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2008 Supreme(Cal) 192

BHASKAR BHATTACHARYA AND RUDRENDRA NATH BANERJEE, JJ.
Allahabad Bank
versus
Shank's (Steel Fab Pvt. Ltd.) and Ors.
F. M. A. No. 107 of 2008 with C. A. N. 7742 of 2007,
Decided on - 15 -2 -2008.

Advocates appeared:
Saptangsu Basu, Ayyan Banerjee and Siddhartha Banerjee, for Appellant; for Respondents.

A Civil Court lacks jurisdiction to entertain a suit for recovery of money exceeding Rs. 10 lacs in view of the bar created under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. In such cases, the plaint should be rejected under Order VII Rule 11(d) of the Code of Civil Procedure, which mandates rejection of a plaint if the suit appears to be barred by law from the statements made in the plaint.

Headnote:

CIVIL PROCEDURE - ORDER VII RULE 10 AND ORDER VII RULE 11 - RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993 - REJECTION OF PLAINT - JURISDICTION - SUIT FILED IN CIVIL COURT FOR RECOVERY OF MONEY EXCEEDING RS. 10 LACS - COURT LACKS JURISDICTION - PLAINT REJECTED UNDER ORDER VII RULE 11(D) INSTEAD OF RETURNED UNDER ORDER VII RULE 10 - VALIDITY.

Fact of the Case:

A Nationalized Bank filed a suit for recovery of money exceeding Rs. 10 lacs in a Civil Court, despite the bar created under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (the Act). The defendants filed an application for rejection of the plaint under Order VII Rule 11 of the Code of Civil Procedure (CPC), arguing that the suit was barred by the provisions of the Act. The plaintiff, in response, filed an application under Order VII Rule 10 of the CPC, seeking return of the plaint.

Finding of the Court:

The Court held that the Civil Court lacked jurisdiction to entertain the suit in view of the bar created under the Act. It further held that the Trial Court rightly rejected the plaint under Order VII Rule 11(d) of the CPC, as the suit appeared to be barred by law from the averments made in the plaint.

Issues: 1. Whether the Civil Court had jurisdiction to entertain the suit in light of the bar created under the Act? 2. Whether the Trial Court erred in rejecting the plaint under Order VII Rule 11(d) instead of returning it under Order VII Rule 10?

Ratio Decidendi: 1. The Court relied on the provisions of the Act, which barred Civil Courts from entertaining suits for recovery of money exceeding Rs. 10 lacs. 2. The Court distinguished Order VII Rule 10 and Order VII Rule 11 of the CPC, holding that Rule 10 applies to cases of lack of territorial or pecuniary jurisdiction, while Rule 11 prescribes situations where the Court shall reject a plaint. 3. The Court emphasized that Order VII Rule 11(d) mandates rejection of a plaint if the suit appears to be barred by law from the statements made in the plaint, and that the Court must presume all statements in the plaint to be true for this purpose.

Final Decision: The Court dismissed the appeal, holding that the Trial Court was justified in rejecting the plaint under Order VII Rule 11(d) and that the plaintiff was not prejudiced by the order as they could still pursue their claim before the Debt Recovery Tribunal.

JUDGMENT :- This first miscellaneous appeal is at the instance of a plaintiff in a suit for recovery of money and is directed against order dated 21st May, 2007 passed by the Civil Judge, Senior Division, 9th Court, Alipore, in Money Suit No. 20 of 2002, thereby rejecting the plaint and at the same time, dismissing an application under Order VII Rule 10 of the Code of Civil Procedure filed by the plaintiff for return of the plaint.

2. The plaintiff, a Nationalized Bank, filed a suit for recovery of money valued above Rs. 10 lac in the Court of Civil Judge, Senior Division, 9th Court, Alipore, notwithstanding the fact that in view of the provisions contained in the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, (hereinafter referred to as the Act), such suit is barred and the proceedings are entertainable only by the Debt Recovery Tribunal.

3. The defendants, after entering appearance in the suit, filed an application under Order VII Rule 11 of the Code of Civil Procedure thereby praying for rejection of the plaint on the ground that even on the basis of averments made in the plaint itself, the suit was barred by the provisions contained in the said Act.

4. The plaintiff, at that stage, came forward with an application under Order VII Rule 10 of the Code of Civil Procedure thereby praying for a direction for return of the plaint instead of rejection of the same.

5. Both the applications were taken up together for hearing and by the order Impugned herein, the learned Trial Judge has allowed the application under Order VII Rule 11 of the Code by rejecting the plaint and at the same time, has dismissed the other application under Order VII Rule 10 of the Code of Civil Procedure filed by the plaintiff for return of the plaint.

6. Being dissatisfied, the plaintiff has come up with the present first miscellaneous appeal.

7. Mr. Basu, the learned advocate appearing on behalf of the plaintiff/appellant, has strenuously contended before us that the learned Trial Judge erred in law in rejecting the plaint when, on the face of it, it had no jurisdiction to entertain the suit in view of the bar created under the Act. Mr. Basu, therefore, submits that the learned Trial Judge, instead of rejection of the plaint, ought to have passed direction for return of plaint for presentation before the Debt Recovery Tribunal.

8. Therefore, the sole question that arises for determination in this appeal is whether the learned Trial Judge erred in law in rejecting the plaint in the facts of the present case.

9. After hearing Mr. Basu appearing on behalf of the appellant and after going through the provisions contained in Order VII Rule 10 and Order VII Rule 11 of the Code of Civil Procedure, we find that Rule 10 authorises the Court to return the plaint at any stage of the suit for presentation before the appropriate Court once it comes to the conclusion that it has no jurisdiction to entertain such suit. Rule 11, on the other hand, prescribes the situations in which the Court shall reject a plaint. At this stage, we cannot lose sight of the fact that rejection of a plaint does not amount to dismissal of the suit. If a suit is dismissed, a fresh suit will be barred by the principles of res judicata; whereas in the case of rejection of a plaint, a fresh suit is maintainable and the previous order of rejection of plaint will not be an impediment in filing the second suit after removal of defect which was the cause of rejection of the plaint.

10. Order VII Rule 11(d) authorizes a Court to reject a plaint, where the suit appears from the statements made in the plaint to be barred by any law. In order to invoke Order VII Rule 11 (d) of the Code, the Court must restrict its scrutiny only to the averments made in the plaint and at that stage, it cannot take into consideration the defence of the defendant nor can it seek assistance of any evidence from the parties. If it appears from the averments made in the plaint itself that the Court cannot entert

























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