UCO BANK Vs. RAKESH BHANOT

JUDGEMENT

(1.) The petitioner-Bank is the defendant in the suit. It filed an application under Order 7 Rule 11 CPC for rejection of the plaint which was allowed by the Civil Judge (Junior Division) Phagwara vide order dated 15.10.2018 (Annexure P-11). The plaintiffs preferred an appeal against the said order and the same was allowed by learned Additional District Judge, Kapurthala vide order dated 29.11.2019 (Annexure P-1). This order is under challenge in the revision petition.

(2.) Certain relevant facts need to be elucidated. The plaintiffs wanted to construct a hotel in their own property. They approached Punjab & Sind Bank, Phagwara Branch for a term loan of Rs.3.5 crores and the same was sanctioned vide letter dated 17.09.2010. In the year 2011, the plaintiffs entered into a collaboration agreement with Clarks Inn Group of Hotels and this led to plans for construction of a 3 Star hotel. This required additional funds and the plaintiffs contacted the petitioner-Bank for a loan of Rs.6.5 crores as the total projected requirement of funds was Rs.10 crores. Vide letter dated 05.08.2013, the loan was sanctioned. The sanction was based upon the willingness of Punjab & Sind Bank to enter into a consortium arrangement under which the security offered by the plaintiffs was to be shared with the petitioner-Bank. On 19.08.2013, first instalment of Rs.2.5 crores was released followed by release of second instalment of Rs.2 crores on 27.09.2013. The consortium agreement did not finally fructify which resulted into a loan of Rs.4.5 crores having been advanced without any security. It has been alleged that a sum of Rs.2 crores was transferred into the account of the plaintiffs on 31.12.2013 to enable them to clear the loan of Punjab & Sind Bank and get the title deeds released, which could then be deposited with the petitioner-Bank. Transfer of this amount was allegedly made from the account of a third party and without his knowledge leading to registration of FIR No.348 dated 06.10.2014. The loan of Rs.3.5 crores given by the Punjab & Sind Bank was in fact cleared and after getting the security released, it was deposited with the petitioner-Bank. Meanwhile, the petitioner-Bank had issued notice dated 24.09.2014 under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the Securitisation Act). This was followed by notice dated 08.01.2015 under Section 13(4) of the said Act. Consequently, suit for declaration that notice dated 08.01.2015 was illegal and unlawful and further declaration that defendants had no right to take possession of the property offered to secure the loan with consequential relief of injunction was filed on 08.06.2015.

(3.) It is thus, evident that the suit has been filed challenging notice issued under Section 13(4) of the Securitisation Act whereafter, symbolic possession has admittedly been taken. The major ground cited in support of the suit is fraud and the relevant pleading in this regard contained in paragraph 5 (iv) of the plaint is reproduced below: