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2023 DIGILAW 41 (JK)

Madan Mohan Bhargav v. Canara Bank

2023-02-13

RAHUL BHARTI

body2023
JUDGMENT : Rahul Bharti, J. 1. Heard learned counsel for the appellant and also respondent no. 1. 2. Dormant potentiality of Order VII rule 11 of the Code of Civil Procedure, 1908 was given a kinetic impetus and interpretation by the Hon'ble Supreme Court in its judgment in case of T. Arivandandam vs. T.V. Satyapal, 1977 AIR SC 2421 by imploring the civil courts handling the civil suits to apply a diagnostic examination of a plaint at first blush so as to check its fitness for onward march of trial so that in case a plaint, in its true hue, is found to be bearing just a disguise of a cause of action then to deliver it a rejection. 3. The Court of learned 1st Additional District Judge, Jammu reminded itself of said potentially of Order VII Rule 11(d) CPC by not falling to trap of an illusion of cause of action set up in his plaint to order its rejection which has brought the appellant in present civil first appeal under section 96 CPC and this court is also dealing with same skill to deal with the appeal at its very inception so as to show it its resting place. 4. This is a Civil 1st Appeal against a judgment and decree dated 04.02.2023 passed by the trial court of learned 1st Additional District Judge, Jammu in civil suit on File No. 185/COS thereby dismissing the suit filed on 23.01.2023 by the appellant. The suit has been dismissed by operating Order VII Rule 11(d) of the Code of Civil Procedure, 1908 (in short CPC) on the ground of non-maintainability in view of the bar created under the provisions of “Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002” (“SARFAESI Act” in short). 5. The factual background bearing which the appellant came forward to institute the aforementioned civil suit is by reference to a money decree dated 28.09.2017 passed by the Court of learned Additional District Judge (Bank Cases) Jammu in favour of the respondent no. 1, herein the Canara Bank. 6. The respondent no. 1-Canara Bank had advanced a loan facility of rupee fourteen (14) lacs in 1984 in favour of one Kewal Krishan Kohli son of Jagdish Raj Kohli. 1, herein the Canara Bank. 6. The respondent no. 1-Canara Bank had advanced a loan facility of rupee fourteen (14) lacs in 1984 in favour of one Kewal Krishan Kohli son of Jagdish Raj Kohli. For this loan facility, the loanee Kewal Krishan Kohli had mortgaged his ownership house premises of 20 B/C Gandhi Nagar, Jammu in favour of the respondent no. 1-Canara Bank by virtue of a mortgage deed dated 14.02.1984 and had also furnished a guarantor, namely, Shanti Devi Kohli. 7. Upon the failure of said Kewal Krishan Kohli to repay the loan liability, the respondent no. 1-Canara Bank had filed a civil suit on File No. 308/Civil on 28.10.1991 before the Court of learned Additional District Judge (Bank cases), Jammu asking for money decree of Rs. 51,95,633/- along with interest pendente lite. In this suit, the principal borrower Kewal Krishan Kohli and his guarantor Shanti Devi Kohli had caused appearance to file written statement on 19.09.1997 and also to be examined on 10.07.1999 as well under Order X CPC requirement. 8. While the aforesaid suit of recovery was so pending, the appellant herein had emerged on his own, acting through an attorney holder Gheetan Singh, to seek impleadment as co-defendant in the suit with an application filed on 30.04.2007 saying that by virtue of an agreement to sell dated 30.03.2000. The appellant had come to pay a sale price to Kewal Krishan Kohli for sale of his house Property No. 20 B/C Gandhi Nagar, Jammu. This application had got dismissed on 05.10.2007 by the trial court of Additional District Judge (Bank cases) Jammu. 9. Thereafter, the appellant again stepped forward for his impleadment as defendant in the suit with an application filed on 07.11.2007 this time putting up a sale deed dated 30.07.2001 quo House No. 20 B/C Gandhi Nagar, Jammu in terms whereof the appellant claimed to have purchased the house property of 20 B/C Gandhi Nagar, Jammu from said Kewal Krishan Kohli. This application too came to be dismissed by the trial court of Additional District Judge (Bank cases) Jammu vide an order dated 15.12.2007. This application too came to be dismissed by the trial court of Additional District Judge (Bank cases) Jammu vide an order dated 15.12.2007. A Civil revision under section 115 CPC then came to be filed before this Court against non impleadment of the appellant through Gheetan Singh but said civil revision too was dismissed on merits holding the appellant neither a necessary party nor a property party in the said suit for recovery of the respondent no. 1-Canara Bank against borrower and his guarantor. 10. While the respondent no. 1-Canara Bank's civil suit for recovery against the principal borrower Kewal Krishan Kohli and the guarantor Shanti Devi Kohli was so pending, both came to demise whereupon the respondent no. 1-Canara Bank, as being the plaintiff, came to seek impleadment of two persons, namely, Surinder Kumar Kohli and Vijay Kohli as legal representatives by filing an application on 28.07.2014 in which regard as news-paper publication came to be issued by the Court before ordering impleadment of said two persons as legal representatives of defendant Kewal Krishan Kohli in terms of an order dated 06.01.2017. It is important to mention here that the appellant herein did not step forward to seek his impleadment as legal representative of the defendant Kewal Krishan Kohli although the appellant was having the house property 20 B/C Gandhi Nagar, Jammu so to say purchased from said Kewal Krishan Kohli. 11. The respondent no. 1-Canara Bank's Suit No. 308-Civil came to be decreed by the trial court of learned Additional District Judge (Bank cases) Jammu by passing a decree dated 28.09.2017 for an amount of Rs. 51,95,633/- along with interest pendente lite with quarterly rests from date of institution of suit till actual realization. 12. While the civil suit so filed by the respondent no. 1-Canara Bank came to be decreed in its favour and against the defendants in the suit so as to become as judgment debtors in terms of the decree and judgment dated 28.09.2017, on the other hand the respondent no. 1-Canara Bank opted to set into effect proceedings under the SARFAESI Act against the mortgaged security of the House No. 20-BC, Gandhi Nagar, Jammu which, incidentally, had suffered purported change of ownership from that of the principal borrower/judgment debtor Kewal Krishan Kohli to that of the appellant herein by virtue of the purported sale deed dated 30.07.2001. The respondent no. 1-Canara Bank opted to set into effect proceedings under the SARFAESI Act against the mortgaged security of the House No. 20-BC, Gandhi Nagar, Jammu which, incidentally, had suffered purported change of ownership from that of the principal borrower/judgment debtor Kewal Krishan Kohli to that of the appellant herein by virtue of the purported sale deed dated 30.07.2001. The respondent no. 1-Canara Bank came to initiate proceedings against the mortgage property in terms of the SARFAESI Act. 13. It is against the play of the proceedings borne out of said money decree and also of SARFAESI Act that the appellant reckoned himself to be an aggrieved person having right in the mortgage property and, thus, came forward with the civil suit in reference against the respondent no. 1-Canara Bank and its Branch Manager, Jammu. 14. The appellant came to present and institute the suit on file no. 185/COS before the Court of learned Additional District Judge, Jammu by virtue of which the appellant as being the plaintiff sought the following relief:- “Suit for Declaration seeking declaration to the effect that the judgment and decree dated 28.09.2016 passed by ld. Additional District Judge (bank cases, Jammu) in File No. 308/Civil titled Canara Bank vs. Surinder Kumar Kohli is illegal, null and void as obtained by fraud. AND Declaration that the proceedings initiated by the defendant no. 1 with respect to House No. 20 B/C Gandhi Nagar, Jammu under SARFAESI Act and auction notice are null and void and obtained with fraud. With a consequential relief of permanent prohibitory injunction restraining the defendant no. 1 from interfering into the peaceful possession of the plaintiff with respect to H. No. 20 B/C Gandhi Nagar, Jammu or dispossessing or auctioning the House No. 20, B/C Gandhi Nagar, Jammu in any manner whatsoever.” 15. The appellant in his plaint pleaded that he acted purely on the representation and assurance of said Kewal Krishan Kohli and his agent Gheetin Singh to believe that the house Property No. 20 B/C Gandhi Nagar, Jammu was free of any encumbrance and lien but the said representation and assurance provided to be false. The appellant in his plaint pleaded that he acted purely on the representation and assurance of said Kewal Krishan Kohli and his agent Gheetin Singh to believe that the house Property No. 20 B/C Gandhi Nagar, Jammu was free of any encumbrance and lien but the said representation and assurance provided to be false. The appellant did not plead that as a principle of caveat emptor (let the buyer beware), he had also made requisite search and inquiry to verify the non-encumbrance status of the house property in reference which he was intending to go for deal of purchase except the plea made that in the office of the J&K Housing Board no lien was found marked against said house property. 