Allegations of fraud against a secured creditor allow civil court access despite statutory bars, permitting claims and proceedings to continue.

JUDGMENT

The Background

1. Mr. Ravi Gupta, learned Senior Counsel for Defendant 3, the Kotak Mahindra Bank ("the Bank", hereinafter) vehemently opposed the issuance of summons in this suit and submitted that, even without any pleadings being invited by the Court or being placed on record by his client, he desired to advance submissions, orally, as would persuade this Court to dismiss the suit in limine in exercise of the jurisdiction vested in it by Order VII Rule 11 of the Code of Civil Procedure, 1908 ("the CPC").

2. No application under Order VII Rule 11 has been moved by the defendant. No pleadings by the defendant are on record. As Mr. Gupta has chosen to argue sans any pleadings, the submissions in the plaint have, for the purposes of this application, to be treated as admitted, at least for the present and for the purpose of consideration of the objections raised by Mr. Gupta. The Court, therefore, proceeds on demurrer.

3. On the principles of law, on which he seeks to base his oral prayer for dismissal of the suit without issuance of summons, Mr. Gupta has placed on record written submissions, along with copies of judgments on which he seeks to place reliance. Mr. Anupam Lal Das, learned Senior Counsel for the plaintiffs, has done likewise.

4. Learned Senior Counsel have been heard at exhaustive length.

5. Mr. Das had initially objected to grant of an audience to Mr. Gupta at this stage, contending that summons had, of necessity, to be issued in any suit validly instituted and that the right of the defendant to an audience would enure only by way of response to the summons. Any objection to the maintainability of the suit, Mr. Das had sought to submit, would have, at that stage, to be raised by the defendant by moving an appropriate application under Order VII Rule 11 of the CPC. Mr. Das had sought to contend that the defendant could not seek to stymie the very issuance of summons, to which every suit, validly instituted, was entitled. He had placed reliance, in this context, on the decision of a Division Bench of this Court in Bright Enterprises Pvt. Ltd. v. MJ Bizcraft LLP, 2017 SCC OnLine Del 6394.

6. I had, vide my order dated 23rd July, 2021, 2021 SCC OnLine Del 3803, rejected the submission of Mr. Das, relying on Bright Enterprises itself which, in paras 18 and 19, allowed the suit to be disposed of, without issuance of summons, where a successful challenge to the maintainability of the suit was raised under Order VII Rule 10 or under Order VII Rule 11 of the CPC. Success of a challenge laid under the former provision would result in return of the suit, to be instituted before a proper forum, whereas success of a challenge laid under the latter would result in rejection of the suit outright. Bright Enterprises, I observed, allowed the suit to be brought to an end in limine without issuance of summons in these two select instances; in all other cases, as Mr. Das contended, issuance of summons was a matter of right. As the court to decline to issue summons on the suit, were a case under Order VII Rule 10 or Order VII Rule 11 to be successfully made out, the defendant could not be denied an opportunity of an audience in that regard. The objection of Mr. Das, to the Court entertaining Mr. Gupta at this stage, even before summons were issued in the suit was, therefore, rejected.

7. In choosing, however, to oppose issuance of summons in the suit even without placing pleadings on record, Mr. Gupta has allowed the averments in the suit to, for the purposes of consideration of his challenge, be regarded as correct on the principle of demurrer and has, thereby, taken a calculated risk. As