Cites 21 docs -
The Industrial Disputes Act, 1947
Article 142 in The Constitution Of India 1949
The Code Of Civil Procedure (Amendment) Act, 1956
Section 13 in The Industrial Disputes Act, 1947
Section 34 in The Industrial Disputes Act, 1947
Citedby 2 docs
Rajkumar vs Mahesh Kumar on 28 April, 2010
Madras High Court
G.V.Films Limited vs Indian Bank on 13 July, 2009
DATED : 13.07.2009
CORAM
THE HONOURABLE MR.JUSTICE K.CHANDRU
APPLICATION NO.2258 OF 2009 AND O.A.NO.765 OF 2008
IN
C.S.NO.48 OF 2008
AND
APPLICATION NO.2257 OF 2009 AND O.A.NO.764 OF 2008
IN
C.S.NO.49 OF 2008
G.V.Films Limited
rep. By its Director
P.Raghuraman,
FO-Whispering Heights,
No.132, St. Mary's Road,
Alwarpet,
Chennai-600 018 .. Applicant in
all these petitions
Vs.
1.Indian Bank,
Assets Recovery Management
Branch-II,
55,Wellington Estate,
Ethiraj Salai,
Chennai-600 008.
2.M/s.Parsn Holiday Resorts
Private Limited,
rep. By its Director K.L.Srihari,
No.33, Pasumarthy Street,
Kodambakkam,
Chennai-600 024.
3.M/s.Coconut Groves Holiday
Resorts Private Limited,
rep. By its Director K.L.Srihari,
No.33, Pasumarthy Street,
Kodambakkam, Chennai-600 024.
4.S.Martin,
No.355-359, 4th Street,
Gandhipuram, Coimbatore-12 .. Respondents in
(impleaded vide order dt.24.6.09 all these petitions
(A.Nos.2602 to 2605/09)
For Applicant : Mr.K.Ravi
for M/s.Rugan & Arya
For Respondents: Mr.G.Masilamani, Advocate General
for M/s.King & Partridge for R-1
Mr.Srinatrh Sridevan for RR2 and 3
Mr.R.Srinivas for R4
- - - -
ORDER
Heard both sides.
2.The applicant M/s.G.V.Films Limited is also the plaintiff in both the suits. While C.S.No.48 of 2008 has been instituted for redemption of the mortgage, C.S.No.49 of 2008 has been instituted for a declaration that the provisions of the SARFAESI Act do not apply to the security interest created on 8.2.1989 and for a consequential permanent injunction.
The plaintiff in both the suits is a Company by name G.V.Films Limited and the Bank against whom the relief is claimed in both the suits, is the Indian Bank. The properties which form the subject matter of both the suits is also the same.
3.Pending the suit, O.A.No.765 of 2008 is filed by the applicant/plaintiff, seeking for an interim injunction restraining the first respondent, its agents, servants or men from in any way disturbing the applicant's peaceful possession of the property described in the schedule attached to the judge's summons pending disposal of the suit.
4.Application No.2258 of 2009 is filed by the plaintiff seeking for a direction to the first respondent Bank and its officers and all persons claiming under or through them to maintain status quo with reference to the suit property, pending disposal of O.A.No.765 of 2008 in C.S.No.48 of 2008.
5.Likewise, O.A.No.764 of 2008 is filed is filed by the applicant/plaintiff seeking for an interim injunction, restraining the first respondent, its agents, servants or men from in any way disturbing the applicant's peaceful possession of the property described in the schedule attached to the judge's summons pending disposal of the suit.
6.Application No.2257 of 2009 is filed seeking for a direction to the first respondent-Bank and its officers and all persons claiming under or through them to maintain status quo with reference to the suit property pending disposal of O.A.No.764 of 2008 in C.S.No.49 of 2008.
7.The brief facts leading to the case are as follows:
7.1.On 8.2.1989, a Company by name Sujatha Films Limited and its promoter-Directors G.Venkateswaran and Sujatha Venkateswaran availed a loan of Rs.1.50 crores from the Indian Bank and executed necessary documents. The promoter-Directors also executed Letters of Guarantee. The said company Sujatha Films Limited shall hereinafter be referred to as "the borrower company' for easy reference. For the loan availed by the borrower company, two other Companies by name M/s.Parsn Medicinal Plants Private Ltd. (R2) and M/s.Coconut Grobves Private Ltd.(R3) promoted by the very same promoter-Directors, stood guarantee. These two Companies, owned a large extent of land in Mamallapuram Village and they deposited the original title deeds relating to those lands with the first respondent-Bank as security for the loan availed by Sujatha Films Limited. These two respondents shall hereinafter be referred to as the 'guarantor/mortgagor-companies'. It is those lands in Mamallapuram Village, over which a mortgage by deposit of title deeds was created, that form the subject matter of both the present suits. 7.2.Mr.G.Venkateswaran and Mrs.Sujatha Venkateswaran happened to be the promoter-Directors of the borrower Company Sujatha Films Limited as well as the guarantor/mortgagor-Companies M/s. Parsn Medicinal Plants Pvt Ltd (R2) and M/s.Coconut Groves Pvt Ltd.(R3).
7.3.Since the borrower committed default in repayment, the Indian Bank (respondent No.1) filed an application under Section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 before the Debts Recovery Tribunal, Chennai in the year 1997, in O.A.No.552 of 1997 for recovery of a sum of Rs.7,95,67,088/- together with interest at the contractual rate of 20.75% with quarterly rests. The said application subsequently got renumbered as O.A.No.2018 of 2001 and later as O.A.No.81 of 2007 and it is now pending on the file of the Debts Recovery Tribunal-III, Chennai. The borrower Company, its promoter-Directors and the guarantor/mortgagor Companies are cited as defendants 1,2,3,5 and 6 in the OA before DRT. 7.4.On 3.5.2003, one of the promoter-Directors (G.Venkateswaran), died by committing suicide. In the meantime, the SARFAESI Act, 2002, came into force and hence the Bank issued a notice under Section 13 (2) of the Act, on 30.6.2004, calling upon the borrowers, guarantors and mortgagors to pay a sum of Rs.32,47,05,634.76 and threatened to initiate further action if the amount was not paid within 60 days.
