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High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE S.J. MUKHOPADHAYA & THE HONOURABLE MR. JUSTICE M. VENUGOPAL
S.V. Subramaniam
Versus
M/s.Cypress Semiconductor Technology India Private Limited, rep. by its Director Mr.K.Viswanath
O.S.A.Nos.211 of 2007 to 214 of 2007
Decided on: 22-01-2008
RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993 - SECTION 18 - SUIT FOR DECLARATION - JURISDICTION - FRAUD ON COURT - ALTERNATIVE REMEDY - ELECTION DOCTRINE - CIVIL PROCEDURE CODE, 1908 - ORDER 7 RULE 11 - REJECTION OF PLAINT - LETTERS PATENT (MADRAS) - CLAUSE 12 - SUIT FOR LAND - INTERPRETATION.
Fact of the Case:
The plaintiff filed a suit for declaration that the order passed by the Debt Recovery Tribunal (DRT) and the Sale Certificate issued by the DRT were null and void and not binding on his property. The plaintiff alleged that the orders were obtained by fraud played by the parties before the DRT and the Recovery Officer. The fourth defendant, who was the purchaser of the property in question, filed an application under Order 7 Rule 11 CPC to reject the plaint on the ground that the suit was not maintainable in the Original Side of the High Court under Clause 12 of the Letters Patent, as it was a "suit for land" and all the suit properties were situated outside the jurisdiction of the High Court. The plaintiff contended that the suit was not a "suit for land" and that the High Court had jurisdiction to decide the issue under Clause 12 of the Letters Patent. The plaintiff also contended that the appeal under Section 20 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (1993 Act) against a consent decree was not maintainable, and therefore, the remedy of appeal under Section 20 of the 1993 Act was not available to him. The plaintiff further contended that Section 18 of the 1993 Act did not bar a civil Court to give a declaration relating to the fraud, as the DRT was not required to determine such issue under Section 17 of the said Act.
Finding of the Court:
The High Court held that the suit was not a "suit for land" under Clause 12 of the Letters Patent and that the High Court had jurisdiction to decide the issue. The High Court also held that the appeal under Section 20 of the 1993 Act against a consent decree was not maintainable, and therefore, the remedy of appeal under Section 20 of the 1993 Act was not available to the plaintiff. The High Court further held that Section 18 of the 1993 Act did not bar a civil Court to give a declaration relating to the fraud, as the DRT was not required to determine such issue under Section 17 of the said Act. The High Court also held that the plaintiff could not be made remedy-less and that the learned single Judge had not committed any error while rejecting the application preferred by the appellant/fourth defendant under Order 7 Rule 11 C.P.C. to reject the plaint.
Issues: 1. Whether the suit was a "suit for land" under Clause 12 of the Letters Patent and whether the High Court had jurisdiction to decide the issue? 2. Whether the appeal under Section 20 of the 1993 Act against a consent decree was maintainable? 3. Whether Section 18 of the 1993 Act barred a civil Court to give a declaration relating to the fraud? 4. Whether the plaintiff could be made remedy-less?
Ratio Decidendi: 1. A suit for declaration that the order passed by the Debt Recovery Tribunal (DRT) and the Sale Certificate issued by the DRT were null and void and not binding on the plaintiff's property was not a "suit for land" under Clause 12 of the Letters Patent. 2. An appeal under Section 20 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (1993 Act) against a consent decree was not maintainable. 3. Section 18 of the 1993 Act did not bar a civil Court to give a declaration relating to the fraud, as the DRT was not required to determine such issue under Section 17 of the said Act. 4. The plaintiff could not be made remedy-less.
Final Decision: The High Court dismissed the appeals filed by the appellant/fourth defendant.
S.J. Mukhopadhaya,J
As all these appeals have been preferred by the common appellant (S.V.Subramaniam) (who is the fourth defendant in the suit in C.S.No.517 of 2007) against the common order dated 17.7.2007 passed in Application Nos.4144, 4145 and 4349 of 2007 and O.A.No.729 of 2007 in C.S.No.517 of 2007, they were heard together and disposed of by this common judgment.
2. The suit in C.S.No.517 of 2007 was preferred by the plaintiff (the first respondent herein) for the following relief:
(a) Declaration that order dated 10.8.2006 modified by order dated 30.8.2006 and 31.8.2006 in I.A.No.336 of 2006 in T.A.No.1 of 2004 passed by the Debt Recovery Tribunal-2, Chennai, is null and void and not binding on the plaintiff's property described in Schedule A.
(b) Declaration that Sale Certificate No.53 of 2006, dated 31.8.2006 issued by the Debt Recovery
Tribunal-2, Chennai, is null and void and not binding on the plaintiff's property described in Schedule A and
(c) Permanent injunction restraining the fourth defendant, his men, agents, servants or assigns, from in any manner directly or indirectly acting upon the Sale Certificate No.53 of 2006, dated 31.8.2006 issued by the Debt Recovery Tribunal-2, Chennai, and dealing with the said property described in Schedule A, in any manner whatsoever.
3. In the aforesaid suit, the first respondent-plaintiff preferred the following applications:
(i) Original Application No.729 of 2007: preferred for interim injunction restraining the fourth respondent/fourth defendant, his men, agents, servants or assigns, from in any manner directly or indirectly acting upon the Sale Certificate No.53 of 2006, dated 31.8.2006 issued by the Debt Recovery Tribunal-2, Chennai, developing and dealing with the property described in Schedule A to the Judge's Summons in the Application, in any manner whatsoever, pending disposal of the suit.
(ii) Application No.4144 of 2007 : preferred for stay of the operation of the Sale Certificate No.53 of 2006, dated 31.8.2006, issued by the Debt Recovery Tribunal-2, Chennai, pertaining to Schedule A property, mentioned in Judge's Summons to the Application, pending disposal of the suit.
(iii) Application No.4145 of 2007 : preferred under Order 2 Rule 2 of the Civil Procedure Code for grant of leave for reserving its right to claim further consequential relief. A Separate application in Original Application No.4349 of 2007 was preferred by the appellant/fourth defendant under Order 7 Rule 11, CPC to reject the plaint, as the Court having no jurisdiction. All the four applications were heard together and by the impugned common order dated 17.7.2007, the learned single Judge while allowing the applications in Appln.Nos.4144 and 4145 of 2007 and O.A.No.729 of 2007. preferred by the first respondent-plaintiff, rejected the applications in Appln.No.4349 of 2007 preferred by the appellant-fourth defendant, which has given rise to the present four Original Side Appeals.
4. Before noticing the rival contentions and the issues involved in the present appeals, it is desirable to notice the relevant facts as mentioned hereunder:
(i) One M/s.M.G.M.Brothers, a Partnership firm, on 28.2.1964, purchased the property under Document No.1457/64, S.R.O. Bangalore North, land in S.No.43/3, Hebbal Village (Kasabu), Bangalore Taluk, measuring 2 acres 3-1/2 guntas having boundary: East: Bellary Road, West: K.Nanjappan lands in S.No.43/2, North: small part of land measuring 3.5 guntas sold to Nanjappa and M.G.Brothers jointly, and South: Military Dairy Farms in S.No.42. According to the first respondent-plaintiff, on the same date, i.e. on 28.2.1964, another small part of the land measuring 3.5 guntas in S.No.43/3, Hebbal Village (Kasabu), Bangalore Taluk, was also sold, which has been shown in the North side of the other sale deed dated 28.2.1964, as earlier referred to.
(ii) On 16.2.1987, an agreement was reached between M/s.M.G.Brothers, represented by partner and power agent of other
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