Asian Hotels North Ltd v. Yes Bank Ltd & Ors.

16. In the meantime, another application bearing I.A. No. 1747/2023 was also filed by the defendant No. 5, namely JC Flowers Assets Construction Ltd., under Order I Rule 10 of the CPC for impleadment due to alleged illegal and erroneous assignment of the Plaintiff‟s loan facility to them. Pursuant to completion of proceedings, the said application was also listed on 2nd March, 2023.

17. Another application bearing I.A. No.1746/2023 was filed by the defendant No. 9, namely M/s Exclusive Capital Ltd. for impleadment of the Bank of Maharashtra, Axis Bank, Punjab National Bank and itself.

18. On 2nd March, 2023, this Court heard the parties at length and passed the following order/orders: ―8. The captioned suit on behalf of the Plaintiff has been filed assailing the Loan Recall cum Guarantee Invocation Notice dated 17th February 2022 issued by the defendant No. 1. The relevant portion of the Notice is reproduced hereunder:- ―4. Please note that pursuant to submission of request by the Borrower on September 28, 2020, the Bank had approved One Time Restructuring ("OTR'') under the Resolution Framework for Covid-19 Related Stress ("Resolution Framework") dated August 6, 2020 subject to Borrower meeting terms and conditions stipulated under the extant RBI guidelines. Under the OTR scheme, Bank also sanctioned fresh FITL limits amounting to ~INR 321 MM for interest servicing till Mar 2022 apart from extending repayment terms, reducing interest rate and other benefits to the Borrower.

5. However, the Borrower deviated from the Resolution Framework and kept compliances under OTR scheme pending, including but not limited to, implementation beyond 180 days of invocation, documents execution not completed within 180 days of invocation, reclassification of asset exposure as commercial real estate, pending revised independent credit evaluation rating, the Bank was constrained to declare OTR as not implemented. In view of the above, the Borrower is bound by the sanction terms of the Facility as captured in the Facility Agreements. Further, in the joint lender‘s meeting conducted on September 24, 2021, two lenders in the multiple banking arrangement of the Borrower i.e., Indusind Bank Limited and Axis Bank Limited confirmed that in their view OTR have not been implemented/ cannot be considered as implemented. Pursuant to terms and conditions of the Facility Agreements, the Borrower was required to make the payment(s)/repayment(s) towards the Facility promptly on the due dates, without any delay. However, the Borrower did not honor the terms and conditions of the Facility Agreements and neglected in making payment/repayment(s), despite repeated reminder(s) by the Bank. Accordingly, the Borrower has been classified as NPA with effect from December 20, 2020. In such circumstances, the Bank has become entitled to and does hereby recall the Facility and declare the Facility as due and payable by the Borrower to the Bank forthwith. Accordingly, we hereby call upon you, the 'Borrower, and demand of you to pay amount to the Bank at its office at 4th Floor, Max Towers, Sector-16B, Noida, Uttar Pradesh - 201301, within 7 days of the receipt of this notice, the outstanding amount under the Facility together with interest, liquidated damages and other charges of the particulars of which are set out in the Schedule- II hereto together with further interest and other charges thereon at the contractual rates upon the footing of interest until payment/realization.

9. The Bank hereby recalls the Facility as sanctioned/ disbursed to the Borrower and in case you, the Borrower and the Guarantors fail to make the payments as aforesaid, we shall be constrained to take such steps and measures as may be permissible under law for recovery of all the monies due and payable by you, more particularly mentioned in Schedule - II hereto, at your own risk as to the costs and consequences.

10. In the event the monies due and payable as mentioned above are not paid in full within a period of seven (7) days from the date of receipt of this notice by the Borrower and/ or the Guarantors, we shall be constrained to exercise our rights and remedies against the Borrower, the Guarantors and obligors/ security providers.‖

9. A perusal of the order passed by the Predecessor Bench on 24th February 2022 shows that after appreciation of the grounds raised on behalf of the Plaintiff while prima facie satisfying this Court to issue summons in the suit, the Predecessor Bench passed the interim order of restraint on the defendant No. 1 with respect to the impugned Notice dated 17th February 2022. The relevant portion of the said order is reproduced hereunder:- ―50. As such, given the nature of the dispute and keeping in mind the order passed by this Court on 6th December, 2021 in IA 16083/2021 in CS (COMM) 626/2021, the Court deems it appropriate to balance the interests by granting a temporary stay of the operation of the impugned letter dated 17th February, 2022 till 7th March, 2022 and fixing IA 3102/2022 for hearing, along with IA 16083/2021 in CS (COMM) 626/2021, on 7th March, 2022.

59. Till the next date of hearing, Defendant 1 shall remain restrained from taking any action against the Plaintiff on the basis of the impugned letter dated 17th February, 2022.‖

10. At this stage, the instant application has been filed on behalf of the Plaintiff whereby the holding Joint Lenders‘ Meeting and the decision followed by the same has been sought to be stayed. The Minutes of the Meeting dated 23rd January 2023 have been brought on record and produced before this Court. A perusal of the Minutes reveal that the defendant No. 5 as well as other lenders/Banks have sought to make decisions and take actions for the account of M/s Asian Hotel (North) taking note of the fact that an interim order, qua Notice dated 17th February 2022 and any action arising therefrom, is already in operation. The relevant portion of the Minutes of the Meeting is reproduced hereunder:- ―2) Discussion on the status of the account, Suit filing, OTS Status and recovery action by individual Bank BOM asked all the Lenders to inform the current status of the account with all Lenders: · JC Flowers ARC informed that YES Bank has assigned the portfolio to them. YBL has already informed that they have issued LRM and has done pledge invocation. The company has taken stay from high Court on the ground that OTR was implemented and there was no default on the part of Borrower. Next hearing is in the end of Jan-2023. · BOM informed that they have issued 13 (2) under SARFAESI in the said account. The same has been objected by the company. BOM further added that they have replied to the objection raised by the company. BOM further informed that they have conveyed OTS sanction on bilateral basis to the borrower which is not accepted by the borrower as on date. BOM further added that they will go for recovery action and will proceed for all option available i.e. PIRP/CIRP/IBC/DRT. xxxxx · Axis Bank informed that they recalled the loan and have proceeded for recovery action. They have already invoked personal guarantee (not as per Sec-95 of IBC). Axis Bank further added that they will go ahead with BOM for filling of NCLT. He further added any kind of settlement will be looked only after finalization of forensic audit. xxxxx

5) Discussion on Progress of Forensic Audit BOM informed to all the Lenders that the Forensic audit has been initiated and a list of required documents is already shared to all the Lenders and the borrower for onward submission. BOM further added that the Forensic audit is in initial stages only and will go simultaneously with OTS or recovery action.... BOM requested all the lenders to provide the documents as required by the auditor. Axis bank further added that both recovery action and forensic audit will go hand in hand.... xxxxx

7) Discussion on future course of recovery action- PIRP/CIRP/DRT/NCLT JC flowers ARC enquired BOM about the recovery action initiated by them. BOM replied that as the company has offered OTS offer to all the Lenders and out Bank has also convey OTS sanction to them, which is not yet accepted by the company. Hence they are looking for all the course of recovery action. BOM will proceed for all the option available i.e. PIRP/CIRP/IBC/DRT. BOM further informed to all the Lenders that nay lender can join them for joint recovery action or otherwise they will go individually. All the Lenders except DBS an ECL supported BOM and will be jointly go for recovery action. xxxxx

9) Discussion on the Performance of the Company. Performance of the company was discussed with the Lender. The company officials informed that nine month revenue is Rs.

184.09 crore approx. as compared to previous year 9 month sale Rs. 97.85 crore. Revenue for the quarter is Rs, 70.50 crore. The company also informed that the EBITA as on 31.12.2022 is around 21%. BOM enquired company officials why there is decline in the cash flows for the Dec-22 and Jan-23 months. The Company officials informed that maximum revenue comes from corporate bookings. But from 15.12.2022 to 15.01.2023, there is minimal corporate bookings as due to New Year Eve and Christmas all over the world. Even the weddings are minimal due to some religious issues. Hence the sale declines. Lenders asked the company officials to inform the estimated revenue for this FY. Company informed that it will be around Rs. 250.00 crore.‖

11. A conjoint reading of the order dated 24th February 2022 and the aforementioned paragraphs of the Minutes of the Meeting dated 23rd January 2023 reveal that the action that has been taken on behalf of the defendant NO. 5 and the other lenders is in the teeth of the interim order passed by this Court. The lenders/Banks have either initiated or have decided to initiate recovery action against the Plaintiff despite clear directions from this Court restraining the defendant No. 1 Bank to take any action in furtherance of Notice dated 17th February 2022. Hence, at this stage, this Court is inclined to issue notice of the application to the defendants.

12. Since learned counsel for the defendants No. 1 and 5 and learned counsel for defendants No. 2, 3 and 4 appear on advance notice, there is no need for issuing a formal notice of the application. The learned counsel appearing on behalf of the defendants vehemently opposed the instant application and prayed for some time to file reply/objection to the application. Let the same be filed within two weeks.

13. List on 29th

14. Since a prima facie case is made out on behalf of the Plaintiff, all defendants are directed to restrain from taking any action in pursuance of the Minutes of the Meeting January 2023, till the next date of hearing. I.A. 1754/2023 (u/O-XXXIX R-1 & 2 of CPC)

1. The instant application under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, 1908 has been filed on behalf of applicant/Plaintiff seeking the following reliefs:- "a. Stay the operation and effect of the Communication dated 30.12.2022 issued by Defendant No. 1 and any assignment of the loan facility extended to the Plaintiff by the Defendant No. 1; and b. Restrain Defendant No. 1 from in any manner acting upon or implementing any assignment of the credit facilities extended to the Plaintiff by Defendant No. 1..."

2. Heard.

3. On the last date of hearing, i.e., 30th January 2023, this Court heard the applicant at length on the instant application, upon being prima facie satisfied, issued notice to the non-applicants. At this stage, since JC Flowers has been impleaded as defendant No. 5, it is pertinent to make clear that the order passed by this Court on 24th February 2022 shall be extended to the said party.

4. Learned counsel appearing on behalf of defendants No. 1 to 4 and learned counsel appearing on advance notice for defendant No. 5 pray for and are granted two weeks' time to file reply/objection to the application.

5. List on 29th

6. All parties are directed to comply with the order dated 24th February, 2022 passed by the Predecessor Bench. Interim Order passed in the said order, to continue, till the next date of hearing. xxx xxxxxx I.A. No.1746/2023 (u/O I Rule 10 CPC by proposed defendant ExclusiveCapital Limited) in CS (COMM) 128/2022 Argument heard. Orders reserved‖

19. Upon perusal of the above reproduced extracts, it is made out that this Court had reserved the judgment in application bearing I.A. No.1746/2023 filed for impleadment of „M/S Exclusive Capital Ltd., Bank of Maharashtra, Axis Bank and Punjab National Bank‟.

20. In the application bearing I.A. No. 1747/2023, vide the judgement dated 2nd March, 2023 this Court had allowed the prayer for impleadment of defendant No. 5 in place of the Yes Bank as the credit facility extended by the Yes Bank was taken over by the defendant No. 5.

21. In other application, i.e. I.A. No. 4163/2023, vide the above said judgement this Court had referred to the order dated 24th February, 2022 passed by the Predecessor Bench and therefore, held that the action as decided in the minutes of meeting dated 23rd January, 2023 was in teeth of the stay granted by the Predecessor Bench and therefore, need to be kept in abeyance as the said action, if taken, would be contrary to the order dated 24th February, 2022 passed by the Predecessor Bench.

22. On 3rd March, 2023, this Court pronounced the judgment on the reserved application, i.e. I.A. No. 1746/2023 and held that the ‗M/S Exclusive Capital Ltd., Bank of Maharashtra, Axis Bank and Punjab National Bank‘ were necessary and proper parties to the suit and therefore, their names as parties to the same needs to be duly impleaded in the suit. Furthermore, vide the said judgment, this Court also extended the stay granted by the Predecessor Bench vide order dated 24th

23. Thereafter, the parties to the suit filed multiple applications and the same are pending for adjudication before this Court.

24. Before delving into the submissions advanced by the respective counsel for the various parties, this Court deems it important to reiterate the position of parties as per the amended memo of parties. The following table depicts the same:

1. ASIAN HOTELS (NORTH) LTD. THROUGH: AUTHORIZED REPRESENTATIVE HYATT REGENCY HOTEL BHIKAJI CAMA PLACE, M.G. MARG, R.K. PURAM, NEW DELHI - 110066 PH. NO.: 8178211302 EMAIL:law@ahlnorth.com..PLAINTIFF

VERSUS

1. YES BANK LTD. 48, NYAYA MARG, CHANAKYAPURI, NEW DELHI 110021 PHONE No.: 30259000 EMAIL: communications@yesbank.in, yestouch@yesbank.in A/so At Max Towers Level 4 Section 16 B, Noida UP-201301...DEFENDANT NO. 1

2. ASIAN HOLDING PVT. LTD. THROUGH: AUTHORIZED REPRESENTATIVE C/O BHIKAJI CAMA PLACE, PH. NO.: 9810058391 EMAIL: info.asianholding@gmail.com...DEFENDANT NO.2

3. MR.

SHIV KUMAR JATIA DIRECTOR OF ASJAN HOLDING PVT. LTD. M.G. MARG, R.K. PURAM, NEW DELHI -110066 PH. NO.: 9810058391 EMAIL: info.asianholding@gmail.com...DEFENDANT NO.3

4. MR.

AMRITESH JATIA DIRECTOR OF ASIAN HOLDING PVT. LTD. PH. NO.; 8178211302 EMAIL: amritesh.jatia@ahlnorth.com...DEFENDANT NO.4

5. J.C. FLOWER ASSET RECONSTRUCTION PRIVATE LIMITED THROUGH MANAGING DIRECTOR 2nd Floor, Crompton Greaves House, Dr. Annie Besant Road, Worli, Mumbai-400030 Email: teamjcfarc@jcfarc.com Phone: +91 7042944775... DEFENDANT NO.5

6. BANK OF MAHARASHTRA THROUGH; AUTHORISED REPRESENTATIVE 'Lokmangal', 1501, Shivajinagar, Rune -411005 Also at: B-29, Connaught Place, New Delhi -110001 Email: bom343@mahabank.co.in; brmgr343@mahabank.co.in Phone: +91 9867978412: +91 9871911138...DEFENDANT NO. 6

7. PUNJAB NATIONAL BANK THROUGH: AUTHORISED REPRESENTATIVE Plot No. 4, Sector-10 Dwarka New Delhi - 110075 Also at: Zonal Sastra Centre - Delhi 1ST Floor, 7, BhikajiCama Place New Delhi - 110066 Email: zs843@pnb.co.in Phone: +91 8920441410: +91 8100017032 ….DEFENDANT NO. 7

8. AXIS BANK LIMITED THROUGH: AUTHORISED REPRESENTATIVE "Trishul", 3rd Floor, Opp. Samartheswar Temple, Near Law Garden, Ellisbridge, Ahmedabad - 386006 Also at: Bombay Dyeing Mills Compound, Pandurang Budhkar Marg Worli, Mumbai -400025 Also at: Axis Bank, 4th Floor, Tower 2, Axis House.Jaypee Wish Town, Sector 128, Noida-201304 Uttar Pradesh Email - subhodip.mukheriee@axisbank.com; chittaranjan.tripathy@axisbank.com; Phone: +91 8130891183...DEFENDANT NO. 8

9. EXCLUSIVE CAPITAL LIMITED THROUGH AUTHORISED REPRESENTATIVE 7/17, L.G.F., Near Hauz Khas Metro Station, SarvpriyaVihar, New Delhi - 110016 Email: bd@exciusivecapital.in Phone: 9821122312...DEFENDANT NO. 9

25. In the last few hearings, this Court heard the contentions of the learned counsel for the parties on the respective applications filed by them. Following are the details of the said applications.

1. 10671/2023 Order VI Rule 17 of the CPC Plaintiff

2. 8068/2023 Order VII Rule 11 of the CPC Defendant No. 7

3. 9173/2023 Order XXXIX Rule 4 of the CPC Defendant No. 7

4. 2858/2024 Order XXXIXRule 4 of the CPC Defendant No. 6

26. Pursuant to conclusion of the hearings, this Court reserved the above mentioned applications vide order dated 9th May, 2024.

27. Since the learned senior counsel along with other learned counsel for the respective parties advanced arguments for the individual applications, this Court deems it appropriate to deal with the respective applications chronologically.

28. Mr. Vikram Nankani, learned senior counsel appearing on behalf of the Plaintiff started his submissions and at the outset, he submitted that the application bearing I.A. No. 10671/2023 has been filed for amendment of the Plaint under Order VI Rule 17 of the CPC and the same may be heard before adjudication of the application filed for rejection of the Plaint under Order VII Rule 11 of the CPC.

29. The learned senior counsel submitted that the settled position of law requires the Courts to adjudicate the application filed for amendment of Plaint before adjudication of an application filed for rejection of the Plaint. Reliance has been placed upon the judgment of the Division Bench of this Court in Anita Kumari Gupta v. Late Ved Bhushan.[1]

30. Pursuant to the above said submission made by the learned senior counsel for the Plaintiff, Mr. Makkar, the learned senior counsel appearing for the defendant No. 6 and Mr. Rattan, learned counsel for the defendant No. 7conceded to the same and therefore, this Court is first adjudicating the application filed by the Plaintiff/applicant under Order VI Rule 17 of the CPC seeking amendment of the Plaint.

31. As mentioned in the preceding paragraphs, the aforementioned application has been filed by the applicant/Plaintiff i.e. M/s Asian Hotels (North) Ltd. under Order VI Rule 17 of the CPC seeking amendment of its Plaint.

32. The foregoing discussions already makes it clear that vide order dated 3rd March, 2023, the lender Banks namely ‗M/S Exclusive Capital Ltd., Bank of Maharashtra, Axis Bank and Punjab National Bank‘ were impleaded by this Court as parties to the instant suit upon an application filed by one of the lenders, i.e. the defendant No. 9.

33. As a general rule under the civil procedural law, the Plaintiff is provided the opportunity to amend the Plaint, if the same cause of action extends to the newly impleaded party. Further, since the instant suit is at the pre-trial stage and the written statements have not yet been filed by the defendants, this Court is of the view that no prejudice will be caused to the defendants if the instant application is adjudicated prior to other pending applications.

34. Mr. Vikram Nankani, learned senior counsel appearing on behalf of the applicant submitted that the Plaintiff/applicant availed loan and other credit facilities from various banks and in order to take benefit of the aforementioned Resolution Framework proposed under the RBI circular dated 6th August, 2020, the lenders of the Plaintiff formed a consortium. Thereafter, in furtherance of the OTR scheme, a Master Amendment Agreement, a TRA agreement and a FITL agreement were also executed between the Plaintiff and the consortium of lenders.

35. It is submitted that all the lenders duly acted upon the OTR scheme and the OTR agreements which included the moratorium period, creating the FITL account and regularly funding it on behalf of the Plaintiff. During the moratorium period, on 17th February, 2022, the defendant No. 1 Yes Bank issued a loan recall notice („YBL Recall Notice‟ hereinafter) on the basis that Agreements executed between the parties had not been implemented due to the defaults allegedly committed on behalf of the Plaintiff, and the defendant No. 1 resiled from its obligations under the OTR agreements.

36. It is submitted that the Plaintiff assailed the said actions of Yes Bank in the captioned suit wherein it seeks inter alia implementation and specific performance of the Agreements amongst the Plaintiff and its lenders, i.e., defendants‟ No. 1, 5 to 9.

37. It is submitted that during the pendency of the captioned suit, the aforesaid defendants also resiled from their admitted position under the Agreements, therefore, disputing the implementation of the same and sought to take coercive legal actions against the Plaintiff, including recovery proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 („SARFAESI Act‟ hereinafter) which was stayed by the Predecessor Bench of this Court vide order dated 24th

38. It is submitted that as evident from the Minutes of the JLM held on 14th March, 2022, 14th November, 2022 and 12th December, 2022, the defendant Banks were aware of the stay and despite the same they decided to take actions including issuance of loan recall notices, declaration of the Plaintiff/s account as non-performing asset („NPA‟ hereinafter) and invocation of securities/guarantees.

39. Learned senior counsel appearing on behalf of the applicant/Plaintiff further submitted that in furtherance of the aforementioned actions taken against the Plaintiff, during the JLM held on 23rd January, 2023, the lenders also resolved to take over the possession of the immovable assets of the Plaintiff.

40. It is submitted that aggrieved by these coercive actions and decisions, the Plaintiff filed an application bearing I.A. No. 4163/2023 praying for stay on the operation of such decisions taken in the JLM by the defendants which was allowed by this Court vide order dated 2nd

41. Therefore, the learned counsel appearing on behalf of the applicant/Plaintiff submitted that in view of the above said subsequent developments qua the Agreements entered into by the parties herein, the amendment in the Plaint has become imperative to determine the real question in controversy between the parties and for proper adjudication of the suit, and since the suit is at the pre-trial stage and the written statements have not yet been filed by the defendants, no prejudice will be caused to them if the instant application is allowed and the amended Plaint is taken on record. (On behalf of the defendant No. 7/Punjab National Bank)

42. Per Contra, Mr. Rattan, learned counsel appearing on behalf of the defendant No. 7 vehemently opposed the instant application under Order VI Rule 17 of the CPC submitting to the effect that the entire suit is misconceived as the Agreements so executed were not signed by all the parties and same were never implemented.

43. It is submitted that the defendant No. 7 had issued a demand notice dated 26th July, 2022 under Section 13(2) of the SARFAESI Act to the Plaintiff and it‟s guarantors as the loans taken by the Plaintiff were classified as NPA on 2nd May, 2022. It is also submitted that the Plaintiff had duly replied to the above said notice vide letters dated 20th September, 2022 and 4th October, 2022 and had raised objections under Section 13(3A) of the SARFAESI Act.

44. It is submitted that the impleadment application bearing I.A. NO. 1746/2023, filed by the defendant No.9 for impleadment of the members of the consortium of lenders, was not authorized to be filed by the defendant No. 7 and therefore, the defendant No.7 was impleaded in the suit by this Court without hearing its arguments.

45. It is submitted that since the defendant Bank have already filed applications for dismissal of the suit on the grounds of non-maintainability, the application seeking amendment of the Plaint is nothing but a gross misuse of the process of law and the same also deserves to be dismissed by this Court.

46. It is submitted that the defendant No. 7 has exercised its legal right to declare the account of Plaintiff as an NPA and therefore, the issuance of demand notice was in accordance with the law.

47. It is further submitted that the Civil Courts do not have jurisdiction to scrutinize the actions of Banks under SARFAESI Act and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 („RDB Act‟ hereinafter), and therefore, this Court cannot restrain the defendant No.7 to exercise the rights provided under the aforesaid special legislations.

48. Therefore, in view of the foregoing submissions, the learned counsel for the defendant No.7 submitted that the instant application may be dismissed. (On behalf of defendant No. 6/Bank of Maharashtra)

49. Per Contra, Mr. Sudhir Makkar, learned senior counsel appearing on behalf of the defendant No. 6 also opposed the instant application submitting to the effect that the captioned suit was filed by the Plaintiff against the Yes Bank and the defendant No. 6 was impleaded as party to the suit by allowing the application bearing I.A. No.1746/2023 filed by the defendant No.9/ M/S Exclusive Capital Ltd. It is submitted that in the said application, the instant defendant was neither given a notice, nor an opportunity to present its arguments.

50. It is submitted that the instant application has been filed by the Plaintiff to introduce new cause of actions based on new facts against the newly impleaded defendants which are based on an independent cause of action and not anywhere related to the party against which the original suit was filed.

51. It is submitted that the present amendment application has been filed to create confusion among the set of facts even though it is evident that the said application does not seek to determine the real question in controversy.

52. It is submitted that the captioned suit is barred in view of the provisions of Section 34 of the SARFAESI Act and the remedy available against the actions taken by the defendant Banks can only be determined by the Debt Recovery Tribunal (“DRT” hereinafter), therefore, this Court is not the appropriate forum for adjudication of the dispute between the parties.

53. It is also submitted that the instant application has been filed by the Plaintiff to incorporate new facts against the newly impleaded parties that has no connection to the original impugned actions, therefore, the present application is impermissible in law as it seeks to change the very nature and character of the suit.

54. It is further submitted that an application bearing I.A. No. 7982/2023, filed for deletion of the defendant No.6 from array of the parties, has been pending before this Court and the Plaintiff has cleverly prayed to cure the defects as demonstrated in the said application by filing the instant application.

55. Therefore, in view of the foregoing submissions, Mr. Makkar prayed that the present application may be dismissed with heavy costs.

56. Pursuant to completion of the submissions by the learned senior counsel, Mr. Nishant Awana, learned counsel appearing on behalf of the defendant No.8/Axis Bank & defendant No. 6 apprised this Court that the submissions advanced by the learned senior counsel may be considered as the submissions advanced for the defendant No. 8, i.e., Axis Bank as well.

57. A perusal of the reply filed by the defendant No.8 in the instant application depicts that the defendant No.8 has taken identical grounds as taken by the defendant No.6 and argued in detail by the learned senior counsel. Therefore, for brevity, this Court deems it appropriate to not reproduce the same. (Rejoinder by the applicant/Plaintiff)

58. Mr. Vikram Nankani, learned senior counsel began his submissions by denying the allegations levelled by Mr. Sudhir Makkar, learned senior counsel for the defendant No. 8 and submitted that the averments regarding the maintainability of the captioned suit are misconceived as there is no material change in the nature of suit and the amendment sought by way of filing the instant application concerns only the contractual dispute between the parties.

59. It is submitted that the Plaintiff had already made a prima facie case that the Agreements have been implemented and acted upon by the defendant Banks, and there is no default on part of the Plaintiff, and on being satisfied on both the parameters, the Predecessor Bench of this Court had granted the stay on the operation of the recall notice dated 17th February, 2022 vide order dated 24th

60. It is submitted that pursuant to filing of the captioned suit, certain developments occurred which are directly related to the issues pending before this Court, therefore, amendment in the original Plaint is sought by the Plaintiff as the same is necessary for proper adjudication.

61. It is submitted that the amendments sought in the suit are in line with the existing nature of the suit and imperative to determine the real controversy regarding the Agreements executed among the Plaintiff and defendant Banks.

62. It is submitted that the defendant No. 7 had acted upon the OTR scheme Master Amendment Agreement, TRA agreement and FITL agreement, and the same is evident from the FITL mechanism created by the defendant No.7. Furthermore, the said position was expressly admitted by the defendant No. 7 during the JLM held on 14th

63. It is submitted that despite acting upon the Agreements, the defendant No.7 undertook actions which are in violation of the OTR scheme and the Agreements executed in pursuance thereof.

64. It is also submitted that the dispute in the instant suit is regarding the obligation of the parties under various agreements executed among them and therefore, this Court is well within its jurisdiction to adjudicate the same.

65. The learned senior counsel further submitted that the objections, if any, regarding the jurisdiction can be raised at an appropriate stage and the reply to the amendment application is not the appropriate stage for raising such objections.

66. It is submitted that the other arguments, i.e., the alleged nonimplementation of the Agreements falls into the category of objections concerning the merits and as per the settled position of law, the correctness or falsity of the amendment sought is not relevant for deciding the application filed under Order VI Rule 17 of the CPC.

67. On the allegation of Plaintiff‟s negligence in non-implementation of the OTR scheme and the Agreements, the learned senior counsel submitted that it was failure on part of the lender Banks to ensure effective action to implement the agreement and the defendant Banks had a duty towards the Plaintiff to ensure the same, however, they failed to do so, and instead issued notices for recovery of the loans.

68. In view of the foregoing submissions, the learned senior counsel submitted that the arguments taken by the learned counsel for the defendant Banks do not hold weight and therefore, the instant application may be allowed and amended Plaint may be taken on record accordingly.

ANALYSIS AND FINDINGS

69. Heard learned senior counsel for the parties and counsel appearing on behalf of the defendant No. 7 & 9, and perused the contents made in the application as well as in other pleadings filed by the respective parties.

70. The defendant Banks have objected to the instant amendment application on the grounds that firstly, the said amendment changed the nature of the suit, secondly, the amendments are based on new cause of action and thirdly, the said amendments are barred by law under Sections 34 and 35 of SARFAESI Act. Before delving into the issue, it is important for this Court to discuss the scheme of the Order 6 Rule 17 of the CPC, under which the present application has been filed.

71. The said provision reads as under: ―Order 6 Rule 17. Amendment of pleadings.—The Court may at any stage of the proceedings allow either party to alter or amend his pleadings in such manner and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties: Provided that no application for amendment shall be allowed after the trial has commenced, unless the Court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial.‖

72. The plain reading of the above provision states that the Courts are empowered to amend the pleadings at any stage of the proceedings if an application under the said provision is filed by the Plaintiff. The latter part of the provision also clarifies that once the trial commences, no amendment would ordinarily be allowed, except in the cases where the Court finds it necessary, on subsequent events, such as change in factual circumstances, which could not have been discovered at an initial stage even after proper due diligence.

73. The said provision empowers the Plaintiff to amend its own pleadings where such amendment may not change the character of a suit and no prejudice or harm is inflicted upon the opposite party.

74. As per the settled position of law, a bonafide amendment application is vital for the adjudication of real questions in dispute and therefore, should be allowed without taking into account the negligence on part of the

75. The scope of allowing the amendment under the above said provision has been discussed by the Hon‟ble Supreme Court in a catena of judgments, whereby, the Hon‟ble Court affirmed the idea of liberal interpretation of an application filed under Order VI Rule 17 of the CPC.

76. In Rajesh Kumar Aggarwal v. K.K. Modi,[2] the Hon‟ble Supreme Court discussed the aforesaid principle in the following manner:

states that such amendments should be necessary for the purpose of determining the real question in controversy between the parties. The proviso enacts that no application for amendment should be allowed after the trial has commenced, unless the court comes to the conclusion that in spite of due diligence, the party could not have raised the matter for which amendment is sought before the commencement of the trial.

15. The object of the rule is that the courts should try the merits of the case that come before them and should, consequently, allow all amendments that may be necessary for determining the real question in controversy between the parties provided it does not cause injustice or prejudice to the other side.

16. Order 6 Rule 17 consists of two parts. Whereas the first part is discretionary (may) and leaves it to the court to order amendment of pleading. The second part is imperative (shall) and enjoins the court to allow all amendments which are necessary for the purpose of determining the real question in controversy between the parties.

17. In our view, since the cause of action arose during the pendency of the suit, proposed amendment ought to have been granted because the basic structure of the suit has not changed and that there was merely change in the nature of relief claimed. We fail to understand if it is permissible for the appellants to file an independent suit, why the same relief which could be prayed for in the new suit cannot be permitted to be incorporated in the pending suit.

18. As discussed above, the real controversy test is the basic or cardinal test and it is the primary duty of the court to decide whether such an amendment is necessary to decide the real dispute between the parties. If it is, the amendment will be allowed; if it is not, the amendment will be refused. On the contrary, the learned Judges of the High Court without deciding whether such an amendment is necessary have expressed certain opinions and entered into a discussion on merits of the amendment. In cases like this, the court should also take notice of subsequent events in order to shorten the litigation, to preserve and safeguard the rights of both parties and to subserve the ends of justice. It is settled by a catena of decisions of this Court that the rule of amendment is essentially a rule of justice, equity and good conscience and the power of amendment should be exercised in the larger interest of doing full and complete justice to the parties before the court.

19. While considering whether an application for amendment should or should not be allowed, the court should not go into the correctness or falsity of the case in the amendment. Likewise, it should not record a finding on the merits of the amendment and the merits of the amendment sought to be incorporated by way of amendment are not to be adjudged at the stage of allowing the prayer for amendment. This cardinal principle has not been followed by the High Court in the instant case.

20. We shall now consider the proposed amendment and to see whether it introduces a totally different, new and inconsistent case as observed by the Hon'ble Judges of the Division Bench and as to whether the application does not appear to have been made in good faith. We have already noticed the prayer in the Plaint and the application for amendment. In our view, the amendment sought was necessary for the purpose of determining the real controversy between the parties as the beneficiaries of the Trust. It was alleged that Respondent 1 is not only in exclusive possession of 57, 942 shares of GPI and the dividend received on the said shares but has also been and is still exercising voting rights with regard to these shares and that he has used the Trust to strengthen his control over GPI. Therefore, the proposed amendment was sought in the interest of the beneficiaries and to sell the shares and have the proceeds invested in government bonds and/or securities. A reading of the entire Plaint and the prayer made thereunder and the proposed amendment would go to show that there was no question of any inconsistency with the case originally made out in the Plaint. The court always gives leave to amend the pleadings of a party unless it is satisfied that the party applying was acting mala fide. There is a plethora of precedents pertaining to the grant or refusal of permission for amendment of pleadings. The various decisions rendered by this Court and the proposition laid down therein are widely known. This Court has consistently held that the amendment to pleading should be liberally allowed since procedural obstacles ought not to impede the dispensation of justice. The amendments sought for by the appellants have become necessary in view of the facts that the appellants being the beneficiaries of the Trust are not deriving any benefit from the creation of the Trust since 1991- 92 and that if the shares are sold and then invested in government bonds/securities the investment would yield a minimum return of 10-12%. It was alleged by the appellants that Respondent 1 is opposing the sale in view of the fact that if the said shares are sold after the suit is decreed in favour of the appellants, he will be the loser and, therefore, it is solely on account of the attitude on the part of Respondent 1 that the appellants have been constrained to seek relief against the same.

21. We shall now consider the argument of the learned Senior Counsel for the respondent on Sections 60 and 61 of the Trusts Act. It was submitted by the appellants that since Respondent 1 did not act in a bona fide manner as a result of which the appellants were compelled to file the suit before the High Court in the capacity of the beneficiaries of the Trust and that the amended Plaint is not alien and extraneous to the ambit and purview of Sections 60 and 61 of the Trusts Act.

22. We shall now consider the judgments cited by learned Senior Counsel for the appellants:

1. Ganesh Trading Co. v. Moji Ram [(1978) 2 SCC 91] This Court held that the main rules of pleadings in Order 6 CPC, 1908, show that the provision for the amendment of pleadings subject to such terms as to costs and giving to all parties concerned necessary opportunities to meet exact situations resulting from any amendment, are intended for promoting the ends of justice and not for defeating them. This Court further held that the amendment only sought to give notice to the defendant on facts which the Plaintiff would and could have tried to prove in any case. Such notice was given only by way of abundant caution so that no technical objection can be taken that what was sought to be proved was outside the pleadings.

2. Jai Jai Ram Manohar Lal v. National Building Material Supply [(1969) 1 SCC 869: AIR 1969 SC 1267] It was held that a party cannot be refused just relief merely because of some mistake, negligence, inadvertence or even infraction of the rules of procedure. The court always gives leave to amend the pleading of a party, unless it is satisfied that the party applying was acting mala fide, or that by his blunder he had caused injury to his opponent which may not be compensated for by an order of costs. However negligent or careless may have been the first omission and however late the proposed amendment, the amendment may be allowed if it can be made without injustice to the other side.