7.5.Though a reply was sent by the second and third respondents on 13.9.2004, the Bank issued a possession notice under Section 13 (4) of the SARFAESI Act, 2002, on 4.12.2004.
7.6.Challenging the proceedings initiated under Section 13 (4) of the Act, one Abdul Hameed, filed an appeal under Section 17 of the SARFAESI Act, 2002, in S.A.No.1 of 2005, before the Debts Recovery Tribunal-I, Chennai, claiming to be a Lessee of the suit property, under M/s.Coconut Groves Pvt Ltd (R3) (one of the guarantor/ mortgagor companies). But the said application was dismissed by an order dated 17.11.2005 and it became final. 7.7.In the meantime, the shares held by the promoters in those two guarantor/mortgagor Companies (R2 and R3) changed hands. Therefore the guarantor/ mortgagor companies attempted to stall the sale of the properties under Section 13(4) of the SARFAESI Act, 2002, by taking recourse to the Debts Recovery Tribunal, not under section 17 of the SARFAESI Act, but by filing an Interlocutory Application in I.A.No.640 of 2004 in the pending O.A.No.2018 of 2001 (presently OA No.81/2007). Then they moved the Debts Recovery Appellate Tribunal (DRAT) by filing an appeal in S.A.No.32 of 2006. Against the dismissal order, dated 13.12.2006, they came to this Court by filing W.P.Nos.5694 and 5695 of 2006. That was also dismissed on 1.3.2006. They also went to the Supreme Court, by filing S.L.P.(C). Nos.5177 and 5179 of 2006. It was also dismissed on 31.3.2006. Thus, the R2 and R3 companies failed in all their attempts. 7.8.Thereafter the guarantor/mortgagor companies filed an appeal under Section 17 of the SARFAESI Act, 2002, in S.A.No.23 of 2006, as against the measures taken by the Bank under section 13(4) of the Act. In the said application, the Debts Recovery Tribunal-II passed a conditional order directing them to deposit a sum of Rs.160 lakhs, for the stay of auction. The guarantor/mortgagor companies complied with the said conditional order.
7.9.Upto this point of time, the dispute was only between (1) the borrower company Sujatha Films Limited and its promoter-Directors on the one hand, (2) the guarantor/mortgagor companies (in whose names the properties stood), on the other hand and (3) the Indian Bank on the third hand, though a person by name Abdul Hameed was also staking a claim as the Lessee under one of the guarantor/ mortgagor companies. 7.10.However, at this stage, another company by name G.V.Films Ltd. (applicant), the plaintiff in the present suits, entered the fray. They filed a suit in O.S.No.115 of 2006 before the Sub Court, Chengalpattu against M/s.Parsn Medicinal Plants Pvt Ltd (R2) and M/s.Coconut Groves Pvt Ltd (R3) (guarantor/mortgagor Companies) as well as the Indian Bank (R1), seeking a declaration that they have perfected title to the suit properties by adverse possession and also for a consequential decree of permanent injunction to protect their possession. Though in the said suit, the plaintiff G.V.Films Ltd obtained an interim order of injunction in I.A.No.446 of 2006 protecting their possession, the suit was subsequently withdrawn as against the Bank alone on 21.8.2006.
7.11.But before the withdrawal of the suit O.S.No.115 of 2006 against the Indian Bank, the applicant/plaintiff G.V.Films Ltd filed another suit in O.S.No.6757 of 2006 on the file of the III Assistant City Civil Court, Chennai against the Bank and obtained an interim injunction in I.A.No.14152 of 2006 on 10.8.2006. However, the plaintiff G.V.Films Ltd later withdrew the suit O.S.No.6757 of 2006, when the Bank filed a Civil Revision Petition under Article 227 of the Constitution (C.R.P.No.1266 of 2006) before this Court for striking out the plaint in O.S.No.6757 of 2006 from the Suit Register. 7.12.In the meantime, the appeal filed under Section 17 of the SARFAESI Act, 2002, by the guarantor/mortgagor Companies in S.A.No. 23 of 2006 on the file of the Debts Recovery Tribunal-II, Chennai (in which the guarantor/mortgagor Companies had deposited Rs.160 lakhs in compliance with the conditional order of stay), was dismissed on 13.12.2006. Their subsequent Review Application in RA No.1 of 2008 filed against this order was also dismissed by the DRT-II by a speaking order dated 26.2.2009. 7.13.After the dismissal by the DRT, an auction/Tender notice was issued by the Bank on 26.2.2009. As against the said order, a writ petition was filed by R2 and R3. The Writ Petition filed by them in W.P.No.4686 of 2009 was dismissed by a Division Bench of this court vide an order dated 26.3.2009. Liberty was given to move the DRAT by filing an appeal. 7.14.Thereafter, an appeal was filed before the DRAT in SA No.95 of 2009. The DRAT by its order, dated 27.3.2009 dismissed the application for interim stay of further proceedings taken by the Indian Bank in the Tender-cum-Auction notice. But, in the main appeal, notice was ordered to the Bank. As against the dismissal of interim application, R2 and R3 moved the Supreme Court in SLP(C) No.7707 of 2009. The said SLP was dismissed, by an order, dated 8.5.2009. But, liberty was given to them to move the DRAT to pursue their appeal. 7.15.In the meanwhile, the fourth respondent became the successful bidder and paid a sum of Rs.55 crores and 25 lakhs towards the sale consideration. A sale certificate dated 7.5.2009 was also issued to the 4th respondent by the Indian Bank.
