IMPORTANT POINTS
(1) When suit is barred by any law, plaintiff cannot be allowed to circumvent that provision by means of clever drafting.
(2) Mere mentioning and using word ‘fraud’/’fraudulent’ is not sufficient to satisfy test of ‘fraud’.

JUDGMENT :

M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 13.08.2021 passed by the High Court of Judicature at Madras in O.S.A. No. 292 of 2019, by which the Division Bench of the High Court has dismissed the said appeal preferred by the original plaintiff rejecting the plaint/suit filed by the appellant herein-original plaintiff on the ground that the suit is barred by Section 34 of the SARFAESI Act, 2002, the original plaintiff has preferred the present appeal.

2. The facts leading to the present appeal in nutshell are as under:

2.1 That original defendant No. 3 respondent No. 3 herein (hereinafter referred to as original defendant No. 3) availed the loan facility vide Rupee Loan Agreement dated 26.07.2011 from defendant No. 2 respondent No. 2 herein-SREI Infrastructure Finance Limited and availed the financial assistance to the extent of Rs. 500 crores. The appellant herein-original plaintiff stood as guarantor. A mortgage was created by the appellant herein-original plaintiff in favour of defendant No. 2-respondent No. 2 herein-financial creditor over its factory land at Evalur, Tamil Nadu along with plant and machinery, by way of deposit of title deeds in terms of the declaration to secure the repayment, discharge and redemption by original defendant No. 3. That original defendant No. 3-corporate debtor could not pay the loan amount, therefore the proceedings under the Insolvency Bankruptcy Code, 2016 (IBC) was initiated against the corporate debtor. An application under Section 7 of the IBC was filed by the State Bank of India against original defendant No. 3-corporate debtor. The default amount was INR 923,75,00,000/. The resolution process was initiated and an interim resolution professional was appointed under the provisions of IBC. A resolution plan came to be approved by the Committee of Creditors under Section 30(4) of the IBC. The learned Adjudicating Authority vide order dated 17.04.2018 approved the resolution plan. Under the approved resolution plan an amount of INR 241,71,84,839.18 was required to be paid and 67,23,710 equity shares of the corporate debtor were to be allotted. As per the case on behalf of the plaintiff-appellant herein on payment of aforesaid amount and transfer of aforesaid shares No Due Certificate was issued in favour of the corporate debtor-original defendant No. 3 on 25.06.2018 and the corporate debtor came to be discharged. It appears that thereafter an assignment agreement was executed between defendant No. 2-respondent No. 2 herein and defendant No. 1-respondent No. 1 herein on 30.06.2018, assigning all the rights, titles and interest in all the financial assistance provided by defendant No. 2-financial creditor respondent No. 2 herein in terms of agreement dated 26.07.2011 in favour of assignee respondent No. 1. As assignee respondent No. 1 herein pursuant to the assignment agreement dated 30.06.2018 had issued letter to all the interested parties, namely, assignor financial creditor, guarantor and corporate debtor informing that assignor-financial creditor respondent No. 2 herein had absolutely assigned all the rights, title and interest in all the financial assistance granted by financial creditor respondent No. 2 herein from time to time to corporate debtor in favour of assignee respondent No. 1 herein vide assignment agreement dated 30.06.2018. The said letter was responded by the plaintiff-appellant herein stating the following:

“(i) Respondent No. 2 had duly filed its claim before the Resolution Professional in accordance with the provisions of IBC.

(ii) This claim was crystallised and admitted at INR 577.90 Crores and also formed part of the approved Resolution Plan of Vedanta Limited.

(iii) Pursuant to the approved Resolution Plan, the entire debt of Respondent No. 2 has been discharged by way of allotment of shares and payment in cash on 6.06.2018 and 21.06.2018 respectively.

(iv) It was also highlighted that in terms of section 3.2(xi)