3. Ragu Thilak D. John v. S. Rayappan [(2001) 2 SCC 472] Sethi, J. speaking for the Bench has observed that the amendment sought would change the nature of the suit originally filed was not a reason for refusing application for amendment and that the dominant purpose of Order 6 Rule 17 was to minimise litigation and that the plea that the relief sought for by way of amendment was barred by time is arguable in the circumstances of the case. This Court further observed in para 5 as under: (SCC p. 473) ―5. After referring to the judgments in Charan Das v. Amir Khan [(1920) 47 IA 255: AIR 1921 PC 50], L.J. Leach & Co. Ltd. v. Jardine Skinner & Co. [1957 SCR 438: AIR 1957 SC 357], Ganga Bai v. Vijay Kumar [(1974) 2 SCC 393], Ganesh Trading Co. v. Moji Ram [(1978) 2 SCC 91] and various other authorities, this Court in B.K. Narayana Pillai v. Parameswaran Pillai [(2000) 1 SCC 712] held: (SCC p. 715, para 3) ‗3. The purpose and object of Order 6 Rule 17 CPC is to allow either party to alter or amend his pleadings in such manner and on such terms as may be just. The power to allow the amendment is wide and can be exercised at any stage of the proceedings in the interests of justice on the basis of guidelines laid down by various High Courts and this Court. It is true that the amendment cannot be claimed as a matter of right and under all circumstances. But it is equally true that the courts while deciding such prayers should not adopt a hypertechnical approach. Liberal approach should be the general rule particularly in cases where the other side can be compensated with the costs. Technicalities of law should not be permitted to hamper the courts in the administration of justice between the parties. Amendments are allowed in the pleadings to avoid uncalled for multiplicity of litigation.‘ ‖

23. We shall now consider the judgments relied on by Mr Ganesh, learned Senior Counsel for the respondent.

1. K.K. Modi v. K.N. Modi [(1998) 3 SCC 573] This civil appeal was filed by K.K. Modi against K.N. Modi and others and this judgment was relied on by Mr Ganesh to show that the parties are litigating before different forums and that the directions issued by this Court pending final disposal of the suit in the Delhi High Court.

2. Kanda v. Waghu [(1949) 77 IA 15: AIR 1950 PC 68] The Privy Council, in the above case, has observed as under: (IA pp. 21-22) The powers of amendment must be exercised in accordance with legal principles. An amendment which involves the setting up of a new case and alters the real matter in controversy between the parties cannot be allowed. (AIR p. 68)

3. Kumaraswami Gounder v. D.R. NanjappaGounder [AIR 1978 Mad 285 (FB)] Likewise, the above case was cited in regard to the permissibility of amendment by introducing a new cause of action. This Full Bench decision of the Madras High Court was cited for the proposition that when the amendment sought for sets up a totally different cause of action which ex facie cannot stand in line with the original pleading, the courts cannot allow such application for amendment and that a pleading could only be amended if it is to substantiate, elucidate and expand the pre-existing facts already contained in the original pleadings; but under the guise of an amendment a new cause and a case cannot be substituted and the courts cannot be asked to adjudicate the alternative case instead of the original case.‖

77. The position of law regarding powers granted to the Civil Courts for amendment of a Plaint was again discussed by the Hon‟ble Supreme Court in J. Samuel v. Gattu Mahesh, 3 where the Hon‟ble Court discussed the situations in which an application seeking amendment can be rejected. The relevant part of the said judgment reads as under:

amend his pleadings in such manner and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties: Provided that no application for amendment shall be allowed after the trial has commenced, unless the court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial.‖ The said provision was omitted by the Civil Procedure Code (Amendment) Act, 1999.

12. Section 16 of the Amendment Act reads as under: ―16.Amendment of Order 6.—In the First Schedule, in Order 6, — (i)-(ii)***

(iii) Rules 17 and 18 shall be omitted.‖

13. After stiff resistance by the litigants and the members of the Bar, again Order 6 Rule 17 was reintroduced with proviso appended therein. As per the said proviso, no application for amendment shall be allowed after the trial has commenced. However, there is an exception to the said Rule i.e. if the court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of the trial, such application for amendment may be allowed.

14. Before proceeding further, it is also useful to refer to Section 16(c) of the Specific Relief Act which reads as under: ―16. Personal bars to relief.—Specific performance of a contract cannot be enforced in favour of a person— (a)-(b)***

(c) who fails to aver and prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant. Explanation.—For the purposes of clause (c), —

(i) where a contract involves the payment of money, it is not essential for the Plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court;

(ii) the Plaintiff must aver performance of, or readiness and willingness to perform, the contract according to its true construction.‖ It is clear that in a suit for specific performance of a contract, unless there is a specific averment that he has performed or has always been ready and willing to perform the essential terms of the contract, the suit filed by him is liable to be dismissed. In other words, in the absence of the abovesaid claim that he is always ready and willing to perform his part of the contract, the decree for specific performance cannot be granted by the court.

15. In this legal background, we have to once again recapitulate the factual details. In the case on hand, Suit OS No. 9 of 2004 after prolonged trial came to an end in September 2010. The application for amendment under Order 6 Rule 17 CPC was filed on 24-9-2010, that is, after the arguments were concluded on 22-9-2010 and the matter was posted for judgment on 4-10-2010. We have already mentioned that Section 16(c) of the Specific Relief Act contemplates that specific averments have to be made in the Plaint that he has performed and has always been willing to perform the essential terms of the Act (sic contract) which have to be performed by him. This is an essential ingredient of Section 16(c) and the form prescribes for the due performance. The proviso inserted in Rule 17 clearly states that no amendment shall be allowed after the trial has commenced except when the court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of the trial.

16. As stated earlier, in the present case, the amendment application itself was filed only on 24-9-2010 after the arguments were completed and the matter was posted for judgment on 4-10-2010. On proper interpretation of the proviso to Rule 17 of Order 6, the party has to satisfy the court that it could not have discovered that ground which was pleaded by amendment, in spite of due diligence. No doubt, Rule 17 confers power on the court to amend the pleadings at any stage of the proceedings. However, the proviso restricts that power once the trial has commenced. Unless the court satisfies (sic itself) that there is a reasonable cause for allowing the amendment, normally the court has to reject such a request.

17. An argument was advanced that since in the legal notice sent before the filing of the suit, there is reference to readiness and willingness and the Plaintiff has also led in evidence, nothing precluded the court from entertaining the said application which we are unable to accept in the light of Section 16(c) of the Specific Relief Act as well as proviso to Order 6 Rule 17. The only reason stated so in the form of an affidavit is omission by ―type mistake‖. Admittedly, it is not an omission to mention a word or an arithmetical number. The omission is with reference to specific plea which is mandated in terms of Section 16(c) of the Specific Relief Act.

18. The primary aim of the court is to try the case on its merits and ensure that the rule of justice prevails. For this the need is for the true facts of the case to be placed before the court so that the court has access to all the relevant information in coming to its decision. Therefore, at times it is required to permit parties to amend their Plaints. The court's discretion to grant permission for a party to amend his pleading lies on two conditions, firstly, no injustice must be done to the other side and secondly, the amendment must be necessary for the purpose of determining the real question in controversy between the parties. However, to balance the interests of the parties in pursuit of doing justice, the proviso has been added which clearly states that: ―… no application for amendment shall be allowed after the trial has commenced, unless the court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial.‖

19. Due diligence is the idea that reasonable investigation is necessary before certain kinds of relief are requested. Duly diligent efforts are a requirement for a party seeking to use the adjudicatory mechanism to attain an anticipated relief. An advocate representing someone must engage in due diligence to determine that the representations made are factually accurate and sufficient. The term ―due diligence‖ is specifically used in the Code so as to provide a test for determining whether to exercise the discretion in situations of requested amendment after the commencement of trial.

20. A party requesting a relief stemming out of a claim is required to exercise due diligence and it is a requirement which cannot be dispensed with. The term ―due diligence‖ determines the scope of a party's constructive knowledge, claim and is very critical to the outcome of the suit.

21. In the given facts, there is a clear lack of ―due diligence‖ and the mistake committed certainly does not come within the preview of a typographical error. The term ―typographical error‖ is defined as a mistake made in the printed/typed material during a printing/typing process. The term includes errors due to mechanical failure or slips of the hand or finger, but usually excludes errors of ignorance. Therefore, the act of neglecting to perform an action which one has an obligation to do cannot be called as a typographical error. As a consequence the plea of typographical error cannot be entertained in this regard since the situation is of lack of due diligence wherein such amendment is impliedly barred under the Code.

23. Though the counsel for the appellants have cited many decisions, on perusal, we are of the view that some of those cases have been decided prior to the insertion of Order 6 Rule 17 with proviso or on the peculiar facts of that case. This Court in various decisions upheld the power that in deserving cases, the Court can allow delayed amendment by compensating the other side by awarding costs. The entire object of the amendment to Order 6 Rule 17 as introduced in 2002 is to stall filing of application for amending a pleading subsequent to the commencement of trial, to avoid surprises and that the parties had sufficient knowledge of other's case. It also helps checking the delays in filing the applications. [Vide AniglaseYohannan v. Ramlatha [(2005) 7 SCC 534], Ajendraprasadji N. Pandey v. Swami Keshavprakeshdasji N. [(2006) 12 SCC 1], Chander Kanta Bansal v. Rajinder Singh Anand [(2008) 5 SCC 117], RajkumarGurawara v. S.K. Sarwagi and Co. (P) Ltd. [(2008) 14 SCC 364], Vidyabai v. Padmalatha [(2009) 2 SCC 409: (2009) 1 SCC (Civ) 563] and Man Kaur v. Hartar Singh Sangha [(2010) 10 SCC 512: (2010) 4 SCC (Civ) 239].]‖

78. Recently, the Hon‟ble Supreme Court confirmed the above said principles in the case of Basavaraj v. Indira[4] and discussed the scope of amendment of a Plaint by way of filing an application under Order VI Rule 17 of the CPC and held as under:

was oversight. The same cannot be accepted as a ground to allow any amendment in the pleadings at the fag end of the trial especially when admittedly the facts were in knowledge of Respondents 1 and 2-Plaintiffs.

11. The relevant paragraphs of the application seeking amendment of the Plaint are reproduced hereunder: ―2. That, due to oversight and by mistake the Plaintiff was unable to sought relief declaration of decree as null and void and unable to pay required court fee some unavoidable circumstances and the proposed amendment is very essential for deciding the matter in dispute. 3.***

4. That, if the proposed amendment is allowed no prejudice will be cause to the other side, on the other hand if it is not allowed then the deponent will be put to great loss and will also leads multiplicity of litigations. Hence it is just and proper to allow the proposed amendment to meet the ends of justice.‖ (sic)

12. This Court in M. Revanna v. Anjanamma [M. Revanna v. Anjanamma, (2019) 4 SCC 332: (2019) 2 SCC (Civ) 338] opined that an application for amendment may be rejected if it seeks to introduce totally different, new and inconsistent case or changes the fundamental character of the suit. Order 6 Rule 17CPC prevents an application for amendment after the trial has commenced unless the Court comes to the conclusion that despite due diligence the party could not have raised the issue. The burden is on the party seeking amendment after commencement of trial to show that in spite of due diligence such amendment could not be sought earlier. It is not a matter of right. Para 7 thereof is extracted below: (SCC p. 335) ―7. Leave to amend may be refused if it introduces a totally different, new and inconsistent case, or challenges the fundamental character of the suit. The proviso to Order 6 Rule 17CPC virtually prevents an application for amendment of pleadings from being allowed after the trial has commenced, unless the court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of the trial. The proviso, to an extent, curtails absolute discretion to allow amendment at any stage. Therefore, the burden is on the person who seeks an amendment after commencement of the trial to show that in spite of due diligence, such an amendment could not have been sought earlier. There cannot be any dispute that an amendment cannot be claimed as a matter of right, and under all circumstances. Though normally amendments are allowed in the pleadings to avoid multiplicity of litigation, the court needs to take into consideration whether the application for amendment is bona fide or mala fide and whether the amendment causes such prejudice to the other side which cannot be compensated adequately in terms of money.‖

13. Initially, the suit was filed for partition and separate possession. By way of amendment, relief of declaration of the compromise decree being null and void was also sought. The same would certainly change the nature of the suit, which may be impermissible.

14. This Court in Revajeetu case [Revajeetu Builders & Developers v. Narayanaswamy & Sons, (2009) 10 SCC 84: (2009) 4 SCC (Civ) 37] enumerated the factors to be taken into consideration by the court while dealing with an application for amendment. One of the important factor is as to whether the amendment would cause prejudice to the other side or it fundamentally changes the nature and character of the case or a fresh suit on the amended claim would be barred on the date of filing the application.

15. If the amendment is allowed in the case in hand, certainly prejudice will be caused to the appellant. This is one of the important factors to be seen at the time of consideration of any application for amendment of pleadings. Any right accrued to the opposite party cannot be taken away on account of delay in filing the application.‖

79. Upon perusal of the above discussed cases, the scope regarding amendment of a Plaint is crystal clear where the Courts are duty bound to allow such amendment if the same is essential for dispensation of justice to the parties.

80. The rule of amendment has been termed as a rule of justice, equity and good conscience, and the same needs to be exercised in the larger interest of doing full and complete justice to the parties before the Court.

81. In the above cited judgments, it is clarified by the Hon‟ble Court that under normal circumstances, the amendment sought in a Plaint cannot be done if the trial has already commenced, until and unless the Court arrives to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of the trial.

82. The perusal of the above cases also make it evident that the term due diligence, as provided for in the provision, has been emphasized, whereby, the Hon‟ble Court deemed it appropriate to hold that an application seeking amendment can be rejected if the amendment sought by the parties can materially change the entire suit.

83. Therefore, in view of the foregoing discussion, it is amply clear that the scope of Order VI Rule 17 of the CPC is wide and the Plaintiff can seek amendment to the Plaint, however, is legally bound to prove the bona fides for the same.

84. Having dealt with the scheme of the provision, this Court now deems it appropriate to deal with the issue in instant application.

85. During the course of the proceedings in the present application, even though the learned senior counsel for the Plaintiff had apprised this Court regarding the preference to be given for adjudication of the present application before the application filed for rejection of the Plaint, an objection with regard to adjudication of the same before the adjudication of the applications filed for vacation of the stay has been raised on behalf of the defendant Bank.

86. As mentioned earlier, Mr. Vikram Nankani had vehemently opposed the said submission and prayed for adjudication of the application filed for amendment of the Plaint and argued that the settled position of law requires the Court to adjudicate the application filed for amendment of the Plaint before any other application. To buttress his arguments, the learned senior counsel has placed reliance upon the judgment of the Division Bench of this Court in the case of Anita Kumari Gupta v. Ved Bhushan, (Supra). The relevant parts of the said judgment read as under: ―8. The appellant/Plaintiff, within days of filing of the written statement aforesaid, filed I.A. No. 8823/2011 for amendment of the Plaint, inter alia pleading, (a) that she is the youngest sibling; (b) that soon after marriage, she had settled abroad, though had retained physical possession of one room on the ground floor and one room on the first floor of the property, where her belongings remained; (c) that the appellant/Plaintiff was always under the impression that the property was owned by her father and was inherited by the mother from the father and had only then learnt that it, from the beginning, was in the name of the mother; (d) that after the demise of the mother, there were extensive discussions about sharing of the property; (e) that she totally trusted the respondents/defendants and had also lent a sum of Rs. 25 lakhs to them in the year 1994 (i.e. after the demise of the mother); (f) that the respondents/defendants had taken her signatures on blank papers on the pretext of the same being required for common activities and it appears that the said papers had been misused by placing the same on the file of the DDA; and, (g) that she had become aware of the alleged Will of the mother for the first time then only and to incorporate the said facts in the Plaint.

9. The respondents/defendants, besides contesting the said application for amendment, also filed I.A. No. 14420/2011 under Order VII Rule 11 CPC for rejection of the Plaint, on the ground that the appellant/Plaintiff had not appropriately valued the same and not paid the appropriate court fees thereon and on the ground that the appellant/Plaintiff having given her no objection before the DDA to the mutation of the lease of the land underneath the property in the names of the respondents/defendants No. 1 to 3, 5 & 6 on the basis of the Will of the mother, the suit on the premise that the mother had died intestate, was false.

10. The learned Single Judge, in the impugned order dated 9th July, 2013, first dealt with the application of the respondents/defendants under Order VII Rule 11 CPC and observing that: ―There is no need for DDA to resort any fabrication. The files appear to have been continuously numbered. There does not appear to be any sign of a tempering. Significantly, there is no averment in the Plaint that the Plaintiff was asked to sign blank papers. This stand is plainly an afterthought. On the other hand the Plaintiff has no satisfactory explanation as to what she was doing all these years after the death of her mother, and after the mutation was carried out in favour of the respondents/defendants No. 1 to 4 admittedly to her knowledge. The suit is barred by laches. Further, the Court is satisfied that the Plaintiff has not come with clean hand and has suppressed material facts of her having agreed to the mutation of the suit property in favour of the defendants No. 1 to 4.‖ allowed the application holding that the Plaint did not disclose any cause of action. The learned Single Judge consequently dismissed the application for amendment of the Plaint.

11. We are not only unable to agree with the reasoning given by the learned Single Judge for allowing the application of the respondents/defendants under Order VII Rule 11 CPC and in the facts aforesaid, do not find any ground for rejection of the Plaint to have been made out but are also of the view that the order is erroneous also for dealing first with the application under Order VII Rule 11 CPC, when an application filed earlier in point of time for amendment of the Plaint was pending consideration. We are of the opinion that once an application for amendment of the Plaint has been filed, even if after the filing of an application under Order VII Rule 11 CPC, ordinarily the application for amendment of the Plaint is to be considered first and it is only thereafter, if the amendment were to be refused, that the application for rejection of the Plaint as originally filed, is to be considered; needless to state that if the amendment is allowed, it has to be seen, whether the ground on which rejection is sought survives. It was so held by this Court as far back as in Wasudhir Foundation v. C. Lal & Sons 45 (1991) DLT 556 by aptly observing that Courts allow amendments, not really as a matter of power but in performance of loftier duty to deliver substantial justice and the ouster of Order VI Rule 17 CPC will throttle the very life line of Order VII Rule 11 and instead of promoting, would defeat the ends of justice. Alas, neither counsel cited the law before the learned Single Judge or before us.

12. Faced therewith, the counsel for the respondents/defendants contends that we may dispose of this appeal by setting aside the order allowing the application of the respondents/defendants under Order VII Rule 11 CPC and remand the matter to the learned Single Judge for considering the application for amendment of the Plaint in accordance with the principles applicable thereto.

13. Though the modus suggested by the counsel for the respondents/defendants is a possible one but having heard the counsels at length including on the aspect of amendment, we are of the view that rather than perpetuating duplicity by allowing the time of the learned Single Judge also to be spent on the application for amendment, we only should deal therewith, dismissal thereof also being in any case part of the order impugned in this appeal.

14. The amendment sought was at a pre-trial stage. It cannot also be doubted that the amendment sought is necessary for adjudication of the matter in controversy. The counsel for the respondents/defendants however contends that the principles of amendment of the Plaint are different from the principles of amendment of the written statement (with which legal principle, there can be no dispute); that the amendment is in withdrawal of the admission and changes the very nature and character of the suit and ought not to be allowed. Reliance in this regard is placed on:

(I) Modi Spinning & Weaving Mills Co. Ltd. v. Ladha Ram & Co. AIR 1977 SC 680;

(II) Kali Charan v. Ishwar Dass (2002) 61 DRJ 401 (DB);

(III) Vivek Narayan Pal v. Sumitra Pal ILR (2010) IV

(IV) Usha Balashaheb Swami v. Kiran Appaso Swami AIR

(V) Joginder Singh v. Gurdeep Singh AIR 2007 Delhi 278;

(VI) Revajeetu Builders and Developers v.

(VII) Rameshkumar Agarwal v. Rajmala Exports Pvt. Ltd.

(VIII) B.K.N. Pillai v. P. Pillai AIR 2000 SC 614;

(IX) The Municipal Corporation of Greater Bombay v.

(X) Rajan Suri v. State 125 (2005) DLT 433;

(XI) Judgment dated 1st November, 2013 in FAO(OS) NO. 271/2013 titled Nripendra Kumar Aggarwal v. Surender Lal Aggarwal; and,

(XII) ValluriJaganmohiniSeetharama Lakshmi v.

15. We are unable to agree. In the Plaint as filed, there is no admission of the Will of the mother. Rather, it is expressly stated that the mother died intestate. Similarly, there is no admission in the Plaint, of the property having been mutated in the names of the respondents/defendants or with the consent of the appellant/Plaintiff. The question thus, of withdrawal of any admission does not arise. The only question for consideration is, whether in the face of the appellant/Plaintiff, while seeking the amendment, not disputing her signatures on the papers in the record of the DDA, it can be stated that the appellant/Plaintiff has to suffer for not disclosing in the Plaint as originally filed, the factum of having signed papers in blank and giving the same to the respondents/defendants.

16. We are of the view that no case for denying the amendment on the said ground is made out. The appellant/Plaintiff is not stating that such blank signed papers were handed over in respect of anything to be done qua the property with which the suit is concerned. The plea sought to be taken is, of the signatures on the blank papers having been taken on the pretext of any common activities of the parties. Such a plea is not of a kind which is not to be put to trial. It is a different matter that ultimately the appellant/Plaintiff may fail in proving the same. However, the appellant/Plaintiff when confronted with such a defence is entitled to take the plea to meet such defence and which plea can be adjudicated only after trial and cannot be rejected at the stage of Order VI Rule 17 CPC only.

17. As far as the contention, of the amendment changing the nature and character of the suit is concerned, we may notice that the suit as originally filed was for partition of the property, on the ground of the mother of the parties having died intestate. The appellant/Plaintiff in such a suit, when met with the defence of a Will of the common predecessor, is entitled to either in the replication or by way of amendment of the Plaint, plead facts constituting a challenge to the Will. Therefrom, it cannot be said that the nature and character of the suit has changed.

18. Though the counsel for the respondents/defendants has handed over the judgments aforesaid but during the hearing has referred only to Lala Pancham and Usha Balashaheb Swami supra. Lala Pancham is cited to contend that where there is not the slightest basis in the Plaint as originally stood to make out a case of fraud, amendment to make out such a case has to be disallowed. It is argued that the plea of the appellant/Plaintiff by way of amendment of her having signed papers in blank and the same having been used for mutation, is a plea of fraud and since there was no basis therefor in the suit as originally filed, the said amendment cannot be allowed. However, reliance placed on the said judgment de hors the facts thereof, is misconceived. The Supreme Court in that case was concerned with, a suit by tenants for injunction against demolition by the landlord for the reason of the tenancy premises having been declared as dangerous. The suit was dismissed as untenable, since the demolition was at the instance of the Municipality. At the appellate stage, the Plaint was sought to be amended to plead that the demolition order of the Municipality was fraudulently induced by the landlord. It was such an amendment which was disallowed holding that in the suit as originally filed, there was no challenge to the order of the Municipality. The situation here is entirely different. Similarly, Usha Balashaheb Swami supra is relied only to contend that the general principles of amendment of the written statement are different from that applicable to amendment of the Plaint. However, the same does not amount to laying down that the amendment of Plaint can never be allowed.

19. We are therefore of the view that the learned Single Judge, has erred in dismissing the application for amendment of the Plaint without testing the same on the anvil of the legal principles applicable thereto.

20. Though in view of the aforesaid, the ground of rejection of the Plaint disappears but we may otherwise also observe that the learned Single Judge, in exercising power under Order VII Rule 11 CPC also, has gone contrary to the settled principle of law that at the stage of Order VII Rule 11 CPC, the Plaint and only the Plaint and the documents filed therewith are to be seen and not the defence thereto. Reference if any required can be made to the dicta of the Division Bench of this Court in Texem Engineering v. Texcomash Export 179 (2011) DLT 693. The learned Single Judge has however held the Plaint to be not disclosing any cause of action on the basis of the defence of the respondents/defendants.

21. Not only so, there is no presumption lest rebuttable presumption as drawn by the learned Single Judge that there is no need for DDA to resort to any fabrication. Further, rejection of the Plaint is on factual findings of the mutation in the records of the DDA being genuine and honest inspite of challenge thereto and which factual finding could not have been arrived at without trial. Rather, the procedure for mutation adopted by the DDA in the present case is found to be strange in the experience of at least one of us (Rajiv SahaiEndlaw, J.) which is that the DDA, for such mutation, insists upon the affidavits, undertakings and indemnities of all the natural heirs and does not record statements of the natural heirs on its file as is stated to have been done in the present case. It is thus to be determined at trial, whether the statement attributed to the appellant/Plaintiff and recorded admittedly not in the hand of the appellant/Plaintiff but in the hand of some official of the DDA, is of the appellant/Plaintiff or not, though bearing the signature of the appellant/Plaintiff. Significantly, the said statement is not on oath as indeed the said official of the DDA was not entitled and empowered to administer. The possibility of a blank piece of paper bearing the signature of the appellant/Plaintiff being used for the purpose of recording such a statement of the appellant/Plaintiff, instead of accepted procedure of requiring the appellant/Plaintiff to furnish affidavit and indemnity bond, cannot be ruled out.

22. The counsel for the respondents/defendants has also contended that the impugned order was made after examining the file of the DDA summoned at the instance of the appellant/Plaintiff herself.

23. The same would however not make any difference. Undoubtedly, the counsel for the appellant/Plaintiff when faced with the argument of the counsel for the respondents/defendants of appellant/Plaintiff having participated in mutation, while denying submitted that record of DDA can be requisitioned. However the same, cannot estopp the appellant/Plaintiff from controverting the said record or explaining the same.

24. Though the counsels have not argued but we may notice that the learned Single Judge has besides the aforesaid reason, also given the reason of there being no satisfactory explanation for the delay in filing the suit and of laches, for rejecting the Plaint. The same is however without any discussion on, which Article of the Schedule to the Limitation Act, 1963 applies. Substantive rights in properties cannot be defeated by laches. A suit by a co-owner for partition can be defeated on the ground of limitation, only by pleading ouster and the other co-owner having become exclusive owner of the property by adverse possession and which is not the plea of the respondents/defendants.

25. We may further notice that though the respondents/defendants have also raised the ground of the suit being not appropriately valued for the purposes of court fees and jurisdiction and appropriate court fees having not been paid, for rejection of the Plaint but neither was the same pressed before the learned Single Judge and has not been given as a ground for rejection of the Plaint nor has the counsel for the respondents/defendants argued so before us. We may however refer to the judgment dated 2nd February, 2012 of the Division Bench of this Court in FAO(OS) No. 183/2006 titled Sonu Jain v. Rohit Garg as per which also and in view of the averments in the Plaint, the same does not constitute a ground for rejection of the Plaint.

26. We accordingly allow the appeal, set aside the order dated 9th July, 2013 of the learned Single Judge rejecting the Plaint as well as the order declining the amendment sought by the appellant/Plaintiff and remand the suit for decision in accordance with law. Accordingly, the application for amendment of Plaint is allowed and the application for rejection of the Plaint is dismissed.

27. The parties to appear before the learned Single Judge on 7th July, 2014.

28. The suit file if requisitioned in this appeal, be put up before the learned Single Judge on the same date..‖

87. In the written submissions filed by the Plaintiff/applicant, reliance has been placed upon the judgment of the co-ordinate bench in the case of Roche Products (India) Pvt. Ltd. and Ors. v. Drugs Controller General of India and Ors[5] whereby, the co-ordinate bench deemed it appropriate to adjudicate the application filed for amendment of the Plaint before adjudication of any other application.

88. The written submissions filed by the Plaintiff/applicant also places reliance upon the judgment rendered by the co-ordinate bench in the case of Sukruti Dugal v. Jahnavi Dugal, 6 whereby, it touched upon the necessity to deal with the application filed for amendment before adjudication of the application filed for rejection of the Plaint.

89. Upon perusal of the relevant extracts of the cases cited by the Plaintiff, there cannot be an iota of doubt about whether an application filed under Order VI Rule 17 of the CPC needs to be adjudicated first or not.

90. Therefore, the above cited judgments make the position of law clear and the application filed for amendment of Plaint is required to be adjudicated before any application filed by the parties. The premise of the same is based upon the fact that the same would prevent multiplicity of litigation.

91. Having dealt with the settled position of law regarding the objection raised by Mr. Makkar, this Court will now address whether there is merit in the instant application seeking amendment of the Plaint.

92. On the said aspect, the learned senior counsel for the Plaintiff, on instructions submitted that the main ground for filing of the instant suit against the Yes Bank was the violation of the Agreement, executed between the parties and since the other lender Banks have subsequently issued similar notices as issued by the Yes Bank, it becomes imperative for the Plaintiff to seek same prayer against the other defendant Banks as well.

93. In response to the above said contention, Mr. Makkar, learned senior counsel for the defendant No.6 submitted that the amendment of the Plaint is not required as the issue for consideration before this Court is regarding recovery of debts from the Plaintiff and since the banks have already declared the accounts of the Plaintiff as NPA, the appropriate forum for such adjudication would be the DRT and not this Court.

94. In addition to the above said submission, the learned senior counsel also submitted that the defendant No. 6 and 7 have already filed the application for rejection of the Plaint under Order VII Rule 11 of the CPC and therefore, the amendment, even if allowed, would not serve any purpose as this Court does not have the jurisdiction to adjudicate the dispute between the parties in the captioned suit.

95. The above said submissions were also supported by Mr. Rattan, learned counsel appearing for the defendant No. 7.

96. Pursuant to such objection taken by the learned counsel for the defendant Banks, Mr. Vikram Nankani submitted that the issue pending for adjudication before this Court is not related to the recovery of the debts, rather, the Plaint was originally filed for specific performance of the Agreements entered into by the parties.

97. On the aspect of amendment of Plaint at this stage, Mr. Nankani referred to the judgment dated 3rd March, 2023, passed by this Court whereby, this Court had impleaded the defendants No. 6-9 as the parties to the captioned suit on the prima facie satisfaction that the said parties are necessary and proper parties to the suit.

98. The position regarding amendment of the Plaint is well settled and the scope and ambit of the powers conferred to this Court while adjudicating an application under Order VI Rule 17 of the CPC has been already explained in the foregoing paragraphs.

99. Therefore, the only limited question for adjudication before this Court is whether the amendment sought by the Plaintiff changes the nature of suit or not.

