Back
2020 Supreme(Guj) 632
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R.M. CHHAYA, ILESH J. VORA, JJ.
Sintex Industries Limited – Appellant
Versus
South Indian Bank Limited – Respondent
First Appeal No. 1575 of 2020, Civil Application (For Stay) No. 1 of 2020, Civil Application (For Additional Evidence) No. 2 of 2020
Decided On : 16-09-2020
Advocate Appeared:
For the Appellant : Mr. Salil M. Thakore.
IMPORTANT POINT
Rejection of the plaint under Order VII rule 11 of the CPC is a drastic power conferred in the court to terminate a civil action at the threshold. The conditions precedent to the exercise of power under Order VII rule 11, therefore, are stringent and have been consistently held to be so by the Court.
Headnote:
Civil Procedure Code, 1908 - Section 96 - Order 7 and 41 - Rule 11 and 10 -- Specific Reliefs Act - Sections 34, 37 and 40 - Rejection of Suit - Cause of action and jurisdiction - Injunction and damages - It would be open for the Court having territorial jurisdiction to decide the same after hearing the plaintiff-appellant. In view of the aforesaid observations, the alternative submissions made by Mr. Thakore, learned Sr. Counsel for the petitioner - to permit him to withdraw the suit with a liberty to file a fresh suit on the same grounds, is not required to be considered.
Fact of Case
Senior Counsel assisted , learned counse, learned counsel for appellant through Video Conferencing learned counsel for appellant has also submitted written arguments through what's app, which is taken on record - Present appeal directed against judgment and decree passed by learned Principal, whereby, suit has been rejected for want of cause of action and jurisdiction - Present appellant-Sintex Industries Limited filed a suit for declaration, injunction and damages against 19 defendants
Finding of Court
Discussions and reason findings recorded by learned Trial Court while rejecting plaint are not sustainable in eye of law and accordingly, same are set aside - Plaint be returned to plaintiff for presentation to competent Court - After plaint is so presented to court having jurisdiction, case shall be decided by such Court, in according with law, on its own merits without in any manner being influenced by observations made by this Court - Present appeal is, thus, partly allowed - plaint is hereby ordered to be returned to plaintiff-appellant herein for its presentation before appropriate Court having territorial jurisdiction - Trial Court is directed to return plaint accordingly - Decree stands modified to aforesaid extent - However, there shall be no order as to costs –
Result: Civil Applications disposed of.
ORDER :
1. Heard Mr. Mihir J. Thakore, learned Senior Counsel assisted by Mr. Salil M. Thakore, learned counsel and Ms. Feresthe Shethna, learned counsel for the appellant through Video Conferencing. Mr. Sahil Thakore, learned counsel for the appellant has also submitted written arguments through what's app, which is taken on record.
2. The present appeal under Section 96 r/w. Order 41 of the Code of Civil Procedure, 1908, is directed against the judgment and decree dated 27.07.2020 passed by learned Principal Sr. Civil Judge, Kalol, District Gandhinagar, whereby, the suit has been rejected for want of cause of action and jurisdiction under Order 7, Rule 11 (a) and (d) of the Code of Civil Procedure, 1908 (now referred as “the Code” for short).
3. The present appellant-Sintex Industries Limited (hereinafter referred to as the “plaintiff” for short) filed a suit for declaration, injunction and damages against 19 defendants under Sections 34, 37 and 40 of the Specific Reliefs Act and prayed as under:
“(a) For an order of permanent mandatory injunction restraining Defendant No. 1 from filing a Fraud Monitoring Return against the Plaintiff, or in the alternative, declaring any such purported Fraud Monitoring Return filed by Defendant No. 1 as illegal, null, void ab initio and non est.
(b) For a permanent mandatory injunction restraining the Defendants, its agents, servants and representatives from acting in pursuance of and/or in any manner whatsoever publishing, notifying and/or further relying upon any such purported Fraud Monitoring Return filed by Defendant no. 1 with the Reserve Bank of India, including but not limited to adopting any coercive action based thereon against the Plaintiff and/or its directors and/or key managerial personnel.
(c) For a decree of damages in favour of the Plaintiff against Defendant No. 1 in the sum of Rs. 100,00,00,000/- (Rupees one Hundred Crores) in the event of wrongful institution of the purported Fraud Monitoring Return.
(d) Pending hearing and final disposal of the present suit, for an order of stay in relation to the effect and operation of any action taken, contemplated and/or threatened in pursuance of Defendant no. 1’s purported Fraud Monitoring Return apprehended to have been lodged at the Central Fraud Registry maintained by the Reserve Bank of India, including but not limited to acting in pursuance thereof and/or in any manner whatsoever publishing, notifying and/or further relying thereupon and/or adopting any coercive action based thereon against the Plaintiff and/or its directors and/or key managerial personnel.
(e) Pending hearing and final disposal of the present suit, for an order directing the Defendants to consider any resolution plan that may be filed by the Plaintiff in the best interests of the Project and all shareholders.”
4. The brief facts which can be gathered from the appeal are as under:
4.1. It is an admitted facts that, the plaintiff company availed term loan facility from a consortium of bank vide a common loan agreement dated 30.12.2016. The lenders to the company are Punjab National Bank, Bank of Baroda, Bank of India, Syndicate Bank, Union Bank of India, Punjab and Sind Bank, Central Bank of India, Oriental Bank of Commerce, State Bank of India, Andhra Bank, South Indian Bank, IDBI Bank, Karnataka Bank. In June, 2019, following adverse financial reason, leading eventually to the inability to the plaintiff company to service its obligation to lenders and accordingly, a forensic audit was ordered by the lender consortium. It is also admitted fact that, in parallel the lender consortium has declared the account of the company as Non Performing Account (NPA) on 31.08.2019. The forensic audit report is awaited. The observations of the forensic auditor offered to the plaintiff company, for comments, on 15.06.2020, in aid of examination of whether a willful default is committed by the company, in relation to meeting its loan obligation to the lender consortium, under RBI Master
