2021 Supreme(Mad) 1567

IN THE HIGH COURT OF JUDICATURE AT MADRAS
Sanjib Banerjee, Senthilkumar Ramamoorthy, JJ.
Electrosteel Castings Limited, Chennai – Petitioner
Versus
UV Asset Reconstruction Company Limited, New Delhi & Others - Respondents
O.S.A. No. 292 of 2019
Decided On : 13-08-2021

Point of law : Tribunal may be embarrassed, on the ground of lack of authority, to completely remedy the wrong done to the person who had applied under Section 17 of the Act of 2002 to establish that the creditor did not qualify to take any measure under Section 13(4) of the Act of 2002 by reason of its status or otherwise by operation of law or the like. In such a case, the civil court’s doors remain open to receive an action, not only to completely undo the mischief but also to consider a claim in damages.

Headnote:

Commercial Courts Act, 2015 - Sections 13 and 13(1A) - Letters Patent - Clause 15 - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Sections 34 and 13(1A) - Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (which has since been renamed Recovery of Debts and Bankruptcy Act, 1993) – Section 17 - Code of Civil Procedure, 1908 - Order XLIII - Mortgage of property - Pertaining to an immovable property that was mortgaged by the plaintiff in favour of the second defendant, - Grounds that there was a statutory bar in receiving the action and that cause of action as pleaded in plaint had no nexus with this court exercising authority on Original Side - Whether relief claimed then for return of title-deeds is accompanied by a relief for possession of immovable property - Whether the appeal lies before the court proceeds to address the merits of the matter - Whether such security had been furnished by principal debtor or by any other in connection with loan obtained by the debtor - Whether or not any part of the plaintiff’s cause of action arose within the territorial limits of Original Side of this court, by virtue of the statutory bar in Section 34 of the Act of 2002 - Assignment Agreement between the 1st and 2nd is bad, invalid, illegal void ab initio and of no legal effect or consequence against the Plaintiff, whatsoever, and for a consequential PERMANENT INJUNCTION restraining Defendants 1 and 2 from acting or, implementing or in any manner taking any action against the Plaintiff on the basis of the Assignment Agreement - judgment and order impugned passed while considering the plaintiff’s prayer for leave under Clause 12 of the Letters Patent, 1865, the trial court observed that the suit had to be regarded as a suit for land and, since no part of such land was within the original jurisdiction of this court suit could not be instituted here - Leave sought was declined, but liberty was granted to the plaintiff “to approach the Tribunal”; presumably the appropriate Debts Recovery - order impugned has been passed in a suit filed before the Commercial Division of this court and it is not an order enumerated in Order XLIII of Code of Civil Procedure, 1908. Though the first defendant, the principal adversary of the plaintiff –

Finding of the court :

Measures taken by the creditor would require to be undone - It cannot be said, in such a scenario - Since the DRT had held that the so-called creditor could not have invoked the provisions of the Act of 2002, the DRT would lose all jurisdiction over the matter. It would opposed to public policy to view Section 17 of the Act of 2002 in such narrow light that it would not permit the wrong done to a person aggrieved who has approached the forum to be adequately remedied - There may be the odd situation where the limited authority of the DRT or the DRAT may not be effective to remedy the wrong; but Section 17(3) of the Act of 2002 confers sufficient authority on tribunal to pass appropriate directions which are consequential to its finding that the secured creditor was not entitled to invoke the provisions of the Act of 2002 or measures taken by secured creditor were not in accordance with the provisions of the Act - person who had applied under Section 17 of the Act of 2002 to establish that creditor did not qualify to take any measure under Section 13(4) of the Act of 2002 by reason of its status or otherwise by operation of law or the like - In such a case, civil court’s doors remain open to receive an action, not only to completely undo the mischief but also to consider a claim in damages - court had territorial jurisdiction to entertain the suit may not be conclusively answered and left open to the unlikely stage that the plaintiff may have to approach this court again and as to whether the relief claimed then for return of title-deeds is accompanied by a relief for the possession of the immovable property, whereupon the situs of the immovable property may be the deciding factor –

Result :O.S.A.No.292 of 2019 is disposed of basis. C.M.P.Nos.23686 of 2019 and 11818 of 2020 are closed