7.16.Even before these proceedings, G.V.Films Ltd (plaintiff in both the present suits) filed an appeal under Section 17 of the SARFAESI Act, 2002, in S.A.No. 49 of 2007 challenging the action taken by the Bank under Section 13 (4) of the SARFAESI Act, 2002. They raised two contentions viz., (i) that they have acquired prescriptive title to the property and (ii) that in any case, the properties are agricultural lands exempt from the operation of the provisions of the SARFAESI Act, 2002, by virtue of Section 31 (f) of the Act. 7.17.On 29.12.2006, the Debts Recovery Tribunal-I granted an interim stay of all further proceedings pursuant to the action initiated under Section 13 (4) of the Act. But ultimately the said appeal S.A.No.49 of 2007 filed by G.V. Films Ltd (the plaintiffs herein) was dismissed by the Debts Recovery Tribunal-I on 4.1.2008. While dismissing the appeal, the Tribunal granted stay of further proceedings for a period of two weeks, to enable the plaintiff herein (G.V. Films Ltd) to take up the matter on appeal to the Debts Recovery Appellate Tribunal (DRAT). 7.18.However, without filing a regular appeal to the DRAT under Section 19 of the SARFAESI Act, 2002, against the order of the Debts Recovery Tribunal dated 4.1.2008 passed in S.A.No.49 of 2006, the plaintiff herein has come up with the present suits.
7.19.Pending the suit, the applicant filed OA Nos.61 and 62 of 2008 seeking for interim order. This Court by its order, dated 23.4.2008 granted a conditional interim order. The applicant was directed to deposit certain sums as a condition precedent for the grant of injunction.
7.20.As against the said order, the applicant filed appeals being OSA Nos.211 and 212 of 2008. They were disposed of by a common order, dated 7.7.2008. Paras 3(a) and 4 of the said order may be reproduced below:
"3.(a)After some hearing for a few days, learned counsel for the appellant submits that this Court, without deciding the various controversies raised, may set aside the order appealed against on the limited ground that the injunction petition is defective as the ostensible owners and the mortgagors were not impleaded in the injunction petition, on which an injunction order was obtained in respect of the property in question.
4.In view of such a stand being taken, this Court without going into the submissions and counter submissions made by the parties, hereby sets aside the order dated 23.04.2008 only on the limited point indicated herein above."
7.21.It was thereafter, R2 and R3 came to be impleaded in the suit as well as in the applications. R4 who has a Sale certificate in his hand, having parted with substantial amounts to the Bank, also got himself impleaded in the suits as well as in the applications.
8.Mr.K.Ravi, the counsel for the applicant principally raised two contentions in their applications. The first contention was that notwithstanding the enactment of SARFAESI Act, the civi court has power to go into the issue raised in the suit. The second contention was that inasmuch as the suit land is an "Agricultural land", any proceedings instituted by the first respondent Bank will be null and void. In terms of Section 2(zf) read with Section 31(f), for any "security interest" created in agricultural land, the provisions of the SARFAESI Act will not apply and hence all the proceedings instituted by the Bank under SARFAESI Act will be void ab-initio. Apart from these two main contentions, he also submitted that the possession of the suit land is still with the applicant/plaintiff and therefore, on grounds of prima facie case and balance of convenience, the applications should be ordered in favour of the plaintiff. Such protection can be given by the courts even to a trespasser in the land.
9.The learned counsel for the applicant relied upon the following decisions in support of his first contention that the civil court's jurisdiction to try his suit cannot be ousted in view of Sections 34 and 35 of the SARFAESI Act, 2002.
1.1961 (1) MLJ 335 (Madras HC - DB) (M.S.Ramachandran Sastrigal Vs. Kuppuswami Vanniar)
2.AIR 1964 SC 807 (Adanki Thirunkat Thata Desika Charyarulu (deceased) Vs. State of Andhra Pradesh and others)
3.AIR 1966 SC 893 (Ram Swarup and others Vs. Shikar Chand and another)
4.AIR 1969 SC 78 (Dhulabai etc. vs. State of M.P. and another)
5.AIR 1970 SC 1727 (Smt.Munni Devi and another Vs. Gokul Chand and another)
6.AIR 1974 SC 1069 (Katikara Chintamani Dora and others Vs. Guatraddi Annamanaidu and others)
7.AIR 1980 Madras 180 (Full Bench) (Periathambi Gounden Vs. District Revenue Officer, Coimbatore and others)
8.1985 (4) SCC 10 (State of Tamil Nadu Vs. Ramalinga Swamigal Madam)
9.2005 (10) SCC 760 (Church of North India Vs. Lavajibhai Ratanjibhai and others)
10.In the light of the above decision, the learned counsel wanted to contend that the embargo placed by Sections 34 and 35 of the SARFAESI Act will not oust the jurisdiction of this court. However, it cannot be denied that the civil court's jurisdiction can never be ousted at any time by a valid law made by the legislature. Whenever the jurisdiction of a Civil court is sought to be excluded, the court will have to decide the issue in respect of a particular provision found in the special enactment. The Courts have always held that if the special laws creates a new right and obligation, the remedy will have to be found only in terms of that Law and the jurisdiction of the civil court can be impliedly ousted by such legislation.
11.However, in its latest decision in Rajasthan SRTC Vs. Bal Mukund Bairwa (2) reported in (2009) 4 SCC 299, the Supreme Court held that in certain circumstances, the Civil Court's jurisdiction will still be available. The said judgment rendered in terms of the provisions of the Industrial Disputes Act vis a vis Civil Procedure Code, the following observations were made in paragraphs 48 and 49 of the said judgment: "48.In a case where no enquiry has been conducted, there would be a violation of the statutory regulation as also the right of equality as contained in Article 14 of the Constitution of India. In such situation, a civil suit will be maintainable for the purpose of declaration that the termination of service was illegal and the consequences flowing therefrom. However, we may hasten to add that if a suit is filed alleging violation of a right by a workman and a corresponding obligation on the part of the employer under the Industrial Disputes Act or the Certified Standing Orders, a civil suit may not lie. However, if no procedure has been followed as laid down by the statutory regulation or is otherwise imperative even under the common law or the principles of natural justice, which right having arisen under the existing law, sub-para (2) of para 23 of the law laid down in Premier Automobiles Ltd. Shall prevail.