100. By way of the instant application, the Plaintiff has sought to amend the Plaint in the following manner: ―..16. That therefore, the Plaintiff seeks liberty of this Hon‘ble Court to amend the captioned Plaint as follows: a. After Paragraph 5B of the Plaint, the following Paragraph may be added: ―5C. That this Hon‘ble Court during by order dated 24.02.2022 (‘Stay Order’), held that prima facie it was Defendant No.1 who had obstructed the implementation of the OTR. Consequently this Hon‘ble Court was pleased to stay the operation of the Impugned Notice, which has not been vacated or modified till date. 5D. That during the pendency of this Suit and during the operation of the Stay Order, Defendant Nos. 7 and 8 issued loan recall notices on 08.07.2022 and 06.05.2022(‘Subsequent Recall Notices’), on the same grounds as the Impugned Notice. Defendant No.6 has even declared the Plaintiff‘s loan accounts as Non-Performing Assets (‘NPA’) with effect from 31.12.2020. On this basis, Defendant No. 6 has inter alia invoked the guarantees executed on behalf of the Plaintiff by notices dated 07.02.2023. 5E. That' this is even though Defendant Nos. 6 to 8 were aware of the Stay Order, which is evident from minutes of the Joint Lenders Meetings (‘JLM’ )held on 14.03.2022, 14.09.2022 and12.12.2022. 5F. That these actions of Defendant Nos. 6 to 8 against the Plaintiff, are on the erroneous basis that the OTR has not been implemented. This is contrary to the admitted position of Defendant Nos. 6 and 7 as recorded during the JLM held on24.09.2021 that the OTR has been implemented. Thereafter as per the Minutes of the JLM held on 14.03.2022, the Lead Bank i.e. Defendant No. 6 has clarified that the OTR was implemented by majority lenders. This is also contrary to the conduct of Defendant Nos. 6 and 7 who have funded the FITL accounts of the Plaintiff on the basis that the OTR stands implemented. Notably, each of the JLMs were attended by duly authorized representatives of each of Defendant Banks. Further, the minutes of these meetings were finalized after due approval and authorization of each of the Defendant banks. 5G. That clearly, the Subsequent Recall Notices, declaration of the Plaintiffs‘ accounts as NPA by Defendant Nos. 6 to 8 and all consequent actions including invocation of the guarantees executed on behalf of the Plaintiff, are illegal and liable to be set aside.‖ b. After Paragraph 9 of the Plaint, the following Paragraphs "9B. That the Defendant No. 6 is Bank of Maharashtra Ltd., a public limited company having commercial banking license under the Banking Regulation Act, 1949 (hereinafter referred to as ‗Lead Bank‘ or ‗Defendant Banks‘); 9C. That the Defendant No. 7 is the Punjab National Bank Ltd. a public limited company having commercial banking license under the Banking Regulation Act, 1949. 9D. That the Defendant No. 8 is the Axis Bank Ltd., a public limited company having commercial banking license under the Banking Regulation Act, 1949. 9E. That the Defendant No. 9 is the Exclusive Capital Ltd., a public limited company incorporated under the Companies Act, 1956. By Assignment Agreement dated 28.12.2022, Indusind Bank Ltd., the erstwhile lender of the Plaintiff, has assigned the loans in respect of the Plaintiff to Defendant No.9. 9F. That the banks/ lenders/ creditors of the Plaintiff i.e. Defendant Nos. 1, 6 to 8 are collectively referred as or ‗Defendant Bank(s)‘ or ‗Banks‘. c. After Paragraph 13 of the Plaint, the following Paragraphs may be added: ―13A. That besides Defendant No.1, the Plaintiff inter alia availed facilities/loans from Defendant Nos. 6 to 8. The details of the loans are as follows: Facilities/Loans availed from the Lead Bank/Defendant No.6 Date of 15.05.2015 Sanction Letter amended on 29.07.2015 Date of Loan Agreement 30.07.2015 Loan Sanctioned Amount Rs. 197.75 Crores (Term Loan I) Rs. 44.86 Crore (Term Loan II) Securities executed Guarantee of Mr. Shiv Kumar Jatia Facilities/ Loans availed from Defendant No.7 Date of Sanction Letter 09.02.2018 Date of Loan Agreement 22.02.2018 Loan Sanctioned Amount Rs. 146.[2] Crores Securities executed (i) Personal Guarantee of Defendant No.2 dated 22.02.2018;

(ii) Deed of

(iii) Promoters

Undertaking dated 22.02.2018 Facilities/Loans availed from Defendant No.8 Date of Sanction Letter 29.09.2015 Date of Facility/Loan Agreement 30.09.2015 Loan Sanctioned Amount Rupee Term Loan converted to Foreign Currency Loan Agreement - Rs. 162 Crore Overdraft Facility - Rs. 15 Crore Securities executed i) Guarantee of Defendant No.2 dated 30.09.2015;

(ii) Deed of

(iii) Undertakings

30.09.2015

(iv) Demand

Promissory Note dated 30.09.2015 d. Paragraph 22 of the Plaint be amended as follows: ―That clearly therefore, as per the Defendant No.1, and Defendant Nos. 6 to 8, there was no default on the date of invocation of the resolution process i.e. December 9, 2020 or on the date of execution of the ICA.‖ e. After Paragraph 22 of the Plaint, the following Paragraph be added: ―22A. The terms of the facilities granted by each of the Defendant Banks were revised in accordance with the OTR finalized by the Defendant Banks as per the procedure prescribed in the Inter-Creditor Agreement and the RBI Circulars. The implementation of the OTR was also to be undertaken by the Defendant Banks in concert with each other in terms of the Inter-Creditor Agreement.‖ f. After Paragraph 23 of the Plaint, the following Paragraph be added: ―23A. That under the OTR Scheme, debts of the Plaintiff with Defendant Nos. 6 and 7 were also restructured. For this purpose, Defendant No. 6 issued a Revised Sanction Letter interms of the OTR on 03.06.2021, which was later amended by letter dated 07.06.2021. Similarly, Defendant No. 7 issued a Sanction Letter dated 04.06.2021, with the terms of the restructured debt of the Plaintiff. 23B. That consequently, besides the Plaintiff and DefendantNo.1, this Master Amendment Agreement was also executed by Defendant Nos. 6 to 7. Subsequently, Indusind Bank Ltd. also executed a Deed of Accession dated 18.01.2022 acceding to the terms of the Master Amendment Agreement.‖ g. Paragraph 29 of the Plaint be amended as follows: ―29. That in view of the stipulations contained in the TRA Agreement it is to be noted that the Lead Lender, has not pointed out any default under the TRA mechanism. Further, with regard to the pre-exiting loans availed from the Defendant Nos. 1. 6 to 8.the interest, if any, was to be funded by the Defendant Nos. 1. 6 to 8 themselves under the FITL mechanism.‖ h. After Paragraph 30 of the Plaint, the following Paragraph ―30A. That similarly, Defendant Nos. 6 to 7 have funded the respective FITL accounts of the Plaintiff for the period September 2021 till March 2022. This has been recorded in the minutes of the JLM held on 24.09.2021, 14.03, 202215.06.2022. Therefore, Defendant Nos. 6 and 7 have expressly and by their conduct admitted that the OTR has been implemented.‖ i. That after Paragraph 31 of the Plaint, the following Paragraph be added: ―31A. That clearly therefore, as per the RBI Circular and the ICA, the OTR Scheme was implemented by the Majority Lenders including Defendant Nos. 1, 6 and 7. Consequently, this implementation of the OTR Scheme is binding not only on Defendant Nos. 1, 6 and 7, but also Defendant No.8. This position is reiterated by the lenders during the JLM held on14.03.2022.‖ j. That after Paragraph 38 of the Plaint, the following ―38A. That without prejudice to the fact that the OTR was duly implemented as is recorded in the minutes of the JLMs with the Plaintiff and Defendant Banks, if there is any failure in effective implementation of the OTR, it is due to the default of the Defendant Banks, particularly the Lead Bank, to ensure that all steps are taken and all documents signed. This obligation of the Defendant Banks is express and clear from the terms of the ICA and other agreements executed between the Plaintiff and Defendant Banks in respect of the OTR.‖ k. That after Paragraph 42 of the Plaint, the following ―42 A. That clearly, the Defendant Banks having failed to comply with their obligations for effective implementation of the OTR under the ICA and agreements executed in respect of the OTR, have now sought to resile from their obligations under the OTR. The Defendant Banks have unilaterally declared the Plaintiff to be in default, on the same grounds which have been stayed by this Hon‘ble Court by order dated 24.02.2022. This is not only an attempt to overreach the directions of this Hon‘ble Court, but is also contrary to the express provisions of the ICA and other OTR Agreements, which do not permit any Bank to declare any default on part of the Plaintiff, unilaterally. 42B. It is clear that the failure and defaults of Defendant Banks has resulted in the present situation where all Defendant Banks have arbitrarily and illegally withdrawn from the OTR and undertaken coercive recovery action against the Plaintiff, despite the OTR being implemented by the Majority Lenders.‖

I. After Paragraph 54A of the Plaint, the following ―54B. That clearly, after filing of the Suit and after the Stay Order was passed, Defendant Nos. 6 to 8 have proceeded to take coercive action against the Plaintiff on the same grounds as Defendant No.1. This is even though Defendant Nos. 6 to 8were aware of the Stay Order during the JLM held on14.03.2022, 14.09.2022, 12.12.2022. Clearly, the actions of Defendant Nos. 6 to 8 are an afterthought, to resile from their obligations under the OTR Scheme, without any default of the Plaintiff. 54C. That in view of the foregoing, the Subsequent Recall Notices, declaration of the Plaintiffs‘ loan accounts as NPA with \retrospective effect and all consequent actions of Defendant Nos. 6 to 8, including invocation of the guarantees executed on behalf of the Plaintiff, are illegal. These actions are contrary to their admitted position that the OTR is implemented and is binding on them.‖ m. After Paragraph 55A of the Plaint, the following Paragraphs be added: ―55B. That the cause of action against Defendant No.6 arose in July 2022, when Defendant No.6 declared the Plaintiff‘s loan accounts as NPA with retrospective effect i.e. from 31.12.2020.The cause of action is still recurring since Defendant No.6, on the basis of this erroneous declaration, has taken coercive actions against the Plaintiff including invocation of guarantees executed by Defendant Nos. 3 and 4 on behalf of the Plaintiff by letters dated 07.02.2023. 55C. That the cause of action against Defendant No.7 arose on08.07.2022 when Defendant No.7 issued the loan recall notice against the Plaintiff. The cause of action against DefendantNo.7 is recurring and subsisting as on date since DefendantNo.7 has taken, and continues to take, coercive action against the Plaintiff on the basis of this loan recall notice dated08.07.2022. 55D. That the cause of action against Defendant No.8 arose on06.05.2022 when Defendant No.8 issued the loan recall notice against the Plaintiff. The cause of action against DefendantNo.6 is recurring and subsisting as on date since DefendantNo.6 has taken, and continues to take, coercive action against the Plaintiff on the basis of this loan recall notice dated06.05.2022.‖ n. The Prayer clause of the Plaint be amended as follows: ―(f) Pass a decree of specific performance in favour of the Plaintiff and against Defendant Nos. 1, 6 to 8 directing them to specifically perform their obligations under the approved One-Time Restructuring Resolution Plan and ancillary agreements‖ ―(i) Pass a decree of declaration in favour of the Plaintiff declaring the loan recall notices dated 08.07.2022 and06.05.2022 issued by Defendant Nos. 7 and 8, along with all subsequent actions, to be illegal and void; (j) Pass a decree of declaration in favour of the Plaintiff and against Defendant No.6 stating that the declaration of the Plaintiffs‘ loan accounts as Non-Performing Assets with retrospective effect from 31.12.2020 along with all subsequent actions, to be illegal and void; (k) Pass a decree of declaration in favour of the Plaintiff declaring the notices dated 07.02.2023 issued by DefendantNo.6 invoking the guarantees executed by Defendant Nos. 3and 4 on behalf of the Plaintiff and all consequent actions, to be illegal and void;

(l) Pass a decree of mandatory injunction in favour of the

Plaintiff directing Defendant Nos. 6, 7 and 8 to recall the notices dated 08.07.2022, 06.05.2022 and 07.02.2023 respectively, along with all subsequent actions undertaken by Defendant Nos. 6, 7 and 8 respective and execute all documents, acts or deeds necessary in relation thereto;

(m) Pass a decree of mandatory injunction in favour of the\Plaintiff restraining the Defendant Nos.[7] and 8 from acting upon, or taking any consequential action arising from the loan recall the notices dated 08.07.2022 and 06.05.2022respectively; (n) Pass a decree of mandatory injunction in favour of the Plaintiff restraining Defendant No.6 from acting upon, or taking any consequential action against the Plaintiff arising from the illegal declaration of the Plaintiffs‘ loan accounts as Non- Performing Assets with retrospective effect from 31.12.2020, in any manner whatsoever; (o) Pass a decree of mandatory injunction in favour of the Plaintiff restraining Defendant No.6 from acting upon, or taking any consequential action against the Plaintiff arising from the notices dated 07.02.2023 issued by Defendant No.6 invoking the guarantees executed by Defendant Nos. 3 and 4 on behalf of the Plaintiff, in any manner whatsoever; (p) Pass such other relief(s) as this Hon‘ble Court may deem fit and proper in the facts and circumstances of the case‖

17. That the principle issue pending adjudication before this Court concerns the status of the implementation of the OTR and the defaults, if any, by any party in such implementation. This issue will directly affect the lenders of the Plaintiff, Ae. Defendant Nos. 1, 6 to 9. Clearly, the nature of the Suit as on date, concerns not only Defendant No.1, but also all the lenders of the Plaintiff, Ae. Defendant Nos.[6] to 9.

18. That in this view, the aforesaid amendments sought in the Suit concerning Defendant Nos. 6 to 9, would not change the nature of the Suit. This position is fortified by the findings of this Hon‘ble Court by order dated 03.03.2023.

19. That the Applicant/Plaintiff will suffer irreparable harm and injury if this Application is rejected. On the contrary, no prejudice will be caused to the Defendants if this application is allowed.

20. That the present Application is bonafide and in the interest of justice.

21. In light of the aforesaid facts and circumstances this Hon'ble Court may be pleased to: a) Pass an order allow the present Application seeking amendment of the Plaint in the captioned matter; b) Pass an order taking on record the Amended Plaint filed along with this Application; and c) Pass any other order or orders that may deemed fit and proper in the interest of justice….‖

101. Upon perusal of the aforesaid contents of the amendment sought in the Plaint, it is made out that pursuant to impleadment of the defendant Banks in the captioned suit, the Plaintiff deemed it important to amend the suit and seek reliefs against the defendant Banks which was originally sought against the Yes Bank only.

102. Along with amendment in certain paragraphs of the Plaint, the Plaintiff has also sought amendment in the prayer, whereby, the relief for specific performance of the agreement has been sought against the defendants‟ No. 6-8.

103. The paragraph No. 16 onwards in the instant application provides details about the amendment sought by the Plaintiff in the original Plaint. The perusal of the said paragraphs makes it evident that the lender Banks had issued similar notices to the Plaintiff for recovery of the credit facility advanced to the Plaintiff and in pursuance of the same, the accounts of the Plaintiff were also declared as NPA.

104. At this stage, it is pertinent to note that the lender Banks were duly aware of the stay granted by the Predecessor Bench of this Court vide order February, 2022 and despite the same, they admittedly acted upon the decision taken for recovery of the loan which is allegedly in violation of the Agreement/s signed by the defendants with the Plaintiff.

105. In furtherance of the aforesaid decision of taking legal action against the Plaintiff, the defendants No.7 and 8 had issued the recall notices dated 8th July, 2022 and 6th May, 2022 and the same also amounts to violation of the rights of the Plaintiff as the Predecessor Bench of this Court had already provided an „interim relief‟ to the Plaintiff vide order dated 24th February,

2022.

106. Apart from the said amendments, the Plaintiff has also sought addition of certain paragraphs seeking similar reliefs against the other defendants as sought against the Yes Bank in the original Plaint.

107. As discussed in the foregoing paragraphs, the rule regarding amendment is settled where the provision empowering the parties to file for amendment of the Plaint also empowers the Courts to deal with such an application liberally until and unless the amendment sought by the Plaintiff changes the nature of suit and raises a different cause of action all together.

108. The perusal of the contents of the amendments sought by the Plaintiff in the instant application makes it evident that the need for amendment arises due to the impleadment of the parties i.e. defendant No. 6-8 in the present suit and extension of the stay order granted by the Predecessor Bench of this Court.

109. As a matter of practise, whenever a party, being a necessary party to a suit is subsequently impleaded by the Court, the Plaintiff is given the liberty to amend the Plaint and seek relief against the newly impleaded party. Therefore, the amendment to the Plaint becomes necessary for appropriate adjudication of the dispute among the parties.

110. In Asian Hotels (North) Ltd. v. Alok Kumar Lodha[7] the Hon‟ble Supreme Court discussed the principle regarding amendment of a Plaint and held as under:

8. Both the aforesaid applications were opposed by the defendant on the ground that:

8.1. The mortgage in question was in 1980s; there is no challenge to the said mortgage in the present suit and therefore, the same cannot be permitted now.

8.2. The Plaintiff has no right against the banks and financial institutions and therefore, amendment application does not lie.

8.3. That the prayer of the Plaintiff for the relief of declaration and rights in the suit property have to first be adjudicated before any relief can be claimed against the proposed Defendants 2 to 7 and it is only after the Plaintiff is successful in claiming any right in the property that the issue of adjudication of the rights of the third parties would arise.

8.4. That in view of the arbitration clause in the agreement between the parties, the suit is liable to be stayed for which an appropriate application has been filed by the defendant, which is pending adjudication.

9. By the impugned common judgment and order and mainly relying upon the decision of this Court in Kasturi v. Iyyamperumal[8] and in Revajeetu Builders & Developers v. Narayanaswamy & Sons[9], the High Court has allowed both the applications i.e. application under Order 6 Rule 17 of the Code of Civil Procedure and application under Order 1 Rule 10 of the Code of Civil Procedure.

10. Feeling aggrieved and dissatisfied with the impugned common order passed by the High Court allowing applications under Order 6 Rule 17 of the Code of Civil Procedure and under Order 1 Rule 10 of the Code of Civil Procedure, original Defendant 1 licensor has preferred present appeals.

11. Shri Mukul Rohatgi, learned Senior Advocate has appeared on behalf of the appellant — original defendant and Shri Avishkar Singhvi, learned counsel and Shri Rahul Gupta, learned counsel have appeared on behalf of the respective respondents.

12. Shri Rohatgi, learned Senior Advocate appearing on behalf of the appellant — original defendant has vehemently submitted that in the facts and circumstances of the case, the High Court has committed a serious error in allowing the applications under Order 6 Rule 17 of the Code of Civil Procedure and Order 1 Rule 10 of the Code of Civil Procedure permitting the respondents to amend their respective Plaints to declare void ab initio all mortgages/charges on the entire premises and implead the mortgagee banks/financial institutions.

13. It is vehemently submitted by Shri Rohatgi, learned Senior Advocate that the appellant granted licence for individual shops at the premises from 1983 onwards to various shopkeepers including the respondents herein. That prior thereto, on 23-9-1982 the appellant created mortgages in favour of financial institutions/banks. The said mortgages were rolled over, refinanced and replaced from time to time for ensuring the continuous development of the hotel projects/premises which requires consistent upkeep, renovations, upgradation from time to time. It is contended that Clause 13 of the licence agreement recognises and preserves the power of the appellant (lessor) to create and continue mortgages. It is submitted that Clause 13 has been retained in every renewal (every five years) and as such the respondents who are licensees have continuously ratified all mortgages from 1982 onwards by signing the licence agreement and subsequent renewals. It is submitted that licences have been revoked on 29-5-2020 by the appellant. It is urged that at this belated stage it is not open for the respondents who are only licensees and whose licences have been revoked to challenge the mortgages created by the appellant created in favour of various banks/financial institutions which have been continued since 1982 onwards.

14. It is further submitted by Shri Rohatgi, learned Senior Advocate that as such in view of the arbitration clause in the licence agreement, suits are not maintainable in view of Section 8 of the Arbitration and Conciliation Act. That application filed by the appellant — original Plaintiff to stay the suits are pending adjudication. Therefore, as such the said application(s) under Section 8 of the Arbitration and Conciliation Act are to be decided first. It is further submitted that while pleadings were completed and Section 8 application was part-heard, the respondents filed the present applications in April 2020 to implead the banks holding mortgage over the premises and amend their Plaints seeking to challenge such mortgages. It is submitted that the learned Single Judge as such, without issuing any notice or granting an opportunity to file reply, heard arguments and reserved the judgment which has been pronounced on 15-9-2021.

15. Shri Rohatgi, learned Senior Advocate appearing for the appellant original defendant has assailed the impugned judgment and order passed by the High Court mainly on the following grounds:

15.1. Impugned judgment has resulted in misjoinder of causes of action and of parties.

15.2. The respondents do not have the locus or right to challenge the mortgages/charges.

15.3. Challenge to mortgage/charges is barred by limitation, delay and laches.

15.4. The impleadment and amendment applications are mala fide filed only to circumvent adjudication pending Section 8 of the Act.

15.5. Impugned judgment has been passed in violation of principles of natural justice.

16. It is vehemently submitted by Shri Rohatgi, learned Senior Advocate for the appellant that when the first licence agreement was executed in 1983, the premises were already mortgaged and the respondents were aware of the said fact, as is evident from Clause 13 of the licence agreement. It is submitted that thus, the respondent‘s rights, even as a licensee, are subject to the pre-existing charge perfected thereon with which the respondents have no concern.

17. It is submitted that the respondent — original Plaintiffs are strangers to the mortgage on the premises created by and between the appellant and its lenders. The respondent — original Plaintiffs have no privity with the mortgagee banks/financial institutions. The suits themselves are based on the licence agreement executed with the appellant and the rights contained thereunder.

18. It is further submitted that the suits originally sought declarations that the respondents are irrevocable licensees or alternatively owners. Thus, the suits preferred by the Plaintiffs only concern the inter se rights between the appellant and the respondent, with which the banks/financial institutions impleaded by the impugned judgment have no concern. But the impugned judgment has resulted in misjoinder of parties and causes of action which is incorrect in law.

19. It is further submitted by Shri Rohatgi, learned Senior Advocate that the respondents have no semblance of right to sue the banks/financial institutions in the present case or challenge the mortgage.

20. It is further submitted that mortgage over the premises has been created by and between the appellant and its lenders. The respondent — original Plaintiffs are not parties to said transaction. There is admittedly no privity of contract between the respondents and original Plaintiffs and its lenders. Therefore, the Plaintiffs have no right to sue the lenders of the appellant against whom reliefs are now sought by way of amendment of the Plaint.

21. It is further submitted that, even otherwise, the respondents are ascertaining their status as irrevocable licensees of the shops concerned. Therefore, the Plaintiffs have not locus or cause to challenge mortgages/ charges, which have been created by the appellant from time to time for ensuring continuing development of hotel project/premises.

22. 1t is further submitted by Shri Rohatgi, learned Senior Advocate that challenge to mortgage/charges now is barred by limitation, delay and laches. This is because the first mortgage was created on the premises on 23-9-1982. By the amendment applications, the principal relief sought to be added by the respondents is to assail any and all charges/mortgages on the premises created since 1982 in favour of any person. It is submitted that first mortgage on the premises was registered on 23-9-1982 with the RoC as per Section 125 of the Companies Act, 1956. Subsequent charges/mortgages were also registered with the RoC. It is submitted that as per Section 126 of the Companies Act, 1956 and Section 80 of the 2013 Act, the respondents are deemed to have knowledge and constructive notice of the said mortgage/charges and there exists a presumption in law that the respondents had knowledge of the aforesaid charges.

23. It is submitted that Clause 13 of the licence agreements expressly records the knowledge of the respondents of the existing charges on the premises and also authorises creation of further charges in the future. It is submitted that this understanding has been renewed and reaffirmed by the parties in the subsequent Renewal Agreements. Therefore, the respondents have knowledge of the mortgages in view of statutory presumption and express stipulation in Clause 13 of the licence agreement since 1982, which negates the assertion that the respondents acquired knowledge by pleadings filed in the proceedings before the High Court. It is further submitted that considering Article 58, Schedule I of the Limitation Act, the prayer to challenge mortgages/ charges would be clearly barred by law of limitation and therefore, liable to be rejected. In support of the above submission, reliance is placed on the decision of this Court in Ashutosh Chaturvedi v. Prano Devi, T.N. Alloy Foundry Co. Ltd. v. T.N. Electricity Board and L.J. Leach & Co. Ltd. v. Jardine Skinner & Co. Making above submissions, it is prayed to allow the present appeals.

24. While opposing the present appeals and supporting the impugned order passed by the High Court, allowing the applications under Order 6 Rule 17 of the Code of Civil Procedure and Order 1 Rule 10 of the Code of Civil Procedure, the learned counsel for the respondents have vehemently submitted that in the facts and circumstances of the case. The impugned order is just and proper. It is contended that it is necessary to implead banks which are mortgagees of the suit property, while the Plaintiffs are claiming ownership interest and that the trial has not yet commenced and the suit is at preliminary stage where the defendant has even not filed its written statement therefore, no prejudice can be said to be caused to the defendant if the application for amendment as well as impleadment applications are allowed. That no error has been committed by the High Court in the peculiar facts and circumstances of the case.

25. It is vehemently submitted by the learned counsel for the respondents that as such the Plaintiff is the dominuslitus in the suit. That in view of the position in law, when the applications submitted by the original Plaintiffs under Order 1 Rule 10 of the Code of Civil Procedure have been allowed, the same may not be interfered with by this Court. Reliance is placed on the decision of this Court in Kasturi v. Iyyamperumal.

26. It is further submitted by the learned counsel for the respondent — original Plaintiffs that cogent reasons have been given by the High Court while allowing the applications under Order 6 Rule 17 and Order 1 Rule 10 of the Code of Civil Procedure, which in a nutshell are as under:

26.1. That it is necessary to implead the banks who are mortgagees of the suit property wherein the Plaintiffs are claiming ownership interest.

26.2. The trial has not yet commenced and the suit is at the preliminary stage where the petitioner has not even filed its written statement.

26.3. No prejudice can be said to be caused to the petitioner if the abovesaid applications are allowed.

26.4. That the Plaintiff is the dominuslitus in the suit.

26.5. The fact that the petitioner themselves had pleaded before the learned Single Judge of the Hon‘ble High Court that the suit was bad for non-joinder of parties without the banks being parties.

26.6. At the stage of allowing the amendment the court should not be concerned with the merits and demerits of such amendments.

26.7. It is imperative that the Hon‘ble courts are liberal in their view of amendment of pleadings especially when the parties are necessary and required to be present to protect the subject-matter of the relief.

27. Relying upon the decisions of this Court in Rajesh Kumar Aggarwal v. K.K. Modi and in Revajeetu Builders & Developers v. Narayanaswamy & Sons, it is vehemently submitted by the learned counsel for the respondent — original Plaintiffs that as observed and held by this Court while considering whether an application for amendment should or should not be allowed, the court should not go into the correctness or falsity of the case in the amendment. It is further observed and held that likewise, it should not record a finding on the merits of the amendment and the merits thereof sought to be incorporated by way of amendment are not to be adjudged at the stage of allowing the prayer for amendment.

28. The learned counsel for Respondent 1 has further submitted that the amendments did not seek any direct injunctions against the banks for creation of the mortgage but has only sought reliefs against the defendant hotel whose property is mortgaged to the banks. That the mortgage has not been challenged by the respondents but only the undeniable interest of the respondent is sought to be protected by having mortgagees as a party to the suit. It is submitted that idea is to see that in the event banks enforce the mortgage then they will step into the shoes of the appellant.

29. It is further submitted by the learned counsel for the Plaintiffs that in the suit original Plaintiffs are seeking perpetual ownership rights in the premises of the appellant hotel. Therefore, if the mortgages with respect to the very property are not challenged, in that case, in future they may affect the rights of the Plaintiffs and therefore, to protect their rights, the impleadment of the mortgagee banks/financial institutions and the amendments are very much necessary. That as such, banks/financial institutions (mortgagees) can be said to be necessary and proper parties for giving the ultimate effective relief in favour of the Plaintiffs. That the respondent — original Plaintiffs after final adjudication of the suit may be held to be owners as they are the perpetual lessee who hold irrevocable licences executed in their favour to operate their respective shops. It is submitted that the Plaintiffs have paid the premium at the time of execution of the licence agreement and hence this is not a case of mere licence but it is a case of irrevocable and perpetual licence. Therefore, no error has been committed by the High Court while passing the impugned orders and allowing the applications under Order 6 Rule 17 and Order 1 Rule 10 of the Code of Civil Procedure.

30. We have heard the learned Senior Advocate appearing on behalf of the appellant and the learned counsel appearing on behalf of the respective respondent — original Plaintiffs at length.

31. By the impugned orders, the High Court has allowed the applications filed by the original Plaintiffs under Order 6 Rule 17 and Order 1 Rule 10 of the Code of Civil Procedure permitting the original Plaintiffs to amend their respective Plaints so as to declare void ab initio all the mortgages/charges on the entire premises in question and also implead mortgagee banks/financial institutions for that purpose.

32. At the outset, it is required to be noted that mortgages have been created in favour of different mortgage banks/financial institutions since 1982 onwards which have been extended and/or rolled over, refinanced and replaced from time to time. The mortgages are created not only with respect to the shops/premises occupied by the original Plaintiffs, but with respect to the entire premises/Hyatt Residency Hotel. The respective original Plaintiffs are granted licences for individual shops which are part of entire premises.

33. According to the appellant, first mortgage was created in the year 1982. At that time, none of the original Plaintiffs were licence-holders. They have been granted licence for individual shops at the premises from 1983 onwards to various shopkeepers including the respondent-original Plaintiffs. The appellant, being owner licensor, has terminated the respective licences granted in favour of respective licence-holders, original Plaintiffs. The revocation of the licence is subjectmatter of respective suits. Therefore, the only controversy/issue in the respective suits is with respect to revocation of the respective licences.

34. By way of an amendment of the Plaint the Plaintiffs now want to challenge the mortgages/charges on the entire premises created by the appellant. As such, the original Plaintiffs are not at all concerned with the mortgages created by the appellant which is required for the continuous development of the hotel. By the purported amendment, the original Plaintiffs have now prayed to declare that all the mortgages/charges created on the premises as void ab initio. Even such a prayer can be said to be too vague. How the original Plaintiffs can now can be permitted to challenge various mortgages/charges created from time to time.

35. At this stage, it is required to be noted that even under the licence agreement (Clause 13) the licensor shall have the right to create charges/ mortgages as and by way of first charge on its land, premises and the buildings (including shops) constructed and to be constructed, in favour of financial institutions and banks as security for their terms loan advanced/to be advanced to the licensor for the completion of its hotel project. Therefore, in fact original Plaintiffs being the licensee are aware that there shall be charges/mortgages on the entire premises and the buildings including the shops. In that view of the matter, now after a number of years, the Plaintiffs cannot be permitted to challenge the mortgages/charges created on the entire premises including Shops.

36. The High Court while allowing the amendment application in exercise of powers under Order 6 Rule 17 of the Code of Civil Procedure has not properly appreciated the fact and/or considered the fact that as such, by granting such an amendment and permitting the Plaintiffs to amend the Plaints incorporating the prayer clause to declare the respective charges/mortgages void ab initio, the nature of the suits will be changed. As per the settled proposition of law, if, by permitting the Plaintiffs to amend the Plaint including a prayer clause nature of the suit is likely to be changed, in that case, the Court would not be justified in allowing the amendment. It would also result in misjoinder of causes of action.

37. From the impugned order passed by the High Court, it appears that what has weighed with the High Court is that the Plaintiffs, is the dominuslitus and heavy reliance is placed in Kasturi. However, the principle that the Plaintiffs is the dominuslitus shall be applicable only in a case where parties sought to be added as defendants are necessary and/or proper parties. The Plaintiffs cannot be permitted to join any party as a defendant who may not be necessary and/or proper parties at all on the ground that the Plaintiffs is the dominuslitus.

38. Even otherwise, the High Court has materially erred in relying upon the decision in Kasturi. In Kasturi before this Court the suit was for specific performance of the agreement to sell and the subsequent purchasers purchased the very property for which decree for specific performance was sought. Therefore, on facts the said decision is not applicable to the facts of the case on hand.

39. In view of the above and for the reasons stated above, the High Court has committed serious error in allowing the application under Order 6 Rule 17 and under Order 1 Rule 10 of the Code of Civil Procedure by permitting original Plaintiffs to amend the Plaint including prayer clause by which, the Plaintiffs have now prayed to declare the charges/mortgages on the entire premises as void ab initio and permitting the original Plaintiffs to join/implead the respective banks/financial institutions as party defendant. The alleged rights of the Plaintiffs as perpetual licence-holders are yet to be adjudicated upon. The licences of the original Plaintiffs have been revoked. Therefore, in a suit challenging revocation of the respective licences, the Plaintiffs cannot be permitted to challenge the respective mortgages/charges created on the entire premises as void ab initio. It is the case on behalf of the appellant that apart from the fact that first charge was created in the year 1982, thereafter said mortgages have been rolled over, refinanced and replaced from time to time for ensuring the continuous development of the hotel project/premises which requires consistent upkeep, renovation and upgradation from time to time. Under the circumstances, the impugned orders passed by the High Court allowing the application under Order 6 Rule 17 and under Order 1 Rule 10 of the Code of Civil Procedure are unsustainable, both on facts as well as on law.

40. In view of above and for the reasons stated above, all these appeals succeed. The impugned order! passed by the High Court allowing the application under Order 6 Rule 17 and Order 1 Rule 10 of the Code of Civil Procedure in respective suits preferred by the respondents herein original Plaintiffs are hereby quashed and set aside. The present appeals are allowed accordingly, However, there shall be no order as to costs.

111. The above cited case deals with the appeal arising out of an order whereby, the application for amendment of the Plaint was erroneously allowed by the High Court. While overturning the decision of the High Court in the above cited case, the Hon‟ble Supreme Court discussed the basic test for amendment of a Plaint. While doing so, the Hon‟ble Supreme Court categorically held that the Plaint as allowed to be amended cannot change the nature of the suit as the same would lead to arising of different cause of action and therefore, the Courts are duty bound to adhere to the said principle.

112. Now adverting back to the instant application, the addition of paragraphs and adding of the parties, i.e., defendants No. 6-8 does not change the nature of the suit as the prayer as sought against the Yes Bank has been merely extended to the other lender Banks.

113. The need for such extension arises due to the similar actions taken by the other lender Banks against which the Plaintiff had approached this Court by way of filing the captioned suit.

114. The amendment sought to be carried out by the Plaintiff is a result of the new developments which have occurred after filing of the suit. The pleadings in the suit are yet to be completed and trial is yet to be commenced. Admittedly, the suit is at the pre-trial stage, i.e., framing of issues, recording of evidence and examination of witness etc. is still pending. Furthermore, since the same reliefs have been sought by the Plaintiff against the other defendant Banks, this Court deems it apposite to deal with the issues altogether to avoid multiplicity of litigation and to determine the real issue between the parties. Therefore, this Court is of the considered view that no prejudice shall be caused to the defendants, if the present application is allowed.

115. On the aspect of bar of jurisdiction upon this Court to adjudicate upon the issue of specific performance of the Agreements in question, it is trite that while adjudication of an application under Order VI Rule 17 of the CPC, this Court is not concerned with the merits of the amendments proposed and the correctness or falsity of the amendments cannot be determined or adjudicated upon, while deciding the application seeking amendments. The said objection raised by the defendant Banks concerns the merit of the suit and therefore, in terms of the settled position of law, the veracity or merits of the reliefs sought by the Plaintiff certainly cannot be decided or discussed while adjudicating an application under Order VI Rule 17 of the CPC. Accordingly, the objection so raised by the defendant Banks is rejected.

116. Order VI Rule 17 of the CPC provides that the Court may, at any stage of the proceedings, allow either party to alter or amend his pleadings in such a manner as may be just and without causing prejudice to other parties. It also provides that such an amendment should be necessary for the purpose of determining the real questions of controversy between the parties.

117. The purpose of Order VI Rule 17 of the CPC is that all the substantial facts and necessary particulars must be stated in the pleadings. The object of the rule states that the Court should evaluate the matter presented before it and therefore, consider allowing such vital amendments to accurately determine the issues in dispute between the parties in question.

118. The Hon‟ble Supreme Court in North Eastern Railway Admn. v. Bhagwan Das10 held that all such amendments ought to be allowed provided it satisfies two conditions, firstly, no injustice to be caused to the other side and secondly, the amendments are necessary for the purpose of determining the real issue in dispute between the parties. It further held that amendments are to be refused only where the other party cannot be placed in the same position as if the pleading had been originally correct, but the amendment would cause him an injury which could not be compensated in terms of costs. These are the broad principles to be kept in mind while dealing with an application under Order VI Rule 17 of the CPC.

119. Adverting to the instant issue, the only question which this Court has to decide is as to whether the prayer for making amendment in the Plaint was justified or not. Accordingly, this Court is of the view that by way of the proposed amendment, the cause of action will not be altered, further neither the pleas raised therein are inconsistent, nor is the same changing the basic structure of the original Plaint. Further, the respondents shall not be caused any prejudice in the event the said amendment is allowed.

120. It is clear that in the present case the Plaintiff has sought to amend the Plaint in order to seek the same reliefs against the other defendants and the said reliefs are concerned with all the parties as the dispute pertains to the OTR scheme entered into by the defendant Banks being part of the consortium of lenders. Pertinently, even the issues have not been framed in the present case, thus, the case has not even commenced. Therefore, considering the entire circumstances and in the interest of justice, the application under Order VI Rule 17 of the CPC deserves to be allowed.

CONCLUSION

121. The captioned application has been filed for amendment of the Plaint pursuant to impleadment of the new parties in the instant suit. In support of the amendment, the learned senior counsel for the Plaintiff had contended to allowing of the said application for the extension of the same cause of action to the newly impleaded defendants. In rebuttal, the defendant Banks had argued the non-maintainability of the suit, however, this Court dealt with the settled position of law and it is made out that the amendment applications are ought to be adjudicated liberally.

122. Pursuant to completion of arguments, and relying upon the settled position of law to the factual matrix in the instant case, this Court is of the view that no harm would be caused to the parties if the captioned application i.e. I.A. No. 10671/2023 is allowed.

123. In light of the observations made herein above, the instant application bearing IA No. 10671/2023 is allowed and stands disposed of.

124. The amended Plaint filed along with the instant application be taken on record. I.A. No. 8068/2023 (seeking rejection of the original Plaint under Order VII Rule 11 of the CPC)

125. Now coming to the other application, i.e., the application filed for the rejection of the Plaint under Order VII Rule 11 of the CPC by the applicant/defendant No. 7 namely Punjab National Bank.

126. It is noted that the instant application has been filed by the defendant No. 7 Bank after it‟s impleadment by this Court vide order dated 3rd March,

2023.

127. In the course of past few proceedings, this Court heard the parties at length and therefore, deems it appropriate to adjudicate the present application along with the other applications reserved vide order dated 9th May, 2024. (On behalf of the applicant/defendant No.7/Punjab National Bank)

128. Mr. Rajesh Rattan, learned counsel appearing on behalf of the defendant No. 7, i.e., Punjab National Bank („PNB‟ hereinafter) began his submissions on the instant application filed for rejection of the Plaint, i.e. I.A. No. 8068/2023 and submitted that the Agreements entered into by the Plaintiff and the defendant Banks was never implemented as the Plaintiff company failed to comply with the terms and conditions enshrined therein.

129. It is submitted that the Plaint is liable to be rejected under Order VII Rule 11 of the CPC as the same is barred by law. The contents of the Plaint in itself shows that the reliefs sought by the Plaintiff are in teeth of the recovery proceedings initiated by the defendant Banks. It is also submitted in view of the said fact, only the DRT has the jurisdiction to entertain any kind of dispute arising out of the recovery proceedings and this Court‟s is barred from exercising its civil jurisdiction under Section 34 of the

130. It is submitted that the Plaint has been drafted in a clever manner and upon reading the contents of the Plaint as a whole, it is evident that the averments made therein warrants rejection of Plaint under Order VII Rule 11 of the CPC.

