RAJIV SAHAI ENDLAW, J.

1. Application of the defendant under Order 7 Rule 11 of the CPC for rejection of the plaint for the reason of the relief claimed in the suit being barred by Section 18 of the Recovery of Debts Due to Banks & Financial Institutions Act, 1993 (DRT Act) r/w Section 34 of the Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Securitization Act) is for consideration.

2. The plaintiffs have instituted the suit for declaration and permanent injunction. They have pleaded that they along with others had promoted M/s Sudarshan Consolidated Limited since known as M/s Willy Agrotech Limited; that the said company had obtained certain credit limits from the defendant and had executed the loan documents in favour of the defendant bank; that the plaintiffs had also executed personal guarantees in favour of the defendant; that the plaintiffs have sold their shareholding in the company and have resigned from the Board of Directors of the company and are left with no concern with the company; that the defendant had got issued notice dated 31st December, 2008 claiming the plaintiffs to be jointly and severally liable for the debts of the company; that the plaintiffs are not so liable for the debts of the company not only for the reason of having transferred their shares and resigned from the Board of Directors of the company but also for the reason of the defendant having altered the terms & conditions of the credit facility with the company. The plaintiffs have further pleaded that notwithstanding the aforesaid and in breach of the RBI guidelines with regard to “willful defaulters”, the defendant had threatened to declare the plaintiffs as willful defaulters and which would interfere with the plaintiffs’ right to carry on other businesses. The plaintiffs have claimed the relief of declaration that the personal guarantees executed by the plaintiffs in favour of the defendant stand discharged, the relief of perpetual injunction restraining the defendant from invoking the personal guarantees and for mandatory injunction directing the defendant to produce the documents of personal guarantee and for cancellation thereof.

3. The suit came up first before this court on 20th March, 2009 when the senior counsel for the plaintiffs was asked to satisfy the court as to how the reliefs claimed in the suit were not barred by the DRT Act. On the next date i.e. 24th March, 2009, the counsel for the defendant appeared and sought time to file the written statement. In the circumstances, the plaint was registered as a suit. On the application of the plaintiffs for interim relief the defendant was restrained from declaring the plaintiff as willful defaulters, subject to the condition that the plaintiffs shall not alienate any of their immovable property save in the normal course of business and not deal with/conduct their affairs to the detriment of the defendant. The plaintiffs were also directed to file list of their assets in the court. Thereafter, the application under consideration was filed. Since it involved only legal questions, arguments thereon were heard without calling for a reply. The senior counsel for the plaintiffs on 1st May, 2009 also clarified that the interim order restraining the defendant from declaring the plaintiffs as defaulters was not intended to be an embargo to the defendant initiating proceedings against the plaintiffs before DRT. It was further clarified that in the event of the defendant initiating proceedings against the plaintiffs before DRT, the plaintiffs shall not before the DRT take up the plea of those proceedings being not maintainable owing to pendency of this suit. The interim order was clarified accordingly.

4. The matter does not require detailed discussion in view of the judgment of the Supreme Court in Nahar Industrial Enterprises Ltd. Vs. Hong Kong and Shanghai Banking Corporation pronounced since the orders were reserved