Point of Law: Though there has been a slight amendment in the language of Order 14 Rule 2 CPC by the amending Act, 1976 but the principle enunciated in the abovequoted decision still holds good and there can be no departure from the principle that the Code confers no jurisdiction upon the court to try a suit on mixed issues of law and fact as a preliminary issue and where the decision on issue of law depends upon decision of fact, it cannot be tried as a preliminary issue

JUDGMENT :

Harsha Devani, J.

1. By this petition under articles 226 and 227 of the Constitution of India, the petitioners have challenged the order dated 2.5.2019 passed by the Debts Recovery Appellate Tribunal, Mumbai in Miscellaneous Appeal (L) No. 3 of 2019, and seek a direction to the Debts Recovery Tribunal-1, Ahmedabad to frame, consider and decide as preliminary issues, the issues raised by the petitioners in their pleadings of Original Application No. 551 of 2018 and Original Application No. 678 of 2018.

2. The facts as averred in the petition are that the respondents financed setting up of a 300 MW (150 MW x 2) Thermal Power Plant at MIDC Dhule, Maharashtra (hereinafter referred to as "the Project") by Shirpur Power Pvt. Ltd. (hereinafter referred to as "the first petitioner/borrower"), the original cost whereof was Rs. 1762.92 crores. The respondents No. 1, 2 and 3, viz., State Bank of India, Bank of Baroda and IDBI Bank, claim to have executed the COR Common Loan Agreement (COR Facility Agreement) dated 8th December, 2012 with the first petitioner for the same. Thereafter, on account of factors beyond the control of the borrower, there was a cost overrun. To meet this cost overrun, the borrower, the respondents and the SBICAP Trustee Company Limited (hereinafter referred to as "the SBICAP") entered into a COR Facility Agreement dated 9th February, 2016, whereby the borrower availed an additional financial assistance of Rs. 192 crores from the banks.

2.1. On or around 4th July, 2018, the respondents filed Original Application No. 551 of 2018 before the Debts Recovery Tribunal against the petitioners No. 2 and 3 (arrayed as defendants No. 1 and 2 therein), based on personal guarantee agreements dated 9th February, 2016 executed by the petitioners No. 2 and 3 in favour of the respondents and the SBICAP Trustee Company Limited. Thereafter, somewhere around 11th September, 2018, the respondents filed another original application against the first petitioner. The petitioners have filed affidavits-in-reply to the original applications, while categorically and expressly disputing the jurisdiction of the Debts Recovery Tribunal to try and entertain Original Application No. 551 of 2018.

2.2. It is further averred in the petition that the petitioners No. 2 and 3 are not parties to the COR Facility Agreement. Furthermore, the borrower has not been joined as a party to the original application. The Original Application No. 551 of 2018 appears to be based on a document, executed after the execution of the COR Facility Agreement on 9th February, 2016, purporting to be a personal guarantee in favour of the SBICAPS.

2.3. It is further the case of the petitioners that the Project faced considerable financial stress on account of various factors affecting the electricity sector, on account of which the borrower was facing difficulty in making payment of interest installments under the Common Loan Agreement and COR Facility Agreement to the respondents. Various communications ensued between the parties as set out in detail in the memorandum of petition culminating into a "Call up notice" dated 10th May, 2018 to the petitioners recalling the entire loan facility including principal and all interest due, viz., an amount of Rs. 1658.14 crores (approximately). It is the case of the petitioners that they had attempted to resolve the crisis and evolve a long lasting solution. However, the respondents issued a so-called "Demand Certificate" to the petitioners No. 2 and 3 calling upon them to pay an amount of Rs. 212,06,90,981/- under the purported personal guarantee within seven days of the receipt of the same. In response thereto, the petitioners gave their reply dated 21st June, 2018. It appears that the respondents did not respond to the said letter of the petitioners No. 2 and 3, but jointly filed Original Application No. 551 of 2018 before the Debts Recovery Tribunal, Ahmedabad under section 19 of the Recovery of Debts and Bankruptcy, Insolven