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Judgment
Heard.
ADMIT.
Taken up for final hearing.
The original defendant No.2 has filed this appeal under Order 43 Rule 1 of the Code of Civil Procedure to challenge the judgment passed by the
learned District Judge by which the appeal filed by the respondent No.1/ original plaintiff under Section 96 of the Code of Civil Procedure is allowed,
the judgment passed by the trial Court on preliminary issue holding that the civil suit filed by the plaintiff is not maintainable, is set aside and the matter
is remanded to the trial Court for decision of the civil suit on merits on all other issues.
The claim of the appellant bank is: Shri Kalyanmal Munot was the owner of land Khasra No.21/1 and Khasra No.22, admeasuring 3 H 77 R. Out
of this land half acre was mortgaged with the appellant bank as security for the loan given to M/s. Wardhman Enterprises of which Kalyanmal Munot
and Smt. Smeeta Ravindra Munot were partners. According to the bank, the Mortgage Deed was executed on 23rd January, 1991. M/s. Wardhman
Enterprises failed to repay the loan. Therefore, bank had filed Special Civil Suit No. 569 of 1992 for recovery of its dues. This civil suit was decreed
by the judgment dated 10th October, 2000. The judgment and decree passed in Special Civil Suit No. 569 of 1992 was not challenged and attained
finality. After establishment of the Debts Recovery Tribunal at Nagpur, the bank had filed Misc. Civil Application No. 167 of 2003 before the Debts
Recovery Tribunal, for issuance of recovery certificate. The recovery certificate was issued on 2nd September, 2003 pursuant to which recovery
proceedings No.183 of 2010 were initiated by the recovery officer and steps were taken to sell the mortgaged property. The sale proclamation
notice was issued on 18th January, 2004. However, no bidder participated in the auction sale proceedings. The second sale proclamation notice
was published on 2nd October, 2005. The respondent No.1/ original plaintiff sent a notice dated 30th October, 2005 by Registered Post
Acknowledgment Due through his advocate to the Recovery Officer raising objection for sale of the property. On 31st October, 2005, the Recovery
Officer filed objection with the following endorsement :
“Received by post without relevant documents and fees etc. As per the procedure of the DRT, every objector can raise the objection on affidavit
with supporting documents and with fees submitted personally or through the advocate to the Recovery Officer and not this way by notice. No action.
Simply keep with case file.â€
Then on 25th March, 2006, third sale proclamation notice was published and auction was conducted on 25th April, 2006 and the property was
purchased by the respondent No.3. The sale was confirmed on 26th May, 2006 and possession was handed over to the auction purchaser (respondent
No.3) on 1st June, 2006. According to the appellantÂBank, it received Rs.24,00,000/Â in the auction sale.
On 17th June, 2006 the plaintiff filed civil suit praying for decree in the following terms:
“1. It be declare that the plaintiff's property was not liable for attachment and sale in respect of the claim of the Defendant No.2 Bank against firm
M/s. Vardhaman Enterprises, Nagpur.
To declare that the entire recovery proceedings initiated by the Defendant No.1 & 2 against the plaintiff suit property and to sale certificate issued
by Defendant No.1 in respect of the plaintiff property in favour of Defendant No.3 to 5 is null and void.
Pass a decree of possession in respect of the property described in para 1 above in favour of the plaintiffs and against the defendants, ordering the
defendants to withdraw themselves from the suit property immediately and forthwith, failing which they be removed from the suit property by process
of law,
The Hon'ble Court be further pleased to inject the defendants from interfering into and upon the property described in para 1 above and from
interfering with the enjoyment and possession of the plaintiff.
A decree for permanent injunction restraining defendants from damaging demolishing or alienating or creating third party interest on the suit
property,
Be further pleased to award damages in the sum of Rs.5,94,850/Â being the cost of the machinery and the stock illegally removed and taken by the
defendant and Rs.16,000/Â as damages for wrongful use and possession as particularized in para 21 above,
Further an inquiry be ordered in respect of future mesne profits from the date of suit till realization of the possession under Order 20 Rule 12
C.P.C.,
Costs of the suit be saddled on the defendants,
And the Hon'ble Court be further pleased to make such other order and grant such other relief as may be deemed fit and proper in the
circumstances and facts of the case, and for which note of kindness, the plaintiffs shall remain duty bound and ever pray.â€
During pendency of the civil suit, the property which was sold in auction is transferred by the auction purchaser and some subsequent proceedings
have also taken place and therefore, the plaintiff has impleaded the subsequent purchasers as defendants in the civil suit.