131. It is submitted that due to non-implementation of the aforesaid Agreement, the defendant No. 7 had issued a demand notice dated 26th July, 2022 under Section 13(2) of the SARFAESI Act, thereby, demanding the outstanding dues amounting to Rs.1, 75, 66, 99, 337.89/- from the Plaintiff and its guarantors/directors.

132. It is submitted that the initiation of proceedings under the SARFAESI Act are legal and within the statutory right of the defendant No. 7, and if the Plaintiff is aggrieved by the same, the appropriate forum for redressal of the said grievances is DRT and not the Civil Court.

133. It is submitted that the lender Banks discussed the legal recourse against the default in payment by the Plaintiff and in furtherance of the same, the leader of consortium i.e. defendant No. 6 (Bank of Maharashtra) issued possession notice under Section 13(4) of the SARFAESI Act.

134. It is submitted that the impleadment application bearing I.A. NO. 1746/2023 was filed by the defendant No.9 after initiation of the proceedings under the SARFAESI Act by the consortium of Bank and the same can only be termed as a move to frustrate the said proceedings ongoing under the SARFAESI Act.

135. It is submitted that this Court had allowed the aforesaid impleadment application without providing an opportunity to the defendant No. 7 as the Bank was not apprised of the said application praying impleadment of the members of the consortium, including but not limited to defendant No.7.

136. It is submitted that the entire purpose of filing the said impleadment application was to stall the process of forensic audit so that illegal transactions made by the Plaintiff could not be brought to the notice of the lender Banks. Furthermore, the factum of non-cooperation by the Plaintiff in the audit process was duly noted in the JLM held on 23rd January, 2023 wherein the said non-cooperation by the Plaintiff was found to be in violation of the norms of Banking and RBI guidelines which clearly permits the Bankers to conduct forensic audit of the stressed accounts having more than Rs. 50 Crores exposures and involving an element of fraud, diversion of funds etc.

137. It is submitted that the defendant No. 9 is the assignee of the IndusInd Bank and had filed the impleadment application at the behest of the Plaintiff and the parties i.e. Plaintiff and defendant No. 9 are in collusion with each other.

138. It is submitted that the defendant No. 7 did not receive any notice of the I.A. No. 1746/2023 and the stay was granted by the Predecessor Bench vide order dated 24th February, 2022, which was extended by this Court, therefore, restraining the defendant from taking any action under

139. It is submitted that the said stay has been granted against the recovery of public money of Rs.1, 81, 56, 42, 608/- and the same is in violation of the legal and statutory rights of the defendant No.7.

140. It is submitted that this Court does not have jurisdiction to deal with the recovery measures initiated under the SARFAESI Act as the jurisdiction of Civil Courts is completely barred under Section 34 of the SARFAESI Act.

141. It is submitted that the prayer in the original Plaint was limited to restraining the Yes Bank from acting upon the impugned notice and no relief has been sought by the Plaintiff against the defendant No.7, therefore, the present suit is without any cause of action against the defendant No.7, and this Court does not have jurisdiction to extend the operation of the stay order originally passed against the Yes Bank.

142. It is submitted that the interim relief sought by a party can only be sought in pursuance to the main relief sought in the Plaint, therefore, the direction to stay the operation of decisions taken during the JLM held on 23rd January, 2023 as well as stay on the action taken under Section 13(4) of the SARFAESI Act are beyond the scope of the captioned suit, and also beyond the jurisdiction of this Court as the same falls exclusively within the jurisdiction of the DRT.

143. It is also submitted that the stay order passed by the Predecessor Bench of this Court on 24th February, 2022 was passed on the basis of the undertaking given by the Yes Bank and the same has nothing to do with the defendant No.7 as the defendant No. 7 is a complete stranger to the Loan recovery cum Guarantee invocation notice dated 17th February, 2022 issued by the Yes Bank, therefore, no cause of action arises against the defendant No.7.

144. It is further submitted that the subject matter of the captioned suit, assailing the issuance of possession notice under Section 13(4) of SARFAESI Act qua the mortgaged property, falls under the jurisdiction of the DRT under Section 17 of the SARFAESI Act and the Plaintiff ought to have raised the issues by filing an application under the said provision, therefore, this Court does not have jurisdiction to entertain and adjudicate the issues raised herein.

145. In concluding remarks, Mr. Rattan submitted that the mortgaged property is a secured asset of the defendant No.7 under the SARFAESI Act and RDB Act and therefore, the defendant No.7 is duly entitled to sell the same and recover the public money, and hence Mr. Rattan submitted that the Plaint may be rejected qua the answering defendant as the captioned suit is non-maintainable before this Court. (On behalf of the non-applicant/Plaintiff)

146. Per Contra, Mr. Vikram Nankani, learned senior counsel appearing on behalf of the non-applicant/Plaintiff vehemently opposed the instant application submitting to the effect that the same is misconceived and overlooks the pending application bearing I.A. No. 10671/2023, filed for amendment of the Plaint, which is consequential to the impleadment order, which is valid and in operation till date.

147. It is submitted that among other grounds, the defendant No.7 contends that the suit does not disclose any cause of action against the defendant No.7, however, the amendment application i.e. I.A. No. 10671/2023 duly addresses the said contention.

148. It is submitted that the defendant No. 7 has failed to make out a case seeking rejection of the Plaint and the contentions advanced on behalf of defendant No. 7 are beyond the scope of Order VII Rule 11 of the CPC.

149. It is submitted that as per the settled position of the law, in order to decide an application under Order VII Rule 11 of the CPC, only the averments made in the Plaint are germane and the Courts cannot consider anything other than the contents of the Plaint.

150. It is submitted that the defendant No. 7 has failed to show as to how the Plaint is liable to be rejected and has merely advanced allegations which do not hold any merit.

151. It is submitted that on a bare reading of the averments made in the Plaint, it is evident that the Plaintiff is not seeking any relief with respect to the recovery of money by the defendant Banks, rather the Plaintiff has asserted in its Plaint that the defendant Banks have failed to abide by the terms and conditions of the Agreements and thus, the reliefs sought by the Plaintiff are in accordance with the law, and there is no ground for rejection of the Plaint.

152. It is also submitted that the defendant Banks had decided to take legal actions against the Plaintiff by way of proceedings under SARFAESI Act, however, no where the Plaintiff has made any averment qua the recovery proceedings.

153. It is further submitted that the Plaintiff is merely seeking specific performance of the Agreements executed among the parties, to which the defendant No. 7 is a party as well. Therefore, the Plaint does disclose the cause of action which has been duly accrued in favour of the Plaintiff to institute the captioned suit.

154. It is submitted that the order dated 3rd March, 2023 duly notes that the subsequent actions of the defendant Banks are central to the disputes pending adjudication and therefore, the Plaintiff has filed the application for amendment of the Plaint.

155. It is submitted that the defendant Banks are duly bound to implement the Agreement executed between the parties and any failure in the said implementation can be attributable only to the defendant Banks and not the

156. It is submitted that the defendant Banks have raised misconceived allegations against the Plaintiff whereas it is clear that the default in payment only happened because of inaction on part of the defendant Banks.

157. It is submitted that the alleged non-implementation of the Agreements is untrue, therefore, the actions as decided to be taken in the JLM held on 23rd January, 2023 are invalid and the lenders Banks are to be blamed for obstruction in effective implementation of the said agreements.

158. It is submitted that the bar imposed upon the jurisdiction of Civil Courts under the SARFAESI Act and RDB Act is limited to the recovery of the debts and the jurisdiction of the DRT does not extend to the adjudication of the suit filed for specific performance of the contract.

159. Therefore, in view of the foregoing submissions, the learned senior counsel submitted that the present application being bereft of any merit may be dismissed.

160. Heard the learned counsel for the parties and perused the records. Mr. Rattan, learned counsel appearing on behalf of the defendant No. 7 Bank argued the present application on multiple dates and thereafter, Mr. Vikram Nankani, addressed his objections to the same in his reply.

161. In summation, the primary arguments taken by Mr. Rattan for rejection of the instant Plaint is that the question for adjudication before this Court is related to SARFAESI Act and therefore, the appropriate forum for resolving the dispute would be the DRT, and not this Court which is a Civil Court. During the course of proceedings, as well as in the written submissions filed by him, Mr. Rattan has taken the aforesaid ground and vehemently argued that any grievance arising out of the actions taken by the lenders under the SARFAESI Act can only be adjudicated by way of an application before the DRT under Section 17 of the SARFAESI Act.

162. In addition to the aforesaid arguments, the learned counsel for defendant No.7 has also contended that the issue for adjudication before this Court is whether a Civil Court can prevent the lenders i.e. the defendant Banks herein from taking an action under the SARFAESI Act and RDB Act for recovery of loan advanced to the Plaintiff. In answer to the aforesaid issue, the learned counsel submitted that the relief sought for mandatory injunction and declaration becomes illegal, unjustifiable when the Civil Court does not have a jurisdiction to try, adjudicate and entertain a dispute which falls under the ambit of special legislations, i.e., SARFAESI Act and RDB Act. To supplement his arguments, the learned counsel has placed reliance upon the following judgments of the Hon‟ble Supreme Court:  SBI Vs. M/s Allwyn Alloys Pvt. Ltd and others.11 State Bank of Patiala Vs. Mukesh Jain and Anr.12  Mardia Chemicals Ltd and others Vs. Union of India and others13.  Bijnor Urban Co-operative Bank Ltd Vs. Meenal Agarwal & Ors.14 2O18(8) SCC 12O

(2004)4SCC 311 2022 AIR (SC) 56.  IFCI Venture Capital Funds Ltd Vs. SRGP Corporation Limited, decided by this Hon'ble Court vide Judgement dated 22.02.2024 in C.R.P. No.115/2022  HON'BLE MR.

JUSTICE PRATEEK JALAN, of this Hon'ble Court in CS(Os) 9/2023 & O.A. 60/2023 vide Order / Judgement dated 05.03.2024 in case titled " RIDDHI AGGARWAL & ANR Vs ADITYA BHUTANI & ANR

163. In rival submissions, Mr. Nankani, learned senior counsel appearing on behalf of the Plaintiff submitted that the Plaintiff is well aware of the bar imposed upon the jurisdiction of the Civil Courts over the matters to be tried under the SARFAESI Act and RDB Act, however, the relief sought in the captioned suit is nowhere related to the said statues, rather, the dispute between the parties arise of out a contractual agreement.

164. Mr. Nankani further submitted that the Plaintiff is seeking specific performance of the of the Inter-Creditor Agreement dated 23rd December 2021 (“ICA”), Master Facilities Amendment Agreement (“Master Amendment Agreement”), a Trust and Retention Account Agreement (“TRA Agreement”) and a Funded Interest Term Loan Agreement (“FITL Agreement”) whereby the consortium of lenders including defendant Nos. 6 to 8 had agreed to financial restructuring (OTR scheme) of the Plaintiff and therefore, no case is made out for rejection of the Plaint on the grounds of non-maintainability.

165. Apart from the above said submissions, the learned senior counsel for the Plaintiff also submitted that the instant suit has been filed after breach of the terms of the Agreements by the Yes Bank and subsequently, the Plaintiff had sought extension of the stay order qua the other lenders due to the breach committed by them as well, therefore, the instant suit requires trial and no case under Order VII Rule 11 of the CPC is made out.

166. Since the present application involves the various facets of law, this Court deems it apposite to discuss the scope of the said provisions. Order VII Rule 11 of the CPC provides for rejection of the Plaint. The said provision reads as follows:

167. Upon perusal of the above provision, it is clear that the Courts are empowered to reject a Plaint on the grounds given therein. Clause d) of Order VII Rule 11 of the CPC states that a Plaint can be rejected if the suit appears to be barred by law and if the same is evident from the Plaint itself.

168. The scope of rejection of Plaint under the said provision has been discussed at length by the Hon‟ble Supreme Court as well as various High Courts and it has been held that the application for rejection of a Plaint need to be adjudicated only on the basis of the facts pleaded in the Plaint.

169. In C. Natrajan v. Ashim Bai15 the Hon‟ble Supreme Court discussed the scope of rejection of a Plaint under Order VII Rule 11 of the CPC and held as follows:

10. The question which was raised before the learned trial Judge was different from the question raised before the High Court. Before the learned trial Judge, as noticed hereinbefore, the provisions of the Limitation Act were brought in with reference to the identification of the property. It was not contended that the suit was barred by limitation in terms of Article 58 of the Limitation Act, 1963. The High Court, therefore, in our opinion, ex facie committed an error in arriving on the aforementioned finding. The scope of applicability of the Limitation Act vis-à-vis Order 7 Rule 11 of the Code of Civil Procedure has been considered in some recent decisions of this Court to which we may advert to.

11. In Popat and Kotecha Property v. SBI Staff Assn. [(2005) 7 SCC 510: (2005) 4 CTC 489] this Court, inter alia, opined: (SCC p. 517, para 23) ―23. Rule 11 of Order 7 lays down an independent remedy made available to the defendant to challenge the maintainability of the suit itself, irrespective of his right to contest the same on merits. The law ostensibly does not contemplate at any stage when the objections can be raised, and also does not say in express terms about the filing of a written statement. Instead, the word ‗shall‘ is used clearly implying thereby that it casts a duty on the court to perform its obligations in rejecting the Plaint when the same is hit by any of the infirmities provided in the four clauses of Rule 11, even without intervention of the defendant. In any event, rejection of the Plaint under Rule 11 does not preclude the Plaintiffs from presenting a fresh Plaint in terms of Rule 13.‖ It was further opined: (SCC p. 517, para 25) ―25. When the averments in the Plaint are considered in the background of the principles set out in Sopan Sukhdeo case [Sopan Sukhdeo Sable v. Asstt. Charity Commr., (2004) 3 SCC 137] the inevitable conclusion is that the Division Bench was not right in holding that Order 7 Rule 11 CPC was applicable to the facts of the case. Diverse claims were made and the Division Bench was wrong in proceeding with the assumption that only the nonexecution of lease deed was the basic issue. Even if it is accepted that the other claims were relatable to it they have independent existence. Whether the collection of amounts by the respondent was for a period beyond 51 years needs evidence to be adduced. It is not a case where the suit from statement in the Plaint can be said to be barred by law. The statement in the Plaint without addition or subtraction must show that it is barred by any law to attract application of Order 7 Rule 11. This is not so in the present case.‖

12. However, we may notice that another Division Bench of this Court, in Balasaria Construction (P) Ltd. v. Hanuman Seva Trust [(2006) 5 SCC 658] stated the law thus: (SCC p. 661, para 8) ―8. After hearing counsel for the parties, going through the Plaint, application under Order 7 Rule 11(d) CPC and the judgments of the trial court and the High Court, we are of the opinion that the present suit could not be dismissed as barred by limitation without proper pleadings, framing of an issue of limitation and taking of evidence. Question of limitation is a mixed question of law and fact. Ex facie in the present case on the reading of the Plaint it cannot be held that the suit is barred by time. The findings recorded by the High Court touching upon the merits of the dispute are set aside but the conclusion arrived at by the High Court is affirmed. We agree with the view taken by the trial court that a Plaint cannot be rejected under Order 7 Rule 11(d) of the Code of Civil Procedure.‖

13. In the said decision, it may be placed on record, on the question as to whether Order 7 Rule 11(d) can be applied when a suit was filed on the premise that a suit is barred by limitation, this Court noticed: (Balasaria Construction case [(2006) 5 SCC 658], SCC pp. 660-61, para 4) ―4. This case was argued at length on 30-8-2005. Counsel appearing for the appellant had relied upon a judgment of this Court in N.V. Srinivasa Murthy v. Mariyamma [(2005) 5 SCC 548] for the proposition that a Plaint could be rejected if the suit is ex facie barred by limitation. As against this, counsel for the respondents relied upon a later judgment of this Court in Popat and Kotecha Property v. SBI Staff Assn. [(2005) 7 SCC 510: (2005) 4 CTC 489] in respect of the proposition that Order 7 Rule 11(d) was not applicable in a case where a question has to be decided on the basis of fact that the suit was barred by limitation. The point as to whether the words ‗barred by law‘ occurring in Order 7 Rule 11(d) CPC would include the suit being ‗barred by limitation‘ was not specifically dealt with in either of these two judgments, cited above. But this point has been specifically dealt with by the different High Courts in Mohan Lal Sukhadia University v. Priya Soloman [AIR 1999 Raj 102], Khaja Quthubullah v. Govt. of A.P. [AIR 1995 AP 43], Vedapalli Suryanarayana v. Poosarla Venkata Sanker Suryanarayana [(1980) 1 An LT 488: (1980) 1 APLJ 173 (HC)], Arjan Singh v. Union of India [AIR 1987 Del 165] wherein it has been held that the Plaint under Order 7 Rule 11(d) cannot be rejected on the ground that it is barred by limitation. According to these judgments the suit has to be barred by a provision of law to come within the meaning of Order 7 Rule 11 CPC. A contrary view has been taken in JugolinijaRajiaJugoslavija v. Fab Leathers Ltd. [AIR 1985 Cal 193], National Insurance Co. Ltd. v. NavromConstantza [AIR 1988 Cal 155], J. Patel & Co. v. National Federation of Industrial Coop. Ltd. [AIR 1996 Cal 253] and SBI Staff Assn. v. Popat & Kotecha Property [(2001) 2 Cal LT 34]. The last judgment was the subjectmatter of challenge in Popat and Kotecha Property v. SBI Staff Assn. [(2005) 7 SCC 510: (2005) 4 CTC 489] This Court set aside the judgment and held in para 25 as under: (SCC p. 517) ‗25. When the averments in the Plaint are considered in the background of the principles set out in Sopan Sukhdeo case [Sopan Sukhdeo Sable v. Asstt. Charity Commr., (2004) 3 SCC 137] the inevitable conclusion is that the Division Bench was not right in holding that Order 7 Rule 11 CPC was applicable to the facts of the case. Diverse claims were made and the Division Bench was wrong in proceeding with the assumption that only the nonexecution of lease deed was the basic issue. Even if it is accepted that the other claims were relatable to it they have independent existence. Whether the collection of amounts by the respondent was for a period beyond 51 years needs evidence to be adduced. It is not a case where the suit from statement in the Plaint can be said to be barred by law. The statement in the Plaint without addition or subtraction must show that it is barred by any law to attract application of Order 7 Rule 11. This is not so in the present case.‘ ‖

14. If the Plaintiff is to be granted a relief of recovery of possession, the suit could be filed within a period of 12 years. It is one thing to say that whether such a relief can be granted or not after the evidence is led by the parties but it is another thing to say that the Plaint is to be rejected on the ground that the same is barred by any law. In the suit which has been filed for possession, as a consequence of declaration of the Plaintiff's title, Article 58 will have no application.

15. Learned counsel appearing on behalf of the respondent, however, placed strong reliance upon a decision of this Court in S.M. Karim v. Bibi Sakina [AIR 1964 SC 1254: (1964) 6 SCR 780] to contend that alternative plea cannot be considered for arriving at a conclusion that he has been dispossessed.

16. The law of limitation relating to the suit for possession has undergone a drastic change. In terms of Articles 142 and 144 of the Limitation Act, 1908, it was obligatory on the part of the Plaintiff to aver and plead that he not only has title over the property but also has been in possession of the same for a period of more than 12 years. However, if the Plaintiff has filed the suit claiming title over the suit property in terms of Articles 64 and 65 of the Limitation Act, 1963, burden would be on the defendant to prove that he has acquired title by adverse possession.

17. In Mohd. Mohammad Ali v. Jagadish Kalita [(2004) 1 SCC 271] it was held: (SCC p. 277, para 20) ―20. … By reason of the Limitation Act, 1963 the legal position as was obtaining under the old Act underwent a change. In a suit governed by Article 65 of the 1963 Limitation Act, the Plaintiff will succeed if he proves his title and it would no longer be necessary for him to prove, unlike in a suit governed by Articles 142 and 144 of the Limitation Act, 1908, that he was in possession within 12 years preceding the filing of the suit. On the contrary, it would be for the defendant so to prove if he wants to defeat the Plaintiff's claim to establish his title by adverse possession.‖ (See also P.T. Munichikkanna Reddy v. Revamma [(2007) 6 SCC 59], Binapani Paul v. Pratima Ghosh [(2007) 6 SCC 100], Kamakshi Builders v. Ambedkar Educational Society [(2007) 12 SCC 27: AIR 2007 SC 2191] and Bakhtiyar Hussain v. Hafiz Khan [(2007) 12 SCC 420].)

18. In S.M. Karim [AIR 1964 SC 1254: (1964) 6 SCR 780] this Court was considering a question of benami as also adverse possession. In the aforementioned context, it was opined: (AIR p. 1256, para 5) ―5. … Adverse possession must be adequate in continuity, in publicity and extent and a plea is required at the least to show when possession becomes adverse so that the starting point of limitation against the party affected can be found. There is no evidence here when possession became adverse, if it at all did, and a mere suggestion in the relief clause that there was an uninterrupted possession for ‗several 12 years‘ or that the Plaintiff had acquired ‗an absolute title‘ was not enough to raise such a plea. Long possession is not necessarily adverse possession and the prayer clause is not a substitute for a plea. The cited cases need hardly be considered because each case must be determined upon the allegations in the Plaint in that case. It is sufficient to point out that in Bishun Dayal v. Kesho Prasad [AIR 1940 PC 202] the Judicial Committee did not accept an alternative case based on possession after purchase without a proper plea.‖ (See also PremLalaNahata v. Chandi Prasad Sikaria [(2007) 2 SCC 551].) Such a question does not arise for our consideration herein.

19. We have noticed hereinbefore that the defendant, inter alia, on the plea of identification of the suit land vis-à-vis the deeds of sale, under which the Plaintiff has claimed his title, claimed possession. The defendant did not accept that the Plaintiff was in possession. An issue in this behalf is, therefore, required to be framed and the said question is, therefore, required to be gone into. Limitation would not commence unless there has been a clear and unequivocal threat to the right claimed by the Plaintiff. In a situation of this nature, in our opinion, the application under Order 7 Rule 11(d) was not maintainable. The contentions raised by the learned counsel for the respondent may have to be gone into at a proper stage. Lest it may prejudice the contention of one party or the other at the trial, we resist from making any observations at this stage.

170. In Frost (International) Ltd. v. Milan Developers & Builders (P) Ltd.16 the Hon‟ble Supreme Court again reiterated the principles regarding rejection of a Plaint and made the following observations:

Code is also resourceful enough to meet such men, (Cr. 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.‖ ‖

34.2. In Azhar Hussain v. Rajiv Gandhi [Azhar Hussain v. Rajiv Gandhi, 1986 Supp SCC 315], this Court discussed the very purpose of the power conferred under Order 7 Rule 11 CPC by observing thus: (SCC p. 324, para 12) ―12. … The whole purpose of conferment of such power is to ensure that a litigation which is meaningless, and bound to prove abortive should not be permitted to occupy the time of the court, and exercise the mind of the respondent. The sword of Damocles need not be kept hanging over his head unnecessarily without point or purpose. Even in an ordinary civil litigation, the court readily exercises the power to reject a Plaint, if it does not disclose any cause of action.‖

34.3. In Sopan Sukhdeo Sable v. Charity Commr. [Sopan Sukhdeo Sable v. Charity Commr., (2004) 3 SCC 137], it was held that Rule 11 of Order 7 lays down an independent remedy made available to the defendant to challenge the maintainability of the suit itself, irrespective of his right to contest the same on merits. The law ostensibly does not contemplate any stage when the objections can be raised, and also does not say in express terms about the filing of a written statement. It was held that the word ―shall‖ is used to clearly imply that a duty is cast on the Court to perform its obligations in rejecting the Plaint when the same is hit by any of the infirmities provided in the four clauses of Rule 11, even without intervention of the defendant. Elaborating on the aspect of cause of action by quoting I.T.C. Ltd. v. Debts Recovery Appellate Tribunal [I.T.C. Ltd. v. Debts Recovery Appellate Tribunal, (1998) 2 SCC 70], it was held that the basic question to be decided while dealing with an application filed under Order 7 Rule 11 of the Code is whether a real cause of action has been set out in the Plaint or something purely illusory has been stated with a view to get out of Order 7 Rule 11 of the Code.

34.4. This Court in Liverpool & London S.P. & I Assn. Ltd. v. M.V. Sea Success I [Liverpool & London S.P. & I Assn. Ltd. v. M.V. Sea Success I, (2004) 9 SCC 512] held that a Plaint must be construed as it stands without any amendments. The same is extracted herein as follows: (SCC p. 562, para 139) ―139. Whether a Plaint discloses a cause of action or not is essentially a question of fact. But whether it does or does not, must be found out from reading the Plaint itself. For the said purpose the averments made in the Plaint in their entirety must be held to be correct. The test is as to whether if the averments made in the Plaint are taken to be correct in its entirety, a decree would be passed.‖

34.5. We could allude to the exposition of this Court in Madanuri Sri Rama Chandra Murthy v. Syed Jalal [Madanuri Sri Rama Chandra Murthy v. Syed Jalal, (2017) 13 SCC 174: (2017) 5 SCC (Civ) 602], wherein it was held as under: (SCC p. 179, para 7) ―7. … The averments of the Plaint have to be read as a whole to find out whether the averments disclose a cause of action or whether the suit is barred by any law. It is needless to observe that the question as to whether the suit is barred by any law, would always depend upon the facts and circumstances of each case. The averments in the written statement as well as the contentions of the defendant are wholly immaterial while considering the prayer of the defendant for rejection of the Plaint. Even when, the allegations made in the Plaint are taken to be correct as a whole on their face value, if they show that the suit is barred by any law, or do not disclose cause of action, the application for rejection of Plaint can be entertained and the power under Order 7 Rule 11 CPC can be exercised. If clever drafting of the Plaint has created the illusion of a cause of action, the court will nip it in the bud at the earliest so that bogus litigation will end at the earlier stage.‖

34.6. In Dahiben v. Arvindbhai Kalyanji Bhanusali [Dahiben v. Arvindbhai Kalyanji Bhanusali, (2020) 7 SCC 366: (2020) 4 SCC (Civ) 128], Indu Malhotra, J., while dealing with an appeal against an order allowing rejection of a suit at the threshold, had an occasion to consider various precedents discussing the intent and purpose of Order 7 Rule 11 CPC while setting out principles in relation to the same. It was held that the provision of Order 7 Rule 11 is mandatory in nature and that the Plaint ―shall‖ be rejected if any of the grounds specified in clauses (a) to (e) is made out. If the court finds that the Plaint does not disclose a cause of action, or that the suit is barred by any law, the court has no option, but to reject the Plaint. The relevant portion of the judgment is extracted as below: (SCC pp. 377-78, para 23) ―23.2. The remedy under Order 7 Rule 11 CPC is an independent and special remedy wherein the court is empowered to summarily dismiss a suit at the threshold, without proceedings to record evidence, and conducting a trial, on the basis of the evidence adduced, if it is satisfied that the action should be terminated on any of the grounds contained in this provision.

23.3. The underlying object of Order 7 Rule 11(a) is that if in a suit, no cause of action is disclosed, or the suit is barred by limitation under Rule 11 (d), the court would not permit the Plaintiff to unnecessarily protract the proceedings in the suit. In such a case, it would be necessary to put an end to the sham litigation, so that further judicial time is not wasted.

23.4. In Azhar Hussain v. Rajiv Gandhi [Azhar Hussain v. Rajiv Gandhi, 1986 Supp SCC 315], this Court held that the whole purpose of conferment of powers under this provision is to ensure that a litigation which is meaningless, and bound to prove abortive, should not be permitted to waste judicial time of the court. … ***

23.5. The power conferred on the court to terminate a civil action is, however, a drastic one, and the conditions enumerated in Order 7 Rule 11 are required to be strictly adhered to.

23.6. Under Order 7 Rule 11, a duty is cast on the Court to determine whether the Plaint discloses a cause of action by scrutinizing the averments in the Plaint [Liverpool & London S.P. & I Assn. Ltd. v. M.V. Sea Success I, (2004) 9 SCC 512], read in conjunction with the documents relied upon, or whether the suit is barred by any law. 23.7.***

23.8. Having regard to Order 7 Rule 14 CPC, the documents filed along with the Plaint, are required to be taken into consideration for deciding the application under Order 7 Rule 11(a). When a document referred to in the Plaint, forms the basis of the Plaint, it should be treated as a part of the Plaint.

23.9. In exercise of power under this provision, the court would determine if the assertions made in the Plaint are contrary to statutory law, or judicial dicta, for deciding whether a case for rejecting the Plaint at the threshold is made out.

23.10. At this stage, the pleas taken by the defendant in the written statement and application for rejection of the Plaint on the merits, would be irrelevant, and cannot be adverted to, or taken into consideration. [Sopan Sukhdeo Sable v. Charity Commr., (2004) 3 SCC 137] ‖

35. In a recent judgment of Rajendra Bajoria v. Hemant Kumar Jalan [Rajendra Bajoria v. Hemant Kumar Jalan, (2022) 12 SCC 641: 2021 SCC OnLine SC 764], this Court while elucidating on the underlying object of Order 7 Rule 11 CPC and considering various precedents of this Court, held as under: (SCC para 20) ―20. It could thus be seen that this Court has held that the power conferred on the court to terminate a civil action is a drastic one, and the conditions enumerated under Order

7 Rule 11 CPC are required to be strictly adhered to. However, under Order 7 Rule 11 CPC, the duty is cast upon the court to determine whether the Plaint discloses a cause of action, by scrutinising the averments in the Plaint, read in conjunction with the documents relied upon, or whether the suit is barred by any law. This Court has held that the underlying object of Order 7 Rule 11 CPC is that when a Plaint does not disclose a cause of action, the court would not permit the Plaintiff to unnecessarily protract the proceedings. It has been held that in such a case, it will be necessary to put an end to the sham litigation so that further judicial time is not wasted.‖

36. Relying on Hardesh Ores (P) Ltd. v. Hede & Company [Hardesh Ores (P) Ltd. v. Hede & Company, (2007) 5 SCC 614], it was held in Rajendra Bajoria case [Rajendra Bajoria v. Hemant Kumar Jalan, (2022) 12 SCC 641: 2021 SCC OnLine SC 764], that it is not permissible to cull out a sentence or a passage, and to read it in isolation. It is the substance, and not merely the form, which has to be looked into. The Plaint has to be construed as it stands, without addition or subtraction of words. Further delving upon the ratio in D. Ramachandran v. R.V. Janakiraman [D. Ramachandran v. R.V. Janakiraman, (1999) 3 SCC 267], it was held that if the allegations in the Plaint prima facie show a cause of action, the court cannot embark upon an enquiry whether the allegations are true in fact.

37. It was further held that if on a meaningful reading of the Plaint, it is found that the suit is manifestly vexatious and without any merit, and does not disclose a right to sue, the court would be justified in exercising the power under Order 7 Rule 11 CPC. Placing reliance on Saleem Bhai v. State of Maharashtra [Saleem Bhai v. State of Maharashtra, (2003) 1 SCC 557], it was held that the power under Order 7 Rule 11 CPC may be exercised by the court at any stage of the suit, either before registering the Plaint or after issuing summons to the defendant, or before conclusion of the trial.

38. On a reading of the Plaint, in the instant case, it is noted that it discloses a cause of action inasmuch as the MoU dated 17-1-2009, entered into between the Plaintiff and Defendant 1 in the presence of Defendant 2 and the acts done pursuant to the said MoU is the basis for the grievance of the Plaintiff. According to the Plaintiff, a cheque for Rs 56 lakhs was issued by him in favour of Defendant 1 and handed over to Shri Dilip Das, Advocate—Defendant 2 as security with an understanding that the said cheque will not be handed over by Defendant 2 to Defendant 1 unless Defendant 1 fulfils its undertaking and carries out the responsibility of saving the licence to Plot No. RS-4, issued in favour of the Plaintiff by Paradeep Port Trust Authority, from being cancelled. As a result, the Plaintiff would continue to remain as the licensee of Paradeep Port Trust Authority vis-à-vis the said plot. According to the Plaintiff, Defendant 1 did not take any step to save licence of the Plaintiff from cancellation and it was cancelled on the basis of the comPlaint made by Defendant 1 vide letter dated 18-2-2009, by Paradeep Port Trust Authority. Hence, the question of Defendant 2 handing over the cheque for Rs 56 lakhs to Defendant 1 did not arise.

39. Further, the Plaintiff was pressurised to either supply 3876 MT of iron ore fines to Defendant 1 or else Defendant 1 would present the cheque for encashment. Since the Plaintiff did not agree to the illegal demand of Defendant 1, the cheque for Rs 56 lakhs which had been handed over by Defendant 2 to Defendant 1, was presented by Defendant 1 and it was dishonoured. According to the Plaintiff, Defendant 2 and Defendant 1 colluded with each other to make an illegal gain and Defendant 2 could not have handed over the cheque to Defendant 1. Hence, a letter was written to the Bank directing them to stop the payment of the cheque and the same was conveyed to the defendants. The said cheque was dishonoured. Defendant 1 issued notice under Section 138 of the NI Act dated 10-6-2009, to the Plaintiff through its Managing Director, to which a reply was given on 23-6-2009. According to the Plaintiff, Defendant 1 owes the Plaintiff Rs 21.50 lakhs but the Plaintiff does not have to pay anything to Defendant 1. Hence, Defendant 1 is duty-bound to return the cheque to the Plaintiff but, on the other hand, the defendants are trying to harass the Plaintiff by presenting the cheque and hence certain reliefs were sought in the suit. The relief of declaration was sought to the effect that the cheque handed over by the Plaintiff to Defendant 2 was as a security; that the cheque had been illegally handed over by Defendant 2 to Defendant 1 in violation of the terms and conditions of the MoU dated 17-1- 2009 and that the Plaintiff is neither liable to deliver 3876 MT of iron ore fines to Defendant 1 nor to pay an amount of Rs 56 lakhs since Defendant 1 had failed to save the licence of the Plaintiff's plot from cancellation by Paradeep Port Trust Authority.

40. At the outset, we hold that on perusal of the Plaint averments, the Plaintiff has indeed made out a cause of action for filing the suit. In fact, in Para 2 of the application filed under Order 7 Rule 11 CPC, Defendant 1 has also encapsulated the averments made in the Plaint. Therefore, on that score the Plaint cannot be rejected.

41. The other contention of Defendant 1 is that from the pleadings and averments in the Plaint and the prayers sought therein, it appears that only certain declaratory reliefs have been sought and further, consequential reliefs have been omitted to be prayed. Hence, the suit is barred under the provisions of the SR Act and is liable to be dismissed and the Plaint is liable to be rejected under Order 7 Rule 11 CPC.

42. In the objections filed to the application under Order 7 Rule 11 CPC, it has been averred that the Plaint averments would clearly show a cause of action for filing the suit and further that the suit is not barred by any law. Further, the declaratory reliefs have been valued properly and appropriate court fee has been paid. Hence, the application is liable to be rejected.‖

171. The above discussed cases clarify the position of law where a Plaint is liable to be rejected if the defendant is able to prove the test provided under the said provision. A perusal of the above cited cases also makes it clear that the Courts need to look into the Plaint as a whole and then need to determine whether it discloses any cause or action or is barred by law or not.

172. Clause d) of the above said provision clarifies that the Courts are duty bound to reject the Plaint if the same is in contravention to the existing law, i.e., barred under any provision of law. Further, during the scrutiny of the averments made in a Plaint, it is the bounden duty of the Courts to ascertain the material for highlighting and showing the cause of action for filing the suit.

173. It is also worthwhile to find out the meaning of the words „cause of action‟. Cause of action is a bundle of facts which, along with the application of the law prevailing, gives a Plaintiff the right to seek relief against a defendant. Every fact which is necessary for the Plaintiff to prove to enable him to get a decree is to be set out in clear terms. A cause of action must include some acts/omissions done/omitted to be done by the defendant. In the absence of such an act/omission being contended and shown in the pleadings, no relief can possibly accrue to the parties that have approached the Court of law.

174. It is a settled position of law that while determining cause of action that led to institution of a litigation, the entire facts and circumstances has to be taken into consideration that ultimately led the concerned party to approach the Court of law and not any single event. Furthermore, if upon a bare reading of the averments made in the Plaint, the Court is of the view that it is not liable to be rejected and that proper trial ought to be conducted to determine the rights of the parties, the Plaint may not be rejected outrightly.

175. The question of „stage‟ at which a Plaint can be rejected has been also dealt with by this Court time and again, and it is a settled position of law that the Courts are well within their powers to reject a Plaint at any stage and it is immaterial whether the issues have been framed or not.

176. Therefore, the scope and ambit of an application filed under Order VII Rule 11 of the CPC is limited to the determination of whether the Plaint can be rejected on the basis of averments made by the Plaintiff in the Plaint itself.

177. Having discussed the scope of rejection of the Plaint, at this stage, this Court also deems it imperative to discuss the other provisions relied upon by the applicant for rejection of the Plaint.

178. India has been grappling with the issue of increasing Non-Performing Assets since the 1990s. It is an admitted fact that the legal procedure for recovery of debts used to be a lengthy and time taking process, making such methods unsuitable for recovery of debts by financial institutions.

179. In order to ensure continuity of financial assistance to industries by financial institutions, it is pertinent that financial liquidity is maintained as the inadequacy of funds prevents further lending and drastically impacts industrial growth of the country. When a debt becomes NPA, it affects the cycle of the credit system and therefore, the issue is a matter of concern not only for the lenders but also for the policy makers, who aim for development and economic growth of the nation.

180. As per the relevant reports, the Indian banking system initially did not prioritize the issue of bad loans, however, to complement the global growth, and support economic growth, it got difficult to continue with the conventional methods for recovery of dues. Therefore, in order to address these issues, ‗Narasimham Committee‘ was constituted, which gave its recommendations in the Report of the Committee on the Financial System,

1991. Based on the Committee‟s recommendation and in order to expedite the process of recovery of dues, the government enacted the “Recovery of Debts Due to Banks and Financial Institutions Act, 1993”.

181. Unfortunately, even the aforementioned legislation failed in achieving the desired results17. Thereafter, another committee namely ‗Narasimham Committee II‘ and ‗Andhyarujina Committee‘ were constituted for Mardia Chemicals Ltd. v. Union of India, (2004) 4 SCC 311, para. 34. examining banking sector reforms. Pursuant to completion of the process, the Committee on ‗Banking Sector Reforms, 1998 (Narasimham Committee II)‘ recommended that in order to strengthen the banking legal system, it is pertinent to have an effective legal system.

182. Since, the banks act as repositories of public savings, they are vested with the responsibility of deploying community savings judiciously and contribute towards national wealth creation18. As per the Committee, NPAs were reflective of the unproductive use of the nation‟s capital. The said Committee reports observed that the high default rate along with the long and tedious process of existing framework of law renders even the secured assets worth less due to delay in realization of value of the asset. Therefore, the suggestion was to create new laws under which banks and financial institutions hold assets/securities and enable them to sell assets/securities timely, without involvement of the Courts, and the same is reflected from the statement of object and reasons of the SARFAESI Act.

183. The security interest enforcement laws in the world are being modelled on the pattern of the United States Article 9 of the Uniform Commercial Code („UCC‟ hereinafter). The SARFAESI Act has also been inspired by the same, however, there is a stark difference in both the codes where the UCC only governs credit transactions secured with personal (movable) property but the SARFAESI Act applies to credit transactions for which the underlying repayment obligations are either secured with a movable or an immovable asset. Report of Committee on Banking Sector Reforms, 1998, para. 9.2.

184. Pursuant to implementation of the SARFAESI Act, its validity was tested by the Hon‟ble Supreme Court in the case of Mardia Chemicals Ltd v. UOI.19

185. In the abovementioned judgment, while dealing with the legality of various provisions of the SARFAESI Act, the Hon‟ble Supreme Court, at the outset, rejected the argument that the increasing NPAs and handling of the same is not a serious issue.

186. Even though the Hon‟ble Supreme Court accepted that the RDB Act deals essentially with the same subject-matter, the Hon‟ble Court stated that it is a widely accepted fact that the said legislation has not been very effective and successful in dealing with the problem of NPAs.

187. On the aspect of NPAs, the Hon‟ble Supreme Court further observed that the NPA problem is an important issue hindering the growth of the economy in general and the financial sector in particular. The Hon‟ble Supreme Court also pointed out that the fact that the NPAs have reached an alarming proportion was noted by several committees and institutions dealing with the financial sector.

188. In this backdrop, the Hon‟ble Supreme Court rejected the contention that there was no rationale for the enactment of a special legislation to address the concern of the growing NPAs in banks and pointed out whether to draft a particular legislation or not is a matter of legislative policy and such a policy decision cannot be faulted with, nor it is a matter to be gone into by the Courts to test the legitimacy of such a measure relating to financial policy.

189. Having discussed the intent of enactment of the SARFAESI Act, this Court now deems it important to discuss the relevant provisions of the said act in order to understand the scope of the powers conferred to the creditors and the adjudicating bodies vide this Act.

190. For the adjudication of the applications in the instant suit, there are three provisions relevant for this Court, i.e. Section 13, 17 and 34 of the

191. Section 13 reads as under: “Section 13

13. Enforcement of security interest.—(1) Notwithstanding anything contained in Section 69 or Section 69-A of the Transfer of Property Act, 1882 (4 of 1882), any security interest created in favour of any secured creditor may be enforced, without the intervention of the court or tribunal, by such creditor in accordance with the provisions of this Act. (2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any installment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-section (4): Provided that—

(i) the requirement of classification of secured debt as non-performing asset under this sub-section shall not apply to a borrower who has raised funds through issue of debt securities; and

(ii) in the event of default, the debenture trustee shall be entitled to enforce security interest in the same manner as provided under this section with such modifications as may be necessary and in accordance with the terms and conditions of security documents executed in favour of the debenture trustee; (3) The notice referred to in sub-section (2) shall give details of the amount payable by the borrower and the secured assets intended to be enforced by the secured creditor in the event of non-payment of secured debts by the borrower. (3-A) If, on receipt of the notice under sub-section (2), the borrower makes any representation or raises any objection, the secured creditor shall consider such representation or objection and if the secured creditor comes to the conclusion that such representation or objection is not acceptable or tenable, he shall communicate within fifteen days of receipt of such representation or objection the reasons for nonacceptance of the representation or objection to the borrower: Provided that the reasons so communicated or the likely action of the secured creditor at the stage of communication of reasons shall not confer any right upon the borrower to prefer an application to the Debts Recovery Tribunal under Section 17 or the Court of District Judge under Section 17-A. (4) In case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:— (a) take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset; (b) take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset: Provided that the right to transfer by way of lease, assignment or sale shall be exercised only where the substantial part of the business of the borrower is held as security for the debt: Provided further that where the management of whole of the business or part of the business is severable, the secured creditor shall take over the management of such business of the borrower which is relatable to the security for the debt;

(c) appoint any person (hereafter referred to as the manager), to manage the secured assets the possession of which has been taken over by the secured creditor;

(d) require at any time by notice in writing, any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt. (5) Any payment made by any person referred to in clause

(d) of sub-section (4) to the secured creditor shall give such person a valid discharge as if he has made payment to the borrower. (5-A) Where the sale of an immovable property, for which a reserve price has been specified, has been postponed for want of a bid of an amount not less than such reserve price, it shall be lawful for any officer of the secured creditor, if so authorised by the secured creditor in this behalf, to bid for the immovable property on behalf of the secured creditor at any subsequent sale. (5-B) Where the secured creditor, referred to in subsection (5-A), is declared to be the purchaser of the immovable property at any subsequent sale, the amount of the purchase price shall be adjusted towards the amount of the claim of the secured creditor for which the auction of enforcement of security interest is taken by the secured creditor, under sub-section (4) of Section 13. (5-C) The provisions of Section 9 of the Banking Regulation Act, 1949 (10 of 1949) shall, as far as may be, apply to the immovable property acquired by secured creditor under sub-section (5-A). (6) Any transfer of secured asset after taking possession thereof or take over of management under sub-section (4), by the secured creditor or by the manager on behalf of the secured creditor shall vest in the transferee all rights in, or in relation to, the secured asset transferred as if the transfer had been made by the owner of such secured asset. (7) Where any action has been taken against a borrower under the provisions of sub-section (4), all costs, charges and expenses which, in the opinion of the secured creditor, have been properly incurred by him or any expenses incidental thereto, shall be recoverable from the borrower and the money which is received by the secured creditor shall, in the absence of any contract to the contrary, be held by him in trust, to be applied, firstly, in payment of such costs, charges and expenses and secondly, in discharge of the dues of the secured creditor and the residue of the money so received shall be paid to the person entitled thereto in accordance with his rights and interests. (8) Where the amount of dues of the secured creditor together with all costs, charges and expenses incurred by him is tendered to the secured creditor at any time before the date of publication of notice for public auction or inviting quotations or tender from public or private treaty for transfer by way of lease, assignment or sale of the secured assets, —

(i) the secured assets shall not be transferred by way of lease assignment or sale by the secured creditor; and

(ii) in case, any step has been taken by the secured creditor for transfer by way of lease or assignment or sale of the assets before tendering of such amount under this sub-section, no further step shall be taken by such secured creditor for transfer by way of lease or assignment or sale of such secured assets. (9) Subject to the provisions of the Insolvency and Bankruptcy Code, 2016, in the case of] financing of a financial asset by more than one secured creditors or joint financing of a financial asset by secured creditors, no secured creditor shall be entitled to exercise any or all of the rights conferred on him under or pursuant to subsection (4) unless exercise of such right is agreed upon by the secured creditors representing not less than sixty per cent in value of the amount outstanding as on a record date and such action shall be binding on all the secured creditors: Provided that in the case of a company in liquidation, the amount realised from the sale of secured assets shall be distributed in accordance with the provisions of Section 529-A of the Companies Act, 1956 (1 of 1956): Provided further that in the case of a company being wound up on or after the commencement of this Act, the secured creditor of such company, who opts to realise his security instead of relinquishing his security and proving his debt under proviso to sub-section (1) of Section 529 of the Companies Act, 1956 (1 of 1956), may retain the sale proceeds of his secured assets after depositing the workmen's dues with the liquidator in accordance with the provisions of Section 529-A of that Act: Provided also that liquidator referred to in the second proviso shall intimate the secured creditor the workmen's dues in accordance with the provisions of Section 529-A of the Companies Act, 1956 (1 of 1956) and in case such workmen's dues cannot be ascertained, the liquidator shall intimate the estimated amount or workmen's dues under that section to the secured creditor and in such case the secured creditor may retain the sale proceeds of the secured assets after depositing the amount of such estimated dues with the liquidator: Provided also that in case the secured creditor deposits the estimated amount of workmen's dues, such creditor shall be liable to pay the balance of the workmen's dues or entitled to receive the excess amount, if any, deposited by the secured creditor with the liquidator: Provided also that the secured creditor shall furnish an undertaking to the liquidator to pay the balance of the workmen's dues, if any. Explanation.—For the purposes of this sub-section, — (a) ―record date‖ means the date agreed upon by the secured creditors representing not less than sixty per cent in value of the amount outstanding on such date; (b) ―amount outstanding‖ shall include principal, interest and any other dues payable by the borrower to the secured creditor in respect of secured asset as per the books of account of the secured creditor. (10) Where dues of the secured creditor are not fully satisfied with the sale proceeds of the secured assets, the secured creditor may file an application in the form and manner as may be prescribed to the Debts Recovery Tribunal having jurisdiction or a competent court, as the case may be, for recovery of the balance amount from the borrower. (11) Without prejudice to the rights conferred on the secured creditor under or by this section, the secured creditor shall be entitled to proceed against the guarantors or sell the pledged assets without first taking any of the measures specified in clauses (a) to (d) of subsection (4) in relating to the secured assets under this Act. (12) The rights of a secured creditor under this Act may be exercised by one or more of his officers authorised in this behalf in such manner as may be prescribed. (13) No borrower shall, after receipt of notice referred to in sub-section (2), transfer by way of sale, lease or otherwise (other than in the ordinary course of his business) any of his secured assets referred to in the notice, without prior written consent of the secured creditor.‖

192. A bare reading of the provisions enshrined under Section 13 of the SARFAESI Act makes it clear that the said provision contains the necessary procedures relating to the enforcement of the security interest and the manner in which the same may be done by the secured creditor without the intervention of the Court or Tribunal in accordance with its provisions.

193. Section 13(1) of the SARFAESI Act provides that a secured creditor can enforce the security, irrespective of the operation of Section 69 or 69A of the Transfer of Property Act, 1882 or without any intervention of the Court.

194. Section 13(2) of the SARFAESI Act provides that when a borrower defaults in repayment of the debt or any instalment thereof, and the secured creditor classifies his account in respect of such debt as NPA, then by issuing a notice in writing, under the said provision, the creditor can demand the borrower to discharge his liabilities to the secured creditor within sixty days of receipt of the notice. If the borrower fails to make the repayment of the debt upon expiry of sixty days, the secured creditor can exercise its rights under Section 13(4).

195. The nature and scope of the notice under Section 13(2) of the SARFAESI Act has been clarified by the Hon‟ble Supreme Court in the case of Transcore v. Union of India20 whereby, the Hon‟ble Court discussed the relevance of Section 13(2) of SARFAESI. The relevant parts of the judgment read as under: “25. Reading the scheme of Section 13(2) with Section 13(4), it is clear that the notice under Section 13(2) is not a mere show- cause notice and it constitutes an action taken by the bank/FI for the purposes of the NPA Act.

32. Section 13(11) of the NPA Act inter alia states that, without prejudice to the rights conferred on the secured creditor under Section 13, the secured creditor shall be entitled to proceed against the guarantor/pledgor; that the secured creditor shall be entitled to sell the pledged assets without taking recourse under Section 13(4) against the principal borrower in relation to the secured assets under the NPA Act. Section 13(13) states that, no borrower shall, after receipt of notice under Section 13(2), transfer by way of sale, lease or otherwise any of his secured assets referred to in the notice, without prior written consent of the secured creditor. Thus, Section 13(13) further fortifies our view that notice under Section 13(2) is not merely a show-cause notice. In fact, Section 13(13) indicates that the notice under Section 13(2) in effect operates as an attachment/injunction restraining the borrower from disposing of the secured assets and, therefore, such a notice, which in the present case is dated 6-1-2003, is not a mere show-cause notice but it is an action taken under the provision of the NPA Act.‖

196. Upon perusal of the above, it is made out that the Hon‟ble Supreme Court held that a notice under section 13(2) of the SARFAESI Act is not merely a show cause notice but a notice of demand. While interpreting Section 13(13) of the SARFAESI Act, the Hon‟ble Court further clarified that the notice under section 13(2) of the SARFAESI Act effectively acts as an attachment/injunction restraining the borrower from disposing off the secured assets.

197. In order to prevent the process being completely subjected to the discretion of the creditors and to make the process fair and just, the Courts have emphasized on the creditor‟s duties towards the borrower. In Mardia Chemicals (Supra) the Hon‟ble Supreme Court, at paragraph No. 46 and 47 also opined the same.

198. To prevent the borrower from being prejudiced by the procedure under the law, a creditor is duty bound to reasonably consider the objection/representation made by the borrower and in case the representation/objection is found untenable, the reason for such decision must be communicated to the borrower.

199. As per the settled position of law, the principles of natural justice cannot be applied at the stage of Section 13(2) and 13(3) of the SARFAESI Act and the borrower cannot demand hearing at this stage. The right to appeal against the decision of a creditor only arises after the creditor has taken any measure under Section 13(4) of the SARFAESI Act. Only after one of the measures to realize the value of the secured asset has been exercised by the creditor as mentioned under Section 13(4) of the SARFAESI Act, the borrower can approach the DRT under Section 17 of the SARFAESI Act. The said position has been clarified by the Hon‟ble Supreme Court at paragraph No. 77 of the Mardia Chemicals (Supra).

200. As per Section 13(4) of the SARFAESI Act, there are fourways through which a secured creditor can recover his secured debt. Under Clause (a) of Section 13(4) of the SARFAESI Act, a creditor can take possession of the asset including the right to transfer by way of lease, assignment or sale for realizing the value of the secured asset. Under Clause (b), a creditor can take over the management of the business of the borrower including the right to transfer by way of lease, assignment or sale. The said right to take over the management is subject to the fact that the substantial part of the business of the borrower is held as security for the debt.

201. Further, where the management of the whole of the business or part of the business is severable, a secured creditor is empowered to take over the management of such business of the borrower which is relatable to the security for the debt. Under Clause (c), a creditor can appoint any person, to manage the secured assets taken over by the creditor. Under Clause (d), a creditor, by way of notice in writing, may require any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor the money as is sufficient to write off the secured debt.

202. Now adverting to Section 17 of the SARFAESI Act. The said provision provides for an application by the borrower or any aggrieved person against the action of the bank taken under section 13(4) of the SARFAESI Act, within 45 days of the measure taken. Section 17 (1A) of the SARFAESI Act provides for the principles to be relied on while determining the jurisdiction of DRT. For the sake of convenience, the relevant portion of Section 17 of the SARFAESI Act is reproduced hereunder: “Section 17

17. Application against measures to recover secured debts —(1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, may make an application along with such fee, as may be prescribed, to the Debts Recovery Tribunal having jurisdiction in the matter within forty five days from the date on which such measure had been taken: Provided that different fees may be prescribed for making the application by the borrower and the person other than the borrower. Explanation.—For the removal of doubts, it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under this sub-section. (1A) An application under sub-section (1) shall be filed before the Debts Recovery Tribunal within the local limits of whose jurisdiction— (a) the cause of action, wholly or in part, arises; (b) where the secured asset is located; or

(c) the branch or any other office of a bank or financial institution is maintaining an account in which debt claimed is outstanding for the time being. (2) The Debts Recovery Tribunal shall consider whether any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor for enforcement of security are in accordance with the provisions of this Act and the rules made thereunder. (3) If, the Debts Recovery Tribunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that any of the measures referred to in sub-section (4) of section 13, taken by the secured creditor are not in accordance with the provisions of this Act and the rules made thereunder, and require restoration of the management or restoration of possession, of the secured assets to the borrower or other aggrieved person, it may, by order, — (a) declare the recourse to any one or more measures referred to in sub-section (4) of section 13 taken by the secured creditor as invalid; and (b) restore the possession of secured assets or management of secured assets to the borrower or such other aggrieved person, who has made an application under sub-section (1), as the case may be; and

(c) pass such other direction as it may consider appropriate and necessary in relation to any of the recourse taken by the secured creditor under sub-section (4) of section 13.] (4) If, the Debts Recovery Tribunal declares the recourse taken by a secured creditor under sub-section (4) of section 13, is in accordance with the provisions of this Act and the rules made thereunder, then, notwithstanding anything contained in any other law for the time being in force, the secured creditor shall be entitled to take recourse to one or more of the measures specified under sub-section (4) of section 13 to recover his secured debt. (4A) Where—

(i) any person, in an application under sub-section (1), claims any tenancy or leasehold rights upon the secured asset, the Debt Recovery Tribunal, after examining the facts of the case and evidence produced by the parties in relation to such claims shall, for the purposes of enforcement of security interest, have the jurisdiction to examine whether lease or tenancy, — (a) has expired or stood determined; or (b) is contrary to section 65A of the Transfer of Property Act, 1882 (4 of 1882); or

(c) is contrary to terms of mortgage; or

(d) is created after the issuance of notice of default and demand by the Bank under subsection (2) of section 13 of the Act; and

(ii) the Debt Recovery Tribunal is satisfied that tenancy right or leasehold rights claimed in secured asset falls under the sub-clause (a) or sub-clause (b) or sub-clause (c) or subclause (d) of clause (i), then notwithstanding anything to the contrary contained in any other law for the time being in force, the Debt Recovery Tribunal may pass such order as it deems fit in accordance with the provisions of this Act. (5) Any application made under sub-section (1) shall be dealt with by the Debts Recovery Tribunal as expeditiously as possible and disposed of within sixty days from the date of such application: Provided that the Debts Recovery Tribunal may, from time to time, extend the said period for reasons to be recorded in writing, so, however, that the total period of pendency of the application with the Debts Recovery Tribunal, shall not exceed four months from the date of making of such application made under sub-section (1). (6) If the application is not disposed of by the Debts Recovery Tribunal within the period of four months as specified in subsection (5), any part to the application may make an application, in such form as may be prescribed, to the Appellate Tribunal for directing the Debts Recovery Tribunal for expeditious disposal of the application pending before the Debts Recovery Tribunal and the Appellate Tribunal may, on such application, make an order for expeditious disposal of the pending application by the Debts Recovery Tribunal. (7) Save as otherwise provided in this Act, the Debts Recovery Tribunal shall, as far as may be, dispose of the application in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and the rules made thereunder.”

203. The paragraph No. 45 of the Mardia Chemicals (Supra) has clarified the stage at which a right provided under Section 17 of the SARFAESI Act can be exercised by a debtor. A perusal of the said provision clarifies that the said right can only be exercised after any measure has been taken by the creditor under Section 13(4) of the SARFAESI Act. In paragraph No. 59 of the aforementioned judgment, the Hon‟ble Supreme Court also clarified that the right exercised under Section 17of the SARFAESI Act is not an appeal but rather an initial action and the term “appeal” is a misnomer.

204. Furthermore, while deciding on the question of persons eligible/entitled to approach the DRT under Section 17 of the SARFAESI Act, the Hon‟ble Supreme Court in the case of Jagdish Singh v. Heeralal, held that the same does not include only the borrower, but any person affected by the actions taken under Section 13(4). The relevant part reads as under: “19. The expression ―any person‖ used in Section 17 is of wide import and takes within its fold not only the borrower but also the guarantor or any other person who may be affected by action taken under Section 13(4) of the Securitisation Act. Reference may be made to the judgment of this Court in SatyawatiTondon case [United Bank of India v. SatyawatiTondon, (2010) 8 SCC 110: (2010) 3 SCC (Civ) 260].‖

205. As evident, the expression “any person” as mentioned in Section 17 of the SARFAESI Act includes not only the borrower but also the guarantor or any other person who may be affected/aggrieved by any action of the secured creditor taken under Section 13(4) of the SARFAESI Act irrespective of whether a civil suit is maintainable or not.

206. Clause 2 of Section 17 of the SARFAESI Act imparts a duty upon the DRT to examine if the actions of the secured credit were in accordance with the provisions of the said Act and rules made there under. If the DRT arrives at the conclusion that the actions of the creditor were not in accordance with the provisions of the SARFAESI Act, it can declare the actions invalid under section 17(3) of the SARFAESI Act as well as restore the possession and management of the assets taken over by the creditor.

207. Emphasizing upon the powers conferred to the DRT under Section 17, the Madras High Court in the case of Sumathi v. Sengottaiyan22 held as under:

208. Therefore, the foregoing discussion concludes that the DRT is empowered to nullify the actions taken by a secured creditor if it is established that there had been any error or wrongful use of the powers.

209. The foregoing discussions also sheds light on the intention of the legislature, whereby, it is clear that while the banks and financial institutions have been vested with enormous powers for recovery of their dues, safeguards have also been provided for rectifying any error or wrongful use of such powers by vesting the DRT with the authority, after conducting an adjudication into the matter, to declare any such action invalid and also to restore the possession even though the possession may have been made over by the creditor.

210. The consequences of the authority vested with the DRT under Subsection (3) of Section 17 of the SARFAESI Act necessarily implies that the 2010 SCC OnLine Mad 1172 DRT is entitled to question the action taken by a secured creditor and the transactions entered into by virtue of Section 13(4) of the SARFAESI Act. By including sub-section (3) in Section 17of the SARFAESI Act, the legislature has gone to the extent of vesting the DRT with the authority to even set aside a transaction including sale and to restore possession in appropriate cases.

211. The other relevant Clauses, i.e.(4) and(4-A) of Section 17 of the SARFAESI Act provides for the issues that can be determined by the DRT in case the action of the secured creditors under Section 13(4) of the SARFAESI Act is found to be in accordance with law. Clause 5 of Section 17 of the SARFAESI Act provides that the DRT shall dispose of the application under Section 17(1) of the SARFAESI Act within sixty days, given that it may extend in writing the said period from time to time, but the pendency shall not be more than four months from the date of application.

212. At last, this Court shall discuss the jurisdictional bar upon the Civil Courts. As mentioned earlier, the SARFAESI Act being a special legislation was enacted to expedite the process of recovery of money by the financial institutions of the country. Therefore, DRT came into existence for adjudication of the dispute qua the recovery of money due on the part of the borrowers.

213. Section 34 of the SARFAESI Act provides for ban on the jurisdiction of the Civil Courts. The relevant extracts of the said provision is reproduced herein below for reference: “Section 34

34. Civil court not to have jurisdiction.—No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993).‖

214. A plain reading of the said provision makes it clear that the jurisdiction of Civil Courts is barred with respect to the matters which the DRT or its appellate authority, i.e., DRAT are empowered to determine in respect of any action taken or to be taken in pursuance of any power conferred under SARFAESI Act. Any Court or any other authority is barred from granting any injunction in respect of any action taken or to be taken in pursuance of any power conferred by or under the SARFAESI Act or under the RDB Act.

215. The same view was reiterated by the Hon‟ble Supreme Court in Mardia Chemicals (Supra) when the question of scope of Section 34 of the SARFAESI Act was raised before it. While commenting upon the jurisdictional bar at paragraph No. 50 of its judgment, the Hon‟ble Court held that the Civil Courts are barred from adjudicating upon a dispute arising out of recovery measures taken under the SARFAESI Act.

216. The jurisdiction of Civil Courts is also barred with respect to matters that “may” be taken to the DRT as Civil Courts have no jurisdiction in matters where an action may be taken even later on. Thus, the bar on jurisdiction of Civil Courts, under Section 34 of the SARFAESI Act operates on matters in which the DRT may take cognizance of, as well as to the matters in which measures have been taken under Section 13(4) of the

217. In the subsequent paragraphs of Mardia Chemicals (Supra), the Hon‟ble Supreme Court has further clarified on the limited circumstances in which the jurisdiction of Civil Courts can be involved and it was held that the bar on the jurisdiction of Civil Courts may be invoked if the action of the secured creditor is alleged to be fraudulent; or the claim of the secured creditor is so absurd that it requires a probe into the matter.

218. The scope of limitation on Section 34 of the SARFAESI Act, or prerequisite for invocation of jurisdiction of Civil Court was also clarified in the case of Electrosteel Castings Ltd. v. UV Asset Reconstruction Co. Ltd.23 whereby, the Hon‟ble Supreme Court held as under: ―7. We have heard the learned senior counsel appearing on behalf of the respective parties at length. 7.[1] It is the case on behalf of the Plaintiff – appellant herein that in the Plaint there are allegations of the ‗fraud‘ with respect to the assignment agreement dated 30.06.2018 and it is the case on behalf of the Plaintiff – appellant herein that assignment agreement is ‗fraudulent‘ in as much as after the full payment as per the approved resolution plan under the IBC and the original corporate debtor is discharged, there shall not be any debt by the Plaintiff – appellant herein as a guarantor and therefore Assignment deed is fraudulent. Therefore, it is the case on behalf of the Plaintiff – appellant herein that the suit in which there are allegations of ‗fraud‘ with respect to the assignment deed shall be maintainable and the bar under Section 34 of SARFAESI Act shall not be applicable.

7.2. However, it is required to be noted that except the words used ―fraud‖/―fraudulent‖ there are no specific particulars pleaded with respect to the ―fraud‖. It appears that by a clever drafting and using the words ―fraud‖/―fraudulent‖ without any specific particulars with respect to the ―fraud‖, the Plaintiff-appellant herein intends to get out of the bar under Section 34 of the SARFAESI Act and wants the suit to be maintainable. As per the settled proposition of law mere mentioning and using the word ―fraud‖/―fraudulent‖ is not sufficient to satisfy the test of ―fraud‖. As per the settled proposition of law such a pleading/using the word ―fraud‖/―fraudulent‖ without any material particulars would not tantamount to pleading of ―fraud‖.

8. In BishundeoNarain [BishundeoNarain v. Seogeni Rai, 1951 SCC 447: 1951 SCR 548] in para 22, it is observed and held as under: (SCC p. 454) ―22. … Now if there is one rule which is better established than any other, it is that in cases of fraud, undue influence and coercion, the parties pleading it must set forth full particulars and the case can only be decided on the particulars as laid. There can be no departure from them in evidence. General allegations are insufficient even to amount to an averment of fraud of which any court ought to take notice however strong the language in which they are couched may be, and the same applies to undue influence and coercion. See Order 6 Rule 4, Civil Procedure Code.‖

8.1. Similar view has been expressed in Ladli Parshad Jaiswal [Ladli Parshad Jaiswal v. Karnal Distillery Co. Ltd., (1964) 1 SCR 270: AIR 1963 SC 1279] and after considering the decision of the Privy Council in Bharat Dharma Syndicate Ltd. v. Harish Chandra [Bharat Dharma Syndicate Ltd. v. Harish Chandra, 1937 SCC OnLine PC 24: (1936-37) 64 IA 143], it is held that a litigant who prefers allegation of fraud or other improper conduct must place on record precise and specific details of these charges. Even as per Order VI Rule 4 in all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, wilful default, or undue influence, particulars shall be stated in the pleading. Similarly in K.C. Sharma & Co. [Union of India v. K.C. Sharma & Co., (2020) 15 SCC 209] it is held that ―fraud‖ has to be pleaded with necessary particulars. In Ram Singh [Ram Singh v. Gram Panchayat Mehal Kalan, (1986) 4 SCC 364], it is observed and held by this Court that when the suit is barred by any law, the Plaintiff cannot be allowed to circumvent that provision by means of clever drafting so as to avoid mention of those circumstances by which the suit is barred by law of limitation.

8.2. In T. Arivandandam v. T.V. Satyapal [T. Arivandandam v. T.V. Satyapal, (1977) 4 SCC 467], it is observed and held in para 5 as under: (SCC p. 470) ―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.‖

8.3. A similar view has been expressed by this Court in the recent decision in P. Selathal [Canara Bank v. P. Selathal,

9. Having considered the pleadings and averments in the suit more particularly the use of word ―fraud‖ even considering the case on behalf of the Plaintiff, we find that the allegations of ―fraud‖ are made without any particulars and only with a view to get out of the bar under Section 34 of the SARFAESI Act and by such a clever drafting the Plaintiff intends to bring the suit maintainable despite the bar under Section 34 of the SARFAESI Act, which is not permissible at all and which cannot be approved. Even otherwise it is required to be noted that it is the case on behalf of the Plaintiff-appellant herein that in view of the approved resolution plan under IBC and thereafter the original corporate debtor being discharged there shall not be any debt so far as the Plaintiff-appellant herein is concerned and therefore the assignment deed can be said to be ―fraudulent‖

10. The aforesaid cannot be accepted. By that itself the assignment deed cannot be said to be ―fraudulent‖. In any case, whether there shall be legally enforceable debt so far as the Plaintiff-appellant herein is concerned even after the approved resolution plan against the corporate debtor still there shall be the liability of the Plaintiff and/or the assignee can be said to be secured creditor and/or whether any amount is due and payable by the Plaintiff, are all questions which are required to be dealt with and considered by the DRT in the proceedings initiated under the SARFAESI Act.

11. It is required to be noted that as such in the present case the assignee has already initiated the proceedings under Section 13 which can be challenged by the Plaintiff-appellant herein by way of application under Section 17 of the SARFAESI Act before the DRT on whatever the legally available defences which may be available to it. We are of the firm opinion that the suit filed by the Plaintiff-appellant herein was absolutely not maintainable in view of the bar contained under Section 34 of the SARFAESI Act. Therefore, as such the courts below have not committed any error in rejecting the Plaint/dismissing the suit in view of the bar under Section 34 of the SARFAESI Act.

12. In view of the above and for the reasons stated above, the present appeal fails and the same deserves to be dismissed and is accordingly dismissed. However, it will be open for the appellant herein to initiate appropriate proceedings before the DRT under Section 17 of the SARFAESI Act against the initiation of the proceedings by the assignee-Respondent 1 herein under Section 13 of the SARFAESI Act inter alia on the ground: (1) that the assignee cannot be said to be secured creditor so far as the appellant is concerned; (2) that there is no amount due and payable by the Plaintiff-appellant herein on the ground that in view of the proceedings under IBC against the corporate debtor and the corporate debtor being discharged after the approved resolution plan, there shall not be any enforceable debt against the appellant. If such an application is filed within a period of two weeks from today the same be considered in accordance with law and on merits after complying with all other requirements which may be required while filing the application under Section 17 of the SARFAESI Act.‖

219. Since the objective behind enactment of a special legislation was made clear by imposing strict requirements for invocation of the jurisdiction of Civil Courts, the Courts in the country have tried to limit their intervention in the matters where the jurisdiction of DRT lies.

220. It is well settled that a mere claim by the borrower regarding the existence of fraud, just to overcome the bar under Section 34 of the SARFAESI Act, would not lead to the invocation of jurisdiction of a Civil Court and the borrower would need to mention the particulars in the pleading for a successful claim of existence of fraud and to overcome the bar imposed under Section 34 of the SARFAESI Act.

