Or. 7, rule 11 C.P.C. - Suit against the Bank which institute a claim under Debts Recovery Tribunal challenging the very mortgage is not valid as they have got share in it - petition to dismiss the suit -The trial Court dismissed the I.A - High court held that the counter claim mentioned under sec.18,19 of Debt Recovery Act not bar the plaintiffs to file a suit and further the tribunal has no jurisdiction to decide the validity of Mortgage deed and further this petition under Or. VII, rule 1 is not maintainable as there are no ingredients and as such dismissed the revision = CIVIL REVISION PETITION No. 1245 OF 2014 01-08-2014 State Bank of India, Stressed Assets Recovery Branch (SARB), Nampally, Hyderbad, rep., by its Chief Manager... PETITIONER Archana Adiraju and three others RESPONDENTS = 2014 - Aug. Month - http://judis.nic.in/judis_andhra/filename=11806

 Or. 7, rule 11 C.P.C. - Suit against the Bank which institute a claim under Debts Recovery Tribunal  challenging the very mortgage is not valid as they have got share in it - petition to dismiss the suit -The trial Court dismissed the I.A - High court held that the counter claim mentioned under sec.18,19 of Debt Recovery Act not bar the plaintiffs to file a suit and further the tribunal has no jurisdiction to decide the validity of Mortgage deed and further this petition under Or. VII, rule 1 is not maintainable as there are no ingredients and as such dismissed the revision =

 The loan became
non-performing asset (NPA) on account of failure to pay
instalments.
Therefore, the petitioner got issued a notice
dated 10-01-2013 to respondent Nos.1 to 4 for repayment of
the loan.  Since there was no positive response, O.A No. 303
of 2013 was field before the Debts Recovery Tribunal,
Hyderabad (for short the Tribunal) by invoking the provisions
of Recovery of Debts Due to Banks and Financial Institutions
Act, 1993 (for short the Act). =

Respondent Nos.1 and 2 i.e., the daughter and the son
of late Srinivas Kumar Mawle filed O.S No. 2073 of 2013 in
the Court of V Junior Civil Judge, City Civil Court,
Hyderabad, with a prayer that the transaction of mortgage
covered by letter dated 27-12-2006, followed by the deposit of
instrument, be declared as null and void. =
  On receipt of the summons in the suit, the petitioner
filed I.A No. 364 of 2013 under Order VII Rule 11 CPC, with a
prayer to reject the plaint.
It was pleaded that the O.A
pending before the Tribunal is comprehensive in nature and
being a party to that, respondent Nos.1 and 2 can put
forward their contentions, including the filing of counter
claim.
It was pleaded that the filing of a separate suit would
lead to several complications.
 According to the petitioner, the
Act is a self-contained code in relation to the loan
transactions with banks and once an O.A is filed, any suit in
relation to that very dispute is barred.
The application was
opposed by respondent Nos.3 and 4.
They pleaded that the
plaint can be rejected only when the circumstances provided
for under various clauses of Rule 11 of Order VII CPC are
shown to be existing and that such grounds were not even
pleaded.
It was also pleaded that the Tribunal does not have
the jurisdiction to decide the legality or otherwise of a
mortgage deed.=

 Respondent Nos.1 and 2 were very much justified in
choosing a civil Court for the relief of declaration in relation to
the transaction of mortgage between their father on the one
hand and the petitioner on the other hand.
Though the
Tribunal is conferred with the power to adjudicate the
disputes between the bank or banking institutions; and the
persons who are indebted to such banks, its jurisdiction is
circumscribed by the provisions of the Act.
It has to proceed
under the assumption that the deed of mortgage is legal and
valid, in all respects.
It cannot decide the contentious issues about the very legality of the mortgage.
    None of the grounds pleaded by the petitioner fit into
Order VII Rule 11 CPC.  The trial Court has taken note of this
fact and dismissed the I.A.  No fresh or further grounds are
pleaded before this Court.
     The apprehension of the petitioner is that the pendency
of the suit may be cited as a ground to stall the proceedings
in the O.A.
Even according to respondent Nos.1 and 2, they
have 50% share in the mortgaged property.  Therefore, they
cannot have any objection for the adjudication that may be
undertaken by the Tribunal vis--vis the balance of 50%.

