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IN THE HIGH COURT OF DELHI AT NEW DELHI
Chandra Dhari Singh, J.
Ifci Venture Capital Funds Limited - Appellant
Versus
Srgp Corporation Limited - Respondent
C.R.P. No. 115 of 2022 and CM APPL No. 35157 of 2022
Decided On : 22-02-2024
| Table of Content |
|---|
| 1. contextual background of the parties and contract (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. timeline of loan defaults and moratorium (Para 7 , 8 , 9 , 10 , 11 , 12) |
| 3. initiation of sarfaesi act measures (Para 13 , 14 , 15 , 16 , 17) |
| 4. court jurisdiction and trial court's authority (Para 18 , 19 , 20) |
| 5. arguments from the petitioner regarding jurisdiction (Para 21 , 22 , 25 , 26) |
| 6. arguments from the respondent on maintainability (Para 31 , 32 , 33 , 34) |
| 7. challenges to the validity of the order (Para 46 , 47) |
| 8. judicial scrutiny and error assessment (Para 55 , 56 , 57 , 58 , 81 , 82) |
| 9. decision on undervaluation and status quo (Para 88 , 89 , 90) |
| 10. determining jurisdiction under sarfaesi (Para 94 , 98 , 100) |
| 11. final judgment and order (Para 117 , 119 , 120 , 121) |
JUDGMENT
Chandra Dhari Singh, J. - The instant civil revision petition under Section 115 of the Code of Civil Procedure, 1908 (hereinafter "CPC") has been filed on behalf of the petitioner seeking the following reliefs:
"(a) Call the records of C.S. No. 901/2021 titled as "SRGP Corporation VS. IFCI Venture Capital Funds Limited" is pending before the Ld. Trial Court Shri Aviral Shukla, Ld. Civil Judge, District (South-East) Saket Court, New Delhi.
(b) Set aside the impugned order dated 22.12.2021 passed by the Hon 'ble Court of Shri Aviral Shukla, Ld. Civil Judge, District (South-East) Saket Court, New Delhi in C.S. No. 901/2021 titled as " SRGP Corporation Ltd. Vs. IFCI Venture Capital Funds Limited ".
(c) Allow the application under Order VII Rule 11 CPC filed by the Petitioner and Suit filed by the Respondent/Plaintiff may kindly be rejected.
(d) Any other relief/ reliefs, which this Hon 'ble Court may think fit and proper in the interest of justice."
FACTUAL HISTORY
2. The petitioner, i.e., the defendant before the learned Trial Court is a public financial institution under the Ministry of Finance, Government of India, incorporated under the Companies Act, 1956 having its registered office at IFCI Tower, 61 Nehru Place, New Delhi - 110019. inter alia the petitioner entity is involved in the business of assisting the innovation and development including application and commercialization of technology and/or granting financial assistance by way of equity participation, debentures or advances.
3. The respondent, i.e., the plaintiff before the learned Trial Court is a company incorporated under the provisions of Companies Act, 2013, also registered with the Ministry of Micro, Small and Medium Enterprises, Government of India (hereinafter "MSME") and has its registered office at Ganges Nagar, 365, Harris Ganj, Kanpur, Uttar Pradesh-208004.
4. A project was proposed by the respondent company wherein it was agreed that the petitioner shall takeover/refinance all the loans advanced by M/s Venus India Asset Finance Pvt. Ltd. to the respondent and the project also included for financing of development/finishing work of Ganges Nagar Mall (Phase I) & Ganges Nagar Plots TAT Mill (Phase II) respectively situated at 365 & 364, Harris Ganj, Kanpur, Uttar Pradesh (hereinafter "the project").
5. The respondent company through its director namely Mr. Raghu Raj Kanudia (plaintiff no. 2 before the learned Trial Court) approached the petitioner company for financial assistance to the tune of Rs. 17.50 Crores for refinancing/taking over of all the existing four loans aggregating to Rs. 13.50 Crores of M/s Venus India Asset Finance Pvt. Ltd. and Rs. 4 Crores for development/finishing work of the above said project.
6. The petitioner agreed to finance the amount of Rs. 17.50 Crores in favour of the respondent vide Corporate Loan Agreement dated 8th August, 2017 for a period of 48 months including moratorium period of 12 months from the date of first disbursement subject to certain terms and conditions. Further, a Deed of Guarantee dated 8th August, 2017 was also executed by the Director of the respondent company namely Mr. Raghu Raj Kanudia in favour of the petitioner. An Undertaking da
The jurisdiction of the civil court is excluded in matters related to the classification of loan accounts as NPA under the SARFAESI Act.
The classification of loan accounts as NPAs and the subsequent actions taken by the bank are not justiciable at the writ stage, and the petitioners should avail the remedy under Section 17 of the SAR....
The classification of a borrower's account as NPA under the SARFAESI Act is not justiciable in writ jurisdiction until measures under section 13(4) are invoked, necessitating the exhaustion of statut....
Classification of an account as NPA under SARFAESI Act is not subject to judicial review and requires the borrower to seek recourse through statutory appeal under Section 17.
The High Court should not exercise jurisdiction under Article 226 in matters governed by the SARFAESI Act where effective remedies exist, and classification of accounts as NPAs is not subject to judi....
The statutory scheme of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Act, 2002) does not provide for a legal remedy until the Section 13(4....
Borrowers have remedies under Section 13(3A) and Section 17 of the SARFAESI Act, 2002 to challenge NPA classification and appeal actions taken by the bank.
The High Court should not adjudicate on the classification of NPA, and recovery proceedings should not be halted by exercising power under Article 226 of the Constitution of India.
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