16. The appellant, thus, projected himself as a bonafide buyer so as to relieve the house property of House No. 20 B/C Gandhi Nagar, Jammu from effects of mortgage held by the respondent no. 1-Canara Bank and its right under SARFAESI Act to proceed against said property as a security interest. For this end object, the appellant asked for the relief in the suit which is directly and squarely related to the course of action being intended or perused by the respondent no. 1-Canara Bank under SARFAESI Act. 17. Read between the lines, the plaint of the appellant is actually using the pretext of passing of money decree dated 28.09.2017 by the court of learned Additional District Judge (Bank Cases) Jammu on File No. 308/Civil titled Canara Bank vs. Surinder Kumar Kohli and Others, to block the right of the respondent no. 1-Canara Bank to act and proceed against the security interest. This is what was being intended by the appellant in asking for relief of declaration that the proceedings initiated by the defendant no. 1, that being the respondent no. 1-Canara Bank, with respect to House No. 20 B/C Gandhi Nagar, Jammu under SARFAESI Act and auction notice are null and void and actuated with fraud. 18. The trial court of learned 1st Additional District Judge, Jammu came to pose a question as to whether the Court was having jurisdiction to entertain the suit and pass a decree in accordance with law. 18. The trial court of learned 1st Additional District Judge, Jammu came to pose a question as to whether the Court was having jurisdiction to entertain the suit and pass a decree in accordance with law. To this question, the trial Court came up with an answer through its impugned judgment that the remedy for the appellant to get rid of the course of proceedings initiated by and at the end of the respondent no. 1-Canara Bank under section 13(1) and 13(4) of the SARFAESI Act is before the Debts Recovery Tribunal and that the civil court has no jurisdiction to entertain and try the appellant's suit in view of the bar created by the SARFAESI Act. The plaint came to be rejected by the trial Court vide its judgment dated 04.02.2023. 19. To reach to said conclusion, the trial Court has referred and relied upon the Hon'ble Supreme Court of India's judgment in the case of Jagdish Singh vs. Heeralal and Others, 2014 (1) SCC 479 . 20. The trial court overruled the plea of the appellant to salvage the maintainability of the suit that a fraud has been played upon the appellant by the respondent no. 1-Canara Bank in earning the decree dated 28.09.2017 on File No. 308/Civil from the court of learned Additional District Judge (Bank Cases), Jammu to claim that the decree was illegal, null and void as obtained by fraud. 21. As the trial court of learned 1st Additional District Judge, Jammu has non suited the appellant-plaintiff by hitting the plaint under Order VII Rule 11 CPC holding the suit barred by law, so it makes incumbent upon this Court to visit the scheme of the Code of Civil Procedure, 1908 (in short CPC) to examine as to whether the learned trial court has rightly exercised the procedural jurisdictional of Order VII Rule 11(d) CPC. 22. First provision to be immediately taken notice of is the definition of “Decree” as given in Section 2(2) of the CPC. This definition is so dynamic a definition that it contains a code to understand what a civil suit and its trial is all about. 22. First provision to be immediately taken notice of is the definition of “Decree” as given in Section 2(2) of the CPC. This definition is so dynamic a definition that it contains a code to understand what a civil suit and its trial is all about. A decree is defined to be formal expression of an adjudication which, so far as regards the court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of plaint and the determination of any question within Section 144, but shall not include: (a) any adjudication from which an appeal lies as an appeal from an order. (b) any order of dismissal for default. Explanation: A decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely disposes of the suit. It may be partly preliminary and partly final. 23. This definition of decree encapsulates an entire conception and idea of a dispute before a court of law and the decision making of the given court of law with respect to actual position of rights of parties in dispute. Now, what becomes a matter in controversy in a civil suit in practical sense is a dispute stated by the disputants which, in fact, sets up a civil suit. 24. A civil suit is born when a plaint comes to be instituted as is said by Section 26 CPC read with Order IV CPC. 25. Scheme of the Rules in the First Schedule of the CPC, which is comprised of Orders I to LI, is very systematically set bearing an underlying connectivity. Orders bear not only inter-relationship with each other but also within a given Order its sub rules bear intra-relationship so as to carry forward a civil suit unto its trial for adjudication to become a decree. 26. Orders bear not only inter-relationship with each other but also within a given Order its sub rules bear intra-relationship so as to carry forward a civil suit unto its trial for adjudication to become a decree. 26. As it takes two or more persons to get into a dispute, so Order I Rule I identifies that a plaintiff is a person having a right to relief in respect of, or arising out of, an act or transaction or series of acts or transactions against a person/s as defendant/s. This “right to relief” in actuality is what is known or meant as “right to sue” and the expression “act or transaction or series of acts or transactions” is what comes to mean and constitute the expression “cause of action” to find an express mention in very next Order II. What is “right to relief” in Order I Rule I is “the claim” in Order II and what is an act or transaction or series of acts or transactions in Order I Rule I partakes expression “the cause of action” in Order II Rule 2. 27. Orders I, II, VII combine together to present a situation when it gets said that a suit has been instituted in the meaning of Section 26 and Order IV CPC. 28. Cause of action, which in essence is a statement of dispute in terms of act or transaction between the parties, factual and legal relationship of the plaintiff and the defendant with respect to property or matter in issue quo which a right/legal claim is being claimed or disclaimed, is very soul of a plaint whereas rest of averments serve as body part. It is with this perspective that Order VI Rule 2 while referring to material facts read with Order VII Rule 1(e) CPC which refers to facts constituting cause of action actually intend to be essentially pleaded in a plaint in absence of which plaint is meaningless for a civil court of law to act upon it. 29. A cause of action is conceived to be carrying a claim or claims meaning thereby that a claim is borne out of a cause of action and not vice versa. A cause of action may have only one claim coming out of and asked for by the plaintiff to be granted to him/her or more than one claim out of same very cause of action. A cause of action may have only one claim coming out of and asked for by the plaintiff to be granted to him/her or more than one claim out of same very cause of action. A plaintiff states or presents act or transaction or series of acts or transactions as a cause of action in a written form known as a plaint under Order VII. The word ‘plaint’ has not been defined in CPC but is well understood across legal mind of any experience and standing. The word plaint as per Black's law dictionary is used in civil law to mean a complaint and is an English equivalent to Latin word ‘querela’ which means an action preferred in any court of justice. Thus, every plaint is a cause of action specific for which a suit comes into being when a given plaint gets instituted in terms of Section 26 read with Order IV. 30. Order II commands a plaintiff to ask for every claim or claims borne out of a given cause of action and not to miss out any except at the cost of losing the omitted claim to be asked for next time from a civil court. A suit, thus, means a particular cause of action coming for an adjudication which is going to come in form of a decree from a given civil court so as to end the suit so borne. 31. While CPC envisages a cause of action giving rise to a civil suit between two persons, it also provides that in same very suit more than one cause of action can join and be presented together for an adjudication between same very two persons and in that situation a particular suit becomes a carrier of more than one plaint in itself depending upon number of causes of action joined together at the discretion of the plaintiff. Each cause of action will be independent of other though pleaded in the same suit and that is why it is left to a civil court to watch and guard as to whether two joined causes of action should go for trial in same suit or will have to part from each other to have separate trial as is mandated by Order II Rule 6 CPC. 32. An adjudication of a civil suit, in essence, means a trial of a particular cause of action. 