Surana Industries vs Tunor Engineering Company

B. Rajendran, J.—This writ petition is listed today under the caption for maintainability.

The petitioner/Party-in-Person has come forward with this writ petition praying for a Writ of Prohibition to prohibit the first respondent from enforcing the order passed by the 4th respondent in this writ petition. When the writ petition was listed for hearing on 05.06.2014, the petitioner/party-in-person has made an endorsement giving up the fourth respondent from the array of parties.

According to the petitioner, the property owned by him were offered as collateral security with the second and third respondents for availing financial assistance. As the petitioner committed default in payment of the dues to the bank, Indian Bank has filed O.A. No. 314 of 2010 before the Debts Recovery Tribunal I, Chennai for recovery of dues of approximately Rs. 3 crores. A notice under Section 13(2) of the SARFAESI Act was also issued by the second respondent on 21.04.2011. In those circumstances, in order to settle the debts due to the second and third respondent, the petitioner has entered into an agreement of sale dated with the first respondent herein on 10.08.2011. On executing the sale agreement, the petitioner received Rs. 5,00,000/- from the first respondent in cash on various dates and it was utilised for fulfilling the conditional order imposed by the Debts Recovery Tribunal, Chennai.

According to the petitioner, the agreement of sale was entered into with the first respondent in the above stated circumstances. The first respondent also invoked the provisions of SARFAESI Act and issued notices under Sections 13(2) and 13(4) of the Act. When once the first respondent invoked SARFAESI Act and the third respondent also approached the Debts Recovery Tribunal, Chennai, the petitioner could not sell his property to the first respondent. Notwithstanding the same, the first respondent has filed W.P. No. 21888 of 2011 before this Court directing the second respondent to give necessary consent for execution of the sale deed as per the agreement of sale dated 10.08.2011. In the said writ petition, the petitioner was not a party. The writ petition was dismissed on 16.03.2012. As against the order dated 16.03.2012 in WP No. 21888 of 2011, the first respondent has filed review application No. 88 of 2012 and that was also dismissed by this Court on 22.10.2013. After dismissal of the review application, the first respondent has filed a civil suit in O.S. No. 105 of 2012 before the Principal District Judge, Tiruvallur on 08.08.2012 praying for the relief of specific performance of the agreement of sale dated 10.08.2011. According to the petitioner, such a suit filed by the first respondent is not maintainable and the relief sought for therein is non-est in the eyes of law. It is also the contention of the petitioner that the suit in O.S. No. 105 of 2012 is hit by the principles of res judicata in view of the fact that the first respondent has already filed WP No. 21888 of 2011 and also review application No. 88 of 2012 before this Court. In those circumstances, the petitioner has filed an application before the Civil Court under Order VII Rule 11 of CPC to reject the Plaint. As the petitioner attended to a writ proceedings before this Court, he could not appear before the Civil Court on 24.01.2014, on that date, he was set exparte and consequently, on 29.01.2014, a decree was passed in the suit. The suit was however contested by the second respondent and only thereafter, the judgment and decree dated 29.01.2014 came to be passed.

The petitioner/party-in-person would mainly contend that the decree and judgment dated 29.01.2014 passed by the learned II Additional District Judge, Thiruvallur @ Poonamallee is non-est in the eye of law. The civil court did not take note of the fact that the petitioner could not honour the agreement in view of the SARFAESI Proceedings initiated by the first and second respondent. According to the petitioner/party-in-person, when the SARFAESI Proceedings are pending, no civil suit would lie. It is further contended that earlier, the first respondent filed a writ petition and on its dismissal, he has filed a review application and it was also dismissed. Therefore, the suit filed by the first respondent is hit by the principles of res judicata and the decree passed therein will not bind the petitioner in any manner. Therefore, according to the petitioner/party-in-person, he need not file an appeal against the judgment and decree dated 29.01.2014 passed in the suit and the writ petition filed by him, invoking Article 226 of The Constitution is very much maintainable.

Office has entered a doubt as to the maintainability of the writ petition. Therefore, as mentioned above, this writ petition is listed today under the caption for maintainability.

I heard the petitioner/party-in-person in detail. According to the petitioner/party-in-person, when once the first and second respondent invoked the provisions of the SARFAESI Act and issued the notices under Sections 13(2) and 13(4) of the Act, he could not honour his contractual obligations to execute a sale deed in favour of the first respondent. It is further contended by the petitioner/party-in-person, when the property in question is subjected to litigation at the instance of the first and second respondents, he cannot be expected to execute a sale deed in favour of the first respondent.

The office note relating to the maintainability of this writ petition deserves consideration. The petitioner now seeks for the relief of prohibition, prohibiting the first respondent from enforcing the decree and judgment passed on 29.01.2014 in O.S. No. 105 of 2012. Such a relief cannot be countenanced. It is pertinent to point out that the petitioner appeared in the suit as party-in-person and he has also filed an application under Order VII Rule 11 of CPC to reject the plaint filed by the first respondent. As the petitioner appeared before the Civil Court as party-in-person, the Court permitted him to engage a lawyer of his choice. The petitioner also engaged an advocate for some time, however, due to misunderstanding with the lawyer, he withdrew the vakalath. On 24.01.2014, as the petitioner did not appear before the Civil Court, he was set exparte. Even though the petitioner was set exparte, the second respondent vehemently contested the suit. The second respondent contended that the property in question was mortgaged by the petitioner with them and the agreement of sale was entered into with the first respondent without their knowledge and concurrence. It was also contended by the second respondent that invoking the provisions of SARFAESI Act, only a notice under Section 13(2) of the Act was issued and the notice under Section 13(4) of the Act is yet to be issued. The learned II Additional District Judge, after appreciating the rival contentions, has passed a detailed judgment concluding that only with the knowledge and consent of the second respondent, the petitioner had entered into the agreement of sale with the first respondent and the first respondent also parted with a portion of the sale amount to the petitioner as sale advance. In any event, the decree and judgment passed by the Civil Court cannot be questioned by the petitioner in this writ petition or it cannot be contended by the petitioner that the civil court did not take into consideration many of the grounds raised by him. The Civil Court also taken note of the writ petition and the review application filed by the first respondent. Therefore, it is futile on the part of the petitioner to contend that the judgment and decree passed on 29.01.2014 in O.S. No. 105 of 2012 on the file of the II Additional District Judge is a nullity. The petitioner has knowledge about the pendency of the suit, he contested it for some time, but did not appear before the Civil Court. The petitioner also filed an application for rejecting the plaint. Therefore, merely because the petitioner was set exparte, it will not render the decree and judgment passed by the Civil Court, a nullity. It is needless to mention that the petitioner can always challenge such decree and judgment before the appellate Forum in a manner known to law and the writ petition filed under Article 226 of The Constitution of India is legally not sustainable besides it is not maintainable.

The petitioner has to assail the decree and judgment passed in O.S. No. 105 of 2012 only before the appellate Forum, if he is so advised. The writ petition filed by the petitioner is not maintainable. Consequently, the objections raised by the Office as regards maintainability of this writ petition are sustained.