repayment obligations of UAE Exchange Centre LLC (“Personal Guarantee – UAEX”).
4. It is stated in paragraph 15 of the plaint that as on 5th May, 2020, the liability of the first defendant and/or the companies/entities controlled by him is to the extent of Indian Rs.1912,52,80,000 (Rupees One Thousand Nine Hundred and Twelve Crore Fifty Two Lakh Eighty Thousand)
5. It is pointed out in the plaint that the first defendant and entities controlled by him are under distress and are under investigation by multiple Authorities including the agencies abroad. The details of the proceedings taken against
