JAI PRAKASH JAISWAL Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) The present appeal has been preferred by the plaintiff in a suit for damages/compensation of Rs.60,00,00,000.00, interest pendente lite, declaration that the plaintiff nos.2 and 3 stand discharged of all guarantees to the defendant nos.2 to 4/Banks and the consequential relief of permanent injunction. By the impugned judgment and deemed decree dated April 9, 2019, the learned Trial Judge rejected the plaint primarily on the grounds that the suit was barred under Sec. 80 of the Code of Civil Procedure and Sec. 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, "the SARFAESI Act").

(2.) The premise of the suit was that the defendant/respondent no.1, the Official Liquidator (O/L), as well as the defendant nos.2 to 4/Banks (creditors), were negligent in preserving and maintaining a property of the Company, including plant, machinery, equipment and other assets, from damage and theft, seeking compensation for such damages. The suit was filed by the plaintiff nos.2 and 3, two of the Directors of the plaintiff no.1-Company, namely Shree Sanyeeji Steel and Power Limited, in the name of the plaintiff no. 1-Company as well as in the capacity of Guarantors in respect of a loan taken by the said Company from the respondent nos.2 to 4/Banks. It was pleaded in the plaint that since the plaintiff nos.2 and 3 were also liable to meet the debt which the plaintiff nos.1-Company failed to repay to the Banks, the liability of the plaintiff nos.2 and 3 in respect of the said loan as guarantors ought to be mitigated by the compensation payable by the defendants for their negligence in preserving the property. It was pleaded in the plaint that in the event the compensation to the tune of Rs.60,00,00,000.00 was granted, the said amount would be much larger than the dues payable by the Company, for which the plaintiff nos.2 and 3 stood as guarantors.

(3.) In the said suit, the defendant/respondent no.1-O/L on the one hand and the defendants/respondent nos.2 and 4 (Banks) on the other, filed two separate applications under Order VII Rule 11 of the Code of Civil Procedure, seeking rejection of the plaint on different grounds. The O/L pleaded that in view of non-compliance of two months" prior notice as required under Sec. 80 of the Code of Civil Procedure, the suit was not maintainable. On the other hand, the respondent nos.2 to 4 argued primarily that in view of measures taken under Sec. 13 of the SARFAESI Act as well as the dispute raised in the suit being governed by the Companies Act, 1956 (hereinafter referred to as "the 1956 Act"), which was then in force, and subject to the jurisdiction of the Company Court, where a winding up petition was pending, the Civil Court had no jurisdiction and the plaint ought to be rejected.