Canara Bank vs P. Selathal and Ors. Etc.Etc.

Allowing the appeals, the Court

HELD:1. The short question which is posed for

consideration of this Court is, whether the suits filed by the plaintiffs were liable to be rejected in exercise of powers under Order 7 Rule 11(d) of the CPC or not? [Para 7.1][957 D-E]

2. Applying the law laid down by this Court on exercise of powers under Order 7 Rule 11 of the CPC to the facts of the case on hand and the averments in the plaints, this Court is of the opinion that both the courts below have materially erred in not rejecting the plaints in exercise of powers under Order 7 Rule

11 of the CPC. As observed, the main prayer in the suits is challenging the decree passed by the DRT. The decree passed by the DRT and even the order passed by the Recovery Officer are appealable under Section 20 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. In the case of O.C. Krishnan and others, this Court has observed and held that in view of the alternate remedy of preferring the appeal before the DRAT, the petition under Article 227 challenging the order passed by the DRT shall not be maintainable, without exhaustion of such remedy. In the case of O.C. Krishnan and others, decree passed by the DRT was challenged in a petition under Article 227 of the Constitution of India. The High Court allowed the petition. While allowing the appeal of the bank – Punjab National Bank, this Court has observed that without exhaustion of the remedies under the RDDBFI Act, the High Court ought not to have exercised its jurisdiction under Article 227. [Para 8][960 D-G]

3. Having considered the pleadings and the averments in the suits, more particularly the allegations of fraud, this Court finds that the allegations of fraud are with respect to the partnership deed and there are no allegations at all with respect to mortgage created by the Guarantor and that too with respect to the deed of guarantee executed by the Guarantor. Much reliance is placed upon the judgment and order passed by the Magistrate holding the partners of the firm guilty. However, it is required to be noted that even in the said judgment passed by the Magistrate there is no reference to the deed of guarantee and/or the mortgage created by the Guarantor. Even the bank is not a party to the said proceedings. It is reported that against the judgment and order passed by the learned Magistrate, further appeal is pending. Be that as it may, considering the pleadings/averments in the suits and the allegations of fraud, this Court is of the opinion that the allegations of fraud are illusory and only with a view to get out of the judgment and decree passed by the DRT. This Court is of the opinion that therefore the suits are vexatious and are filed with a mala fide intention to get out of the judgment and decree passed by the DRT. As observed hereinabove, the plaintiffs are claiming right, title on the basis of the sale deeds dated 30.01.1996 and 10.03.1997 respectively executed by the guarantor as power of attorney holder of the original owner. However, according to the averments in the plaints, they have purchased the suit property from their vendor which is factually incorrect. On a bare reading of the sale deeds, it appears that the sale deeds are executed by the guarantor as power of attorney holder of the original vendor. As observed hereinabove, even in the year 2008, when the guarantor filed interlocutory application before the DRT to quash and set aside the ex-parte judgment and decree passed by the DRT, he did not disclose that he has already sold the property in favour of the original plaintiffs. As observed, even the sale consideration is alleged to have been paid in cash. Before the execution of the sale deeds dated 30.01.1996 and 10.03.1997, the lands were already put as a security by way of mortgage with the appellantbank by the guarantor. Thus, considering the overall facts and circumstances of the case, the suits filed by the original plaintiffs are vexatious, frivolous and nothing but an abuse of process of law and court. Therefore, considering the law laid down by this Court in the aforesaid decisions, more particularly in the case of T. Arivandandam, the suits being vexatious and frivolous, the plaints are required to be rejected in exercise of powers under Order 7 Rule 11 of the CPC. As pointed out by Krishna Iyer, J. in T. Arivandandam, the ritual of repeating a word or creation of an illusion in the plaint can certainly be unravelled and exposed by the court while dealing with an application under Order 7 Rule 11(a). As observed by this Court, such proceedings are required to be nipped in the bud. Even otherwise as observed hereinabove, without exhausting the remedy of appeal provided under the RDDBFI Act, the suits with the basic relief of challenging the decree passed by the DRT were liable to be dismissed, as observed and held by this Court in the case of O.C. Krishnan and others. [Para 10][961 F-H; 962 A-G]

4. At this stage, it is also required to be noted that the suits have been filed after a period of 15 years from the date of mortgage and after a period of 7 years from the date of passing of the decree by the DRT. In the plaints, it is averred that the plaintiffs came to know about the mortgage and the judgment and decree passed by the DRT only six months back. However, the said averments can be said to be too vague. Nothing has been averred when and how the plaintiffs came to know about the judgment and decree passed by the DRT and the mortgage of the property. Only with a view to get out of the law of limitation and only with a view to bring the suits within the period of limitation, such vague averments are made. On such vague averments, plaintiffs cannot get out of the law of limitation. There must be specific pleadings and averments in the plaints on limitation. Thus, on this ground also, the plaints were liable to be rejected. As observed hereinabove, the plaints are vexatious, frivolous, meritless and nothing but an abuse of process of law and court. Therefore, this is a fit case to exercise the powers under Order 7 Rule 11 (d) of the CPC. Both the courts below have materially erred in not rejecting the plaints in exercise of powers under Order 7 Rule 11(d) of the CPC. Both the courts below have materially erred in not exercising the jurisdiction vested in them. [Para 11][962 GH; 963 A-D] Sopan Sukhdeo Sable v. Assistant Charity Commissioner (2004) 3 SCC 137 : [2004] 1 SCR 1004; T.

Arivandandam v. T.V. Satyapal (1977) 4 SCC 467 : [1978] 1 SCR 742; Church of Christ Charitable Trust and Educational Charitable Society v. Ponniamman Educational Trust (2012) 8 SCC 706 : [2012] 6 SCR 404; Punjab National Bank v. O.C. Krishnan and Ors. (2001) 6 SCC 569 : [2001] 1 Suppl. SCR 466 – relied on.

M/s. Cambridge Solutions Limited, Bangalore v. Global software Limited, Chennai 2016-5-L.W. 45; A.B.C. Laminart Pvt. Ltd. v. A.P. Agencies (1989) 2 SCC 163; Madanuri Sri Rama Chandra Murthy v. Syed Jalal (2017) 13 SCC 174 : [2017] 5 SCR 294; Ram Singh v. Gram Panchayat Mehal Kalan (1986) 4 SCC 364 –

referred to.