The defendant Nos. 6 to 9 had filed an application (Exh.168) under Order 7 Rule 11 of the Code of Civil Procedure praying that the plaint be
rejected as the civil suit was not maintainable before the Civil Court. This application was rejected by the trial Court by order dated 13th October,
2011.
The trial progressed, the defendants filed their written statements and issues came to be framed. The evidence of the plaintiff is recorded, he is
crossÂexamined, the plaintiff examined one more witness i.e. Mohammed Asharafi from whom he purchased the land in dispute, the defendants have
not examined any witness and at the stage of final arguments, the learned trial Judge opined that issue No.8 which is on the point whether the Civil
Court has jurisdiction to try the civil suit should be tried as preliminary issue. The learned trial Judge heard the arguments and took up issue No.8 first
for consideration. Issue No.8 reads as follows:
“Whether this court has jurisdiction to try this suit?â€
The learned trial Judge concluded that the civil suit filed by the plaintiff was not maintainable in view of the provisions of subÂrule (6) of Rule 11 of
the Second Schedule under the IncomeÂtax Act, 1961. The learned trial Judge held that the civil suit of the nature as filed by the plaintiff is
maintainable only after objection raised by such party is decided against such party by the Recovery Officer, and in the present case the plaintiff had
not raised any objection as contemplated by Rule 11(1) of the Second Schedule under the IncomeÂtax Act, 1961 referred above and therefore, the
civil suit was not maintainable. The civil suit was dismissed without considering other issues. The plaintiff had challenged the judgment passed by the
trial Court before the District Court in appeal, which is allowed by the impugned judgment.
The case of the plaintiff is that he purchased 5516 sq.ft. land from Shri Mohammed Asharafi by saleÂdeed executed on 2nd January, 1991.
According to the plaintiff, Mohammed Asharafi had purchased the land in question from Mangilal Munot by saleÂdeed executed on 29th January,
1981. According to the plaintiff, the land purchased by him bears City Survey No.
22 of 2002, Khasra No.120, Patwari Halka No.17 of Mouza : Wanjara. The plaintiff claims that the land purchased by him from Mohd. Asharafi
cannot be the subject matter of mortgage with the defendant No.2ÂBank and defendant No.2ÂBank cannot sale this land by auction.
The defendant No.2ÂBank disputes the claim of the plaintiff that the land auctioned by it is purchased by the plaintiff by saleÂdeed, dated 2nd
January, 1991. According to the defendant No.2ÂBank, the land which is auctioned by it was not owned by Mangilal Munot, but it was owned by
Kalyanmal Munot and it was mortgaged as security for the loan given to M/s. Wardhman Enterprises of which Kalyanmal Munot and his daughter in
law were partners.
Be that as it may, at this stage, the dispute about the identity of the property is not required to be considered. The point which arises for
consideration is:
Whether the civil suit filed by the plaintiff is maintainable?
The learned advocate for the appellantÂbank has submitted that a party gets right to institute the civil suit to establish his right in respect of the
property in dispute only if that party raises objection before the Recovery Officer as per Rule 11 of the Second Schedule under the IncomeÂtax Act,
1961 and the Recovery Officer passes an order against that party. It is submitted that in the present case, the plaintiff had not raised any objection
before the recovery officer as contemplated by Rule 11 of the Second Schedule under the IncomeÂtax Act, 1961 and therefore, there was no
occasion for the Recovery Officer to pass any orders in the matter and consequently no order is passed by the Recovery Officer against the plaintiff
and therefore, the plaintiff does not get right to institute civil suit in the matter. It is submitted that the trial Judge had properly considered the legal
position and had rightly dismissed the civil suit. Various erroneous observations/ considerations are pointed out in the impugned judgment
delivered by the learned District Judge.
