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2014 DIGILAW 2875 (MAD)

P. Roopasundari v. State Bank of India

2014-08-25

T.RAJA

body2014
JUDGMENT T. RAJA, J. 1. This second appeal is directed against the impugned judgment passed by the learned XVIII Additional City Civil Judge, Chennai in A.S. No. 364 of 2013 dated 10.2.2014, in and by which the first appellate Court, reversing the judgment of dismissal of the suit passed by the trial Court, has decreed the suit by allowing the appeal. 2. Learned counsel for the appellants/defendants, contending heavily on the reasoning and the conclusions reached by the first appellate Court, argued before this Court that when the suit was filed by the respondent/plaintiff/State Bank of India seeking a prayer for recovery of a sum of Rs. 5,52,862.37p together with future interest at the rate of 11.0% per annum compounded at monthly rests from the date of plaint till the date of realisation along with payment of costs, a specific and explicit stand was taken by the appellants on the non-maintainability of the suit under Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), which says that no civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered to determine in respect of any action taken or to be taken in pursuance of any power conferred by the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The trial Court, after accepting the case of the appellants on the non-maintainability of the suit, giving liberty to the respondent-Bank to proceed under Section 13(4) of the SARFAESI Act, dismissed the suit further holding that the respondent was not entitled to file the suit before the civil Court, as the same was not maintainable. That apart, delving into the merits of the issue in regard to the recovery of the balance amount, the trial Court also has decided that the respondent was entitled to recover a sum of Rs. 3,27,862/-. In spite of the fact that a finding has been recorded by the trial Court with regard to the recovery of Rs. 3,27,862/- from the appellants, by virtue of Section 13(4) of the SARFAESI Act, finding that the suit was not maintainable, dismissed the same. 3. Aggrieved by the judgment and decree passed by the trial Court, an appeal was filed in A.S. No. 364 of 2013 by the respondent-Bank. 3,27,862/- from the appellants, by virtue of Section 13(4) of the SARFAESI Act, finding that the suit was not maintainable, dismissed the same. 3. Aggrieved by the judgment and decree passed by the trial Court, an appeal was filed in A.S. No. 364 of 2013 by the respondent-Bank. But the first appellate Court, ignoring the admission made by one Mr. Balagopal, the officer of the Bank, who was examined as P.W.1, as to the repayment of the following amounts, namely, Rs. 2,56,078/- as on 21.3.2012, another sum of Rs. 1,50,000/- on 18.3.2013 and one another sum of Rs. 75,000/- on 17.4.2013 by the appellants, which comes to more than the loan amount, without there being any further memo of calculation filed by the respondent-Bank, the first appellate Court, reversing the well considered judgment of the trial Court, heavily relying upon Section 1(4) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, has wrongly held that the financial institutions can approach the Debts Recovery Tribunal if the debt due is more than Rs. 10 lakhs and if the debt due is below Rs. 10 lakhs, they have to seek the remedy before the civil Court. Therefore, the approach adopted by the trial Court that the suit was not maintainable, having been reversed by the first appellate Court, clearly shows that the matter needs to be examined by admitting the second appeal. Adding further, he has also stated that when admittedly the appellants borrowed a sum of Rs. 4,20,000/- on 20.10.2004, they had repaid a sum of Rs. 4,81,078/-. That itself indicates that the suit as claimed by the respondent to recover a sum of Rs. 5,52,862/- at the rate of 11.0% interest per annum needs to be dismissed. But the first appellate Court, he pleaded, went against the specific and explicit provision barring the institution of civil suit for recovery of the amount against the appellants. Therefore, the impugned judgment and decree directing the appellants to pay the suit amount of Rs. 3,27,862/- to the respondent with subsequent interest of 9% per annum for the above said amount from the date of plaint till the date of decree and again 6% interest per annum thereafter till the realisation of the entire money, is not in accordance with law, hence, the same is required to be interfered with. 4. 3,27,862/- to the respondent with subsequent interest of 9% per annum for the above said amount from the date of plaint till the date of decree and again 6% interest per annum thereafter till the realisation of the entire money, is not in accordance with law, hence, the same is required to be interfered with. 4. This Court hardly finds any substance or merits in the submissions made by the learned counsel for the appellants for more than one reason. Firstly, it is the admitted case of the appellants that they had borrowed a sum of Rs. 4,20,000/- from the respondent-State Bank of India, Perambur Branch on 20.10.2004 by executing the mortgage deed and by depositing the original sale deed of the property as a security. It is also the admitted case of the appellants that they had paid a sum of Rs. 2,56,078/- as on 21.3.2012. Even as per the deposition