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2018 DIGILAW 414 (RAJ)

R. K. Polytex Pvt. Ltd. v. Ridhakaran Parasrampuria

2018-02-02

INDERJEET SINGH

body2018
JUDGMENT : Inderjeet Singh, J. 1. The instant appeal has been filed by the appellant against the order dated 23.08.2017 passed by the Additional District & Session Judge, No. 17, Jaipur Metropolitan, Jaipur in Temporary Injunction Application No. 33/2016 (C.I.S. No. CMC/304/2016), whereby the temporary injunction application filed by the appellants-plaintiffs (hereinafter referred to as 'Appellants) was dismissed. 2. Brief facts of the case are that the appellants have filed a suit under Order 7 Rule 1 CPC for declaration and permanent injunction. The appellants also filed an application for temporary injunction under Order 39 Rule 1 & 2 CPC along with main suit stating therein that the respondent No. 1 had a meager shareholding of 9.34% and by defrauding the Company Director and other shareholders in collusion with Respondent No. 2 and officers of Respondent No. 3 (hereinafter referred to as 'the Bank') mortgaged the Company property with the Bank in violation of the memorandum and Articles of Association of the Company. It was further stated that the respondent No. 1 did not have the requisite authority to mortgage the company properties. It was also stated that the appellants for the first time came to know of the fact relating to the mortgage of property when a letter dated 14.05.2016 issued by the Bank under Section 13(4) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as 'SARFAESI Act') was received by the Company. The appellants thereafter inquired with respondents No. 1 & 2 regarding the same. The complete picture of the fraudulent credit came to the notice of the appellants when they obtained copies of the proceedings pending before Debt Recovery Tribunal with respect to the properties of the Company. It was also stated that the respondent No. 1 without any lawful justification got the company inducted as partner in the firm of respondent No. 2 by virtue of deed of partnership dated 01.06.2016. Thereafter on the basis of a concocted meeting of the Board of Directors of the Company allegedly dated 28.06.2016 constructed a fraudulent impression that respondent No. 1 under authorization of the company was entitled to mortgage the Company properties comprising of Plot No. G-857-A and Plot No. 857-B situated at Road No. 14 Vishvakarma Industrial Area, Jaipur, for availing credit facility in favour of Respondent No.2. The contention of the appellants was that on the basis of such concocted meeting dated 28.06.2016 no right accrued in favour of the Bank to initiate recovery proceedings of taking possession or auctioning of the secured assets. 3. The respondent No. 1 & 2 filed reply to the temporary injunction application and denied the allegations made against them. 4. The Bank also filed reply to the temporary injunction application stating therein that all the documents pertaining to the loan and mortgage of the company assets were executed by the Company in pursuance of the meeting of Board of Directors dated 28.06.2012 and further on 30.06.2012, the company had executed the guarantee documents in its capacity as partner of Respondent No. 2. The company had also created a legal charge in accordance with Section 125 of the Companies Act 1956 and Director of the Company had submitted the required document to the Registrar of Companies in this regard. It was also stated that the RIICO had issued a no objection letter dated 29.06.2012 in favour of the Bank and for authentication of the resolution passed in meeting dated 28.06.2012 a certificate was issued by Shri Mukesh Gupta, Charted Accountant and A. Bafna & Company. It was further stated by the Bank that a total amount of Rs. 405 Lacs has to be recovered from appellant company which had executed the guarantee and mortgaged the assets for securing the credit facility to respondent No. 2. The charge on company assets was created pursuant to resolution dated 28.06.2012 passed by Board of Directors of the Company after which documents of Company assets were submitted to Bank and therefore the Company and its shareholders are bound by such acts. Objection regarding jurisdiction of the Civil Court was also taken. 5. The learned trial court vide order dated 23.08.2017 dismissed the Temporary Injunction application filed by the appellants. 6. Counsel for the appellants submitted that the appellants have filed the Civil Suit mentioning therein that a fraud has been committed by the respondent No. 1 by mortgaging the assets of the Company as he was not duly authorized by the Company. The learned trial court vide order dated 23.08.2017 dismissed the Temporary Injunction application filed by the appellants. 