KOTAK MAHINDRA BANK LTD Vs. BALARAM CEMENTS LIMITED

JUDGEMENT

(1.) The present Civil Application has been filed for vacating the inter order dated 10.08.2009 passed in Civil Application No. 395/2009.

(2.) The facts of the case briefly stated are that the the Plaintiff filed Suit for declaration that he has not taken any loan or advances or hypothecated any property to the Defendant and yet the Defendant has served the notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the Securitization Act") on the ground that the debt of the Plaintiff to the ICICI Bank has been assigned in favor of the Respondent bank by executing the deed of assignment under the Securitization Act and, therefore, they have no right to take every action for the recovery of the outstanding dues. The Defendant filed an application, Exh.21 under Order VII, Rule 11(d) of the Code of Civil Procedure Code, 1908 for the rejection of the plaint, which came to be allowed by passing order. Therefore, the Plaintiff filed Regular Civil Appeal, which has been dismissed and, therefore, the present Second Appeal has been filed by the original Plaintiff raising substantial questions of law posed therein with regard to the interpretation of the Securitization Act, which came to be admitted. Along with the Second Appeal, Civil Application for stay also came to be filed, wherein the order came to be passed on 10.08.2009 and stay was granted.

(3.) Learned Counsel, Mr. Navin Pahwa for the applicant contended that in view of the judgment of the Hon'ble Apex Court reported in in case of ICICI Bank Limited v. Official Liquidator of Aps. Star Industries Ltd., 2010 10 JT 599 by which, the Hon'ble Apex Court has set aside the judgment of the Division Bench of this Court and it has made observation that assignment of the debt is valid. It is further observed that a benefit under the contract can always be assigned. Reference is made to the provisions of the Banking Regulation Act, 1949 and it has been observed that RBI can lay down guidelines and directions enabling banking companies to deal in derivatives like futures and options and also to do all things as are incidental or conducive to the promotion or advancement of the business of the company. He has referred to Sections 34 and 35 of the Recovery of Debts due to Banks and Financial Institution Act, 1993 (hereinafter referred to as "Financial Institution Act") and submitted that there is an absolute bar of the Civil Court and, therefore, the Suit itself would not be maintainable. Learned Counsel, Mr. Pahwa submitted that once the jurisdiction of the Civil Court is barred, the remedy would be to make any such application before the Debt Recovery Tribunal, which is established under the Act and, therefore, the present application may be allowed.