   Therefore, the C.R.P is dismissed. It is however directed
that it shall be open to the Tribunal to proceed with the
matter and if the sale of the mortgaged property becomes
necessary, it shall be confined to undivided 50% share.
However, if the suit filed by respondent Nos.1 and 2 is
dismissed, the mortgage shall be in respect of the entire
property.


2014 - Aug. Month - http://judis.nic.in/judis_andhra/filename=11806
HONBLE SRI JUSTICE L. NARASIMHA REDDY      

CIVIL REVISION PETITION No. 1245 OF 2014  
     
01-08-2014

State Bank of India, Stressed Assets Recovery Branch (SARB), Nampally,
Hyderbad, rep., by its Chief Manager... PETITIONER

Archana Adiraju and three others RESPONDENTS    

Counsel for the Petitioner:   Sri Hari Prasad Polida

Counsel for the Respondents: Sri G. Rama Chandra Reddy

<GIST:

>HEAD NOTE:  

?Cases referred

THE HON'BLE SRI JUSTICE L. NARASIMHA REDDY        

CIVIL REVISION PETITION No. 1245 OF 2014  
Dated:01-08-2014

ORDER:
     

      One Sri Srinivas Kumar Mawle, the father of respondent
Nos.1 to 3 and husband of respondent No.4 obtained loan
from the petitioner for higher studies of respondent No.3 in
the United States of America.  An item of immovable property
bearing house No.3-4-846/1, Barkatpura, Hyderabad was
mortgaged for repayment of the loan.  The original loanee
Srinivas Kumar Mawle died.  The loan became
non-performing asset (NPA) on account of failure to pay
instalments.  Therefore, the petitioner got issued a notice
dated 10-01-2013 to respondent Nos.1 to 4 for repayment of
the loan.  Since there was no positive response, O.A No. 303
of 2013 was field before the Debts Recovery Tribunal,
Hyderabad (for short the Tribunal) by invoking the provisions
of Recovery of Debts Due to Banks and Financial Institutions
Act, 1993 (for short the Act).

      Respondent Nos.1 and 2 i.e., the daughter and the son
of late Srinivas Kumar Mawle filed O.S No. 2073 of 2013 in
the Court of V Junior Civil Judge, City Civil Court,
Hyderabad, with a prayer that the transaction of mortgage
covered by letter dated 27-12-2006, followed by the deposit of
instrument, be declared as null and void.  The petitioner
herein was shown as defendant No.1 and respondent Nos.3
and 4, as defendant Nos.2 and 3 in the suit.

      On receipt of the summons in the suit, the petitioner
filed I.A No. 364 of 2013 under Order VII Rule 11 CPC, with a
prayer to reject the plaint.  It was pleaded that the O.A
pending before the Tribunal is comprehensive in nature and
being a party to that, respondent Nos.1 and 2 can put
forward their contentions, including the filing of counter
claim.  It was pleaded that the filing of a separate suit would
lead to several complications.  According to the petitioner, the
Act is a self-contained code in relation to the loan
transactions with banks and once an O.A is filed, any suit in
relation to that very dispute is barred.  The application was
opposed by respondent Nos.3 and 4.  They pleaded that the
plaint can be rejected only when the circumstances provided
for under various clauses of Rule 11 of Order VII CPC are
shown to be existing and that such grounds were not even
pleaded.  It was also pleaded that the Tribunal does not have
the jurisdiction to decide the legality or otherwise of a
mortgage deed.

      The trial Court dismissed the I.A through order dated
14-03-2014.  Hence, the revision.

      Sri Hari Prasad Podila, learned Standing Counsel for the
petitioner submits that the effort of respondent Nos.1 and 2 is
to dispute and deny their obligation under the transaction of
mortgage and that the same can be urged by filing a counter
claim in the O.A.  He made extensive reference to Sections 18
and 19 of the Act.

      Sri G. Rama Chandra Reddy, learned counsel for
respondent Nos.1 and 2, on the other hand, submits that the
facility of filing a counter claim no doubt exists in an O.A filed
under the Act, but the Tribunal is not conferred with the
jurisdiction to declare the legality or otherwise of a
transaction of mortgage.  He submits that respondent Nos.1
and 2 have a definite share in the mortgaged property and
mortgage of the property without their participation is null
and void and at least, not binding upon them.  He submits
that the trial Court has taken the correct view of the matter
on finding that none of the ingredients of Rule 11 of Order VII
CPC are proved, and that the order under revision does not
warrant any interference.