6. Counsel for the appellants submitted that the appellants have filed the Civil Suit mentioning therein that a fraud has been committed by the respondent No. 1 by mortgaging the assets of the Company as he was not duly authorized by the Company. Counsel further submits that the application submitted by the Bank under Order 7 Rule 11 CPC was dismissed by the learned trial court, therefore, the trial court was having the jurisdiction to here the decided the Suit, however, the trial court has wrongly rejected their application for temporary injunction. Counsel further submits that although an information was given to the Register of Companies under Section 125 of the Companies Act, regarding Registration of charges created by the Company, however, the said information was false as the signature of Mr. Anand Parasrampurai i.e. Director was forged. Counsel further submits that the resolution dated 28.06.2012 by which the respondent No. 1 was authorized to mortgage the property of the Company was not in accordance with provisions of Companies Act and the same was false and fabricated. Counsel further submits that a fraud has been committed by the respondent No. 1 with the other shareholders of the company and the Civil Court has jurisdiction to here and decide the suit pertaining to fraud. Counsel further submits that the appellant was not having any knowledge with regard to proceedings pending before the Debt Recovery Tribunal (hereinafter referred to as 'DRT') under the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as 'Act of 1993') or under the 'SARFAESI Act 2002'. When the notice demanding possession was issued by the Bank under Section 13(4) of 'SARFAESI' Act, then only they came to know about the fraud and they have approached the Civil Court. Counsel further submits that learned trial court has committed illegality in not considering the fact that the appellants have established a prima facie in their favour. 7. Counsel for the respondent No. 1 submits that fraud has been committed by respondent No. 2 & 3. 8. Counsel for the respondent No. 2 submits that respondent No. 2 has not committed any fraud and he has taken the loan from the Bank after due process of the law. 9. 7. Counsel for the respondent No. 1 submits that fraud has been committed by respondent No. 2 & 3. 8. Counsel for the respondent No. 2 submits that respondent No. 2 has not committed any fraud and he has taken the loan from the Bank after due process of the law. 9. Counsel for the respondent Bank submitted that their application under Section (sic Order) 7 Rule 11 CPC has been rejected by the learned trial court and against the said order, the Bank has already filed S.B. Civil Revision Petitions No. 90/2017, 106/2017 & 108/2017 and the same are pending before this Hon'ble Court. Counsel further submits that the Bank has sanctioned loan in favour of respondent No. 2 after following the due process of law and after verifying the documents by the respondent No. 1. Counsel further submits that the respondent No. 1 was duly authorized to execute the guarantee documents and mortgage the property with the Bank on behalf of the Company as per the Board Resolution dated 28.06.2012. Counsel further submits that the Company Secretary of M/s. R.K. Polytex Pvt. Ltd. as well as the Charted Accountant verified the documents submitted by the respondent No. 1. Counsel further submits that documents submitted by the M/s. R.K. Polytex Pvt. Ltd. in Forum No. 8 were duly certified by the Company Secretary, therefore, they have sanctioned the loan after following the due process of law. The Bank has filed an application for recovery or their dues before the D.R.T. by way of O.A. 118/2015 in which the Company has been represented and also filed the reply. Counsel further submits that they have also initiated proceedings under the 'SARFAESI Act, 2002' against the Company i.e. M/s. R.K. Polytex Pvt. Ltd. and against respondent No. 1 & 2 and others by issuing of demand notice on 06.11.2015 and the possession by the property has also been taken over by the Bank under Section 13(4) of the 'SARFAESI Act, 2002'. Lastly, counsel submits that if at all the appellants are aggrieved against the action taken by the Bank then they can file an appeal under section 17 of the 'SARFAESI Act 2002', before the DRT. Lastly, counsel submits that if at all the appellants are aggrieved against the action taken by the Bank then they can file an appeal under section 17 of the 'SARFAESI Act 2002', before the DRT. Counsel submits that the learned trial court has rightly dismissed the temporary injunction application submitted by the appellants as the Civil Court has no right to issue any injunction in pursuance of any action taken under the 'SARFAESI Act 2002'. Counsel relied upon the judgment of Hon'ble Supreme Court in the matter of State Bank of Patiala vs. Mukesh Jain & Another, reported in (2017) SCC 53, wherein para No. 14, 15 has held as under :- "14. It would be beneficial to consider the relevant provisions of the Act referred to hereinabove : 17. Right to appeal (1) Any person (including borrower), aggrieved by any of the measures referred to in Sub-section (4) of Section 13 taken by the secured creditor or his authorized officer under this Chapter, [may make an application along with such fee, as may be prescribed] to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken: Provided that different fees may be prescribed for making the application by the borrower and the person other than the borrower. ............................................... x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x 34. Civil Court not to have jurisdiction.-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 by or under this Act to determine and no injunction shall be granted by any Court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993). Section 1(4) of the DRT Act reads as under: 1. Short title, extent, commencement and application. - (1) ................. (2) ................. (3) ................. (4) The provisions of this Act shall not apply where the amount of debt due to any bank or financial institution or to a consortium of banks or financial institutions is less than ten lakh rupees or such other amount, being not less than one lakh rupees, as the Central Government may, by notification, specify. 