49.An assumption on the part of this Court that all such cases would fall only under the Industrial Disputes Act or sister laws and thus, the jurisdiction of the civil court would be barred, in our opinion, may not be the correct interpretation of Premier Automobiles Ltd. Which being a three-Judge Bench judgment and having following Dhulabhai, which is a Constitution Bench judgment, is binding on us." (Emphasis added)
12.The supreme Court while dealing with the SARFAESI Act, dealt with the scope of Sections 34 and 35 vide its judgment in Mardia Chemicals Ltd. and others Vs. Union of India and others reported in (2004) 4 SCC 311. The following passages found in paragraphs 50, 51 and 80.5 may be extracted below: "50.It has also been submitted that an appeal is entertainable before the Debts Recovery Tribunal only after such measures as provided in sub-section (4) of Section 13 are taken and Section 34 bars to entertain any proceeding in respect of a matter which the Debts Recovery Tribunal or the Appellate Tribunal is empowered to determine. Thus before any action or measure is taken under sub-section (4) of Section 13, it is submitted by Mr Salve, one of the counsel for the respondents that there would be no bar to approach the civil court. Therefore, it cannot be said that no remedy is available to the borrowers. We, however, find that this contention as advanced by Shri Salve is not correct. A full reading of Section 34 shows that the jurisdiction of the civil court is barred in respect of matters which a Debts Recovery Tribunal or an Appellate Tribunal is empowered to determine in respect of any action taken or to be taken in pursuance of any power conferred under this Act . That is to say, the prohibition covers even matters which can be taken cognizance of by the Debts Recovery Tribunal though no measure in that direction has so far been taken under sub-section (4) of Section 13. It is further to be noted that the bar of jurisdiction is in respect of a proceeding which matter may be taken to the Tribunal. Therefore, any matter in respect of which an action may be taken even later on, the civil court shall have no jurisdiction to entertain any proceeding thereof. The bar of civil court thus applies to all such matters which may be taken cognizance of by the Debts Recovery Tribunal, apart from those matters in which measures have already been taken under sub-section (4) of Section 13.
51. However, to a very limited extent jurisdiction of the civil court can also be invoked, where for example, the action of the secured creditor is alleged to be fraudulent or his claim may be so absurd and untenable which may not require any probe whatsoever or to say precisely to the extent the scope is permissible to bring an action in the civil court in the cases of English mortgages. We find such a scope having been recognized in the two decisions of the Madras High Court which have been relied upon heavily by the learned Attorney General as well appearing for the Union of India, namely, V. Narasimhachariar5, AIR at pp. 141 and 144, a judgment of the learned Single Judge where it is observed as follows in para 22: (AIR p. 143) 22. The remedies of a mortgagor against the mortgagee who is acting in violation of the rights, duties and obligations are twofold in character. The mortgagor can come to the court before sale with an injunction for staying the sale if there are materials to show that the power of sale is being exercised in a fraudulent or improper manner contrary to the terms of the mortgage. But the pleadings in an action for restraining a sale by mortgagee must clearly disclose a fraud or irregularity on the basis of which relief is sought: Adams v. Scott11. I need not point out that this restraint on the exercise of the power of sale will be exercised by courts only under the limited circumstances mentioned above because otherwise to grant such an injunction would be to cancel one of the clauses of the deed to which both the parties had agreed and annul one of the chief securities on which persons advancing moneys on mortgages rely. (See Ghose, Rashbehary: Law of Mortgages, Vol. II, 4th Edn., p. 784.) .......
80.5.As discussed earlier in this judgment, we find that it will be open to maintain a civil suit in civil court, within the narrow scope and on the limited grounds on which they are permissible, in the matters relating to an English mortgage enforceable without intervention of the court.
13.In the same context, Mr.K.Ravi, learned counsel for the applicant also referred to the judgment of the Supreme Court in United Bank of India, Calcutta Vs. Abhijit Tea Co. Pvt. Ltd. And others reported in (2000) 7 SCC 357 and referred to the following passages found in paragraphs 25 and 26 of the said judgment, which reads as follows: "25.In regard to purposive interpretation, Justice Frankfurter observed as follows:
Legislation has an aim, it seeks to obviate some mischief, to supply an inadequacy, to effect a change of policy, to formulate a plan of government. That aim, that policy is not drawn, like nitrogen, out of the air; it is evidenced in the language of the statute, as read in the light of other external manifestations of purpose [Some Reflections on the Reading of Statutes, 47 Columbia LR 527, at p.538 (1947)].
26. That principle has been applied to this very Act by this Court recently in Allahabad Bank v. Canara Bank. If the said principle is applied, it is clear that the provision in Section 31 must be construed in such a manner that, after the Act, no suit by the Bank is decided by the civil court and all such suits are decided by the Tribunal."
14.The said judgment came to be referred and explained by the subsequent judgment in Indian Bank Vs. ABS Marine Poroducts (P) Ltd. reported in (2006) 5 SCC 72. The following passages found in paragraphs 25 and 26 may be extracted below:
25.Though there appears to be some merit in the first respondent s submission, we do not propose to examine that aspect. Suffice it to clarify that the observations in Abhijit1 that an independent suit of a defendant (in the bank s application) can be deemed to be a counter claim and can be transferred to the Tribunal, will apply only if the following conditions were satisfied: (i) The subject-matter of the bank s suit, and the suit of the defendant against the bank, should be inextricably connected in the sense that decision in one would affect the decision in the other.
(ii) Both parties (the plaintiff in the suit against the bank and the bank) should agree for the independent suit being considered as a counterclaim in the bank s application before the Tribunal, so that both can be heard and disposed of by the Tribunal.
In short the decision in Abhijit is distinguishable both on facts and law.
26. One word before parting. Many a time, after declaring the law, this Court in the operative part of the judgment, gives some directions which may either relax the application of law or exempt the case on hand from the rigour of the law in view of the peculiar facts or in view of the uncertainty of law till then, to do complete justice. While doing so, normally it is not stated that such direction/order is in exercise of power under Article 142. It is not uncommon to find that courts have followed not the law declared, but the exemption/relaxation made while moulding the relief in exercise of power under Article 142. When the High Courts repeatedly follow a direction issued under Article 142, by treating it as the law declared by this Court, incongruously the exemption/relaxation granted under Article 142 becomes the law, though at variance with the law declared by this Court. The courts should therefore be careful to ascertain and follow the ratio decidendi, and not the relief given on the special facts, exercising power under Article 142. One solution to avoid such a situation is for this Court to clarify that a particular direction or portion of the order is in exercise of power under Article 142. Be that as it may."