      Late Sri Srinivas Kumar Mawle, the father of respondent
Nos.1 to 3 and the husband of respondent No.4 obtained loan
from the petitioner for the education of respondent No.3.  An
item of immovable property was mortgaged for securing
repayment of the loan.  Srinivas Kumar Mawle died before the
loan could be liquidated.  The petitioner filed the O.A before
the Tribunal against his legal representatives.

      Respondent Nos.1 and 2 who are parties to the O.A
instituted suit O.S No. 2073 of 2013 for declaration to the
effect that the mortgage of the immovable property for
repayment of the loan obtained by their father is void and
illegal.  The petitioner who figured as defendant No.1 wanted
the plaint in the suit be rejected.  It is too well known that
rejection of plaint is an extraordinary step to be taken by a
Court.  Whenever a suit is filed, its natural course is that it
should lead to a decree granting or rejecting the relief, after
contest by both the parties.  Rejection of plaint leads to
termination of the proceedings at the threshold.  It is only
when the grounds stipulated in Order VII Rule 11 CPC exist,
that such an extreme step can be taken.  In the instant case,
the only basis pleaded by the petitioner was that O.A No. 303
of 2013 filed by them is already pending and if respondent
Nos.1 and 2 have any objection for the mortgage deed, it can
be canvassed in the O.A itself.

      Section 19 of the Act prescribes the procedure to be
followed by the Tribunal while dealing with an O.A filed before
it.  Apart from the right to contest in the O.A, the respondents
who are the opposite parties are conferred with the power to
plead set off or even to present the counter claim.  This
facility is similar to the one created under the CPC.
Therefore, it has to be seen as to how far the existence of
facility of filing of counter claim in the O.A would bar a
separate suit.

      The set off or counter claim is a facility created for the
benefit of a defendant in a suit, to put forward independent
claim against the plaintiff, apart from opposing the suit.  In a
way, this facility obviates the necessity to file a separate suit
by the defendant, against the plaintiff in respect of a matter,
which arises mostly out of the same cause of action, which
constituted the basis for the suit in which the person figures
as a defendant.  However, de hors such facility, if a defendant
in a suit, files an independent suit, against the plaintiff
though he had the facility of filing a counter claim in relation
thereto, the suit filed by him does not become barred by law.
It is almost an act of election or exercise of option by the
defendant to choose between the facilities of filing a counter
claim in the suit filed against him, or to file a separate suit
against the plaintiff.  In the event of a separate suit being
filed, the only requirement would be that both the suits must
be clubbed together.  The person who first filed the suit would
not be entitled to file an application under Order VII Rule 17
CPC to reject the plaint in a suit filed against him by the
defendant, by pleading the ground that there exists a facility
for the defendant to file counter claim.  When this is the state
of affairs in relation to the proceedings which are exclusively
covered by the CPC, the O.A instituted under the Act does not
stand on a higher footing.

      Respondent Nos.1 and 2 were very much justified in
choosing a civil Court for the relief of declaration in relation to
the transaction of mortgage between their father on the one
hand and the petitioner on the other hand.  Though the
Tribunal is conferred with the power to adjudicate the
disputes between the bank or banking institutions; and the
persons who are indebted to such banks, its jurisdiction is
circumscribed by the provisions of the Act.  It has to proceed
under the assumption that the deed of mortgage is legal and
valid, in all respects.  It cannot decide the contentious issues
about the very legality of the mortgage.

      None of the grounds pleaded by the petitioner fit into
Order VII Rule 11 CPC.  The trial Court has taken note of this
fact and dismissed the I.A.  No fresh or further grounds are
pleaded before this Court.

      The apprehension of the petitioner is that the pendency
of the suit may be cited as a ground to stall the proceedings
in the O.A.  Even according to respondent Nos.1 and 2, they
have 50% share in the mortgaged property.  Therefore, they
cannot have any objection for the adjudication that may be
undertaken by the Tribunal vis--vis the balance of 50%.

      Therefore, the C.R.P is dismissed. It is however directed
that it shall be open to the Tribunal to proceed with the
matter and if the sale of the mortgaged property becomes
necessary, it shall be confined to undivided 50% share.
However, if the suit filed by respondent Nos.1 and 2 is
dismissed, the mortgage shall be in respect of the entire
property.

        The miscellaneous petitions filed in this revision shall
also stand disposed of.  There shall be no order as to costs.
__________________________  
L. NARASIMHA REDDY, J  
01-08-2014

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