Kotak Mahindra Bank Limited vs Twadanya Agarwal

The application under Article 227 of the Constitution of India has been directed by the petitioner Kotak Mahindra Bank Limited assailing order dated August 03, 2016 passed by learned Civil Judge (Junior Division) 2nd Court, Alipore in Title Suit No. 19 of 2015 (Twadanya Agarwal Vs. Kotak Mahindra Bank Limited & Another) by which the application filed on June 14, 2016 by the petitioner as defendant in said suit under Order VII Rule 11(D) of the Code of Civil Procedure with the prayer that the plaint would be rejected as it was barred by the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (shortly to be called as SARFAESI Act ).

Background of the dispute is as follows:-

(i) Pursuant to approach to the petitioner bank by the Directors of M/s.

Narottam Plywood Industries Private

Ltd. & M/s. Toshita Fiscal Services Private Ltd. for financial assistance and taking over their pre-existing loan from Standard Chartered Bank and for extending further loan facility there was a registered agreement on August 19, 2011 against the securities of properties being Flat Nos. 3C and 3D situated at 6, Burdwan Road, Kolkata, and thereby the petitioner sanctioned further amount of Rs. 240 lacs and 270 lacs 56 thousand 3 hundred and 50 only to M/s. Narottam Plywood Private Ltd.

(ii) During continuation of transactions since there were alleged defaults the petitioner recalled all the loan facilities and initiated proceeding under SARFAESI Act, 2002 by issuing statutory notice under Section 16(2) on August 16, 2013.

(iii) Newspaper publication also was held on August 20, 2013 under Section 13(2) of the Act. Possession notice also was issued to the defaulter to take symbolic possession under Section 13(4) of the Act.

(iv) The opposite party Twadanya Agarwal son of Rajesh Agarwal at that juncture moved an application being S.A. No. 1386 of 2013 under Section 17 of the SARFAESI Act before the Debt Recovery Tribunal-II for quashing said notice issued by the petitioner and for injunction so that the petitioner would not be able to take any step in respect of aforesaid Flat No. 3D of 6, Burdwan Road.

(v) The Tribunal on February 14, 2014 refused to grant any order of temporary injunction.

(vi) The opposite party thereafter on January 29, 2015 filed title suit no. 19 of 2015 before the Court of learned Civil Judge, (Junior Division), 2nd Court, Alipore for declaration and injunction against the petitioner.

(vii) The petitioner appearing in said suit and raising bar of Section 34 of the SARFAESI Act to assume jurisdiction by the Civil Court to adjudicate dispute of the present nature prayed to record necessary order for rejection of the plaint under Order VII Rule 11(d) of the Code of Civil Procedure.

Though learned Counsels of both sides argued on merit with aspiring to have intended order from the High Court by disposal of this matter on merit, but this Court may have some reservation by refraining from doing so.

It is obvious that the special or extraordinary remedy by invoking revisional jurisdiction is not supposed to be exercised by this Court, unless it is a last resource for any aggrieved litigant in the State, or alternatively, there is no other efficacious remedy opened to such aggrieved person except moving before the High Court under Article 226 or 227 of the Constitution of India.

Having thereby any alternative, certain and conclusive remedy elsewhere against any impugned order the High Court does not entertain the same for the following reasons:-

(i) to disallow the petitioner to step jump,

(ii) to preclude either of the parties from losing one forum,

(iii) to remain abstained from creating bad precedent,

(iv) to prevent from giving wrong impression about existence of two parallel legal forums for the same remedy.

There is no doubt that the impugned order passed by learned Civil Judge (Junior Division) was interlocutory in nature by which learned Trial Judge declined to reject the plaint under Order VII Rule 11(d) of the Code. If such interlocutory order is revisable under Section 115 of the Court, whether the High Court should exercise its power under Article 227 of the Constitution of India? Answer must be "no", unless it is an exceptional case giving exposure of glaring perversity which cannot be mended without immediate interference under Article 227 of the Constitution of India.

After amendment in Section 115 of the Code of Civil Procedure the scope of revision has been restricted, presumably for such reason availing of Article 227 of the Constitution of India is widely known. However the proviso appended to Section 115 of the Code, as substituted by the CPC (Amendment) Act 1999, is set out :-

"Section 115(1):- The High Court may call for the record of any case which has been decided by any Court subordinate to such High Court and in which no appeal lies thereto, and if such subordinate Court appears-

(a) "......................................................"

(b) "........................................................"

(c) "........................................................"

Provided that the High Court shall not, under this section, vary or reverse any order made, or any order deciding an issue, in the course of a suit or other proceeding, except where the order, if it had been made in favour of the party applying for revision, would have finally disposed of the suit or other proceedings. By incorporating Section 115A with such amendment in our State the District Court has been vested with same power of revision with the same proviso. Section 115A(1) only is set out:-

"A District Court may exercise all or any of the powers which may be exercised by the High Court under section 115."

A District Court may exercise all or any of the powers which may be exercised by the High Court under Section 115."

The above quoted provision thus clearly indicates that revision would apply either before the High Court or the District Court, provided the impugned application presented before learned Court below by the aggrieved party if would have been decided in his favour then the suit, or, the proceeding would have been disposed of finally in that Court. Meaning thereby, disposal of the purported application by passing the impugned interlocutory order favouring either side if does not dispose of the suit or proceeding finally the revision under Section 115 or 115A of the Code of Civil Procedure would not apply. In the case on hand the circumstance is otherwise. Questioning jurisdictional bar of the Civil Court under Section 34 of the SARFAESI Act in proceeding with the Civil suit under reference the petitioner filed the application under Order VII Rule 11(d) of the Code for rejection of

plant. If said application would have been decided by learned trial Judge in favour of the petitioner answering in the affirmative then the suit would have been disposed of finally in that Court statistically by rejecting the plaint. Since learned Civil Judge (Junior Division) negated said application of the petitioner declining to reject the plant under Order VII Rule 11 (d) of the Code the order is revisable under Section 115 or 115A of the Code of Civil Procedure for which the District Court alone would be competent to exercise its revisional jurisdiction record appropriate order on being approached.

Therefore, when there is efficacious remedy in the Code against the impugned order the application under Article 227 of the Constitution of India is not maintainable. In view of above, this Court however refrains from giving any observation on merit and all points are left open as and when the appropriate forum will be approached, where efficacious remedy may be available subject to overcoming hurdle of limitation if any takes place by this time.

As a consequence of disposal of CO, the application being CAN No. 12281 of 2016 being now redundant stands disposed of.

No order as to costs.

Certified Photostat copy of this order be supplied if applied for.