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2023 Supreme(Kar) 327
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
G.NARENDAR, C.M. POONACHA, JJ.
Dr. Ramachandra C S/o Late Chowdappa – Appellant
Versus
Karnataka Bank Limited – Respondent
Commercial Appeal No. 206 of 2022
Decided on : 27-07-2023
Advocate Appeared:
For the Appellant : SRI. REUBEN JACOB, SR. ADV. FOR SRI. PIYUSH KUMAR JAIN. D., ADV.)
For the Respondent: SRI. K V SHYAMAPRASADA.
Point of Law: In a suit for damages and compensation, amount is indeterminate and determination is a discretion of Court.
Headnote:
Commercial Courts Act, 2015 - Section 2, ©(i), (b), 12 – Code of Civil Procedure, 1908 - Section 9, Order VII Rule 11(d) - Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 34, 14 - Auction sale - Loss of rental income - Compensation for loss and damages - Direct Defendants to pay a sum to plaintiffs as compensation for loss and damages sustained by plaintiffs on account of delay in handing over vacant possession of schedule property calculated on basis of loss of rental income – Claim is one of a simple compensation for damages suffered by appellant on account of certain actions of Bank outside ordinary transaction of sale. [Para 6]
Finding of the Court: Suit was barred by Section 34 of SARFAESI Act is concerned, at outset it is required to be noted that suit was for damages/compensation, with respect to balance land, which could not have been decided by DRT or Appellate Tribunal, Section 34 of SARFAESI Act shall be applicable only in a case where Debt Recovery Tribunal and/or Appellate Tribunal is empowered to decide matter under SARFAESI Act - Plaintiff was not challenging sale certificate - Judgment of Hon’ble Apex Court in Leelamma Mathew’s case (stated supra) squarely applies to facts and circumstances of case on hand - Order appealed against does not specifically name DRT as Appropriate Forum, in operative portion, yet on a conjoint reading of para 29 and operative portion of para 30 would indicate that Court below has accepted case of respondents that DRT is Appropriate Forum.
Result: Ordered accordingly.
JUDGMENT :
Heard the learned senior counsel Sri Rueben Jacob along with Sri Piyush Kumar Jain for the appellants and the learned counsel Sri K.V. Shyamaprasada for respondents No.1 to 4.
2. The appeal involves a very short point and is taken up for disposal at the admission stage itself with the consent of the counsels.
3. The appellant who is the plaintiff before the Court below had participated in an auction sale conducted by the second respondent and was declared the successful bidder and thereafter, in terms of the conditions of sale, the appellant complied with the conditions of sale, and the possession of the property has been delivered to him and the sale has been completed in his favour.
4. The case of the appellant/plaintiff is that the actions of the bank resulted in a delay in handing over possession of the property and that consequently, the same has resulted in loss of the rental income and that the delay in handing over possession was unjustified. Hence, the following reliefs were sought for:-
“PRAYER WHEREFORE, it is prayed that this Hon’ble Court may be pleased to:
(a) Direct the Defendants to pay a sum of Rs.1,36,11,080/-(Rupees One Crore Thirty Six Lakhs Eleven Thousand and Eighty Only) to the plaintiffs as compensation for loss and damages sustained by the plaintiffs on account of the delay in handing over the vacant possession of the schedule property from 24-11-2017 till 14-08-2019 calculated on the basis of loss of rental income at the rate of Rs.57/-per square feet in respect of 11554.40 square feet, along with interest at the rate of 18% per annum from the date of filing of the suit.
(b) Direct the Defendants to pay a sum of Rs.7,92,934/-(Rupees Seven lakhs Ninety Two Thousand Nine Hundred and Thirty Four Only) being the excess amount of 1% (along with interest at 9.5% per annum from 24-11-2017 to 09-02-2021) collected by the defendants from the plaintiffs along with interest at the rate of 18% per annum from the date of filing of the suit.
(c) Direct the Defendants to Pay a sum of Rs.17,99,052/-(Rupees Seventeen lakhs Ninety Nine Thousand and Fifty Two Only) to the plaintiffs being interest at the rate of 9.5% per annum calculated from 26-08-2016 till 24-11-2017 on the 25% of the bid amount of Rs.1,51,91,500/-, along with interest at the rate of 18% per annum from the date of filing of the suit.
(d) Grant cost/s.
(e) Pass such other order/s as this Hon’ble deems fit in the facts and circumstances of the case”.
5. The learned senior counsel would also canvass that the Competent Court is the Commercial Courts and he would take the Court through Clause (c)(i) of Section 2 of the Commercial Courts Act, 2015 (hereinafter referred to as ‘the Act’) to state that the dispute raised by the appellant is a Commercial dispute and that the lis would lie to the Commercial Court as defined under Section 2(b) of the Act. He would also take the Court through Section 12 to state that the appellant, apart from damages has also prayed for recovery of certain sums which he alleges were collected over and above the sum due to the bank. In our considered opinion, the said contention is misplaced.
6. The claims as prayed for in the plaint would clearly disclose that the claim is one for damages of an indeterminate amount and not for a determinate amount. Further more, the reliance on Clause (c)(i) 2 of the Act to classify the claim as an ordinary transaction, in our considered opinion is inapplicable in the facts and circumstances of the case. The claim is one of a simple compensation for damages suffered by the appellant on account of certain actions of the Bank outside the ordinary transaction of the sale. The issues that would be required to be adjudicated are issues; as to whether the appellant/plaintiff has indeed suffered any damages as also, whether the respondent bank has been negligent, resulting in and giving rise to an actionable claim; are issues that would require to be adjudicated upon and thereafter, it could be open for