15.If it is seen in the light of the above precedents, it can still be held that there is some scope for moving the Civil Court notwithstanding the fact that the financial institutions have invoked the provisions of SARFAESI Act.
16.In the present case, since the contention of the applicant that the suit schedule land is 'agricultural land' and therefore, in terms of Section 2(z)(f) read with 31(f), the security interest cannot be created in that land. When provisions of the Act will not apply, it may open to an aggrieved person to move the Civil Court. Therefore, in the present case, the applicant cannot be non suited in maintaining the suit.
17.The applicant relied on number of documents such as certificate given by the VAO, extract from the land register, photographs and newspaper clippings and also the schedule in the Original Application No.2018/2001 filed by the Bank before the DRT, they themselves cannot be conclusive proof that the suit property is an agricultural land. Their claim will have to be established in a proper trial. But, at the same time, the argument of the learned Advocate General that an agricultural land must be continued to be an agricultural land and if no agriculture is carried on, then it will cease to be an agricultural land cannot be accepted. If such an argument is accepted in times of drought or other natural calamities (floods, tsunami or fire etc.), the land may be kept unused and the bank can get over the specific statutory prohibition made by the parliament.
18.It is not as if the grounds relating to the objection under Section 31(f) cannot be raised before the DRT when the provision of SARFAESI Act is invoked by a financial institutions. It will be open to resist the invocation of SARFAESI Act in respect of the security interest created over agricultural lands and the financial institutions can be non suited.
19.In the present case, the applicant has moved the DRT firstly through the alleged lessee Abdul Hameed and secondly, by themselves. In one such case, the DRT-I recorded a finding in its order, dated 4.1.2008 in S.A.No.49 of 2007 that it was not an agricultural land and the contentions raised in this regard were rejected by the Tribunal. The learned counsel for the applicant contended that such a finding was not binding on this court as it is a perverse finding. But once the jurisdiction of a special tribunal is invoked on the very same issue, the findings rendered at the interlocutory stage or at the final stage by the said tribunal, is binding on the parties to the suit. The applicant cannot be allowed to contend that finding is either perverse or not based on records collaterally.
20.In any event, for the purpose of denying relief of injunction, this court can certainly take note of such unimpeached finding. It cannot allow the applicant to attack collaterally such findings before this forum. It is for the applicant to lead appropriate evidence during trial of the suit and cannot base his arguments on the documents, which are yet to be tested.
21.It must also be noted that R2 and R3 are claiming ownership for the very same land. Even the adverse possession of the applicant is questioned by R2 and R3. Therefore, the argument is based upon a prima facie case does not arise in the present applications. The contention that they are in possession of the land and therefore, they are claiming adverse possession and if any claim is made either by Bank or by R2 and R3, it can be resisted by the law of prescription as they have perfected their title. This Court is unable to agree with the said submission.
22.In this context, the learned counsel placed reliance upon the Division Bench judgment of the Bombay High Court in Dina Dinshaw Merchant Vs. Dinshaw Ardeshir Merchant reported in AIR 1970 Bombay 341 and referred to the following passages found in paragraphs 13 and 14, which may be extracted below: "13.Now, having regard to the above observations, there is nothing that is in the case of Stevensons on which the contention made by Mr.Banaji can be upheld. As regards the principles of res judicata contained in S.11, Civil P.C., it must at once be stated that these principles can never be made applicable in a case which has not been heard and finally disposed of and/or adjudicated upon by a Court of competent jurisdiction. Further, to apply the principles contained in Section 11 as well as the provisions under O.23, Ru.1 of Civil P.C., it would be absolutely essential that "the subject matter" of the two litigations in question must be the same. The relevant provision in sub-rule (3) of Order 23 runs as follows:- "(3)Where the plaintiff withdraws from a suit, or abandons part of a claim without the permission referred to in sub-rule (2), he shall be liable ...... and shall be precluded from instituting any fresh suit in respect of such subject matter ........."
The phrase "subject-matter" as contained in this sub-rule (3) has caused certain difficulties of construction. But it has now been clarified that unless the relief claimed in the previous suit is the same and/or alike as the relief claimed in the subsequent suit, the subject-matters of the two litigations must be held to be different. (see in this connection the decision of the High Court of Madras in the case of Singa Reddi v. Subba Reddy, ILR 39 Mad 987 at p.996 = (AIR 1917 Mad 512 at p.517) and the observations of the Chief Justice of this Court in the case of Rakhmabai vs. Mahadeo, ILR 42 Bom 155 = (AIR 1917 Bom 10(1)).
14.There is no dispute between the parties that Suit No.45 of 1959 was only for judicial separation. There is no dispute as regards the fact that the acts of cruelty alleged in that suit have been relied upon for the relief of divorce claimed in the present suit. As relief of divorce was not claimed in the previous suit, we are unable to hold that the present suit is in respect of the subject-matter for which the previous suit had been instituted. We are unable to accept Mr.Banaji's contention that on the ground of estoppel the plaintiff was not entitled to rely upon the previous acts of cruelty and/or the constructive desertion which were alleged in the previous suit. In this connection, reliance has been rightly placed on behalf of the plaintiff on the case of Fisher v. Fisher, 1959-3 All ER 131. It is not necessary to refer to the facts in that case. So far as we are concerned, it has been held under O.23, R.1 that when a suit for a different relief is filed, it cannot be held to be a suit for the same subject-matter."
