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.