To support the submissions, the learned advocate for the appellantÂbank has relied on the following judgments :
i) Judgment given by the Hon'ble Supreme Court in the case of Sejal Glass Ltd. Vs. Navilan Merchants Private Limited, reported in AIR 2017 SC
4477,
ii) Judgment given in the case of Kuldeep Singh Pathania Vs. Bikram Singh Jaryal, reported in 2017 Law Suit (SC) 55,
iii) Judgment given by the Hon'ble Supreme Court in the case of Bank of Maharashtra Vs. Pandurang Keshav Gorwardkar & Ors., reported in AIR
2013 SC 2036,
iv) Judgment given by Calcutta High Court in the case of Shambhoo Prosad Bajoria & Ors. Vs. Union of India& Ors., reported in 1978 LawSuit (Cal)
367,
v) Judgment given by the Hon'ble Supreme Court in the case of Tax Recovery Officer II, Sadar, Nagpur Vs. Gangadhar Vishwanath Ranade,
reported in 1998 LawSuit 902 (SC),
vi) Judgment given by this Court in the case of Anil Nandkishore Tibrewala Vs. Jammu and Kashmir Bank Ltd., reported in 2007(3)Bom.C.R.941,
vii) Judgment given by the Hon'ble Supreme Court in the case of Union of India Vs. ibrahim Uddin & Anr., reported in 2012(6) SCALE 476,
The advocate for the respondent No.1Âplaintiff has supported the impugned judgment and has placed heavy reliance on the order passed by the
trial Court by which the application filed by the defendant Nos. 6 to 9 under Order 7 Rule 11 of the Code of Civil Procedure was dismissed.
The learned advocate for the respondent No.10 adopts the arguments made on behalf of the appellant.
It is undisputed that the notice dated 30th October, 2005 was sent by the plaintiff through his advocate to the defendant No.2Âbank and the
Recovery Officer raising objection for auctioning the property. On this objection, the Recovery Officer put an endorsement that cognizance was not
required to be taken of the notice dated 30th October, 2005 and it be kept with case file, as according to the Recovery Officer, the objection was not
taken as per the prescribed procedure, the documents were not submitted and fees was not paid. On behalf of the bank it is argued that in such
background the plaintiff would not be entitled to exercise his right conferred by subÂrule (6) of Rule 11 of the Second Schedule under the IncomeÂ‐
tax Act, 1961. It is submitted that the Rules/ Regulations framed by the Debts Recovery Tribunal provided for presentation of the objection by third
party to the Recovery Officer and the plaintiff having not presented any objection as per the prescribed procedure, the Recovery Officer rightly
refused to take cognizance of the notice dated 30th October, 2005.
The above submission made by the learned advocate for the bank appears to be correct at the first blush, however, if examined in depth, it cannot be
accepted.
The challenge is to the jurisdiction of the Civil Court to entertain the civil suit. It is well established that the jurisdiction of the civil Court cannot be
ousted unless any express or implied bar is pointed out. Keeping this established principle in mind, the provisions of subÂrule (6) of Rule 11 of the
Second Schedule under the IncomeÂtax Act, 1961 are required to be examined. The submission that a party gets right to institute civil suit only if the
Recovery Officer passes an order against that party on merits, if accepted, then it will amount to giving a meaning to the provisions, which is not
intended. The order dated 31st October, 2005 endorsed by the Recovery Officer on the notice, in terms amounts to refusal on his part to take
cognizance of the objection raised by the plaintiff and in my view it would amount to an order made against the plaintiff, consequently, giving right to
the plaintiff to institute civil suit.
Thus, I find that the learned District Judge has rightly held that the civil suit filed by the plaintiff is maintainable and has rightly remanded the
matter to the trial Court for deciding the civil suit, considering other issues.
The appeal is dismissed. In the circumstances, the parties to bear their own costs.
The plaintiff/defendant No.1, defendant No.2, defendant No. 8, defendant No.9 and defendant No.10 to appear before the Joint Civil Judge Senior
Division, Nagpur on 12th June, 2018 at 11.00 a.m.