23.He also placed reliance upon the judgment of the Supreme Court in Vallabh Das Vs. Dr. Madanlal and others reported in AIR 1970 SC 987 and referred to the following passage found in paragraph 5 of the said judgment, which may be extracted below:
"5.Rule 1 of the Order 23, Code of Civil Procedure empowers the courts to permit a plaintiff to withdraw from the suit brought by him with liberty to institute a fresh suit in respect of the subject-matter of that suit on such terms as it thinks fit. The term imposed on the plaintiff in the previous suit was that before bringing a fresh suit on the same cause of action, he must pay the costs of the defendants. Therefore we have to see whether that condition governs the institution of the present suit. For deciding that question we have to see whether the suit from which this appeal arises is in respect of the same subject-matter that was in litigation in the previous suit. The expression subject-matter is not defined in the Civil Procedure Code. It does not mean property. That expression has a reference to a right in the property which the plaintiff seeks to enforce. That expression includes the cause of action and the relief claimed. Unless the cause of action and the relief claimed in the second suit are the same as in the first suit, it cannot be said, that the subject-matter of the second suit is the same as that in the previous suit. Now coming to the case before us in the first suit Dr Madan Lal was seeking to enforce his right to partition and separate possession. In the present suit he seeks to get possession of the suit properties from a trespasser on the basis of his title. In the first suit the cause of action was the division of status between Dr Madan Lal and his adoptive father and the relief claimed was the conversion of joint possession into separate possession. In the present suit the plaintiff is seeking possession of the suit properties from a trespasser. In the first case his cause of action arose on the day he got separated from his family. In the present suit the cause of action, namely, the series of transactions which formed the basis of his title to the suit properties, arose on the death of his adoptive father and mother. It is true that both in the previous suit as well as in the present suit the factum and validity of adoption of Dr Madan Lal came up for decision. But that adoption was not the cause of action in the first nor is it the cause of action in the present suit. It was merely an antecedent event which conferred certain rights on him. Mere identity of some of the issues in the two suits do not bring about an identity of the subject-matter in the two suits. As observed in Rukhma Bai v. Mahadeo Narayan, the expression subject-matter in Order 23 of the Rule 1, Code of Civil Procedure means the series of acts or transactions alleged to exist giving rise to the relief claimed. In other words subject-matter means the bundle of facts which have to be proved in order to entile the plaintiff to the relief claimed by him. We accept as correct the observations of Wallis, C.J., in Singa Reddi v. Subba Redd that where the cause of action and the relief claimed in the second suit are not the same as the cause of action and the relief claimed in the first suit, the second suit cannot be considered to have been brought in respect of the same subject-matter as the first suit."
24.The learned counsel also relied upon the judgment of the Supreme Court in Rame Gowda (D) by Lrs. Vs. M.Varadappa Naidu (D) by Lrs & Anr. reported in (2004) 1 SCC 769 for contending that if there is settled possession, the Court should come to the rescue of such person claiming possession. He placed reliance upon the passages found in paragraphs 11 and 12 of the said judgment, which are as follows: "11. In the present case the trial court has found the plaintiff as having failed in proving his title. Nevertheless, he has been found to be in settled possession of the property. Even the defendant failed in proving his title over the disputed land so as to substantiate his entitlement to evict the plaintiff. The trial court, therefore, left the question of title open and proceeded to determine the suit on the basis of possession, protecting the established possession and restraining the attempted interference therewith. The trial court and the High Court have rightly decided the suit. It is still open to the defendant-appellant to file a suit based on his title against the plaintiff-respondent and evict the latter on the former establishing his better right to possess the property.
12. The learned counsel for the appellant relied on the Division Bench decision in Dasnam Naga Sanyasi v. Allahabad Development Authority and a Single Judge decision in Kallappa Rama Londa v. Shivappa Nagappa Aparaj to submit that in the absence of declaration of title having been sought for, the suit filed by the plaintiff-respondent was not maintainable and should have been dismissed solely on this ground. We cannot agree. Dasnam Naga Sanyasi case relates to the stage of grant of temporary injunction wherein, in the facts and circumstances of that case, the Division Bench of the High Court upheld the decision of the court below declining the discretionary relief of ad interim injunction to the plaintiff on the ground that failure to claim declaration of title in the facts of that case spoke against the conduct of the plaintiff and was considered to be unusual . In Kallappa Rama Londa case the learned Single Judge has upheld the maintainability of a suit merely seeking injunction, without declaration of title and on dealing with several decided cases the learned Judge has agreed with the proposition that where the suit for declaration of title and injunction is filed, and the title is not clear, the question of title will have to be kept open without denying the plaintiff s claim for injunction in view of the fact that the plaintiff has been in possession and there is nothing to show that the plaintiff has gained possession by any unfair means just prior to the suit. That is the correct position of law. In Fakirbhai Bhagwandas v. Maganlal Haribhai a Division Bench spoke through Bhagwati, J. (as his Lordship then was) and held that it is not necessary for the person claiming injunction to prove his title to the suit land. It would suffice if he proves that he was in lawful possession of the same and that his possession was invaded or threatened to be invaded by a person who has no title thereof. We respectfully agree with the view so taken. The High Court has kept the question of title open. Each of the two contending parties would be at liberty to plead all relevant facts directed towards establishing their titles, as respectively claimed, and proving the same in duly constituted legal proceedings. By way of abundant caution, we clarify that the impugned judgment shall not be taken to have decided the question of title to the suit property for or against any of the contending parties."
25.The argument of the applicant that he claims adverse possession against R2 and R3, which are the companies floated by former Directors of the applicant company and the Director of both the sister companies at the time of its foundation and at the time of mortgaging the property to the bank and therefore, it is doubtful whether any adverse possession can be claimed. In any event, the applicant's right to be in possession cannot be proved with some scanty documents like EB card, ration card and press clippings when the same has been denied by the other side. The right of possession by the applicant over the land is also denied by R2 and R3, who had also filed similar documents and tried to question the possession by the applicant.
26.In fact, the applicant's conduct also cannot be appreciated, because at one stage one Abdul Hameed was acting as Manager of R2 and R3 and at a later stage, he has become the agent of the plaintiff. With these doubtful claims, which are yet to be tested in trial by this court, the court cannot grant any injunction either on the ground of prima facie case or on grounds of balance of convenience.
