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1999 DIGILAW 253 (HP)

STATE BANK OF INDIA v. OHRI LIME AND CHEMICAL INDUSTRIES

1999-11-25

R.L.KHURANA

body1999
JUDGMENT R. L. Khurana, J.:- The plaintiff, State Bank of India, has filed the present suit under Order 34, Code of Civil Procedure for the recovery of Rs.6,94,610.44 paise against the four defendants by sale of the mortgaged property comprising of land measuring 4050 sq. feet comprising of Khasra No. I 25/2, Vishnu Garden, Kankhal, Haridwar (Uttar Pradesh) and bounded as under:- East Badahu, Rajbaha Patri West Rasta Aam 20 feet North Land of Des Raj South Private Gali 10 feet. 2. Defendant No. 1 Messrs Shri Lime and Chemical Industries is a registered partnership firm of which defendants No. 2 to 4 are the partners. The defendants were granted two loans by the plaintiff bank on 7.9.1990 as follows:- 1. Cash credit limit against book debts to the tune of Rs.75, 000/-; and 27 Cash credit limit against pledge of goods to the tune of Rs.4,50,000/- 3. The two loans carried interest at the rate of 15-1/2% per annum with quarterly rests. Defendants No. 2 to 4 also furnished their personal continuing guarantee for he repayment of the loans. Defendant No. 2 also created an equitable mortgage in respect of his landed property situated in Haridwar, as detailed above, in favour of the plaintiff- bank by deposit of title deeds as security for the repayment of loans. 4. The defendants having availed the loans failed to repay the same and as on the date of suit, a sum of Rs.6, 94,610.44 paise was due from them in respect of the two loans towards principal and interest. 5. The defendants while resisting the suit admitted the loans but denied their liability on the ground that to the knowledge of the plaintiff- bank, the affairs of the defendant No. 1 were sold by defendants No. 2 to 4 to S/Shri S.S. Aggarwal and S.K. Aggarwal arid these transferees had undertaken all the assets and liability of the firm deferent No.1. It was pleaded that the suit is therefore, bad for mis-joinder/non-joinder of necessary parties. They further denied having executed the guarantee deeds or having created an equitable mortgage. Rate of interest as claimed by the plaintiff-bank was also denied. It was pleaded that the signatures of the defendants were obtained on blank proforma. It was pleaded that the suit is therefore, bad for mis-joinder/non-joinder of necessary parties. They further denied having executed the guarantee deeds or having created an equitable mortgage. Rate of interest as claimed by the plaintiff-bank was also denied. It was pleaded that the signatures of the defendants were obtained on blank proforma. An objection as to the jurisdiction of the Court was also raised and it was pleaded that the present suit to enforce sale of mortgaged property situated beyond the territorial jurisdiction of this courts is not maintainable in this Court. 6. On the pleadings of the parties, the following issue were framed on 3.5.1995:- 1. Whether the suit has been filed by a competent person? If not, its effect ? OP Parties. 2. Whether the plaintiff is entitled to the suit amount or any other amount? If so how much? OPP. 3. Whether the plaintiff is entitled to interest? If so, at what rate and from which date? OPP. 4. Whether a legally enforceable equitable mortgage was created, as alleged? If so, its effect? OPP 5. If issue No. 4 is proved in the affirmative whether the suit is maintainable in this court for enforcement of sale of mortgaged property which is situated beyond the territorial jurisdiction of this court? OP. 6. Whether the suit is not within time? OPP. 7. Whether the suit is bad for non-joinder of S/Shri S.K. Aggarwal and S.S. Aggarwal as alleged? If so, to what effect? OPD. 8. Whether the suit is bad for misjoinder of defendants No. 2 to 4, as alleged ? If so, its effect? OPD 2 to 4. 9. Whether the printed blank documents were got executed from the defendants as alleged? If so, its effect? OPD 10. Whether defendants No. 2 to 4 stood absolved of their liability, as alleged ? OPD 2 to 4 11. Relief. 7. I have heard the learned Counsel for the parties and have also gone through the record of the case. My findings on the above issues are as under:- Issue No. 5: Since this issue pertains to the very jurisdiction of this Court, the same is being taken up first. 8. It is the admitted case of the plaintiff-Bank that an equitable mortgage qua the landed property situated in Haridwar was created in its favour by defendant No. 2. My findings on the above issues are as under:- Issue No. 5: Since this issue pertains to the very jurisdiction of this Court, the same is being taken up first. 8. It is the admitted case of the plaintiff-Bank that an equitable mortgage qua the landed property situated in Haridwar was created in its favour by defendant No. 2. The present suit has been filed under Section 34, Code of Civil Procedure to enforce the sale of such mortgaged property. 