32. An adjudication of a civil suit, in essence, means a trial of a particular cause of action. If there are two causes of action joined in one plaint, then it is an adjudication of two civil suits in actual sense. Proceeding on this mechanism, in case if in a plaint there is a joinder of causes of action or multiple causes of action then in the eyes of law there will be as many decrees as there are causes of action joined in a civil suit. 33. For one particular cause of action, a plaintiff may be able to get desired relief against the defendant whereas in the other cause of action pleaded in the same very plaint, a plaintiff may suffer refusal of the relief. Order II Rule 6 CPC reserves a power to a civil court to order separate trial for each separate cause of action otherwise combined for single trial in a suit by a plaintiff, so it means by implication that as many are causes of action so many are plaints found in one suit which can be dealt in a single trial or separate trials. 34. Now if two causes of actions joined and combined in one suit can be afforded a single trial or subjected to separate trials, then a logical corollary is that one of the plaints bearing its own cause of action can be rejected by operation of Order VII Rule 11 CPC and other plaint can even be afforded a trial though found in single plaint. 35. A careful study and understanding of Order II and Order VII Rule 11 CPC would bear out the awareness on the part of the framers of CPC in deliberately providing expression rejection of plaint rather than rejection of suit under Order VII Rule 11 CPC. 36. The framers of CPC had a very clear conception of what is being provided in Order II Rule 3 CPC is in recognition of a plaintiffs inherent right to sue a person upon a cause of action and/or join some other cause or causes of action available at the same/anterior point of time, however, leaving it to the court, under Order II Rule 6 CPC, to see if suit will go for trial for all joined causes of action or to split the joined causes of action and direct separate trial for them. It is with this background position of Order II Rule 3 & 6 that in Order VII Rule 11 CPC instead of saying rejection of suit of the plaintiff that the framers of CPC provided rejection of plaint. If a suit is rejected then it means it goes out in its entirety whether based upon one cause of action or multiple causes of action joined together but when it is said a plaint is rejected then that means for a particular cause of action the plaint has been rejected leaving other causes of action, if joined together in one suit, to stay on course for trial. 37. Now, coming to the present case, after perusing the impugned judgment, the plaint filed and hearing the submissions of the learned counsel for the appellant and also for the respondent no. 1-Canara Bank, this Court is tempted to observe and say that the appellant has fallen victim to his own trap to suffer failure of his suit. The appellant very subtly joined two different causes of action in his suit. One cause of action being with respect to declaration quo the money decree dated 28.09.2017 which the respondent no. 1-Canara Bank, as plaintiff, came to earn against the principal borrower/debtor Kewal Krishan Kohli and co-defendants which did not include the appellant. The money decree so passed by the Court of learned Additional District Judge (Bank Cases), Jammu was not born out of the application of SARFAESI Act so the alleged cause of action to challenge the money decree was not in any manner related to SARFAESI Act proceedings or action of the respondent no. 1-Canara Bank. 38. Second cause of action was to question the proceedings initiated by the respondent no. 1-Canara Bank with respect to House No. 20 B/C Gandhi Nagar, Jammu under SARFAESI Act which is an independent legal proceeding having nothing to do with any civil court decree for recovery of money in favour of the respondent no. 1-Canara Bank against the principal borrower/debtor. Even without any such money decree, the respondent no. 1-Canara Bank was and is fully free to carry out course of action to enforce the security interest subsisting in its favour quo the secured asset which is the house property of House No. 20 B/C Gandhi Nagar, Jammu. 39. This course of action of the respondent no. Even without any such money decree, the respondent no. 1-Canara Bank was and is fully free to carry out course of action to enforce the security interest subsisting in its favour quo the secured asset which is the house property of House No. 20 B/C Gandhi Nagar, Jammu. 