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M/S SARVODAYA SUITINGS LTD. V. STATE

BANK OF INDIA

SB CIVIL MISC. STAY PETITION NO.17190/2010

in

S.B. Civil First Appeal No.369/2010

Date of Order:

07^th March, 2011

PRESENT

HON'BLE MR. JUSTICE KAILASH CHANDRA JOSHI

Mr.R.K.Thanvi ] for the appellant/s.

Mr.Vinay Kothari ]

Mr.M.C.Bhoot, Sr.Advocate, ] for the respondent.

Mr.Surender Singh

]

BY THE COURT:

This order will decide SB Civil Misc.Stay Petition

No. 17190/2010 filed in SB Civil First Appeal

No.369/2010.

The brief facts of the case are that the present

appellant M/s Sarvodaya Suitings Ltd. A Public Ltd.

Company filed a suit in the court of learned District

and Sessions Judge, Bhilwara against the present

respondent State Bank of India , Bhilwara, seeking the

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following relieves:-

“ 1- Grant of a “Declaration

with Decree” in favour of the

plaintiff company against the

defendant bank pronouncing the

impugned derivative contracts

described above at para 7 are

null and void, illegal against

the provisions of FEMA and

violating the guidelines and

circular instructions of RBI,

against public policy and being

of the nature of 'Wagering

Contracts', be declared illegal,

null and void, and

not

enforceable and that these

contracts are not binding on the

plaintiff company.

2-That

permanent

injunction be granted against

the defendant bank providing so

that the defendant bank shall

not make any further debit

entries in the cash credit

No.10385818490 / any other

loan accounts of the plaintiff

company and shall remove all

the debit entries made by it in

the regular cash credit limits/

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accounts/ facilities of the

plaintiff

company and to

reinstate/ present/bring out the

correct position of the plaintiff

company's cash credit account

No.10385818490

after

removing /reversing all such

derivative contracts related

debit entries.

3-The defendant bank be

ordered to be bound in such a

manner that it shall not treat

the plaintiff company as

responsible for and bound by

the said derivative contracts and

that the defendant bank shall

not proceed against the plaintiff

company and shall not take any

action against the guarantors of

the company and that the

defendant be obliged to

maintain unrestricted use and

continuity of the existing credit

facilities sanctioned in favour of

the company. Defendant bank

be restrained from making any

debit entries related to the

impugned derivative contracts

in the regular sanctioned cash

credit limit/ account of the

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plaintiff company and remove

the entries made in the past to

set right the plaintiff company/s

cash credit account.

4 - Defendant bank be

restrained

by

'injunction'

restraining the defendant bank

and their agent, servants and

men from in any way mixing up

the transactions, losses/profits

of the Derivative contracts with

any other transactions or

accounts. Defendant bank be

restrained from making any

recovery

of

the

alleged

derivative losses.

5-Any other relief as may be apt

and legally valid and may be

considered necessary in the

interest of the company by the

Hon'ble court in its own

discretion considering the facts

and circumstances of the case

and the Hon'ble Court may be

pleased to grant a decree Order

to this effect. It would be

necessary and appropriate to

grant the requested relief to the

plaintiff company in the interest

of justice, equity and good

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conscience.

6 - An award be ordered

with regard to the costs

of the suit.”

The respondent defendant filed an application

under Order 7 Rule 11 CPC praying for the rejection of

the plaint on the ground that the suit is barred by law

and the learned Addl.District Judge, Bhilwara, in

whose court the case was transferred for trial vide

order dated 27.10.10 accepted the application filed by

the respondent defendant und