9. Clause (c) of Section 16 of the Code of Civil Procedure prescribed that subject to the pecuniary or other limitations prescribed by any law suits for foreclosure, sale or redemption in the case of a mortgage of or charge upon immovable property shall be instituted in the Court within the local limits of whose jurisdiction the property is situate. According to this Section, therefore, the suit for foreclosure or sale of a mortgage property situate outside the jurisdiction of this Court shall not be triable by it. 10. Learned Counsel for the plaintiff, on the other hand, by placing reliance on Section 120 of the Code of Civil Procedure, has contended that the revisions contained in Section 16 of the Code of Civil Procedure are not applicable to the High Court in the exercise of its original civil jurisdiction and, as such, the present suit is maintainable before this Court. 11. There is no merit in the contention raised by the learned Counsel for the plaintiff. A Division Bench of this Court in State of Himachal Pradesh & Anr. v. M/s. Bhagwan Finance Corporation (Private) Limited, 1980 Sim. L. C. 294 has categorically held that the provisions contained in Section 16 of the Code of Civil Procedure do apply to this Court in exercise of its original civil jurisdiction. 12. In State Bank of India, Sadar Bazar, Delhiv. O. P. Gupta & Ors. AIR 1983 Delhi 214, a suit was filed by the State Bank of India for the recovery of certain sums based on cash credit facility granted to the defendants therein, under Order 34of the Code of Civil Procedure. The immovable property in respect of which an equitable mortgage was created by the defendant as collateral security was situated at Mathura. An objection as to territorial jurisdiction of Delhi High Court with regard to mortgage property situate at Mathura was taken by the defendant. The immovable property in respect of which an equitable mortgage was created by the defendant as collateral security was situated at Mathura. An objection as to territorial jurisdiction of Delhi High Court with regard to mortgage property situate at Mathura was taken by the defendant. The Delhi High Court by holding Section 16 of the Code of Civil Procedure would apply dismissed the suit of the plaintiff- Bank and it was held that such a suit could be filed only before Civil Court at Mathura (U.P.). 13: A similar question also arose before the Kerala High Court in Mrs. Rosy Joseph & Ors. v. Union Bank of India, AIR 1978 Kerala 209. In the said case before Kerala High Court, the Union Bank of India had filed a suit for recovery of Rs.28,153.75 with interest by the sale of immovable property on the basis of transaction of a mortgage by deposit of title deeds. The mortgaged properties were situated within the local limits of jurisdiction of subordinate Court at Cochin, whereas the suit was filed before the subordinate Court at Ernakulam. It was held that in view of the provisions contained in clause (c) of Section 16 of the Code of Civil Procedure, the language of which is explicit and mandatory, the suit could have been filed only before the Civil Court within whose local limits of jurisdiction the immovable propertied were situated. It was further held that once a suit is directly governed by Section 16(c), the provisions contained in Section 20 of the Code of Civil Procedure cannot be called for aid and it is not permissible for the plaintiff to institute the suit in any court other than the one within the local limits of whose jurisdiction the mortgaged properties are sitatute. 14. The ratio laid down by the High Court of Delhi and the Kerala High Court in the above-referred to cases with which I am in full agreement, applies to the facts of the present case on all fours. 15. A similar view was taken by this Court in Central Bank of India v. Eleena Fasteners (P) Ltd., 1999 (2) Sim.L.C. 263. 16. An application, being O.M.P. No. 122/99 has been made by the plaintiff-Bank for leave to relinquish the relief/claim pertaining to sale of mortgaged property and to confine the relief/claim only as to a simple money decree. 15. A similar view was taken by this Court in Central Bank of India v. Eleena Fasteners (P) Ltd., 1999 (2) Sim.L.C. 263. 16. An application, being O.M.P. No. 122/99 has been made by the plaintiff-Bank for leave to relinquish the relief/claim pertaining to sale of mortgaged property and to confine the relief/claim only as to a simple money decree. Though this application has been made under Section 151, Code of Civil Procedure, technically speaking, such "application can be termed to be the one made under Order 23 Rule l(i) read with Order 2, Rule 2(2) of the Code of Civil Procedure. 17. The learned Counsel for he plaintiff-Bank in support of his contention that such a relinquishment of a part of the claim so as to bring the suit within the jurisdiction of the court is permissible, has placed reliance on the ratio of the Bombay High Court in Mrs. Shobha VenkatRao v. K.R. Mahale, AIR 1969 Bombay 3 70. In the said case the suit as constituted was not within the pecuniary jurisdiction of the court. The plaintiff sought relinquishment of a part of the claim so as to bring it within the pecuniary jurisdiction of the Court. The prayer of the plaintiff therein was not allowed by the trial Court on the ground that if the court had no jurisdiction to entertain the suit, it would have no jurisdiction to entertain an application for amendment of the plaint. In appeal before the Bombay High Court, it was held that where the valuation of the suit is found to be beyond the pecuniary jurisdiction of a court, it is open to the plaintiff at any stage of the suit but before the plaint is required for presentation to the proper court, to abandon any part of the claim under Order 23, Rule-1, Code of Civil Procedure, so as to bring it within the jurisdiction of the Court. 