221. Since exercise of powers of Civil Courts is subject to the matter being potentially dealt by the DRT, it becomes pertinent to demarcate the exercise of the jurisdiction by the DRT. The test for the same had been laid down by the Bombay High Court in the case of State Bank of India v. Sagar.24 The Court in the said judgment held that: “18. Once it is admitted that the suit property has in fact been mortgaged with the Bank or Financial Institution, then it cannot be disputed that the ―security interest‖ is created, as defined under section 2(z-f) of the said Act in favour of a ―secured creditor‖, as defined under section 2(z-d) of the said Act in respect of the suit property. The secured creditor thereupon, becomes entitled to enforce its secured interest without intervention of the Courts or the Tribunals, in accordance with the provisions of the said Act and the Rules framed thereunder, as stipulated under sub-section (1) of section 13 of the said Act and the jurisdiction of the Debts Recovery Tribunal under section 17 of the said Act, springs in. However, even if the property in respect of which security interest is found to be created in favour of a secured creditor, that by itself will not be enough to oust the jurisdiction of the Civil Court to decide other disputes in respect of such secured assets. The jurisdiction of Civil Court to decide the suit involving such other disputes in respect of secured assets, is barred only to the extent of the matters, which the Debts Recovery Tribunal or its Appellate Tribunal is empowered by or under the said Act, to determine. The Debts Recovery Tribunal is a Court of limited jurisdiction, which cannot be enlarged beyond the examination of validity of the action of a secured creditor under section 13. All other disputes in respect of secured assets, which do not fall within the jurisdiction of the Debts Recovery Tribunal under section 17 or its Appellate Tribunal under section 18, the Civil Court continues to exercise its jurisdiction. Similarly, even if 2011 SCC OnLineBom 184 the jurisdiction of the Civil Court is not barred under section 9 of the Civil Procedure Code to decide other disputes in respect of secured assets, that cannot encroach upon the right of a secured creditor under section 13 of the said Act, to enforce his security interest in respect of such property and the jurisdiction of the Act, to protect such security interest of a secured creditor remains exclusive to the extent of the matters provided for under sections 17 and 18 of the said Act. Hence, a line of demarcation in this respect is required to be drawn to define the compact area of jurisdiction of the Act. In order to decide the question as to whether the jurisdiction of the Civil Court under section 9 of the Civil Procedure Code is ousted or not, the real test would be to find out whether the Debts Recovery Tribunal under section 17 of the said Act is empowered to hold an enquiry on a particular question and to grant the relief in respect thereof. The extent of jurisdiction of the Debts Recovery Tribunal under section 17 of the said Act shall decide the extent of exclusion of the jurisdiction of the Civil Court to decide the dispute in respect of the suit property.‖

222. In the aforesaid judgment, the Bombay High Court laid emphasis on restriction on the jurisdiction of a Civil Court in matters over which the DRT has jurisdiction.

223. The issue discussed herein above was also dealt with by the Bombay High court in the case of Punjab National Bank v. Shaikh Jumman Shaikh Guljar25. The relevant paragraphs of the same reads as under:

defendant Bank in pursuance of power conferred upon the secured creditor under section 13(4) of the said Act and hence the jurisdiction of Civil Court, to grant injunction sought for, restraining the defendant Bank from taking measures against the Plaintiff, is barred under section 34 of the said Act. Anyway the suit as framed is barred by law as contemplated under Order VII, Rule 11(d) of the Code of Civil Procedure and hence the Plaint is liable to be rejected. The trial Court was right in its view.‖

224. It is observed that the Courts have held that the Civil Courts are not only barred from entertaining any suit or proceeding but also barred from granting any injunction in the matters where the DRT has the power to exercise its jurisdiction under the special legislations.

225. The question which arises time and again is if a legislation grants jurisdiction over a matter to the DRT, would the bar under Section 34 of the SARFAESI Act still operate and precludes the other Courts/Tribunals from granting injunction in such matter over which DRT has the jurisdiction. The answer to the same was given by the Hon‟ble Supreme Court in Harshad Govardhan Sondagar v. International Assets Reconstruction Co. Ltd.26, whereby, it was held as under: ―35. A further question of law raised in these appeals is whether the tenants have remedies under the tenancy law concerned. In the State of Maharashtra, the Maharashtra Rent Control Act, 1999 is in force and this Act applies to premises let for the purposes of residence, education, business, trade or storage specified in Schedule I and Schedule II to the Act as well as houses let out in areas to which the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 applied before the commencement of the Act. Section 33 of the Maharashtra Rent Control Act is titled ―jurisdiction of courts‖ and it provides that the courts named therein ―shall have jurisdiction to entertain and try any suit or proceeding between a landlord and a tenant relating to the recovery of rent or possession of any premises and to decide any application made under the Act and the applications which are to be decided by the State Government or an officer authorised by it or the competent authority‖. The question of law that we have to consider is whether the appellants as tenants of premises in the State of Maharashtra including Mumbai will have any remedy to move these courts having jurisdiction under Section 33 of the Maharashtra Rent Control Act and obtain the relief of injunction against the secured creditor taking possession of the secured asset from the appellants. The answer to this question is in Section 34 of the SARFAESI Act, which is extracted hereinbelow: ―34.Civil court not to have jurisdiction.—No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993).‖ A reading of the second limb of Section 34 of the SARFAESI Act would show that no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under the Act. Thus, when action is sought to be taken by the secured creditor under Section 13 of the SARFAESI Act or by the Chief Metropolitan Magistrate or the District Magistrate under Section 14 of the SARFAESI Act, the court or the authority mentioned in Section 33 of the Maharashtra Rent Control Act cannot grant the injunction to prevent such action by the secured creditor or by the Chief Metropolitan Magistrate or the District Magistrate. Even otherwise, Section 33 of the Maharashtra Rent Control Act vests jurisdiction in the courts named therein to decide disputes between the landlord and the tenant and not disputes between the secured creditor and the tenant under landlord who is a borrower of the secured assets.‖

226. On the basis of the foregoing discussions, it is made out that the questions regarding powers granted to the DRT, under the special legislations, has been answered by various Courts of the Country and therefore, there is no dispute about the factum that any other Court of law cannot grant an injunction against a secured creditor in the matters concerning proceedings under SARFAESI Act.

227. The above discussions also enlighten about the powers conferred to the DRT and the manner in which a recovery procedure can be undertaken by the creditors/financial institutions.

228. Now coming to another special legislation, i.e., the RDB Act. In order to understand the purpose and objective of the jurisdictional bar imposed upon the Civil Courts under the said legislation, it is important to understand the intent behind the imposition of such a bar.

229. As discussed earlier, the increasing issue of non-payment of debts to banks and financial institutions leads to public money being blocked in unproductive ventures rather than being invested towards generation of national wealth. Due to inordinate burden, Civil Courts have failed in expeditiously adjudicating the recovery suits.

230. Therefore, based on the suggestions of various Committees, special Tribunals were established for adjudication of matters of dues of banks and financial institutions and therefore, intervention of Courts in such recovery matters was barred. A similar view has been reiterated by the Hon‟ble Supreme Court in the case of United Bank of India v. SatyawatiTondon27 whereby, the Hon‟ble Court held as under:

5. An analysis of the provisions of the DRT Act shows that primary object of that Act was to facilitate creation of special machinery for speedy recovery of the dues of banks and financial institutions. This is the reason why the DRT Act not only provides for establishment of the Tribunals and the Appellate Tribunals with the jurisdiction, powers and authority to make summary adjudication of applications made by banks or financial institutions and specifies the modes of recovery of the amount determined by the Tribunal or the Appellate Tribunal but also bars the jurisdiction of all courts except the Supreme Court and the High Courts in relation to the matters specified in Section 17. The Tribunals and the Appellate Tribunals have also been freed from the shackles of procedure contained in the Code of Civil Procedure.‖

231. Section 18 of the RDB Act bars any Court or other forum of law from exercising any power or authority over the matter specified in Section 17 of the RDB Act. Section 18 of the RDB Act reads as under: ―18. Bar of jurisdiction.—On and from the appointed day, no court or other authority shall have, or be entitled to exercise, any jurisdiction, powers or authority (except the Supreme Court, and a High Court exercising jurisdiction under Articles 226 and 227 of the Constitution) in relation to the matters specified in Section 17: Provided that any proceedings in relation to the recovery of debts due to any multi-State co-operative bank pending before the date of commencement of the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2012 under the Multi-State Co-operative Societies Act, 2002 ((39 of

2002) shall be continued and nothing contained in this section shall, after such commencement, apply to such proceedings.‖

232. Upon perusal of the above, it can be inferred that the said provision ousts the jurisdiction of Civil Courts and other authorities in matters listed under Section 17 of the RDB Act. As per the said provision, no Court or any other Authority has any power to exercise their jurisdiction in the matters where the DRT has been vested with the powers to exercise its jurisdiction under the said Act.

233. The exception to this jurisdiction, however, is subject to a limitation. The provision to oust the jurisdiction of Courts shall not in any manner impact the writ jurisdiction of the High Court under Article 226 and 227 of the Constitution of India and the jurisdiction of the Hon‟ble Supreme Court. Further, the said Act does not impact the proceedings under the Multi-State Co-operative Societies Act, 2002. However, the said Act precludes the Civil Courts from entertaining a dispute related to the recovery measures instituted under the RDB Act.

234. While examining the scope of intervention of the High Courts in matters provided under the RDB Act, the Hon‟ble Supreme Court in the case of Industrial Credit and Investment Corpn. of India Ltd. v. Grapco Industries Ltd.28 held that: ―14. The High Court also said that on merits as well the Tribunal was wrong in granting an ex parte order. It is not that the High Court itself considered the merits of the case. The objection of the High Court was twofold: (1) the Tribunal did not give any reasons, and (2) it was an omnibus order and that there was no reference even to prayers in the application and that the prayers stood allowed ―in terms of entire hog‖.

Criticism of the High Court appears to be correct on that account. The judgment of the High Court, however, does not refer at all to the facts of the case and it proceeds more on abstract principles of law. There was no bar on the High Court to itself examine the merits of the case in the exercise of its jurisdiction under Article 227 of the Constitution if the circumstances so require. There is no doubt that the High Court can even interfere with interim orders of the courts and tribunals under Article 227 of the Constitution if the order is made without jurisdiction. But then a too technical approach is to be avoided. When the facts of the case brought before the High Court are such that the High Court can itself correct the error, then it should pass appropriate orders instead of merely setting aside the impugned order of the Tribunal and leaving everything in a vacuum.‖

235. As evident from the above quoted paragraphs, the Hon‟ble Supreme Court has clarified that the High Court is well within its jurisdiction under Article 227 of the Constitution to go into the merits of the case and to examine if the order passed was justified or not, and has the powers to interfere with the defect and correct the defect, if any.

236. The forgoing discussions indicate that the DRT was given exclusive jurisdiction in matters relating to recovery of debts by banks and financial institutions. Considering the seriousness of the issue of increasing defaults in repayment of debts to the banks and financial institutions, the legislature wanted no delay in adjudication of such matters. Hence, all the other Courts and Authorities were barred from entertaining the matters falling under purview of the DRT in order to prevent the delay in the recovery of debts.

237. Section 18 of the RDB Act reinforces the DRT‟s authority and ensures that it can effectively carry out its mandate of streamlining debt recovery processes for banks and financial institutions. As discussed earlier, a similar bar on the jurisdiction of Civil Courts has been provided under Section 34 of SARFAESI Act.

238. Therefore, taking into consideration the relevant provisions, judgments, objective of enactment of the legislation and similar provisions in the subsequent legislation, this Court is of the view that the settled position in law is beyond any doubt that no Civil Court can exercise its jurisdiction or interfere in respect of matters where the DRT has been granted the jurisdiction to adjudicate the dispute under the SARFAESI Act and RDB Act.

239. After considering discussions on law in foregoing paragraphs, for proper adjudication of the instant application, this Court deems it imperative to formulate the following issue for adjudication: Whether the suit filed by the Plaintiff is non-maintainable due to the bar imposed by the special legislations and whether the Plaint is liable to be rejected despite rejection is sought only qua the defendant No.7/Punjab National Bank? If not, can the suit filed for specific performance continue without an embargo upon the actions taken by a party under the special legislations, i.e., SARFAESI Act and RDB Act?

240. In order to address the aforementioned issue, it is pertinent for this Court to look into the aspect of what constitutes a suit for specific performance and how the same can or cannot be categorized as an action barred under the SARFAESI Act or RDB Act.

241. The specific performance suit arises out of a breach of an agreement between the parties, where the aggrieved party has the option to either seek damages for such breach or file a civil suit seeking specific performance of the said agreement executed between the parties.

242. In order to institute a suit for specific performance, there are certain conditions enshrined in the Specific Relief Act, 1963 („SRA‟ hereinafter) and the primary condition is the existence of a contract between the parties.

243. With respect to the present case, during the course of proceedings, Mr. Rattan, the learned counsel for the defendant No.7 argued that the Agreements, as referred by the Plaintiff and the OTR scheme never came into implementation, and therefore, the said Agreements between the parties cannot be termed as completed. The above said submission of the learned counsel was also supported by Mr. Makkar, learned senior counsel for the defendant No.6.

244. In response to the same, Mr. Nankani, at the outset, denied the nonimplementation of the Agreements and the OTR scheme and referred to the Agreement dated 7th June, 2021 to contend that the steps were duly taken for implementation of the same. Apart from referral to the said Agreement, Mr. Nankani also apprised this Court that the Predecessor Bench had granted stay on the coercive actions, on being satisfied that the defendant Banks were at fault for non-implementation of the Agreement and the OTR scheme as the said Banks failed to finalize the security documents.

255. At last, Mr. Nankani also apprised this Court that the JLM held on 14th March, 2022 clearly records the acceptance of the implementation of the Agreements and OTR scheme, and subsequent funding of the FITL account by the defendant Banks.

245. Since the issue in present application is limited to whether the Plaint is liable to be rejected under Order VII Rule 11 of the CPC due to the imposition of bar on the jurisdiction of the Civil Courts, or not, this Court deems it appropriate to refrain itself from getting into the merits of the suit.

246. Now coming to the question raised in the instant application, i.e., whether the suit can be held to be barred under Section 34 of the SARFAESI Act or not.

247. In the foregoing paragraphs, this Court has already explained the scope and ambit of the bar imposed on the jurisdiction of the Civil Courts in the matters concerning recovery of the debts. As elaborated earlier, the said recovery measures can only be challenged in the DRT and the aggrieved party needs to file an application under Section 17 of the SARFAESI Act.

248. Therefore, there is no dispute regarding the bar imposed on the Civil Courts to try and adjudicate a dispute arising out of SARFAESI proceedings, however, as contended by the learned senior counsel for the Plaintiff, the captioned suit has been filed for specific performance of the Agreements executed among the parties. Therefore, this Court is to determine whether the Plaintiff is well within its right to file such a suit or not.

249. For determination of the same, this Court deems it appropriate to peruse the Plaint. The relevant parts of the Plaint read as under:

250. During the pendency of the captioned suit, this Court had impleaded the other necessary parties to the suit by order/judgment dated 3rd March, 2023 leading to filing of application for amendment of Plaint under Order VI Rule 17 of the CPC, which stands allowed vide the judgment of the even date in application bearing I.A. No.10671/2023.

251. Since the learned counsel for the defendant No. 7 contended the present application on the basis of the original suit, i.e., before allowing the amendment application, only the contents of the original Plaint are relevant for adjudication of the captioned application.

252. The plain reading of the prayer clause of the original Plaint suggests that the Plaintiff had sought declaration, mandatory injunction and specific performance of the Agreements executed among the parties. Therefore, the contents of the prayer do not suggest that a relief has been sought by the Plaintiff for an action to be taken under the special Acts, i.e., the SARFAESI Act or the RDB Act.

253. During the course of proceedings, Mr. Nankani had placed reliance upon the judgment of the Hon‟ble Supreme Court to draw a distinction between the actions under the special legislations and a suit filed for specific performance of the contract. Following are the said judgments.

254. Firstly, Mr. Nankani referred to the case of Nahar Industrial Enterprises Ltd. v. HSBC and Ors.29 whereby, the Hon‟ble Supreme Court held as under: ―85. If the Tribunal was to be treated to be a civil court, the debtor or even a third party must have an independent right to approach it without having to wait for the bank or financial institution to approach it first. The continuance of its counterclaim is entirely dependent on the continuance of the applications filed by the bank. Before it no declaratory relief can be sought for by the debtor. It is true that claim for damages would be maintainable but the same have been provided by way of extending the right of counterclaim.

86. The Debts Recovery Tribunal cannot pass a decree. It can issue only recovery certificates. [See Sections 19(2) and 19(22) of the Act.] The power of the Tribunal to grant interim order is attenuated with circumspection. [See Dataware Design Labs (P) Ltd. v. SBI [(2005) 127 Comp Cas 176 (Ker)], Comp Cas at p. 184.] Concededly in the proceeding before the Debts Recovery Tribunal detailed examination, cross-examinations, provisions of the Evidence Act as also application of other provisions of the Code of Civil Procedure like interrogatories, discoveries of documents and admission need not be gone into. Taking recourse to such proceedings would be an exception. Entire focus of the proceedings before the Debts Recovery Tribunal centres round the legally recoverable dues of the bank.

88. We have noticed hereinbefore that civil courts are created under different Acts. They have their own hierarchy. They necessarily are subordinate to the High Court. The appeals from their judgment will lie before a superior court. The High Court is entitled to exercise its power of revision as also superintendence over the said courts. For the aforementioned purpose, we must bear in mind the distinction between two types of courts viz. civil courts and the courts trying disputes of civil nature. Only because a court or a tribunal is entitled to determine an issue involving civil nature, the same by itself would not lead to the conclusion that it is a civil court. For the said purpose, as noticed hereinbefore, a legal fiction is required to be created before it would have all attributes of a civil court.

89. The Tribunal could have been treated to be a civil court provided it could pass a decree and it had all the attributes of a civil court including undertaking of a fullfledged trial in terms of the provisions of the Code of Civil Procedure and/or the Evidence Act. It is now trite law that jurisdiction of a court must be determined having regard to the purpose and object of the Act. If Parliament, keeping in view the purpose and object thereof thought it fit to create separate Tribunal so as to enable the banks and the financial institutions to recover the debts expeditiously wherefor the provisions contained in the Code of Civil Procedure as also the Evidence Act need not necessarily be resorted to, in our opinion, by taking recourse to the doctrine of purposive construction, another jurisdiction cannot be conferred upon it so as to enable this Court to transfer the case from the civil court to a tribunal.

90. It is difficult to accept the submission of Mr Divan that if such an interpretation is accepted, the same would remove the anomaly which would otherwise be present in the cases where recovery is for a sum below Rs 10 lakhs and for those where recovery is for a sum of Rs 10 lakhs or more. Parliament created such an anomaly, if any, knowingly. Expeditious recovery of the debts above Rs 10 lakhs is the object of the Act. Casus omissus, if any, it is well known cannot be supplied by the court. In Raghunath Rai Bareja [(2007) 2 SCC 230], this Court has clearly held: (SCC p. 244, para 40) ―40. … Assuming there is a defect or an omission in the words used by the legislature, the court cannot correct or make up the deficiency, especially when a literal reading thereof produces an intelligible result, …‖

91. Would the Tribunal answer the description of the civil court must be considered having regard to the provisions of the Act constituting civil court as also the provisions of the Code of Civil Procedure?

92. We have held that the Tribunals are neither civil courts nor courts subordinate to the High Court. The High Court ordinarily can be approached in exercise of its writ jurisdiction under Article 226 or its jurisdiction under Article 227 of the Constitution of India. The High Court exercises such jurisdiction not only over the courts but also over the Tribunals. The Appellate Tribunals have been constituted for determining the appeals from judgments and orders of the Tribunal.

93. The principles of purposive construction, therefore, in our opinion, are not attracted in the instant case. Had Parliament intended to make the Tribunals civil courts, a legal fiction could have been raised. There are statutes like the Andhra Pradesh Land Grabbing Act where such a legal fiction has been raised. [See V. Laxminarasamma v. A. Yadaiah [(2009) 5 SCC 478: (2009) 2 SCC (Cri) 711: (2009) 3 Scale 685].] Whereas the doctrine of purposive construction is a salutary principle, the same cannot be extended to a case which would lead to an anomaly. It can inter alia be resorted to only when difficulty or doubt arises on account of ambiguity. It is to be preferred when object and purpose of the Act is required to be promoted.

94. For the foregoing reasons, we are of the opinion that the decisions of this Court laying down the principles of purposive interpretation, whereupon strong reliance has been placed by Mr Divan viz. New India Assurance Co. Ltd. v. Nusli Neville Wadia [(2008) 3 SCC 279], Dilip S. Dahanukar v. Kotak Mahindra Co. Ltd. [(2007) 6 SCC 528: (2007) 3 SCC (Cri) 209], South Eastern Coalfields Ltd. v. Commr., Customs & Central Excise [(2006) 6 SCC 340] and UCO Bank v. Rajinder Lal Capoor [(2008) 5 SCC 257: (2008) 2 SCC (L&S) 263], cannot have any application.

95. On the other hand, if the principles of purposive interpretation are resorted to, the same would amount to rewriting of the statute. In Sri Ram Saha v. State of W.B. [(2004) 11 SCC 497: JT (2004) 9 SC 136] this Court held: (SCC p. 508, para 19) ―19. It is well-settled principle of interpretation that a statute is to be interpreted on its plain reading; in the absence of any doubt or difficulty arising out of such reading of a statute defeating or frustrating the object and purpose of an enactment, it must be read and understood by its plain reading. However, in case of any difficulty or doubt arising in interpreting a provision of an enactment, courts will interpret such a provision keeping in mind the objects sought to be achieved and the purpose intended to be served by such a provision so as to advance the cause for which the enactment is brought into force. If two interpretations are possible, the one which promotes or favours the object of the Act and purpose it serves, is to be preferred. At any rate, in the guise of purposive interpretation, the courts cannot rewrite a statute. A purposive interpretation may permit a reading of the provision consistent with the purpose and object of the Act but the courts cannot legislate and enact the provision either creating or taking away substantial rights by stretching or straining a piece of legislation.‖ (See also Director of Public Prosecutions v. Bhagwan [1972 AC 60: (1970) 3 WLR 501: (1970) 3 All ER 97 (HL)].) Conclusion

96. The Tribunal was constituted with a specific purpose as is evident from its Statement of Objects. The Preamble of the Act also is a pointer to that too. We have also noticed the scheme of the Act. It has a limited jurisdiction. Under the Act, as it originally stood, it did not even have any power to entertain a claim of setoff or counterclaim. No independent proceedings can be initiated before it by a debtor.

97. A debtor under the common law of contract as also in terms of the loan agreement may have an independent right. No forum has been created for endorsement of that right. Jurisdiction of a civil court as noticed hereinbefore is barred only in respect of the matters which strictly come within the purview of Section 17 thereof and not beyond the same. The civil court, therefore, will continue to have jurisdiction. Exclusion of jurisdiction must be express

105. The civil court indisputably has the jurisdiction to try a suit. If the suit is vexatious or otherwise not maintainable action can be taken in respect thereof in terms of the Code. But if all suits filed in the civil courts, whether inextricably connected with the application filed before the DRT by the banks and financial institutions are transferred, the same would amount to ousting the jurisdiction of the civil courts indirectly. Suits filed by the debtor may or may not be counterclaims to the claims filed by banks or financial institutions but for that purpose consent of the Plaintiff is necessary.

106. It is furthermore difficult to accept the contentions of the respondents that the statutory provisions contained in Sections 17 and 18 of the DRT Act have ousted the jurisdiction of the civil court as the said provisions clearly state that the jurisdiction of the civil court is barred in relation only to applications from banks and financial institutions for recovery of debts due to such banks and financial institutions.

107. A civil court is entitled to decide the respective claims of the parties in a suit. It must come within the purview of the hierarchy of courts as indicated in Section 3 of the Code. It will have jurisdiction to determine all disputes of civil nature unless the same is barred expressly by a statute or by necessary implication.

108. Although some arguments have been advanced before us whether having regard to the provisions of Sections 17 and 18 of the Act the civil court jurisdiction is completely ousted, we are of the view that the jurisdiction of the civil court would be ousted only in respect of the matters contained in Section 18 which has a direct co-relation with Section 17 thereof, that is to say that the matter must relate to a debt payable to a bank or a financial institution. The application before the Tribunal would lie only at the instance of the bank or the financial institution for the recovery of its debt. It must further be noted in this respect that had the jurisdiction of the civil courts been barred in respect of counterclaim also, the statute would have said so and Sections 17 and 18 would have been amended to introduce the provision of counterclaim.

109. We may in this context place on record the following observations from Indian Bank [(2006) 5 SCC 72]: (SCC pp. 81-82, paras 14-16) ―14. Section 9 of the Code of Civil Procedure provides that the courts shall have jurisdiction to try all suits of a civil nature, excepting suits of which their cognizance is either expressly or impliedly barred.

15. It is evident from Sections 17 and 18 of the Debts Recovery Act that civil court's jurisdiction is barred only in regard to applications by a bank or a financial institution for recovery of its debts. The jurisdiction of civil courts is not barred in regard to any suit filed by a borrower or any other person against a bank for any relief. …

16. … What is significant is that Sections 17 and 18 have not been amended. Jurisdiction has not been conferred on the Tribunal, even after amendment, to try independent suits or proceedings initiated by borrowers or others against banks/financial institutions, nor the jurisdiction of civil courts barred in regard to such suits or proceedings.‖

110. It must be remembered that the jurisdiction of a civil court is plenary in nature. Unless the same is ousted, expressly or by necessary implication, it will have jurisdiction to try all types of suits.

111. In Dhulabhai v. State of M.P. [AIR 1969 SC 78: (1968) 3 SCR 662], this Court opined: (AIR pp. 89-90, para 32) ―32. … The result of this inquiry into the diverse views expressed in this Court may be stated as follows: *** (2) Where there is an express bar of the jurisdiction of the court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court. Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the Tribunals so constituted, and whether remedies normally associated with actions in civil courts are prescribed by the said statute or not. *** (7) An exclusion of the jurisdiction of the civil court is not readily to be inferred unless the conditions above set down apply.‖

112. In Dwarka Prasad Agarwal v. Ramesh Chander Agarwal [(2003) 6 SCC 220]: (SCC p. 227, para 19) ―19. A bare perusal of the aforementioned provisions leaves no manner of doubt that thereby the jurisdiction of the civil court has not been ousted. The civil court, in the instant case, was concerned with the rival claims of the parties as to whether one party has illegally been dispossessed by the other or not. Such a suit, apart from the general law, would also be maintainable in terms of Section 6 of the Specific Relief Act, 1963. In such matters the court would not be concerned even with the question as to the title/ownership of the property.‖ Therein five principles were laid down stating: (Dwarka Prasad Agarwal case [(2003) 6 SCC 220], SCC p. 228, para 22) ―22. The dispute between the parties was eminently a civil dispute and not a dispute under the provisions of the Companies Act. Section 9 of the Code of Civil Procedure confers jurisdiction upon the civil courts to determine all disputes of civil nature unless the same is barred under a statute either expressly or by necessary implication. Bar of jurisdiction of a civil court is not to be readily inferred. A provision seeking to bar jurisdiction of a civil court requires strict interpretation. The court, it is well settled, would normally lean in favour of construction, which would uphold retention of jurisdiction of the civil court. The burden of proof in this behalf shall be on the party who asserts that the civil court's jurisdiction is ousted. (See Sahebgouda v. Ogeppa [(2003) 6 SCC 151].) Even otherwise, the civil court's jurisdiction is not completely ousted under the Companies Act, 1956.‖

113. In NagriPracharini Sabha v. District and Sessions Judge [1991 Supp (2) SCC 36]: (SCC p. 37, para 2) ―2. A litigant having a grievance of a civil nature has, independently of any statute, a right to institute a suit in the civil court unless its cognizance is either expressly or impliedly barred. The position is well settled that exclusion of jurisdiction of the civil court is not to be readily inferred and such exclusion must be either express or implied.‖

114. In Ramesh Chand Ardawatiya v. Anil Panjwani [(2003) 7 SCC 350], this Court opined: (SCC p. 362, para 19) ―19. … Where there is a special tribunal conferred with jurisdiction or exclusive jurisdiction to try a particular class of cases even then the civil court can entertain a civil suit of that class on availability of a few grounds. An exclusion of jurisdiction of the civil court is not to be readily inferred. (See Dhulabhai v. State of M.P. [AIR 1969 SC 78: (1968) 3 SCR 662] )‖

115. Power to create or enlarge jurisdiction is legislative in character. Similarly, right of revision or appeal is normally a creature of statute.

116. In Rajasthan SRTC v. Zakir Hussain [(2005) 7 SCC 447: 2005 SCC (L&S) 945] this Court has held: (SCC p. 459, para 21) ―21. It is a well-settled principle of law as laid down by this Court that if the court has no jurisdiction, the jurisdiction cannot be conferred by any order of court. This Court in A.R. Antulay v. R.S. Nayak [(1988) 2 SCC 602: 1988 SCC (Cri) 372: AIR 1988 SC 1531], AIR paras 40 to 42 wherein it is, inter alia, held and observed as under: (SCC pp. 650-51, paras 38-40) ‗***

39. … The power to create or enlarge jurisdiction is legislative in character, … Parliament alone can do it by law and no court, whether superior or inferior or both combined can enlarge the jurisdiction of a court or divest a person of his rights of revision and appeal. ***‘ ‖

117. The Act, although, was enacted for a specific purpose but having regard to the exclusion of jurisdiction expressly provided for in Sections 17 and 18 of the Act, it is difficult to hold that a civil court's jurisdiction is completely ousted. Indisputably the banks and the financial institutions for the purpose of enforcement of their claim for a sum below Rs 10 lakhs would have to file civil suits before the civil courts. It is only for the claims of the banks and the financial institutions above the aforementioned sum that they have to approach the Debts Recovery Tribunal. It is also without any cavil that the banks and the financial institutions, keeping in view the provisions of Sections 17 and 18 of the Act, are necessarily required to file their claim petitions before the Tribunal. The converse is not true. Debtors can file their claims of setoff or counterclaims only when a claim application is filed and not otherwise. Even in a given situation the banks and/or the financial institutions can ask the Tribunal to pass an appropriate order for getting the claims of setoff or the counterclaims, determined by a civil court. The Tribunal is not a high-powered tribunal. It is a one-man tribunal. Unlike some special Acts, as for example the Andhra Pradesh Land Grabbing (Prohibition) Act, 1982 it does not contain a deeming provision that the Tribunal would be deemed to be a civil court.

118. The liabilities and rights of the parties have not been created under the Act. Only a new forum has been created. The banks and the financial institutions cannot approach the Tribunal unless the debt has become due. In such a contingency, indisputably a civil suit would lie. There is a possibility that the debtor may file preemptive suits and obtain orders of injunction, but the same alone, in our opinion, by itself cannot be held to be a ground to completely oust the jurisdiction of the civil court in the teeth of Section 9 of the Code. Recourse to the other provisions of the Code will have to be resorted to for redressal of his individual grievances.

119. It is also difficult to accept the contention of learned counsel for the banks that the civil court's jurisdiction is not in consonance with the Act. We do not find the same to be correct. On the ground of inconsistency in the procedures contained in the two Acts alone, the jurisdiction of the civil court cannot be said to have been ousted.

120. Reliance has been placed by Mr K.K. Venugopal, learned Senior Counsel for the Bank on Vijay Kumar Sharma v. State of Karnataka [(1990) 2 SCC 562], wherein this Court has held: (SCC p. 587, para 44) ―44. The Court then referred to its earlier decision in Deep Chand v. State of U.P. [AIR 1959 SC 648] and pointed out that in that case the following principles were laid down to ascertain whether there is repugnancy or not:

1. Whether there is direct conflict between the two provisions;

2. Whether Parliament intended to lay down an exhaustive code in respect of the subject-matter replacing the earlier law;

3. Whether the two laws occupy the same field. The Court then referred to Sutherland on Statutory Construction (Vol. 1, 3rd Edn., p. 486) on the question of ‗repeal of special and local statutes by general statutes‘.‖

121. It was further stated: (Vijay Kumar Sharma case [(1990) 2 SCC 562], SCC pp. 589 & 591, paras 46 & 48) ―46. What is important from our point of view, is the view taken in that case that when repugnancy is alleged between the two statutes, it is necessary to examine whether the two laws occupy the same field, whether the new or the later statute covers the entire subject-matter of the old, whether legislature intended to lay down an exhaustive code in respect of the subject-matter covered by the earlier law so as to replace it in its entirety and whether the earlier special statute can be construed as remaining in effect as a qualification of or exception to the later general law, since the new statute is enacted knowing fully well the existence of the earlier law and yet it has not repealed it expressly. The decision further lays down that for examining whether the two statutes cover the same subject-matter, what is necessary to examine is the scope and the object of the two enactments, and that has to be done by ascertaining the intention in the usual way and what is meant by the usual way is nothing more or less than the ascertainment of the dominant object of the two legislations. ***

48. … The legislative intent is clear. Since, further, Parliament had enacted the later statute knowing fully well the existence of the earlier statute and yet it did not expressly repeal it, it will be presumed that Parliament felt that there was no need to repeal the said statute.‖ However, in that case itself it has been held that repugnancy and inconsistency is synonymous. Furthermore in a case of this nature where the banks itself have filed applications for transfer, the jurisdiction of the civil court must be presumed.

122. Submission of Mr Desai that this Court can direct the Tribunal to follow the provisions of the Code, in our opinion, cannot be accepted. Such a direction would be in the teeth of the provisions of the Act. Reliance placed by the learned counsel on sub-section (2) of Section 22 of the Act to contend that the provisions of the Code are applicable, in our opinion, militates against the said contention. Sub-section (2) of Section 22 deals with applicability of the provisions of the Code in a limited manner.

123. Sub-section (3) of Section 22 raises a legal fiction that the proceeding before the Tribunal or the Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 and for all the purposes of Section 196 of the Penal Code, 1860. The very fact that a legal fiction has been created and the Tribunal or the Appellate Tribunal shall be deemed to be a civil court for purposes of Section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973, itself suggests that Parliament did not intend to take away the jurisdiction of the civil court. In any event, the said legal fiction has a limited application. Its scope and ambit cannot be extended. In Bharat Bank Ltd. [1950 SCC 470: AIR 1950 SC 188: 1950 SCR 459] it has clearly been held that although the Labour Court may have all the trappings of a court, but it is still not a court. Inherent jurisdiction

132. Section 151 of the Code of Civil Procedure does not confer any extraordinary jurisdiction on this Court. It saves the inherent power of all the civil courts i.e. from the trial Judge to this Court. Thus, where a matter has expressly been provided for in the body of the Code, ordinarily inherent power shall not be resorted to.

133. The underlying principle of Section 151 of the Code ordinarily would apply where the area is grey. It indisputably confers incidental powers. It confers power on a court to do something which in absence of any provision contrary thereto would lead to advancement of justice and prevent injustice. The power to transfer one case from one court to another or from one tribunal to another having jurisdiction of a different State is an extraordinary jurisdiction. For exercising the said power, this Court has to take into consideration a large number of factors. Such a power is to be exercised if exceptional situation arises and not otherwise.

134. In Padam Sen v. State of U.P. [AIR 1961 SC 218] this Court, having regard to the provisions contained in Order 26 Rule 9 of the Code of Civil Procedure vis-à-vis Order 38 Rule 5, Order 39 Rules 1(b) and 7 thereof, categorically held that the court has no inherent power under Section 151 of the Code of Civil Procedure to appoint a Commissioner to seize accounts books in the possession of the Plaintiff upon an application by the defendant that his apprehension that they would be tampered with, stating: (AIR pp. 219-20, paras 10-11) ―10. The defendants had no rights to these account books. They could not lay any claim to them. They applied for the seizure of these books because they apprehended that the Plaintiff might make such entries in those account books which could go against the case they were setting up in Court. The defendants' request really amounted to the Court's collecting documentary evidence which the defendants considered to be in their favour at that point of time. It is no business of the Court to collect evidence for a party or even to protect the rival party from the evil consequences of making forged entries in those account books. If the Plaintiff does forge entries and uses forged entries as evidence in the case, the defendants would have ample opportunity to dispute those entries and to prove them forgeries.