27.In this context, it will be worthwhile to refer to the decision of the Supreme Court in Dalpat Kumar and another Vs. Prahlad Singh and others reported in (1992) 1 SCC 719. It is necessary to quote the following passage found in paragraphs 4 and 5 of the said judgment, which reads as follows: "4.Order 39 Rule 1(c) provides that temporary injunction may be granted where, in any suit, it is proved by the affidavit or otherwise, that the defendant threatens to dispossess the plaintiff or otherwise cause injury to the plaintiff in relation to any property in dispute in the suit, the court may by order grant a temporary injunction to restrain such act or make such other order for the purpose of staying and preventing ... or dispossession of the plaintiff or otherwise causing injury to the plaintiff in relation to any property in dispute in the suit as the court thinks fit until the disposal of the suit or until further orders. Pursuant to the recommendation of the Law Commission clause ) was brought on statute by Section 86(i)(b) of the Amending Act 104 of 1976 with effect from February 1, 1977. Earlier thereto there was no express power except the inherent power under Section 151 CPC to grant ad interim injunction against dispossession. Rule 1 primarily concerned with the preservation of the property in dispute till legal rights are adjudicated. Injunction is a judicial process by which a party is required to do or to refrain from doing any particular act. It is in the nature of preventive relief to a litigant to prevent future possible injury. In other words, the court, on exercise of the power of granting ad interim injunction, is to preserve the subject matter of the suit in the status quo for the time being. It is settled law that the grant of injunction is a discretionary relief. The exercise thereof is subject to the court satisfying that (1) there is a serious disputed question to be tried in the suit and that an act, on the facts before the court, there is probability of his being entitled to the relief asked for by the plaintiff/defendant; (2) the court's interference is necessary to protect the party from the species of injury. In other words, irreparable injury or damage would ensue before the legal right would be established at trial; and (3) that the comparative hardship or mischief or inconvenience which is likely to occur from withholding the injunction will be greater than that would be likely to arise from granting it.
5.Therefore, the burden is on the plaintiff by evidence aliunde by affidavit or otherwise that there is "a prima facie case" in his favour which needs adjudication at the trial. The existence of the prima facie right and infraction of the enjoyment of his property or the right is a condition for the grant of temporary injunction. Prima facie case is not to be confused with prima facie title which has to be established, on evidence at the trial. Only prima facie case is a substantial question raised, bona fide which needs investigation and a decision on merits. Satisfaction that there is a prima facie case by itself is not sufficient to grant injunction. The Court further has to satisfy that non-interference by the Court would result in "irreparable injury" to the party seeking relief and that there is no other remedy available to the party except one to grant injunction and he needs protection from the consequences of apprehended injury or dispossession. Irreparable injury, however, does not mean that there must be no physical possibility of repairing the injury, but means only that the injury must be a material one, namely one that cannot be adequately compensated by way of damages. The third condition also is that "the balance of convenience" must be in favour of the granting injunction. The Court while granting or refusing to grant injunction should exercise sound judicial discretion to find the amount of substantial mischief or injury which is likely to be caused to the parties, if the injunction is refused and compare it with that which is likely to be caused to the other side if the injunction is granted. If on weighing competing possibilities or probabilities of likelihood of injury and if the Court considers that pending the suit, the subject matter should be maintained in status quo, an injunction would be issued. Thus the Court has to exercise its sound judicial discretion in granting or refusing the relief of ad interim injunction pending the suit." (Emphasis added)
28.The very fact that the applicant is litigating in various forums and filed case after case to circumvent the liability fastened on them and also considering the fact that he had avoided the earlier interim order imposing conditional stay and challenged it in appeal, this court is not inclined to grant any relief to the applicant.
29.The Supreme Court has warned the entertainment of such multifaceted claims before various courts vide its judgment in T.Arivandandam Vs. T.V.Satyapal and another reported in 1977 (4) SCC 467 and it is necessary to refer to the following passages found in paragraph 7 of the said judgment, which is as follows:
7.We regret the infliction of the ordeal upon the learned Judge of the High Court by a callous party. We more than regret the circumstance that the party concerned has been able to prevail upon one lawyer or the other to present to the Court a case which was disingenuous or worse. It may be a valuable contribution to the cause of justice if counsel screen wholly fraudulent and frivolous litigation refusing to be beguiled by dubious clients. And remembering that an advocate is an officer of justice he owes it to society not to colloborate in shady actions. The Bar Council of India, we hope will activate this obligation. We are constrained to make these observations and hope that the cooperation of the Bar will be readily forthcoming to the Bench for spending judicial time on worthwhile disputes and avoiding the distraction of sham litigation such as the one we are disposing of. Another moral of this unrighteous chain litigation is the gullible grant of ex parte orders tempts gamblers in litigation into easy courts. A Judge who succumbs to ex parte pressure in unmerited cases helps devalue the judicial process. We must appreciate Shri Ramasesh for his young candour and correct advocacy."
30.The said decision in Arivandandam's case also came to be quoted with approval in its latest decision by the Supreme Court in Kamala and others Vs. K.T.Eshwara Sa and others reported in (2008) 12 SCC 661. It may be useful to refer to the following passage found in paragraph 47 of the said judgment, which is as follows: "47.Reliance has also been placed on T. Arivandandam v. T.V. Satyapal wherein it has been held: (SCC p.470, para 5)
5. We have not the slightest hesitation in condemning the petitioner for the gross abuse of the process of the court repeatedly and unrepentantly resorted to. From the statement of the facts found in the judgment of the High Court, it is perfectly plain that the suit now pending before the First Munsif s Court, Bangalore, is a flagrant misuse of the mercies of the law in receiving plaints. The learned Munsif must remember that if on a meaningful not formal reading of the plaint it is manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue, he should exercise his power under Order 7 Rule 11 CPC taking care to see that the ground mentioned therein is fulfilled. And, if clever drafting has created the illusion of a cause of action, nip it in the bud at the first hearing by examining the party searchingly under Order 10 CPC. An activist Judge is the answer to irresponsible law suits. The trial courts would insist imperatively on examining the party at the first hearing so that bogus litigation can be shot down at the earliest stage. The Penal Code is also resourceful enough to meet such men, (Chapter XI) and must be triggered against them. In this case, the learned Judge to his cost realised what George Bernard Shaw remarked on the assassination of Mahatma Gandhi: It is dangerous to be too good.
Each case, however, must be considered on its own facts."
31.Besides, in this case, R4 has become an auction purchaser and had parted with more than Rs.52 crores to the Bank. At the deprivation of right of such parties, this court cannot grant any relief to the applicant.