made by P.W.1 Mr. Balagopal on 8.7.2013, he had deposed that apart from the receipt of Rs. 2,56,078/- from the appellants as on 21.3.2012, the appellants had further paid a sum of Rs. 1,50,000/- on 18.3.2013 and another sum of Rs. 75,000/- on 7.4.2013, totalling to Rs. 4,81,078/-. But when the suit was filed by the respondent seeking a judgment and decree for recovery of a sum of Rs. 5,52,862/- the appellants filed a written statement. Although a perusal of the written statement indicates the repayment of Rs. 2,56,078/- as on 21.3.2012 and a further sum of Rs. 1,50,000/- on 18.3.2013, nowhere it was stated that they had paid more than the amount due and payable by them to the respondent-Bank. 5. Be that as it may, when the first appellant stepped into the witness box on 8.7.2013 to cross-examine P.W.1, who had admitted the receipt of Rs. 2,56,078/- as on 21.3.2012, Rs. 1,50,000/- on 18.3.2013 and another sum of Rs. 75,000/- on 7.4.2013, totalling to Rs. 4,81,078/- on the basis of such admission, the appellants had not brought to the notice of either the trial Court or the first appellate Court that they were not liable to pay interest at the rate of 11.0% per annum. Therefore, the first appellate Court, after accepting the finding given by the trial Court that the respondent was entitled to recover the sum of Rs. Therefore, the first appellate Court, after accepting the finding given by the trial Court that the respondent was entitled to recover the sum of Rs. 3,27,862/- from the appellants, keeping in mind Section 1(4) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, has come to the conclusion that the financial institutions can approach the Debts Recovery Tribunal if the debt is more than Rs. 10 lakhs and if the debt is below Rs. 10 lakhs, it has also further held that the financial institutions are entitled to seek their remedy before the civil Court. In support of this conclusion, the first appellate Court has also taken support from the judgment of a Division Bench of the Allahabad High Court in the case of Mudit Entertainment Industries Private Limited vs. Benaras, State Bank of India, 2000 AIHC 3496, wherein the Hon'ble Division Bench has held that the legislature in its wisdom thought it expedient to confine this special remedy for recovery of debts of more than Rs. 10 lakhs, for lesser amount the banks and financial institutions can avail normal remedy of civil Court. 6. In the case on hand also, the suit was laid by the respondent-Bank for recovery of less than Rs. 10 lakhs, hence, as per Section 1(4) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, the conclusions reached by the first appellate Court that the civil Court has got jurisdiction for the reason that the suit claim is below Rs. 10 lakhs is, in my view, unassailable. Therefore, this Court, finding that the conclusions reached by the first appellate Court on the finding of facts are sufficiently supported by Section 1(4) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 along with the Division Bench judgment of the Allahabad High Court, is not inclined to entertain the second appeal. 7. It is also to be noted that the trial Court also, after discussing the various documents, came to the conclusion that the appellants are liable to pay the balance amount of Rs. 3,27,862.37p. In this context, it is appropriate to extract paragraph-10 of the judgment of the trial Court as follows:- "10. The PW1 evidence and Ex.A1 to Ex.A8 documents proved. There was an outstanding dues of Rs. 5,52,862.37/- payable by the defendants to the plaintiff's bank. 3,27,862.37p. In this context, it is appropriate to extract paragraph-10 of the judgment of the trial Court as follows:- "10. The PW1 evidence and Ex.A1 to Ex.A8 documents proved. There was an outstanding dues of Rs. 5,52,862.37/- payable by the defendants to the plaintiff's bank. In pending suit the 1st Defendant paid a sum of Rs. 1,50,000/- through the Ex.B10 challan and paid another sum of Rs. 75,000/- through the Ex.B11 challan. The plaintiff also admitted the Ex.B10 and 11 documents and payment of Rs. 2,25,000/- by the 1st Defendant. After deducting the payment of Rs. 2,25,000/- the defendants are liable to pay balance amount of Rs. 3,27,862.37p. Therefore, it is decided the plaintiff is entitled to recover a sum of Rs. 3,27,862/- from the defendants and the issue No. 1 and 2 decided accordingly in favour of the plaintiff.'' However, the trial Court, without properly appreciating Section 1(4) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 enabling the financial institutions to approach the civil Court for recovery of debts due and payable below Rs. 10 lakhs, has refused to decree the suit for recovery. Therefore, when it is the consistent stand of both parties that there have been dues payable by the appellants to the respondent-Bank, decreeing the suit for payment of Rs. 3,27,862/- by directing the appellants to pay the same to the respondent-Bank with subsequent interest at the rate of 9% per annum for the above said amount from the date of plaint till the date of decree and 6% interest thereafter till the date of realisation, cannot be found fault with. Moreover, this Court is not able to see any substantial question of law involved in the second appeal. 8. For all the aforesaid reasons, the second appeal fails and it is dismissed. Consequently, M.P. No. 1 of 2014 is also dismissed. No costs.