11. We are therefore of opinion that the Additional Munsiff had no inherent power to pass the order appointing a Commissioner to seize the Plaintiff's account books. The order appointing Shri Raghubir Pershad as Commissioner for this purpose was therefore an order passed without jurisdiction and was therefore a null and void order.‖

135. The above said decision in Padam Sen [AIR 1961 SC 218], we are not oblivious, has been distinguished by this Court in Manohar Lal Chopra v. Rai Bahadur Rao Raja Seth Hiralal [AIR 1962 SC 527] in a case for grant of injunction stating that Rules 1 and 2 of Order 39 of the Code of Civil Procedure is not exhaustive, stating: (AIR p. 533, para 22) ―22. In the above case, this Court did not uphold the order of the civil court, not coming under the provisions of Order 26, appointing a Commissioner for seizing the account books of the Plaintiff on the application of the defendants. The order was held to be defective not because the Court had no power to appoint a Commissioner in circumstances not covered by Section 75 and Order 26, but because the power was exercised not with respect to matters of procedure but with respect to a matter affecting the substantive rights of the Plaintiff. This is clear from the further observations made at SCR p. 887. This Court said [Ed.: As observed in Padam Sen v. State of U.P., AIR 1961 SC 218.]: (AIR p. 219, para 9) ‗9. The question for determination is whether the impugned order of the Additional Munsiff appointing Shri Raghubir Pershad, Commissioner for seizing the Plaintiff's books of account can be said to be an order which is passed by the Court in the exercise of its inherent powers. The inherent powers saved by Section 151 of the Code are with respect to the procedure to be followed by the Court in deciding the cause before it. These powers are not powers over the substantive rights which any litigant possesses. Specific powers have to be conferred on the Courts for passing such orders which would affect such rights of a party. Such powers cannot come within the scope of inherent powers of the Court in the matters of procedure, which powers have their source in the Court possessing all the essential powers to regulate its practice and procedure.‘ ‖

136. The Plaintiff furthermore is the dominuslitus. He may institute a suit having regard to the provisions contained in Sections 16 to 20 of the Code of Civil Procedure in any civil court within whose jurisdiction inter alia a cause of action arises. If the jurisdiction of the civil court is not barred or if he having regard to common law principle is entitled to maintain an action in two different forums, he may choose one of them. [See Rajasthan SRTC v. Bal Mukund Bairwa (2) [(2009) 4 SCC 299: (2009) 1 SCC (L&S) 812: (2009) 2 Scale 428].]

137. A debtor having regard to the provisions of the DRT Act would not be entitled to maintain an action before the Tribunal. If a suit is to be transferred from a civil court to a Tribunal, he would lose some rights including the right to prefer an appeal before a higher court in terms of Sections 96 and 100 of the Code of Civil Procedure. Mr Divan, however, has strongly placed reliance upon Union of India v. Delhi High Court Bar Assn. [(2002) 4 SCC 275] wherein it was observed that the Tribunals have become an essential part of the judicial system in the country. Such observations were made keeping in view the provisions of Articles 323-A and 323-B of the Constitution of India. The logical extension of the said observations would not lead to a conclusion that the Tribunals are either civil courts or this Court would be entitled to exercise its inherent power for transfer of a civil suit to a Tribunal.

138. We may place on record that in Durgesh Sharma [(2008) 9 SCC 648] this Court has clearly held that the provisions of Sections 22 to 25 of the Code of Civil Procedure are exhaustive in nature. If that be so, inherent power of the court could clearly not be invoked. Reliance has also been placed on Ram Chandand Sons Sugar Mills (P) Ltd. v. Kanhayalal Bhargava [AIR 1966 SC 1899] wherein it has been held: (AIR p. 1902, para 5) ―5. … Having regard to the said decisions, the scope of the inherent power of a court under Section 151 of the Code may be defined thus: the inherent power of a court is in addition to and complementary to the powers expressly conferred under the Code. But that power will not be exercised if its exercise is inconsistent with, or comes into conflict with, any of the powers expressly or by necessary implication conferred by the other provisions of the Code. If there are express provisions exhaustively covering a particular topic, they give rise to a necessary implication that no power shall be exercised in respect of the said topic otherwise than in the manner prescribed by the said provisions. Whatever limitations are imposed by construction on the provisions of Section 151 of the Code, they do not control the undoubted power of the Court conferred under Section 151 of the Code to make a suitable order to prevent the abuse of the process of the court.‖ We, however, are of the opinion that the principles laid down therein cannot be said to have any application in the instant case as it would bear repetition to state that by reason thereof the court would not be entitled to denude a suitor of his right of appeal and other substantive rights.

139. We are also unable to persuade ourselves to hold that the right of transfer of a case being procedural in nature should be construed liberally. By reason thereof, substantive right of a party cannot be taken away. While accepting that the rules of procedures are intended to provide justice and not to defeat it as has been held by this Court in N.T. VeluswamiThevar v. G. Raja Nainar [AIR 1959 SC 422] and LakshmiratanEngg. Works Ltd. v. CST [AIR 1968 SC 488], that the court must bear in mind that it would not cause injustice to any of the parties thereby.

140. Reliance has also been placed on Industrial Investment Bank of India Ltd. v. Marshal's Power & Telecom (I) Ltd. [(2007) 1 SCC 106] and Durga Hotel Complex v. RBI [(2007) 5 SCC 120]. Both the aforementioned cases have been determined by a Bench which has decided Ranjan Chemicals [(2007) 1 SCC 97]. Those cases related to the contentions raised before the Banking Ombudsman. The Bench held that the appellants therein could make all their claims before the DRT while defending the claim of the bank, including the ones he had put forward before the Banking Ombudsman. We are not concerned with such a contention herein. In any event, in view of our findings that we are bound to follow Indian Bank [(2006) 5 SCC 72], this argument has no force.‖

255. Subsequently, the Nahar Industries (Supra)was reaffirmed by the larger bench of the Hon‟ble Supreme Court in the case of Bank of Rajasthan Ltd. v. Vck Shares & Stock Broking Services Ltd.30 whereby, it was held that the bar imposed by the special legislations does not apply to the independent suits filed before a Civil Court. The relevant part of the said judgment reads as under:

suit or proceeding instituted by a bank or financial institution for recovery of a debt, did not attract Section 31.

16. As far as sub-sections (6) to (11) of Section 19 are concerned, they are merely enabling provisions. The Debts Recovery Act, as it originally stood, did not contain any provision enabling a defendant in an application filed by the Bank/financial institution to claim any set-off or make any counterclaim against the Bank/financial institution. On that among other grounds, the Act was held to be unconstitutional (see Delhi High Court Bar Assn. v. Union of India [Delhi High Court Bar Assn. v. Union of India, 1995 SCC OnLine Del 215: AIR 1995 Del 323] ). During the pendency of appeal against the said decision, before this Court, the Act was amended by Act 1 of 2000 to remove the lacuna by providing for set-off and counterclaims by defendants in the applications filed by Banks/financial institution before the Tribunal. The provisions of the Act as amended were upheld by this Court in Union of India v. Delhi High Court Bar Assn. [Union of India v. Delhi High Court Bar Assn., (2002) 4 SCC 275] The effect of subsections (6) to (11) of Section 19 of the amended Act is that any defendant in a suit or proceeding initiated by a bank or financial institution can: (a) claim set-off against the demand of a Bank/financial institution, any ascertained sum of money legally recoverable by him from such Bank/financial institution; and (b) set-up by way of counterclaim against the claim of a bank/financial institution, any right or claim in respect of a cause of action accruing to such defendant against the Bank/financial institution, either before or after filing of the application, but before the defendant has delivered his defence or before the time for delivering the defence has expired, whether such a counterclaim is in the nature of a claim for damages or not. What is significant is that Sections 17 and 18 have not been amended. Jurisdiction has not been conferred on the Tribunal, even after amendment, to try independent suits or proceedings initiated by borrowers or others against Banks/financial institutions, nor the jurisdiction of civil courts barred in regard to such suits or proceedings. The only change that has been made is to enable defendants to claim set-off or make a counterclaim as provided in sub-sections (6) to (8) of Section 19 in applications already filed by the Banks or financial institutions for recovery of the amounts due to them. In other words, what is provided and permitted is a crossaction by a defendant in a pending application by the Bank/financial institution, the intention being to have the claim of the Bank/financial institution made in its application and the counterclaim or claim for set-off of the defendant, as a single unified proceeding, to be disposed of by a common order.

17. Making a counterclaim in the Bank's application before the Tribunal is not the only remedy, but an option available to the borrower/defendant. He can also file a separate suit or proceeding before a civil court or other appropriate forum in respect of his claim against the Bank and pursue the same. Even the Bank, in whose application the counterclaim is made, has the option to apply to the tribunal to exclude the counterclaim of the defendant while considering its application. When such application is made by the Bank, the Tribunal may either refuse to exclude the counterclaim and proceed to consider the Bank's application and the counterclaim together; or exclude the counterclaim as prayed, and proceed only with the Bank's application, in which event the counterclaim becomes an independent claim against a bank/financial institution. The defendant will then have to approach the civil court in respect of such excluded counterclaim as the Tribunal does not have jurisdiction to try any independent claim against a bank/financial institution. A defendant in an application, having an independent claim against the Bank, cannot be compelled to make his claim against the Bank only by way of a counterclaim. Nor can his claim by way of independent suit in a court having jurisdiction, be transferred to a tribunal against his wishes.

18. In this case, the first respondent does not wish his case to be transferred to the Tribunal. It is, therefore, clear that the suit filed by the first respondent against the Bank in the High Court for recovery of damages, being an independent suit, and not a counterclaim made in the application filed by the Bank, the Bank's application for transfer of the said suit to the Tribunal was misconceived and not maintainable. The High Court, where the suit for damages was filed by the company against the Bank, long prior to the Bank filing an application before the tribunal against the company, continues to have jurisdiction in regard to the suit and its jurisdiction is not excluded or barred under Section 18 or any other provision of the Debts Recovery Act.‖

39. On a plain reading of the provisions, the conclusion reached was that Section 17 of the RDB Act bars the jurisdiction of the civil court only in respect of applications filed by the Bank or financial institution. This provision did not bar the jurisdiction of the civil court to try a suit filed by the borrower. There was also an absence of provisions in the Act for transfer of suits and proceedings except Section 31, which relates to pending suit proceedings by a bank or financial institution for recovery of debt.

40. It was noticed that the significant aspect of Sections 17 and 18 of the RDB Act was that even after establishment of DRT, no jurisdiction had been conferred on it to try independent suits or proceedings initiated by the borrower or others against Banks/financial institutions. What has been permitted is only a cross-action in the form of a counterclaim by a defendant in the pending application to facilitate a unified proceeding. The most significant aspect considered in this behalf is set out in para 17 extracted above—that a counterclaim in a bank's application before DRT was not the only remedy, but an option available to the defendant borrower. The borrower was not precluded from filing a separate suit or proceeding before a civil court or other appropriate forum. Not only that, even the Bank, in whose application a counterclaim is made, has the option to apply to DRT to exclude the counterclaim of the defendant while considering its application. If DRT were to find in the Bank's favour, the defendant would have to approach the civil court in respect of such excluded counterclaim, as DRT does not have jurisdiction to try an independent claim against the Bank/financial institution.

41. The question thus arises as to whether the view expressed in Indian Bank [Indian Bank v. ABS Marine Products (P) Ltd., (2006) 5 SCC 72] is the correct legal proposition in view of certain earlier judgments as well as latter judgments. We may however notice that the earlier judgment in Abhijit Tea Co. [United Bank of Indiav. Abhijit Tea Co. (P) Ltd., (2000) 7 SCC 357], where an independent suit of a defendant was deemed to be a counterclaim and transferred to DRT, was considered and differentiated in Indian Bank case [Indian Bank v. ABS Marine Products (P) Ltd., (2006) 5 SCC 72]. Although both were judgments of Coordinate Benches of this Court, Indian Bank case [Indian Bank v. ABS Marine Products (P) Ltd., (2006) 5 SCC 72] opined that the transfer would only be possible if the subject-matter of the two suits was inextricably connected and where both parties consented to such transfer.

42. In the subsequent judgment in Ranjan Chemicals [SBI v. Ranjan Chemicals Ltd., (2007) 1 SCC 97], the Court went as far as to say that the transfer could be made of the civil proceedings to DRT without consent of both the parties and that a claim in an independent suit could be considered as the claim for set-off or a counterclaim. This flip-flop-flip continued depending on the view that the Bench of two Judges wanted to take as thereafter in Nahar Industrial Enterprises [Nahar Industrial Enterprises Ltd. v. Hong Kong & Shanghai Banking Corpn., (2009) 8 SCC 646: (2009) 3 SCC (Civ) 481], it was found that there was no reason to depart from the view taken in Indian Bank case [Indian Bank v. ABS Marine Products (P) Ltd., (2006) 5 SCC 72], as was sought to be done in Ranjan Chemicals case [SBI v. Ranjan Chemicals Ltd., (2007) 1 SCC 97], and that is how the reference arose.

43. We must note at the threshold itself that there are no restrictions on the power of a civil court under Section 9 of the Code unless expressly or impliedly excluded. This was also reiterated by a Constitution Bench of this Court in Dhulabhai v. State of M.P. [Dhulabhai v. State of M.P., (1968) 3 SCR 662: AIR 1969 SC 78] Thus, it is in the conspectus of the aforesaid proposition that we will have to analyse the rival contentions of the parties set out above. Our line of thinking is also influenced by a three-Judge Bench of this Court in Dwarka Prasad Agarwal v. Ramesh Chander Agarwal [Dwarka Prasad Agarwal v. Ramesh Chander Agarwal, (2003) 6 SCC 220] where it was opined that Section 9 of the Code confers jurisdiction upon civil courts to determine all disputes of civil nature unless the same is barred under statute either expressly or by necessary implication and such a bar is not to be readily inferred. The provision seeking to bar jurisdiction of a civil court requires strict interpretation and the Court would normally lean in favour of construction which would uphold the jurisdiction of the civil court.

44. Now, if we turn to the objective of the RDB Act read with the scheme and provisions thereof; it is abundantly clear that a summary remedy is provided in respect of claims of Banks and financial institutions so that recovery of the same may not be impeded by the elaborate procedure of the Code. The defendant has a right to defend the claim and file a counterclaim in view of sub-sections (6) and (8) of Section 19 of the RDB Act. In case of pending proceedings to be transferred to DRT, Section 31 of the RDB Act took care of the issue of mere transfer of the Bank's claim, albeit without transfer of the counterclaim. Thus, if the debtor desires to institute a counterclaim, that can be filed before DRT and will be tried along with the case. However, it is subject to a caveat that the Bank may move for segregation of that counterclaim to be relegated to a proceeding before a civil court under Section 19(11) of the RDB Act, though such determination is to take place along with the determination of the claim for recovery of debt.

45. We are thus of the view that there is no provision in the RDB Act by which the remedy of a civil suit by a defendant in a claim by the Bank is ousted, but it is the matter of choice of that defendant. Such a defendant may file a counterclaim, or may be desirous of availing of the more strenuous procedure established under the Code, and that is a choice which he takes with the consequences thereof.

49. Now, turning to the issue of the power of the civil court to transfer an independent proceeding instituted by a defendant to be tried alongside a recovery proceeding before DRT. There is gainsay that there is no specific power to transfer a suit to DRT. A Plaint can be returned only under the provisions of Order 7 Rule 10 of the Code for the reasons specified therein. In the absence of such reasons, Section 151 of the Code cannot be utilised as a residuary power to achieve the transfer, which is really a consequence of return of the Plaint when the grounds under Order 7 Rule 10 of the Code are not satisfied. The absence of any legislative power cannot give a power by implication to the civil court. We believe that it would not be appropriate to read such power to transfer a suit to a DRT under Section 151 of the Code when DRT is a creature of a statute and that statute does not provide for such eventuality.

50. We must also notice an important aspect that even where a defendant is to invoke the jurisdiction of DRT by filing a counterclaim, the Bank has a right to seek a relegation of that claim to the civil court and DRT has been empowered to do so, albeit, at the final adjudication stage. This is so in view of the summary nature of remedy provided before DRT and thus, if certain inquiries beyond the contours of what DRT does are envisaged, a civil court remedy may be considered as appropriate.

51. Now coming to the question whether consent is required for the transfer of a suit. We do believe that once we have opined that there is no power of transfer in the civil court, the consent or absence of it is not something which would lend such power to the civil court. The option before the defendant, who has instituted the suit, is clear — either he could file a counterclaim before DRT or he could institute separate civil proceedings.

52. We however have a word of caution keeping in mind the nature of powers exercised by DRT and the objective of its creation. The interpretations in Abhijit Tea Co. [United Bank of India v. Abhijit Tea Co. (P) Ltd., (2000) 7 SCC 357] and Ranjan Chemicals [SBI v. Ranjan Chemicals Ltd., (2007) 1 SCC 97], seeking to give power of transfer to the civil court, whether by consent or otherwise, were apparently predicated on an apprehension that a defendant may launch a suit before the civil court in order to delay the proceedings before DRT.

53. We certainly would not like that the process envisaged under the RDB Act be impeded in any manner by filing of a separate suit if a defendant chooses to do so. A claim petition before DRT has to proceed in a particular manner and would so proceed. There can be no question of stay of those proceedings by way of a civil proceeding instituted by a defendant before the civil court. The suit would take its own course while a petition before DRT would take its own course. We appreciate that this may be in the nature of parallel proceedings but then it is the defendant's own option. We see no problem with the same as long as the objective of having expeditious disposal of the claim before DRT under the RDB Act is not impeded by filing a civil suit. Thus, it is not open to a defendant, who may have taken recourse to the civil court, to seek a stay on the decision of DRT awaiting the verdict of his suit before the civil court as it is a matter of his choice.

54. We thus make it abundantly clear that in case of such an option exercised by the defendant who filed an independent suit, whatever be the nature of reliefs, the claim petition under the RDB Act would continue to proceed expeditiously in terms of the procedure established therein to come to a conclusion whether a debt is due to a bank and/or financial institution and whether a recovery certificate ought to be issued in that behalf.

55. We may say that if the legislature were to think otherwise, nothing prevented the legislature nor prevents it now from making suitable amendments in the RDB Act to meet such a scenario.

56. In view of the discussion aforesaid, the questions framed above are to be answered as under:

(c) Is the jurisdiction of a civil court to try a suit filed by a borrower against a bank or financial institution ousted by virtue of the scheme of the RDB Act in relation to the proceedings for recovery of debt by a bank or financial institution? The aforesaid question ought to be answered first and is answered in the negative. (a) Whether an independent suit filed by a borrower against a bank or financial institution, which has applied for recovery of its loan against the Plaintiff under the RDB Act, is liable to be transferred and tried along with the application under the RDB Act by DRT? In the absence of any such power existing in the civil court, an independent suit filed by the borrower against the Bank or financial institution cannot be transferred to be tried along with application under the RDB Act, as it is a matter of option of the defendant in the claim under the RDB Act. However, the proceedings under the RDB Act will not be impeded in any manner by filing of a separate suit before the civil court. (b) If the answer is in the affirmative, can such transfer be ordered by a court only with the consent of the Plaintiff? Since there is no such power with the civil court, there is no question of transfer of the suit whether by consent or otherwise.

57. The aforesaid takes care of the reference.

58. Now coming to the factual scenario of the case. The fact is that the proceedings under the RDB Act in any case have reached a culmination with satisfaction of the claim and, thus, no proceedings instituted by the appellant are pending before DRT. As for the suit, there is no question of a counterclaim or a transfer or any other manner other than trial of the suit instituted by the respondent. In fact, some part of the claim of the Bank was not even allowed and some adjustments were directed to be made. Even thereafter so far as any other claims of the respondent are concerned, DRT in terms of the order dated 19-5-2003 permitted the respondent to pursue the remedy in accordance with law, which can only mean the civil proceedings. Thus, the suit is liable to proceed accordingly. Conclusion

59. The civil appeals are accordingly dismissed leaving the parties to bear their own costs.

60. The judgments in Abhijit Tea Co. [United Bank of India v. Abhijit Tea Co. (P) Ltd., (2000) 7 SCC 357] and Ranjan Chemicals [SBI v. Ranjan Chemicals Ltd., (2007) 1 SCC 97] are held not to be laying down the correct legal proposition. The judgments in Indian Bank [Indian Bank v. ABS Marine Products (P) Ltd., (2006) 5 SCC 72] and Nahar Industrial Enterprises [Nahar Industrial Enterprises Ltd. v. Hong Kong & Shanghai Banking Corpn., (2009) 8 SCC 646: (2009) 3 SCC (Civ) 481] are affirmed except to the extent that they allow the transfer of a suit from the civil court to DRT.‖

256. Upon perusal of the aforesaid cases, it is crystal clear that the bar imposed upon the jurisdiction of the Civil Courts is only restricted to the challenge to the measures taken under the special legislations as an appropriate forum i.e. the „Debt Recovery Tribunal‟ has been created for the same.

257. The aforesaid judgments of the Hon‟ble Supreme Court also shed light on the aspect of whether a suit independent of the recovery measures can be adjudicated by the Civil Courts or not. On the said aspect, the Hon‟ble Court held that the same are not within the purview of the DRT and therefore, cannot be stated to be barred under the special legislations.

258. The issue of exclusion of jurisdiction of the Civil Courts has been dealt with by the Hon‟ble Supreme Court and it was held that a mere connectivity with a matter pertaining to special legislation does not impose a bar on the jurisdiction of the Civil Courts, and therefore, if the bar imposed on the jurisdiction is interpreted in this manner, the same would completely ouster the jurisdiction of the Civil Court which is not permissible in any manner.

259. In light of the facts of the matter in hand and as per the material on record, the defendant Banks had decided to take actions against the Plaintiff in the JLMs held on 14th March, 2022, 14th November, 2022 and 12th December, 2022, and the said decisions were taken despite the lender Banks (defendants herein) being aware of the stay granted by the Predecessor Bench of this Court vide order dated 22nd

260. Furthermore, the admission of implementation of the Agreements and the OTR scheme by the defendant Banks in the said JLMs compel this Court to prima facie believe that the non-implementation of the said Agreements was not due to the fault on part of the Plaintiff. Therefore, this Court is of the considered view that the Plaintiff is well within its right to file the captioned suit for specific performance of the Agreements.

261. The application of the judgments cited by Mr. Vikram Nankani, learned senior counsel appearing on behalf of the Plaintiff, to the instant case clarifies that the bar imposed upon the jurisdiction of the Civil Courts is only related to matters exclusively concerning the recovery of debt under the special legislations and the same does not preclude the Civil Courts to adjudicate other issues arising out of an agreement executed between the parties.

262. It is also pertinent to note that even though the DRT is held to be a Court for adjudication of certain matters, however, being a quasi-judicial body, it cannot exercise all the functions to be discharged by a Civil Court. Therefore, even if an aspect of a dispute is related to proceedings as per the special legislations, the same does not warrant adjudication of the other disputes by the DRT.

263. The well settled position of law states that the DRT is empowered to issue recovery certificates and can adjudicate the issues revolving around the legally recoverable dues of the Banks.

264. Therefore, the dispute regarding performance of the contract entered between the parties is not under the scope of powers conferred to the DRT and therefore, the role of Civil Court comes into play.

265. It is pertinent to mention herein that in paragraph No. 96 and 97 of the Nahar Industries (Supra), the Hon‟ble Supreme Court made it clear that the DRT does not have a jurisdiction to entertain a counterclaim, therefore, even if a suit filed for specific performance is termed as a counterclaim, the DRT does not have the powers to adjudicate the same.

266. Apart from the above said observations, the Hon‟ble Supreme Court also held that the debtor does not have a recourse to file a case before the DRT and there is no provision which provides for such a forum for adjudication of the grievance of a debtor. Hence, the complete exclusion of the jurisdiction of Civil Court cannot be permitted.

267. Therefore, the first sub-question is answered in the negative and it is held that this Court is well within its jurisdiction to adjudicate upon the dispute raised by way of the captioned suit filed by the Plaintiff seeking specific performance of the Agreements entered into by the parties.

268. At this stage, this Court also deems it appropriate to discuss the principle regarding rejection of a Plaint qua a particular defendant when the other defendants are also on the similar footing.

269. In the present application, it has been contended that the instant suit is not maintainable to the extent of actions taken by them. The position of law regarding rejection of the Plaint concerning one defendant has been made clear in the judgment rendered by the Hon‟ble Supreme Court in the case of Geetha v. Nanjundaswamy31 whereby, it was held that the Order VII Rule 11 of the CPC shall not be applicable if the Plaint survives against certain defendants. The relevant parts of the judgment read as under:

12. There is yet another reason why the judgment of the High Court is not sustainable. In an application under Order VII Rule 11, CPC a Plaint cannot be rejected in part. This principle is well established and has been continuously followed since the 1936 decision in Maqsud Ahmad v. MathraDatt& Co.4. This principle is also explained in a recent decision of this Court in Sejal Glass Ltd. v. Navilan Merchants (P) Ltd., 5 which was again followed in Madhav Prasad Aggarwal v. Axis Bank Ltd.[6] The relevant portion of Madhav Prasad (supra) is extracted hereinunder: ―10. We do not deem it necessary to elaborate on all other arguments as we are inclined to accept the objection of the appellant(s) that the relief of rejection of Plaint in exercise of powers under Order 7 Rule 11(d) CPC cannot be pursued only in respect of one of the defendant(s). In other words, the Plaint has to be rejected as a whole or not at all, in exercise of power under Order 7 Rule 11(d) CPC. Indeed, the learned 2023 SCC Online SC 1407 Single Judge rejected this objection raised by the appellant(s) by relying on the decision of the Division Bench of the same High Court. However, we find that the decision of this Court in Sejal Glass Ltd. [Sejal Glass Ltd. v. Navilan Merchants (P) Ltd., (2018) 11 SCC 780: (2018) 5 SCC (Civ) 256] is directly on the point. In that case, an application was filed by the defendant(s) under Order 7 Rule 11(d) CPC stating that the Plaint disclosed no cause of action. The civil court held that the Plaint is to be bifurcated as it did not disclose any cause of action against the Director's Defendant(s) 2 to 4 therein. On that basis, the High Court had opined that the suit can continue against Defendant 1 company alone. The question considered by this Court was whether such a course is open to the civil court in exercise of powers under Order 7 Rule 11(d) CPC. The Court answered the said question in the negative by adverting to several decisions on the point which had consistently held that the Plaint can either be rejected as a whole or not at all. The Court held that it is not permissible to reject Plaint qua any particular portion of a Plaint including against some of the defendant(s) and continue the same against the others. In no uncertain terms the Court has held that if the Plaint survives against certain defendant(s) and/or properties, Order 7 Rule 11(d) CPC will have no application at all, and the suit as a whole must then proceed to trial. …

12. Indubitably, the Plaint can and must be rejected in exercise of powers under Order 7 Rule 11(d) CPC on account of non-compliance with mandatory requirements or being replete with any institutional deficiency at the time of presentation of the Plaint, ascribable to clauses (a) to (f) of Rule 11 of Order 7 CPC. In other words, the Plaint as presented must proceed as a whole or can be rejected as a whole but not in part…‖ (emphasis supplied)

13. In view of the above referred principle, we have no hesitation in holding that the High Court committed an error in rejecting the Plaint in part with respect to Schedule-A property and permitting the Plaintiffs to prosecute the case only with respect to Schedule-B property. This approach while considering an application under Order VII Rule 11, CPC is impermissible. We, therefore, set aside the judgment and order of the High Court even on this ground.

270. The perusal of the pleadings in the instant application reveals that the defendant No.7 (applicant herein) has not argued that the captioned suit is not maintainable against the other respondents and has only contended for rejection of the Plaint qua the Punjab National Bank, i.e., the defendant NO. 7/applicant.

271. As discussed hereinabove, there cannot be any compartmentalization, dissection, segregation and inversions of the language of various paragraphs in the Plaint. If such a course is adopted, it would be contradictory to the cardinal principles according to which a pleading has to be read as a whole to ascertain its veracity and as per the settled position of law, it is not permissible to cull out a sentence or a passage and to read it out of the context in isolation.

272. The Hon‟ble Supreme Court has reiterated its stand time and again with regard to the partial and whole rejection of a Plaint. It has held that the law specifies that a Plaint is an important part of the pleadings in a suit and its contents not only define the facts and affected legal right of a party but also defines the cause of action which is a crucial factor in a trial as, it creates the locus standi of the parties thereto.

273. It is inferred that if a Court exercises its power, thereby, rejecting a Plaint in a part, it will have serious and unwarranted effect on the trial as there could be gross injustice to the party/parties. A Plaint consist the description of various facts and circumstances along with the legal rights of a party in it.

274. In the event, a Plaint is read in part or in compartments, the contents thereto will have different meaning altogether in regard to the context and purpose for which the suit was filed. Therefore, the intention of the party concerned is to be gathered primarily from the tenor and terms of his pleadings taken as a whole and not in part.

275. It is pertinent to state here that in order to reject a Plaint under Order VII Rule 11 of the CPC, only the averments made in the Plaint are germane and the Court, while adjudicating an application under the said provision, cannot go beyond the contents of the Plaint as allowing an application under the said provision is looking into the case without trial, thus, the Courts must be careful.

276. With respect to the matter in hand, this Court is of the considered view that upon reading of the averments made in the Plaint, particularly the paragraphs quoted hereinabove, no case for rejection of the Plaint is made out as the Plaint merely addresses the breach of Agreements committed by the defendant Banks which the plaintiff is seeking performance of. Furthermore, considering that the defendant No. 7 is also the part of the consortium of lenders of the Plaintiff and that it is also a party to the Agreements, the captioned suit is maintainable in the eyes of law as the same has been filed for the limited purpose, i.e., specific performance.

277. Therefore, it would be trite to say that the rejection of suit cannot happen in part and the arguments advanced with respect to the rejection of Plaint only qua the defendant No. 7 does not hold any water.

278. Moving further, Section 34 of the SARFAESI Act stipulates that no Civil Court shall have jurisdiction to entertain any proceedings which the DRT is empowered to adjudicate under the said Act or under the RDB Act. Moreover, no injunction can be granted by a Civil Court in respect of any such actions under the SARFAESI Act or the RDB Act. Section 35 of the SARFAESI Act further provides overriding effect of such statutes.

279. In the instant case, the defendant No. 7 has initiated recovery actions against the Plaintiff under the SARFAESI Act. This Court is of the view that defendant No. 7/applicant erroneously asserts that these actions under the SARFAESI Act have been challenged by the Plaintiff in the suit before this Court.

280. On the said misconception, the applicant states that the suit is barred by Sections 34 and 35 of the SARFAESI Act and thus, the Plaint is liable to be rejected. These contentions of the applicant are misconceived for the reason that the suit arises from the contractual disputes between the parties. The suit inter alia seeks specific performance of contractual obligations, damages for illegal breach under various Agreements and these actions can only be challenged before a Civil Court.

281. As per the material on record, the position of facts and disputes are set out as below: i. The Plaintiff and its lenders, including applicant/defendant No. 7 executed the Agreements in pursuance of the OTR scheme. The lenders and the Plaintiffs have various obligations under these Agreements. Upon implementation of the OTR scheme, the lenders including the applicant acted in accordance with these obligations and stipulations. However, in February, 2022, Yes Bank resiled from its obligations and issued the YBL Recall Notice. Subsequently, the other lenders of the Plaintiff also recalled the loan facilities extended to the Plaintiff by them. The applicant, i.e., the defendant No. 7/Punjab National Bank also issued a loan recall notice to the Plaintiff on 8th July, 2022. This notice was issued despite the fact that the applicant acted upon the Resolution Plan and Master Amendment Agreement. The applicant also created the FITL mechanism in accordance with the FITL Agreement and also deposited the interest charges on behalf of the Plaintiff. During the JLM held on 24th September, 2021 and on 14th March, 2022, the applicant admitted that the Agreements had been duly implemented. ii. Evidently, the disputes between the parties have arisen since the lenders including the applicant have resiled from their obligations under the Agreements. Accordingly, the Plaintiff had sought inter alia reliefs of „specific performance of the Agreements‟ and „declaration of the loan recall notices issued by lenders as illegal‟.

282. It is clear that the disputes in the captioned suit concern the contractual rights and obligations created under various Agreements executed among the parties. These matters are not covered within the scope and ambit of the SARFAESI Act or RDB Act. In fact, the reliefs sought by the Plaintiff can only be granted by this Court by way of a decree. Therefore, only remedy of the Plaintiff in relation to such contractual disputes and reliefs sought, is before this Court.

283. The aforesaid position has been settled by the Hon‟ble Supreme Court in the case of Nahar Industries (Supra) wherein the Hon‟ble Court held as under: a. No independent proceedings can be initiated before the DRT, which has a limited jurisdiction concerning only the debt. b. Civil Courts will continue to have jurisdiction over the independent contractual claims of debtors under common law and in terms of the loan agreements. c. DRT can only issue recovery certificates and it is not a Civil Court and therefore, cannot pass a decree. d. Sections 17 and 18 of the RDB Act oust the jurisdiction of the Civil Courts only in respect of applications filed by banks. Independent claims of debtors including counter claims filed before Civil Courts are not ousted. e. Civil suit filed by a debtor seeking inter alia declaratory and injunction reliefs against banks are maintainable. This position has been upheld by the Hon‟ble Supreme Court in the case of Bank of Rajasthan Ltd. (Supra) as well.

284. In addition to the position as stated above, learned counsel for the applicant has contended that the question for adjudication before this Court is whether the Civil Court can prevent the lenders i.e. the defendant Bank from taking any action under the SARFAESI Act and RDB Act for recovery of loan facility granted to the Plaintiff.

