RASIKLAL S MARADIA Vs. ICICI BANK LIMITED

JUDGEMENT

(1.) PRESENT Appeal from Order is preferred by the appellants original plaintiff Nos. 1 and 3 under Order 43 Rule 1 (a) of the Code of Civil Procedure challenging the order dated 10. 1. 2008 passed by the learned City Civil Court, Ahmedabad below Exhs. 20 and 21 passed in Civil Suit No. 1431 of 2003, by which the learned Auxiliary Chamber Judge, City Civil Court has allowed the aforesaid two chamber summons by ordering to return the plaint to the plaintiff for being presented in DRT, Mumbai under Order 7 Rule 10 of the Code of Civil Procedure.

(2.) THE facts leading to the present Appeal from Order in nutshell are as under: the original plaintiffs are guarantors of Maradia Chemicals Limited. The said Maradia Chemicals Limited obtained loan from the defendant Bank i. e. I. C. I. C. I. Bank (hereinafter referred to as "the Bank" ). The said Maradia Chemicals Limited suffered loss and it appears that defendant Bank recalled the loan facility. That the Bank had filed a Civil Suit against the Maradia Chemicals Limited for recovery of loan advance to it initially on the original side of the Hon'ble Mumbai High Court and subsequently the said suit has been transferred to Debt Recovery Tribunal (hereinafter referred to as "drt"), Mumbai which is numbered as O. A. No. 977 of 1999. In the said suit, the appellants herein original plaintiffs are also the defendants in the said proceedings. It also appears that even Company filed one Suit in the City Civil Court at Ahmedabad being Civil Suit No. 3189 of 2002 for claiming damages from the Bank on the ground that the Bank had released foreign loan of lesser amount then agreed which resulted in delay in implementation of projects by Company. In the said suit, Chamber summons was taken out for rejection of plaint and by order dated 24. 1. 2003 the plaint was ordered to be returned to the company under Order 7 Rule 10 of the Code of Civil Procedure for being presented before DRT. Mumbai. Against the said order the company preferred Appeal from Order No. 53 of 2003 with Cross Objection No. 2 of 2003 before this Court and by an order dated 26. 2. 2003, the order of the trial Court by which the plaint was returned came to be set aside and instead of that, it is ordered that the plaint against the defendant No. 1 ICICI Bank Ltd. , shall stand rejected under the provisions of Order 10 Rule 11 of the Civil Procedure Code. The suit against the defendants No. 2 and 3 shall proceed further own its merits and from the stage on which the impugned order is passed by the trial Court. Therefore, the suit filed by the Company against the Bank for claiming damages has been dismissed and / or returned to the Company for presenting it before the DRT, Mumbai. That the appellants herein original plaintiffs No. 1 and 3 had also instituted present Civil Suit No. 1431 of 2003 against the Bank also for damages for the recovery of aggregate amount of Rs. 2078. 97 crores with running interest thereon 12% p. a. from the date of suit till realization alleging that Bank has violated principles of Banking in respect of the loan sanctioned to the plaintiff by the Bank as a result whereof plaintiffs suffered damages. It is required to be noted that suit filed by the Company against the Bank being Civil Suit No. 3189 of 2002 was also for claiming the damages, on the same ground, which is not ordered to be returned to the Company for presenting it before the DRT, Mumbai for treating it as counter claim in the suit pending before the DRT, Mumbai. In the said suit No. 1431 of 2003 filed by the appellant original plaintiffs directors and/ or guarantors who are also the defendants in the suit filed by the Bank before the DRT, Mumbai, the respondent Bank, took out two Chamber summons vide Exhs. 20 and 21 for rejection of the plaint under Order 7 Rule 11 (A) of the Code of Civil Procedure mainly on the ground that suit is barred in view of the provisions of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The aforesaid chamber summons were resisted by reply Exhs. 27 and 33. While relying upon the decision of the Hon'ble Supreme Court in the case of Indian Bank Vs. ABS Marine Products Pvt. Ltd. , reported in 2006 AIR SCW 2156, it was submitted that the suit for claiming damages was not barred under the provisions of the aforesaid act and considering Section 9 of the Code of Civil Procedure Civil Court would have jurisdiction. That considering the decision of the Hon'ble Supreme Court in the case of State Bank of India Vs. Ranjan Chemicals Limited and Anr. , reported in (2006) 134 Com. Case 24 (SC) and even considering the fact that even the suit filed by the Company against the Bank being Civil Suit No. 1431 of 2003 claiming damages on the very ground has been rejected and / or returned to the plaintiff /company for presenting it before the DRT, Mumbai and is ordered to be treated as counter claim in the suit before the DRT, Mumbai. The Auxiliary Chamber Judge, City Civil Court by impugned order has allowed the aforesaid two chamber summons and the plaint is ordered to be returned to the plaintiffs-appellants herein for being presented before DRT, Mumbai under Order 7 Rule 10 of the Code of Civil Procedure instead of rejecting the said plaint. Being aggrieved and dissatisfied with the impugned order dated 10. 1. 2008 passed by the learned City Civil Court, Ahmedabad below Exhs. 20 and 21 passed in Civil Suit No. 1431 of 2003, the appellants original plaintiffs No. 1 and 3 have preferred the present Appeal from Order along with Civil Application for interim relief therein.

(3.) SHRI K. M. Patel, learned Senior Advocate appearing on behalf of the appellants-plaintiffs No. 1 and 3 has vehemently submitted that the learned Chamber Judge has materially erred in allowing the aforesaid chamber summons and returning the plaint to the appellants-plaintiffs for being presented in DRT, Mumbai in exercise of power under Order 7 Rule 10 of the Code of Civil Procedure. It is submitted that as such the application below Exhs. 20 and 21 were under Order 7 Rule 11 of the Code of Civil Procedure to reject the plaint on the ground that considering the provisions of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as "the Act"), the Civil Suit before the learned City Civil Court is not maintainable and/or barred and the learned Chamber Judge has passed the impugned order returning the plaint to the plaintiffs to present it before the DRT, Mumbai in exercise of power under Order 7 Rule 10 of the Code of Civil Procedure. It is submitted that as such the Civil Court has no jurisdiction to transfer any suit pending before it to any other Civil Court or Tribunal. It is submitted that as such there is no provision in the Code of Civil Procedure empowering the subordinate Civil Court to transfer any suit pending before it to any other Civil Court or Tribunal except Section 24 of the Code of Civil Procedure. It is submitted that on perusal of Section 24 of the Code of Civil Procedure, High Court or District Court can withdraw any suit, appeal or other proceedings pending in any Court subordinate to its and transfer the same to any Court subordinate to it. It is submitted that DRT, Mumbai cannot be said to be Court subordinate to City Civil Court, Ahmedabad or even to High Court of Gujarat within the meaning of Section 24 of the Code of Civil Procedure. Therefore, the learned Chamber Judge is not justified in law by returning the plaint to the plaintiffs for being presented in DRT, Mumbai. It is submitted that by doing so, the City Civil Court, Ahmedabad has exercised powers of Section 24 of the Code of Civil Procedure, which otherwise, the City Civil Court does not possess. It is further submitted that even otherwise considering Section 9 of the Code of Civil Procedure r/w Section 18 of the Act, it cannot be said that suit filed by the borrower claiming damages for breach of contract is barred.