39. This course of action of the respondent no. 1-Canara Bank is guided by Chapter III of the SARFAESI Act containing Sections 13 to 19 in which is included Section 17 providing remedy of application to any person including a borrower feeling aggrieved by any measures referred to in sub--section 4 of Section 13 taken by a secured creditor/s, which the respondent no. 1-Canara Bank is, before the Debts Recovery Tribunal having the jurisdiction. 40. As the respondent no. 1-Canara Bank is reported to have taken recourse to Section 13 SARFAESI Act proceedings in the case, then Section 34 of the SARFAESI Act bars the intervention of a civil court to entertain any suit or proceedings in respect of any matter which the Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under the SARFAESI Act to determine and no injunction is grantable 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 the SARFAESI Act. 41. Thus, ex facie, the appellant's suit to the extent impugning the course of action on the part of the respondent no. 1-Canara Bank in proceeding under the SARFAESI Act and the relief claimed to that extent was clearly barred from cognizance of civil court and consequently the injunction relief claimed in the suit by the appellant against the respondent no. 1-Canara Bank to proceed against the property of House No. 20 B/C Gandhi Nagar, Jammu, notwithstanding its changed ownership status being claimed by the appellant, was also not grantable by the civil court. 42. In view of this scenario, the plaint of the appellant bearing cause of action for seeking declaration against the money decree in reference is concerned was not barred from cognizance of the civil court of learned 1st Additional District Judge, Jammu whereas the suit for declaration with consequential relief of injunction addressed against the action of the respondent no. 42. In view of this scenario, the plaint of the appellant bearing cause of action for seeking declaration against the money decree in reference is concerned was not barred from cognizance of the civil court of learned 1st Additional District Judge, Jammu whereas the suit for declaration with consequential relief of injunction addressed against the action of the respondent no. 1-Canara Bank under the SARFAESI Act aimed against the secured asset of house property of House No. 20 B/C Gandhi Nagar, Jammu was expressly barred in terms of Section 34 of the SARFAESI Act. Thus, the judgment of the court of learned 1st Additional District Judge, Jammu is correct both on facts and in law in holding the appellant's suit barred from cognizance in so far as the plaint related to cause of action pertaining to SARFAESI Act. 43. However, in so far as the suit of the appellant based upon cause of action with respect to money decree is concerned for which declaration was sought by the appellant against the respondent no. 1-Canara Bank, the plaint to that extent is also liable to be held to be not maintainable, of course, not by any bar of jurisdiction of civil court but because the appellant having no right to sue with respect to legality and validity of money decree earned by the respondent no. 1-Canara Bank against its principal borrower Kewal Krishan Kohli and his guarantor Smt. Shanti Kohli. The appellant is an alien to said loan transaction between the respondent no. 1-Canara Bank and the principal borrower/defaulter Kewal Krishan Kohli and guarantor Shanti Kohli and in that factual script the appellant was having no role to play or perform. In fact, this is what was foretold to the appellant when his civil revision against an order of his non-impleadment was rejected by this Court. 44. The appellant had risked the purchase of a mortgage property under a bank loan and he cannot have an insurance against said risk so as to bailout the mortgaged property. This trick if allowed to succeed would amount to inviting day light fraud taking place against financial institutions who lend money on loan to borrower by having mortgage security of immovable property of a borrower/debtor. 45. This trick if allowed to succeed would amount to inviting day light fraud taking place against financial institutions who lend money on loan to borrower by having mortgage security of immovable property of a borrower/debtor. 45. The fate met by the appellant in his suit at the hands of the court below is fully supported by position of law settled by Hon'ble the Supreme Court of India in the case of Canara Bank vs. P. Selathal and Others, (2020) 13 SCC 143 . The present civil first appeal is, thus, held to be meritless and deserves dismissal. Accordingly, the appeal is dismissed bearing no costs. 46. Disposed of accordingly.