15. (2) ................. (3) ................. (4) The provisions of this Act shall not apply where the amount of debt due to any bank or financial institution or to a consortium of banks or financial institutions is less than ten lakh rupees or such other amount, being not less than one lakh rupees, as the Central Government may, by notification, specify. 15. Upon perusal of Section 34 of the Act, it is very clear that no Civil Court is having jurisdiction to entertain any suit or proceeding in respect of any matter which a Debt Recovery Tribunal or the appellate Tribunal is empowered by or under the Act to determine the dispute. Further, the Civil Court has no right to issue any injunction in pursuance of any action taken under the Act or under the provisions of the DRT Act." 10. Counsel further relied upon the judgment of Jagdish Singh vs. Heeralal and Ors. Reported in (2014) 1 SCC 479 in which in para 25 has held as under:- "We are of the view that the civil court jurisdiction is completely barred, so far as the "measure" taken by a secured creditor under Sub-section (4) of Section 13 of the Securitisation Act, against which an aggrieved person has a right of appeal before the DRT or the Appellate Tribunal to determine as to whether there has been any illegality in the "measures" taken. The bank, in the instant case, has proceeded only against secured assets of the borrowers on which no rights of Respondent Nos. 6 to 8 have been crystalised, before creating security interest in respect of the secured assets." 11. Counsel further submits that the view taken by the learned trial court while dismissing the temporary injunction application was a possible view in the facts and circumstances of the case. The Hon'ble Supreme Court in the case of Mohd. Mehtab Khan and Ors. vs. Khushnuma Ibrahim Khan and Others, (2013) 9 SCC 221 in para No. 20 held as under :- "20. The Hon'ble Supreme Court in the case of Mohd. Mehtab Khan and Ors. vs. Khushnuma Ibrahim Khan and Others, (2013) 9 SCC 221 in para No. 20 held as under :- "20. In a situation where the learned Trial Court on a consideration of the respective cases of the parties and the documents laid before it was of the view that the entitlement of the plaintiffs to an order of interim mandatory injunction was in serious doubt, the Appellate Court could not have interfered with the exercise of discretion by the learned Trial Judge unless such exercise was found to be palpably incorrect or untenable. The reasons that weighed with the learned Trial Judge, as already noticed, according to us, do not indicate that the view taken is not a possible view. The Appellate Court, therefore, should not have substituted its views in the matter merely on the ground that in its opinion the facts of the case call for a different conclusion. Such an exercise is not the correct parameter for exercise of jurisdiction while hearing an appeal against a discretionary order. While we must not be understood to have said that the Appellate Court was wrong in its conclusions what is sought to be emphasized is that as long as the view of the Trial Court was a possible view the Appellate Court should not have interfered with the same following the virtually settled principles of law in this regard as laid down by this Court in Wander Ltd. vs. Antox India (P) Ltd." 12. Heard counsel for the parties and perused the record. 13. The argument raised by the counsel for the appellant that fraud has been committed by the respondent No. 1 in mortgaging the property of the company with the Bank is not acceptable in view of the fact that the Company has passed a resolution dated 28.06.2012 by which the respondent No. 1 was duly authorized to create a charge in favour of the Bank and the Bank was right in issuing the loan in favour of the respondent No. 2 as all the documents were duly executed by the authorized persons. The next argument raised by the counsel for the appellant regarding dismissal of the application submitted by the Bank under Order 7 Rule 11 CPC is concerned the same has no legal force as the Revision Petition is pending against the order passed by the learned Trial court before this court. 14. The next argument raised by the counsel for the appellant regarding forged signature of the Director of the Company on forum No. 8 submitted before the Registrar of Companies is not acceptable in view of the certificates issued by the Company Secretary as well as Charted Accountant and the learned trial court has also considered the fact regarding forged signatures that this issue would be decided after recording the evidence of the parties. Thus, in my considered view the leaned trial court has rightly held that no prima facie case is made out in favour of the appellants. 15. In view of the above discussion, the appeal filed by the appellant deserves to be dismissed, for the reasons, firstly; the Civil Court has no right to issue any injunction in pursuance of any action taken under the 'SARFAESI Act 2002', in view of the judgment passed by the Hon'ble Supreme Court in the matter of State Bank of Patiala (supra); Secondly, the appellants are having an alternative remedy of appeal under Section 17 of the 'SARFAESI Act 2002' before the DRT against the action taken by the Bank under Section 13(4) of the 'SARFAESI Act 2002'; thirdly, the appellants have not lodged any FIR against the respondent No.1 who has committed the alleged fraud with the appellants; fourthly, the view taken by the learned trial court in this matter was a possible view with regard to dismissal of the temporary injunction application. 16. In that view of the matter, the appeal as well as stay application is hereby dismissed.