18. Be it stated that the present case is the one where this court lacks the territorial jurisdiction within the ambit of Section 16(c) of the Code Civil Procedure. Therefore, the suit, as constituted, was not maintainable before this Court for lack of territorial jurisdiction. Therefore, the plaintiff-bank cannot be permitted either to amend the plain for relinquish a part of the claim so as to bring the suit within the jurisdiction of this Court. Therefore, the suit, as constituted, was not maintainable before this Court for lack of territorial jurisdiction. Therefore, the plaintiff-bank cannot be permitted either to amend the plain for relinquish a part of the claim so as to bring the suit within the jurisdiction of this Court. An order passed by this court allowing the amendment or reinquishment of a part of the claim would he bad since such order would be by a court having no territorial jurisdiction. 19." In Pandit Rudranath Mishir & Ors. v. Pandit Sheo Shankar Missir and Ors., AIR 1983 Patna 53 the plaintiffs therein filed a suit before the Subordinate Judge at Arrah (Bihar) for partition of certain joint famility properties. All the immovable properties sought to be partitioned were situated in District Balia in Uttar Pradesh barring a savings bank account in the State Bank of India, Arrah. The office raised an objection as to the maintainability of the suit. The plaintiffs then filed an application for the amendment of the plaint whereby property situated in Arrah was included. The amendment was allowed. One of the defendants appeared and raised the question of jurisdiction and maintainability of the suit. The trial Court upheld the objection and ordered the return of the plaint. The trial Court took the view that the suit itself was beyond the jurisdiction of the Court, the amendment of the plaint was without jurisdiction. 20. On the appeal having been preferred by the plaintiffs, a Division Bench of the Patna High Court held :- "The granting of an amendment postulates an authority of the Court to entertain the suit. But where there is inherent lack of jurisdiction in the court to entertain the suit itself, it cannot make any order for amendment of the plaint to bring the suit within its jurisdiction. In such a case the Court would be exercising its jurisdiction which is not vested in it and, therefore, passing of any order would amount to usurping a jurisdiction not vested in it. In such a case the Court is bound to return the plaint to be represented to the proper Court in which the suit ought to have been instituted. After the plaint is returned for presentation to the proper Court, the plaintiff can amend the plaint and represent it to the same Court. In such a case the Court is bound to return the plaint to be represented to the proper Court in which the suit ought to have been instituted. After the plaint is returned for presentation to the proper Court, the plaintiff can amend the plaint and represent it to the same Court. The question of abandoning a part of the claim in a case where the valuation of the suit is beyond the pecuniary jurisdiction of a court, however, stands on a different footing. In such a case no amendment of the plaint is necessary inasmuch as it is always open to the plaintiff at any stage of the suit to abandon any part of its claim so as to bring it within the pecuniary jurisdiction of the Court" 21. In arriving at the above decisions, the Division Bench followed the ratio laid down in Mst. Zohra Khatoon v. Janab Mohammad Jane Alam, AIR 1978 Calcutta 133, Rattan Chand Khanna v. Mahendra Kumar, AIR 1979 Calcutta 55, Tirkha v. Ghasi Ram, AHt1935 Allahabad 842, Laljit Ranchhoddas v. Narottam Ranchhoddas, AIK 11953 Nagpur 273, H.C. Khan v. Purni Agarwalani, AIR 1953 Assam 102 and in Varry Mutyalamma v. Dasary Narayanaswamy, AIR 1949 Madras 719. 22. In the present case as well there is inherent lack of territorial jurisdiction of the Court to try the present suit when the suit was filed. Therefore, the plaintiff-bank cannot be permitted to relinquish a part of the claim so as to bring it within the jurisdiction of this Court. The application being O.M.P. No. 122 of 1999 is, therefore, dismissed. 23. Resultanlty, since the mortgaged immovable property the sale of whit", is being enforced is situated beyond the territorial jurisdiction of this Court, the present suit is not maintainable in this Court. The issue is decided against the. plaintiff-bank. Issue No. 1 to 4 and 6 to 10: 24. In view of my findings on Issue No. 5 above, that this court had no jurisdiction to try the present suit, these issues cannot be gone into in view of the ratio laid down by the Apex Court in Athmanathaswami Devasthanam v. K. GopalaswamiAyyangar, AIR 1965 SC 338. Relief: 25. Issue No. 1 to 4 and 6 to 10: 24. In view of my findings on Issue No. 5 above, that this court had no jurisdiction to try the present suit, these issues cannot be gone into in view of the ratio laid down by the Apex Court in Athmanathaswami Devasthanam v. K. GopalaswamiAyyangar, AIR 1965 SC 338. Relief: 25. As a result of above discussion and my findings on issue No.5 that this Court had no jurisdiction to try the present suit, it is ordered that the plaint of the suit be returned to the plaintiff under Order 7 Rule 10, Code of Civil Procedure for being presented to die proper court. No orders as to costs. -