32.In this context, the Supreme Court made distinction between a third party bona fide purchaser in the auction sale and a decree holder purchaser at the court auction vide its decision in Janatha Textiles and others Vs. Tax Recovery Officer and another reported in (2008) 12 SCC 582. It is necessary to refer to paragraphs 18 and 20 of the said judgment, which are as follows: "18.It is an established principle of law that in a third party auction-purchaser s interest in the auctioned property continues to be protected notwithstanding that the underlying decree is subsequently set aside or otherwise. This principle has been stated and reaffirmed in a number of judicial pronouncements by the Privy Council and this Court. Reliance has been placed on the following decisions: (i) The Privy Council in Nawab Zain-Ul-Abdin Khan v. Mohd. Asghar Ali Khan1 for the first time crystallised the law on this point, wherein a three-Judge Bench held as follows: (IA p. 16)
A great distinction has been made between the case of bona fide purchasers who are not parties to a decree at a sale under execution and the decree-holders themselves. In Bacon s Abridgment, tit. Error it is laid down, citing old authorities, that if a man recovers damages, and hath execution by fieri facias, and upon the fieri facias the sheriff sells to a stranger a term for years, and after the judgment is reversed, the party shall be restored only to the money for which the term was sold, and not to the term itself, because the sheriff had sold it by the command of the writ of fieri facias . So in this case, those bona fide purchasers who were no parties to the decree which was then valid and in force, had nothing to do further than to look to the decree and to the order of sale. (ii) In Janak Raj v. Gurdial Singh the Division Bench comprising Wanchoo, J. and Mitter, J. held that in the facts of the said case the appellant auction-purchaser was entitled to a confirmation of the sale notwithstanding the fact that after the holding of the sale, the decree was set aside. It was observed: (AIR p.613, para 24) 24. The policy of the legislature seems to be that unless a stranger auction-purchaser is protected against the vicissitudes of the fortunes of the suit, sales in execution would not attract customers and it would be to the detriment of the interest of the borrower and the creditor alike if sales were allowed to be impugned merely because the decree was ultimately set aside or modified. (iii) In Gurjoginder Singh v. Jaswant Kaur this Court relying on the judgment rendered by the Privy Council held that the status of a bona fide purchaser in an auction-sale in execution of a decree to which he was not a party stood on a distinct and different footing from that of a person who was inducted as a tenant by a decree-holder landlord. It was held as follows: (SCC p. 370, para 3) 3. A stranger auction-purchaser does not derive his title from either the decree-holder or the judgment-debtor and therefore restitution may not be granted against him but a tenant who obtains possession from the decree-holder landlord cannot avail of the same right as his possession as a tenant is derived from the landlord. (iv) In Padanathil Ruqmini Amma v. P.K. Abdulla4 this Court in para 11 observed as under: (SCC p.672)
11. In the present case, as the ex parte decree was set aside, the judgment-debtor was entitled to seek restitution of the property which had been sold in court auction in execution of the ex parte decree. There is no doubt that when the decree-holder himself is the auction-purchaser in a court auction-sale held in execution of a decree which is subsequently set aside, restitution of the property can be ordered in favour of the judgment-debtor. The decree-holder auction-purchaser is bound to return the property. It is equally well settled that if at a court auction-sale in execution of a decree, the properties are purchased by a bona fide purchaser who is a stranger to the court proceedings, the sale in his favour is protected and he cannot be asked to restitute the property to the judgment-debtor if the decree is set aside. The ratio behind this distinction between a sale to a decree-holder and a sale to a stranger is that the court, as a matter of policy, will protect honest outsider purchasers at sales held in the execution of its decrees, although the sales may be subsequently set aside, when such purchasers are not parties to the suit. But for such protection, the properties which are sold in court auctions would not fetch a proper price and the decree-holder himself would suffer. The same consideration does not apply when the decree-holder is himself the purchaser and the decree in his favour is set aside. He is a party to the litigation and is very much aware of the vicissitudes of litigation and needs no protection. In para 16, the Court further elaborated the distinction between the decree-holder auction-purchaser and a stranger who is a bona fide purchaser in auction. Para 16 reads as under: (P.K. Abdulla case4, p. 674)
16. The distinction between a stranger who purchases at an auction-sale and an assignee from a decree-holder purchaser at an auction-sale is quite clear. Persons who purchase at a court auction who are strangers to the decree are afforded protection by the court because they are not in any way connected with the decree. Unless they are assured of title; the court auction would not fetch a good price and would be detrimental to the decree-holder. The policy, therefore, is to protect such purchasers. This policy cannot extend to those outsiders who do not purchase at a court auction. When outsiders purchase from a decree-holder who is an auction-purchaser clearly their title is dependent upon the title of decree-holder auction-purchaser. It is a defeasible title liable to be defeated if the decree is set aside. A person who takes an assignment of the property from such a purchaser is expected to be aware of the defeasibility of the title of his assignor. He has not purchased the property through the court at all. There is, therefore, no question of the court extending any protection to him. The doctrine of a bona fide purchaser for value also cannot extend to such an outsider who derives his title through a decree-holder auction-purchaser. He is aware or is expected to be aware of the nature of the title derived by his seller who is a decree-holder auction-purchaser. (v) In Ashwin S. Mehta v. Custodian5 this Court whilst relying upon the aforementioned two judgments stated the principle in the following words: (SCC p.407, para 70)
70. In any event, ordinarily, a bona fide purchaser for value in an auction-sale is treated differently than a decree-holder purchasing such properties. In the former event, even if such a decree is set aside, the interest of the bona fide purchaser in an auction-sale is saved.
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20. Law makes a clear distinction between a stranger who is a bona fide purchaser of the property at an auction-sale and a decree-holder purchaser at a court auction. The strangers to the decree are afforded protection by the court because they are not connected with the decree. Unless the protection is extended to them the court sales would not fetch market value or fair price of the property." (Emphasis added)
33.In the light of the above, the applicant has miserably failed to make out a prima facie case and the balance of convenience certainly not in their favour for the grant of an injunction. Hence all the applications will stand dismissed with costs. The applicant is directed to pay a sum of Rs.50,000/- (Rupees fifty thousand only) towards quantified cost to the first respondent Bank.
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