285. At this stage, this Court deems it fit to analyze the judgments which were relied by the applicant/defendant No. 7/Punjab National Bank in support of its arguments. The analysis is as under:  Electrosteel Casting Limited (Supra): Reliance is placed on this judgment to argue that the Plaintiff cannot contest the assignment of the loan between defendant No. 1 and defendant No. 5. However, this issue falls outside the scope of the present adjudication. This Court observes that defendant No. 7 (the applicant) is a third party to the transaction, and its rights and obligations remain unaffected by the assignment. It is the Plaintiff who is adversely impacted by this assignment, and in response, the Plaintiff amended its suit, which was permitted by the Court's order dated 2nd March, 2023. No party, including defendants NO. 1 and 5, has challenged this. Therefore, defendant No. 7 (the applicant) has no legal basis or entitlement to make assertions contrary to the aforementioned order. In light of this, the Court is of the opinion that this judgment holds no relevance to the present matter. Moreover, in the previous case, the Plaintiff had challenged the assignment on grounds of fraud, as well as the notice issued under the SARFAESI Act. This is entirely different from the current case, where the assignment is being contested for violating the contractual obligations set forth in the Agreements. These matters do not fall within the purview of the DRT and are not precluded by Sections 34 and 35 of the SARFAESI Act. The issue of contractual obligations was neither raised nor considered by the Hon‟ble Supreme Court in the cited judgment.  SBI vs. MS Allwyn Alloys Private Limited (Supra) and State Bank of Patiala (Supra): The facts and circumstances of the present case differ from those considered in the judgments previously relied upon. In the cited cases, the respondents had challenged actions initiated under the SARFAESI Act. The impugned order in that case had allowed the respondents to seek adjudication of property title in the Civil Court. However, the Hon‟ble Supreme Court overturned that change, holding that challenges to actions under the SARFAESI Act could not be adjudicated by a Civil Court. Importantly, the Hon‟ble Supreme Court in those cases was not addressing the issue of banks acting in violation of contractual obligations under the Agreements and, which is the central issue in this case. These contractual obligations and their enforcement are not part of the adjudication before the DRT and are not restricted by Sections 34 and 35 of the SARFAESI Act. The issue of contractual obligations was neither raised nor considered by the Hon‟ble Supreme Court in those earlier judgments.  Mardia Chemical Ltd. (Supra): In the said case, the challenge pertained to proceedings under the SARFAESI Act. The Hon‟ble Supreme Court did not address claims against banks for violating contractual obligations under Agreements. Such matters do not fall within the scope of adjudication by the DRT and are not restricted by Sections 34 and 35 of the SARFAESI Act. The issue of contractual obligations was neither raised nor considered by the Hon‟ble Supreme Court in that case. Furthermore, this judgment predates the decision of the Hon‟ble Supreme Court in Nahar Industrial Enterprises (Supra). In fact, while rendering its decision in Nahar Industrial Enterprises (Supra), the Hon‟ble Supreme Court duly considered the precedent set in Mardia Chemicals (Supra) and upheld the jurisdiction of civil courts to adjudicate contractual disputes raised by the borrowers.  Bijnor Urban Co-operative Bank Ltd. (Supra): The facts and circumstances of the present case differ significantly from those in the cited case. In the referenced case, the issue was whether the jurisdiction of the High Court under Article 226 of the Constitution of India could be invoked to compel lenders to consider a One-Time Settlement proposal. This is entirely contrary to the facts of the present case, where certain Agreements were implemented, and the lenders later withdrew from their obligations under the said Agreement. The Hon‟ble Supreme Court, in the cited case, did not consider actions against banks for violating contractual obligations under Agreements. Such matters do not fall within the jurisdiction of the DRT and are not barred by Sections 34 and 35 of the SARFAESI Act. The issue of contractual obligations was neither raised nor considered by the Hon‟ble Supreme Court in the aforementioned judgment. The Hon‟ble Supreme Court has also not taken into consideration its prior decision in Nahar Industrial Enterprise (Supra), since these issues were not raised.  IFCI Venture Chemicals Funds Ltd. (Supra): The facts and circumstances of the present case also differ from those in the cited case. In that case, the Court was not addressing contractual disputes or breaches by the lenders. Moreover, the questions in the said case did not consider the actions of banks accused of violating contractual obligations under the OTR agreements and RBI guidelines, which are central to the present case. Clearly, these contractual obligations and their enforcement do not fall within the scope of adjudication by the DRT and are not restricted by Sections 34 and 35 of the SARFAESI Act. The issues of contractual obligations and their subsequent breach were neither raised nor considered by the Court in the cited case.

286. Therefore, in view of the above discussion and analysis, the judgment relied by the applicant are not applicable in the instant dispute.

287. Now coming to the other issue raised in the instant application, i.e., if the captioned suit can have any effect on the recovery proceedings initiated before the DRT.

288. To address the said issue, it is imperative to understand the meanings and scope of powers conferred to both the adjudicating bodies, i.e. the Civil Court and the DRT.

289. In cases concerning the jurisdiction issue between a Tribunal and a Civil Court, it is well settled that the Civil Courts have a broader mandate to deal with the disputes and the Tribunals have a limited role, and the same is provided for in the Statute under which the said Tribunal came into existence.

290. Many times, the Tribunals exceeds their jurisdiction and go beyond the mandate, however, the scope of powers conferred to such Tribunals has been reiterated time and again by the Hon‟ble Supreme Court and various High Courts of this Country.

291. At this juncture, this Court again deems it appropriate to refer to the judgment passed in Nahar Industries (Supra) where the Hon‟ble Supreme Court extensively touched upon the question of complete oust of the jurisdiction of the Civil Courts.

292. In paragraph No. 106-108 of the above said judgment, the Hon‟ble Supreme Court explained the reasons for imposition of a bar on the jurisdiction of a Civil Court and held that the said jurisdiction is only limited to the extent of adjudication of a recovery application filed by the financial institution. While commenting upon the nature of suits which can be tried by the Civil Courts, the Hon‟ble Supreme Court opined that the jurisdiction of a Civil Court is not barred for any relief sought by a debtor against a creditor.

293. Therefore, the contention of the learned counsel for the defendant NO. 6 does not hold water as the foregoing discussions makes it clear that the proceedings before the DRT are independent of the proceedings before a Civil Court.

294. Therefore, the bar imposed upon the jurisdiction of this Court is only regarding the recovery measures taken by the financial institutions as the same are meant to be tried before the DRT and any aggrievement from the same can be addressed by way of filing an application under Section 17 of the SARFAESI Act.

295. On the first date of hearing, the Predecessor Bench of this Court had granted an interim stay on the coercive actions against the Plaintiff and subsequently, on being satisfied that the other lenders, i.e., the defendant nos. 6-8 had taken actions similar to the ones taken by the Yes Bank, this Court had extended the said stay on the other defendants as well which includes the applicant herein, i.e., Punjab National Bank.

296. The grant of interim stay by the Predecessor Bench makes it evident that the Plaintiff had satisfied this Court that there exists a cause of action for filing of the instant suit and therefore, the dispute between the parties regarding implementation of the Agreements needs to be adjudicated which requires proper trial.

297. As per the settled position of law, the Court can exercise its power and reject a Plaint under the relevant provision if the said Plaint is found to be vexatious and meritless.

298. In any case, the scope of rejection of a Plaint under Order VII Rule 11 of the CPC has already been explained by this Court in the previous paragraphs and there is no need to reiterate that the Courts are duty bound to only look into the contents of the Plaint.

299. The perusal of the relevant parts of the Plaint do not suggest that the prayer sought by the Plaintiff suffers from a bar imposed by the SARFAESI Act, hence, making the instant application liable to be dismissed.

300. In view of the same, this Court is of the opinion that the proceedings pending before this Court will not have any effect on the proceedings being taken place before the DRT since this Court does not aim to adjudicate the issue of recovery and therefore, it is held that the scope of the captioned suit is only limited to the extent of specific performance of the Agreements and the OTR scheme entered into between the debtor, i.e., the Plaintiff and the lender Banks. It is held that the arguments advanced by the applicant/Punjab National Bank for rejection of the Plaint are rejected.

301. Summarily stated, it is held by this Court that by seeking rejection of Plaint only qua the defendant No. 7 is impermissible in the eyes of law as the same tantamount to partial rejection of a Plaint. Therefore, the said argument of the applicant is rejected. It is further held that the applicant has been unable to show as to how the captioned suit is not-maintainable and cannot be adjudicated by this Court as it has been deliberated in the preceding paragraphs that the bar upon the Civil Courts is only with respect to the interference in the recovery proceedings initiated under the SARFAESI Act and since the captioned suit is filed for the limited purpose of seeking specific performance of certain agreements executed among the parties, the same does not oust the jurisdiction of this Court as the Plaintiff has not challenged the actions taken by the defendant Banks, instead, it has sought reliefs due to the breach and non-implementation of the Agreements by the defendant Banks.

302. In view of the foregoing discussion on facts and application of the principles expounded by the Hon‟ble Supreme Court, it is held that the applicant/defendant No.7 has failed to make out a case for rejection of the Plaint.

303. In the instant application, the learned counsel for the defendant No.7 vehemently contended on the aspect of the non-maintainability of the suit qua them, and had also supplemented the case laws to support his contention, however, the rebuttal on the same by the learned counsel for the Plaintiff and perusal of the records makes it evident that the said contention does not hold any water.

304. Firstly, the captioned suit has been preferred by the Plaintiff seeking specific performance of the contractual obligations, secondly, the settled position of law makes it clear that the jurisdiction of the Civil Courts is not barred from adjudicating a contractual dispute and the same is only restricted to adjudication of the recovery measures taken by the lenders under the special legislations, and thirdly, the position of law also proscribes for dismissal of the Plaint qua a particular defendant when there are other defendants as well.

305. In application bearing I.A. No. 10671/2023, this Court had allowed the application for amendment of the Plaint by judgement of the even date and the amended Plaint is to be taken on record. Accordingly, the defendant no.7 is at the liberty to file another application for rejection of the amended plaint.

306. In view thereof, the captioned application, being bereft of any merits, is dismissed. I.A. 2858/2024 (under Order XXXIX Rule 4 of the CPC by the defendant No. 6/Bank of Maharashtra for recall of order dated 3rd March, 2023)& I. A. 9173/2023 (under Order XXXIX Rule 4 of the CPC by the defendant No. 7/Punjab National Bank for recall of order 3rd March, 2023).

307. By way of these applications filed under Order XXXIX Rule 4 of the CPC, defendants No. 6 and 7 seek vacation of the order dated 3rd March, 2023 to the extent it has extended the stay passed against defendant No. 1 to the newly impleaded defendants. Primarily, both the aforementioned defendants have sought vacation of the said order on the basis that Plaintiff allegedly suppressed the action initiated by the defendants against the Plaintiff under the SARFAESI Act and therefore, the same is a ground for recall of the order dated 3rd

308. Before delving into the same, it is important for this Court to revisit the chain of events leading to filing of the present applications by the respective applicants/defendants.

309. As already clarified, the captioned suit in which the present applications has been filed was originally filed against the Yes Bank/defendant No. 1 for specific performance of the Agreements entered into by the parties, and subsequently, the other lender Banks (including the instant applicants) also issued notices similar to the one issued by the Yes Bank, thereby, contravening the stay order passed by the Predecessor Bench of this Court vide order dated 24th

310. During the JLM held on 23rd January, 2023, the consortium of lenders resolved to take over the possession of the immovable assets of the Plaintiff. Aggrieved by this coercive action and decision, the Plaintiff filed a stay application praying for stay „on the operation of the said decisions taken by the lenders including the JLM‟. The said stay application was listed for hearing before this Court on 2nd March, 2023, along with the impleadment application.

311. In respect of the stay application, this Court vide, order dated 2nd March, 2023, stayed the decisions of the lenders taken during the abovesaid JLM. This order has not been assailed by any party including the said applicants/defendants.

312. In respect of the impleadment application, this Court reserved the matter for final order, after hearing the parties. On 3rd March, 2023, this Court pronounced the final order in the impleadment application. By the said order, the lenders of the Plaintiff including defendants No. 6 and 7 were impleaded as defendants in the suit. This Court has also extended the directions issued against the defendant No. 1 in the stay order to the newly impleaded defendants.

313. Aggrieved by the same, the instant applications have been filed.

314. Mr. Sudhir Makkar, learned senior counsel apprised this Court that the defendant No.6 (Bank of Maharashtra) has filed one of the applications (I.A. No. 2858/2023) seeking recall of the order dated 3rd March, 2023 passed by this Court in I.A. No. 1746/2023 which was filed by the defendant No.9 for its impleadment as well as other lender Banks.

315. The learned senior counsel submitted that the defendant No.6 was impleaded in the present suit not on the request of the Plaintiff rather on the impleadment application filed by one of the lenders, i.e., defendant No.9, whereby, this Court had extended the stay granted by the Predecessor Bench vide order dated 24th

316. It is submitted that due to the extension of the said stay on the other lender Banks including the defendant No.6, the other lender Banks are restrained from taking any steps to recover its dues and the said restraint also includes the right of the defendant Banks to exercise the remedies available under the SARFAESI Act.

317. It is submitted that the said extension of the stay order is contrary to the bar enshrined under Section 34 of the SARFAESI Act and therefore, the same needs to be vacated.

318. It is submitted that the defendant No. 6 Bank was neither served with any notice of the impleadment application, nor was given any opportunity to oppose the same, therefore, leading to passing of an erroneous order by this Court.

319. It is submitted that the defendant No. 6 had granted term loans amounting Rs. 2,42,61,00, 000/- to the Plaintiff and documents for execution of the said loans were duly executed by the parties, however, the Plaintiff failed to maintain the financial discipline and defaulted in conditions enshrined in the Agreements executed between the parties.

320. It is submitted that despite repeated requests and reminders, the Plaintiff failed to make good of the defaults and therefore breached the terms and conditions of the sanction of the credit limit.

321. It is submitted that due to the said defaults, the accounts of the Plaintiff were classified as NPA w.e.f. 31st December, 2020 and the same action was done in pursuance of the procedure prescribed by the RBI, therefore, the same had the statutory force.

322. It is submitted that this Court ought to have provided an opportunity to the applicant/defendant No. 6 to put forth their objections to the impleadment application before passing the impugned order as the same directly hampers the legitimate action to be taken against the Plaintiff by the defendant No.6.

323. It is submitted that as per the records, it is an admitted position that the defendant No.6 had initiated the action under SARFAESI Act before passing of the order dated 3rd March, 2023 and the said defendant was thereafter restrained from exercising its statutory rights under the

324. It is submitted that the order dated 3rd March, 2023 runs against the scheme of the SARFAESI Act which provides for exclusive jurisdiction of the DRT for adjudication of the disputes under the said Act.

325. It is submitted that the bare perusal of the objects of the SARFAESI Act makes it evident that the banks and financial institutions are empowered to take possession of the securities and sell them without intervention of the Civil Courts and the said action can only be challenged by the aggrieved party under Section 17 of the SARFAESI Act.

326. It is therefore submitted that the present application bearing IA NO. 2858/2023 may be allowed and the order dated 3rd March, 2023 be recalled for the reasons stated in the foregoing paragraphs.

327. In application bearing I.A. No. 9173/2023, Mr. Rattan, learned counsel appearing on behalf of defendant No. 7/Punjab National Bank, began his arguments and at the outset, informed this Court that the contentions advanced for recall of the order dated 3rd March, 2023 are similar to the ones taken by him in application filed for rejection of the Plaint i.e. I.A. No. 8068/2023 and therefore, the same may be taken on record for the adjudication of the above said application filed for recall of the order dated 3rd

328. Pursuant to completion of the arguments on behalf of both the applicants, i.e. defendant No.6 and defendant No.7, Mr. Vikram Nankani began his reply to the aforesaid applications in following manner:

329. In application bearing IA No. 9173/2023, the learned senior counsel submitted that the same has been filed after a delay of two months and the defendant No.7 has suppressed the material facts to mislead this Court.

330. It is submitted that the principle basis for filing of the present application by defendant No.7 is non-implementation of the Agreements, however, the question relating to the status of the same is already pending adjudication before this Court.

331. It is submitted that the defendant Banks were duly intimated about the order dated 3rd March, 2022 vide communication dated 6th March, 2023 and therefore, the defendant Banks had sufficient opportunity to challenge the same but they failed to do so in a timely manner.

332. It is submitted that the application filed by the defendant No.7 is an afterthought and the same is liable to be dismissed on the said ground alone. Furthermore, despite receiving the copy of pleadings on 6th March, 2023, the said defendant chose not to file its written statement to the instant suit, therefore, violating the timeline stipulated in the Commercial Courts Act,

2015.

333. It is submitted that the alleged non-implementation of the Agreements is untrue and therefore, the actions as decided to be taken in JLM held on 23rd January, 2023 are invalid and the lender Banks are to be blamed for obstruction in effective implementation of the Agreements.

334. It is submitted that the defendant had declared the Plaintiff‟s account as NPA with retrospective effect and the said fact has not been disclosed by the defendant No.7 in its application.

335. It is submitted that the leading Bank of the consortium of lenders, i.e., Bank of Maharashtra and the defendant No.7 itself admitted the implementation of the Agreement, and the same is evident from the minutes of the meeting dated 14th March, 2022, therefore, the applicant/defendant No.7 is estopped from contending contrary to the JLM proceedings.

336. It is submitted that the defendant No.7 had duly acted upon the Agreements and had deposited the interest charges on behalf of the borrower, i.e., Plaintiff till 31st February, 2022 and the said position is undisputed and admitted by the defendant No.7.

337. It is submitted that the issue in the present suit pertains to the contractual rights and obligations under various Agreements and therefore, the same is outside the scope of DRT.

338. It is submitted that as per the Inter-Creditor Agreement, the defendant Banks are required to act as per the majority by value of the loans extended to the Plaintiff. Notably, the Yes Bank holds 27% value of the loans and the party replacing the Yes bank is defendant No.5 which sought to exercise its rights as per the JLM held on 23rd January, 2023 and therefore, this Court had stayed operation of the decisions taken vide minutes of the meeting dated 23rd

339. In the application filed by the defendant No.6 (Bank of Maharashtra), the learned senior counsel submitted that the defendant No.6 having the highest share (35%) in the total debt owed a responsibility to effectively implement the Agreements and its vote is necessary for the implementation of the same.

340. It is submitted that the order dated 3rd March, 2023 specifically mentions that any order passed in the suit materially affects all the lenders including defendant No.6 and therefore, the stay order was extended to the other defendant Banks.

341. It is submitted that the plain reading of the order dated 3rd March, 2023 makes it clear that this Court has the discretionary powers under Order I Rules 8 and 10 of the CPC to include the parties without an application for the same.

342. It is submitted that despite intimating about the extension of stay order to the defendant No.6, they did not act upon it immediately and filed the instant application only after 10 months, and the said fact has been suppressed by the defendant No.6, and an attempt has been made to obtain a favorable order by concealing the material facts.

343. Therefore, the learned senior counsel submitted that the grounds taken by the learned counsel for the respective defendants do not warrant recall of March, 2023 as the suit has been filed on a different issue and the stay was granted when the Court was satisfied on the aspect of breach of the terms and conditions of the Agreements executed among the parties.

SCHEME OF THE ACT

344. Out of the four applications which were reserved for judgments by this Court, three of the applications have been filed by the parties, i.e., defendant No. 6 and 7 after they were impleaded in the instant suit by this Court vide order/judgment dated 3rd

345. During the course of proceedings, the said parties have vehemently contended that the case for their impleadment does not arise as the original suit has been filed seeking specific performance of the Agreements between the Plaintiff and the Yes Bank (now replaced by defendant No.5), however, it is an admitted fact that the other defendant Banks were also part of the consortium of lenders formed for recovery of the pending dues from the Plaintiff herein.

346. Since the present applications revolves mainly around two provisions of the CPC, this Court is duty bound to discuss the scheme related to the said provisions and the scope of judicial powers under the same. The scheme of the said provisions is explained herein below. Order 1 Rule 10 of the CPC (addition, striking out or substitution of a party)

347. In the order dated 3rd March, 2023, this Court had briefly touched upon its powers to implead a party in a suit. Therefore, it becomes appropriate to discuss the statutory norm regarding the impleadment of a party.

348. Rule 10 of Order 1 of the CPC talks about the addition, striking out or substitution of a party. It is well settled that the Courts are empowered to strike out or add a party either by an application filed by the concerned party or as per the own decision of the Court, however, the only condition for making such addition or deletion is that the Court should be satisfied that the party concerned is/is not a necessary party to the case pending adjudication.

349. As per the settled position of law, the test for determination of whether a party is a necessary and proper party in the suit is whether the presence of such party is required for proper adjudication of the suit or not.

350. In the instant applications, the case of the defendant nos. 6 and 7 is that they were impleaded by this Court without due notice being provided to them. Therefore, this Court deems it imperative to reiterate the settled position of law regarding such impleadment.

351. The Hon‟ble Supreme Court discussed the above said provision in Mumbai International Airport (P) Ltd. v. Regency Convention Centre & Hotels (P) Ltd.32 whereby, it was held that the Courts are empowered to add a party if it deems it necessary. The relevant part of the said judgment reads as under:

performance), either upon or even without any application, and on such terms as may appear to it to be just, direct that any of the following persons may be added as a party: (a) any person who ought to have been joined as Plaintiff or defendant, but not added; or (b) any person whose presence before the court may be necessary in order to enable the court to effectively and completely adjudicate upon and settle the questions involved in the suit. In short, the court is given the discretion to add as a party, any person who is found to be a necessary party or proper party.

15. A ―necessary party‖ is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the court. If a ―necessary party‖ is not impleaded, the suit itself is liable to be dismissed. A ―proper party‖ is a party who, though not a necessary party, is a person whose presence would enable the court to completely, effectively and adequately adjudicate upon all matters in dispute in the suit, though he need not be a person in favour of or against whom the decree is to be made. If a person is not found to be a proper or necessary party, the court has no jurisdiction to implead him, against the wishes of the Plaintiff. The fact that a person is likely to secure a right/interest in a suit property, after the suit is decided against the Plaintiff, will not make such person a necessary party or a proper party to the suit for specific performance.

18. In Kasturi,33 this Court reiterated the position that necessary parties and proper parties can alone seek to be impleaded as parties to a suit for specific performance. This Court held that necessary parties are those persons in whose absence no decree can be passed by the court or those persons against whom there is a right to some relief in respect of the controversy involved in the proceedings; and that proper parties are those whose presence before the court would be necessary in order to enable the court effectually and completely to adjudicate upon and settle all the questions involved in the suit although no relief in the suit was claimed against such person.

19. Referring to suits for specific performance, this Court in Kasturi [(2005) 6 SCC 733], held that the following persons are to be considered as necessary parties: (i) the parties to the contract which is sought to be enforced or their legal representatives; (ii) a transferee of the property which is the subject-matter of the contract. This Court also explained that a person who has a direct interest in the subject-matter of the suit for specific performance of an agreement of sale may be impleaded as a proper party on his application under Order 1 Rule 10 CPC. This Court concluded that a purchaser of the suit property subsequent to the suit agreement would be a necessary party as he would be affected if he had purchased it with or without notice of the contract, but a person who claims a title adverse to that of the defendant vendor will not be a necessary party.

22. Let us consider the scope and ambit of Order 1 Rule 10(2) CPC regarding striking out or adding parties. The said subrule is not about the right of a non-party to be impleaded as a party, but about the judicial discretion of the court to strike out or add parties at any stage of a proceeding. The discretion under the sub-rule can be exercised either suomotu or on the application of the Plaintiff or the defendant, or on an application of a person who is not a party to the suit. The court can strike out any party who is improperly joined. The court can add anyone as a Plaintiff or as a defendant if it finds that he is a necessary party or proper party. Such deletion or addition can be without any conditions or subject to such terms as the court deems fit to impose. In exercising its judicial discretion under Order 1 Rule 10(2) of the Code, the court will of course act according to reason and fair play and not according to whims and caprice.

24. We may now give some illustrations regarding exercise of discretion under the said Sub-Rule. 24.[1] If a Plaintiff makes an application for impleading a person as a defendant on the ground that he is a necessary party, the court may implead him having regard to the provisions of Rules 9 and 10(2) of Order I. If the claim against such a person is barred by limitation, it may refuse to add him as a party and even dismiss the suit for nonjoinder of a necessary party. 24.[2] If the owner of a tenanted property enters into an agreement for sale of such property without physical possession, in a suit for specific performance by the purchaser, the tenant would not be a necessary party. But if the suit for specific performance is filed with an additional prayer for delivery of physical possession from the tenant in possession, then the tenant will be a necessary party in so far as the prayer for actual possession. 24.[3] If a person makes an application for being impleaded contending that he is a necessary party, and if the court finds that he is a necessary party, it can implead him. If the Plaintiff opposes such impleadment, then instead of impleading such a party, who is found to be a necessary party, the court may proceed to dismiss the suit by holding that the applicant was a necessary party and in his absence the Plaintiff was not entitled to any relief in the suit. 24.[4] If an application is made by a Plaintiff for impleading someone as a proper party, subject to limitation, bonfides etc., the court will normally implead him, if he is found to be a proper party. On the other hand, if a non-party makes an application seeking impleadment as a proper party and court finds him to be a proper party, the court may direct his addition as a defendant; but if the court finds that his addition will alter the nature of the suit or introduce a new cause of action, it may dismiss the application even if he is found to be a proper party, if it does not want to widen the scope of the specific performance suit; or the court may direct such applicant to be impleaded as a proper party, either unconditionally or subject to terms. For example, if ‗D‘ claiming to be a co-owner of a suit property, enters into an agreement for sale of his share in favour of ‗P‘ representing that he is the co-owner with half share, and ‗P‘ files a suit for specific performance of the said agreement of sale in respect of the undivided half share, the court may permit the other co-owner who contends that ‗D‘ has only onefourth share, to be impleaded as an additional defendant as a proper party, and may examine the issue whether the Plaintiff is entitled to specific performance of the agreement in respect of half a share or only one-fourth share; alternatively the court may refuse to implead the other co-owner and leave open the question in regard to the extent of share of the vendor-defendant to be decided in an independent proceeding by the other co-owner, or the Plaintiff; alternatively the court may implead him but subject to the term that the dispute, if any, between the impleaded co-owner and the original defendant in regard to the extent of the share will not be the subject matter of the suit for specific performance, and that it will decide in the suit, only the issues relating to specific performance, that is whether the defendant executed the agreement/contract and whether such contract should be specifically enforced. In other words, the court has the discretion to either to allow or reject an application of a person claiming to be a proper party, depending upon the facts and circumstances and no person has a right to insist that he should be impleaded as a party, merely because he is a proper party.‖

352. In Gurmit Singh Bhatia v. Kiran Kant Robinson34, the Hon‟ble Supreme Court crystalised the principles regarding the scope of addition of parties under Order I Rule 10 of the CPC and held as under: “5.1. At the outset, it is required to be noted that the original Plaintiffs filed the suit against the original owner — vendor — original Defendant 1 for specific performance of the agreement to sell with respect to suit property dated 3-5-2005. It is an admitted position that so far as agreement to sell dated 3-5- 2005 of which the specific performance is sought, the appellant is not a party to the said agreement to sell. It appears that during the pendency of the aforesaid suit and though there was an injunction against the original owner — vendor restraining him from transferring and alienating the suit property, the vendor executed the sale deed in favour of the appellant by sale deed dated 10-7-2008. After a period of approximately four years, the appellant filed an application before the learned trial court under Order 1 Rule 10 CPC for his impleadment as a defendant. The appellant claimed the right on the basis of the said sale deed as well as the agreement to sell dated 31-3-2003 alleged to have been executed by the original vendor. The said application was opposed by the original Plaintiffs. The learned trial court despite the opposition by the original Plaintiffs allowed the said application which has been set aside by the High Court by the impugned judgment and order [Satya Dev Pandey v. Kiran Kant Robinson Writ Petition No. 856 of 2012, order dated 3-7-2013 (Chh)]. Thus, it was an application under Order 1 Rule 10 CPC by a third party to the agreement to sell between the original Plaintiffs and original Defendant 1 (vendor) and the said application for impleadment is/was opposed by the original Plaintiffs. Therefore, the short question which is posed for consideration before this Court is, whether the Plaintiffs can be compelled to implead a person in the suit for specific performance, against his wish and more particularly with respect to a person against whom no relief has been claimed by him?

5.2. An identical question came to be considered before this Court in Kasturi [Kasturi v. Iyyamperumal, (2005) 6 SCC 733] and applying the principle that the Plaintiff is the dominus litis, in the similar facts and circumstances of the case, this Court observed and held that the question of jurisdiction of the court to invoke Order 1 Rule 10 CPC to add a party who is not made a party in the suit by the Plaintiff shall not arise unless a party proposed to be added has direct and legal interest in the controversy involved in the suit. It is further observed and held by this Court that two tests are to be satisfied for determining the question as to who is a necessary party. The tests are: (1) there must be a right to some relief against such party in respect of the controversies involved in the proceedings; (2) no effective decree can be passed in the absence of such party. It is further observed and held that in a suit for specific performance the first test that can be formulated is, to determine whether a party is a necessary party there must be a right to the same relief against the party claiming to be a necessary party, relating to the same subject-matter involved in the proceedings for specific performance of contract to sell. It is further observed and held by this Court that in a suit for specific performance of the contract, a proper party is a party whose presence is necessary to adjudicate the controversy involved in the suit. It is further observed and held that the parties claiming an independent title and possession adverse to the title of the vendor and not on the basis of the contract, are not proper parties and if such party is impleaded in the suit, the scope of the suit for specific performance shall be enlarged to a suit for title and possession, which is impermissible. It is further observed and held that a third party or a stranger cannot be added in a suit for specific performance, merely in order to find out who is in possession of the contracted property or to avoid multiplicity of the suits. It is further observed and held by this Court that a third party or a stranger to a contract cannot be added so as to convert a suit of one character into a suit of different character.

5.3. In paras 15 and 16, this Court observed and held as under: (Kasturi case [Kasturi v. Iyyamperumal, (2005) 6 SCC 733], SCC pp. 741-42, paras 15-16) ―15. As discussed hereinearlier, whether Respondents 1 and 4 to 11 were proper parties or not, the governing principle for deciding the question would be that the presence of Respondents 1 and 4 to 11 before the court would be necessary to enable it effectually and completely to adjudicate upon and settle all the questions involved in the suit. As noted hereinearlier, in a suit for specific performance of a contract for sale, the issue to be decided is the enforceability of the contract entered into between the appellant and Respondents 2 and 3 and whether contract was executed by the appellant and Respondents 2 and 3 for sale of the contracted property, whether the Plaintiffs were ready and willing to perform their part of the contract and whether the appellant is entitled to a decree for specific performance of a contract for sale against Respondents 2 and 3. It is an admitted position that Respondents 1 and 4 to 11 did not seek their addition in the suit on the strength of the contract in respect of which the suit for specific performance of the contract for sale has been filed. Admittedly, they based their claim on independent title and possession of the contracted property. It is, therefore, obvious as noted hereinearlier that in the event, Respondents 1 and 4 to 11 are added or impleaded in the suit, the scope of the suit for specific performance of the contract for sale shall be enlarged from the suit for specific performance to a suit for title and possession which is not permissible in law. In Vijay Pratap v. Sambhu Saran Sinha [Vijay Pratap v. Sambhu Saran Sinha, (1996) 10 SCC 53] this Court had taken the same view which is being taken by us in this judgment as discussed above. This Court in that decision clearly held that to decide the right, title and interest in the suit property of the stranger to the contract is beyond the scope of the suit for specific performance of the contract and the same cannot be turned into a regular title suit. Therefore, in our view, a third party or a stranger to the contract cannot be added so as to convert a suit of one character into a suit of different character. As discussed above, in the event any decree is passed against Respondents 2 and 3 and in favour of the appellant for specific performance of the contract for sale in respect of the contracted property, the decree that would be passed in the said suit, obviously, cannot bind Respondents 1 and 4 to 11. It may also be observed that in the event, the appellant obtains a decree for specific performance of the contracted property against Respondents 2 and 3, then, the Court shall direct execution of deed of sale in favour of the appellant in the event Respondents 2 and 3 refusing to execute the deed of sale and to obtain possession of the contracted property he has to put the decree in execution. As noted hereinearlier, since Respondents 1 and 4 to 11 were not parties in the suit for specific performance of a contract for sale of the contracted property, a decree passed in such a suit shall not bind them and in that case, Respondents 1 and 4 to 11 would be at liberty either to obstruct execution in order to protect their possession by taking recourse to the relevant provisions of CPC, if they are available to them, or to file an independent suit for declaration of title and possession against the appellant or Respondent 3. On the other hand, if the decree is passed in favour of the appellant and sale deed is executed, the stranger to the contract being Respondents 1 and 4 to 11 have to be sued for taking possession if they are in possession of the decretal property.

16. That apart, from a plain reading of the expression used in sub-rule (2) Order 1 Rule 10 CPC ―all the questions involved in the suit‖ it is abundantly clear that the legislature clearly meant that the controversies raised as between the parties to the litigation must be gone into only, that is to say, controversies with regard to the right which is set up and the relief claimed on one side and denied on the other and not the controversies which may arise between the Plaintiff-appellant and the defendants inter se or questions between the parties to the suit and a third party. In our view, therefore, the court cannot allow adjudication of collateral matters so as to convert a suit for specific performance of contract for sale into a complicated suit for title between the Plaintiff-appellant on one hand and Respondents 2 and 3 and Respondents 1 and 4 to 11 on the other. This addition, if allowed, would lead to a complicated litigation by which the trial and decision of serious questions which are totally outside the scope of the suit would have to be gone into. As the decree of a suit for specific performance of the contract for sale, if passed, cannot, at all, affect the right, title and interest of Respondents 1 and 4 to 11 in respect of the contracted property and in view of the detailed discussion made hereinearlier, Respondents 1 and 4 to 11 would not, at all, be necessary to be added in the instant suit for specific performance of the contract for sale.‖ That thereafter, after observing and holding as above, this Court in Kasturi [Kasturi v. Iyyamperumal, (2005) 6 SCC 733] further observed that in view of the principle that the Plaintiff who has filed a suit for specific performance of the contract to sell is the dominus litis, he cannot be forced to add parties against whom, he does not want to fight unless it is a compulsion of the rule of law.

5.4. In the aforesaid decision in Kasturi [Kasturi v. Iyyamperumal, (2005) 6 SCC 733], it was contended on behalf of the third parties that they are in possession of the suit property on the basis of their independent title to the same and as the Plaintiff had also claimed the relief of possession in the Plaint and the issue with regard to possession is common to the parties including the third parties, and therefore, the same can be settled in the suit itself. It was further submitted on behalf of the third parties that to avoid the multiplicity of the suits, it would be appropriate to join them as party defendants. This Court did not accept the aforesaid submission by observing that merely in order to find out who is in possession of the contracted property, a third party or a stranger to the contract cannot be added in a suit for specific performance of the contract to sell because they are not necessary parties as there was no semblance of right to some relief against the party to the contract. It is further observed and held that in a suit for specific performance of the contract to sell the lis between the vendor and the persons in whose favour agreement to sell is executed shall only be gone into and it is also not open to the Court to decide whether any other parties have acquired any title and possession of the contracted property.

5.5. It is further observed and held by this Court in Kasturi [Kasturi v. Iyyamperumal, (2005) 6 SCC 733] that if the Plaintiff who has filed a suit for specific performance of the contract to sell, even after receiving the notice of claim of title and possession by other persons (not parties to the suit and even not parties to the agreement to sell for which a decree for specific performance is sought) does not want to join them in the pending suit, it is always done at the risk of the Plaintiff because he cannot be forced to join the third parties as party defendants in such suit. The aforesaid observations are made by this Court considering the principle that the Plaintiff is the dominus litis and cannot be forced to add parties against whom he does not want to fight unless there is a compulsion of the rule of law.

5.6. Therefore, considering the decision of this Court in Kasturi [Kasturi v. Iyyamperumal, (2005) 6 SCC 733], the appellant cannot be impleaded as a defendant in the suit filed by the original Plaintiffs for specific performance of the contract between the original Plaintiffs and original Defendant 1 and in a suit for specific performance of the contract to which the appellant is not a party and that too against the wish of the Plaintiffs. The Plaintiffs cannot be forced to add party against whom he does not want to fight. If he does so, in that case, it will be at the risk of the Plaintiffs.‖

353. In the aforesaid case, the Hon‟ble Supreme Court discussed the principle of dominus litius and held that the master of the suit, i.e. the Plaintiff cannot be forced to add a party to the said suit and therefore, an impleadment cannot be made against the wishes of the Plaintiff unless the same is mandated by the law.

354. While adjudicating the issue regarding addition of a party in a specific performance suit, the Hon‟ble Supreme Court opined that the party necessary to the suit needs to be impleaded and the said party should be a proper party.

355. The Hon‟ble Supreme Court reaffirmed the principles laid down in the case of Kasturi v. Iyyamperumal35 and upheld the application of the principle of dominus litius where the Plaintiff is termed as the master of the suit.

356. In Mumbai International Airport (Supra) the Hon‟ble Supreme Court had discussed the aforestated principle and held that the Plaintiff, being dominus litis, has the right to choose the persons against whom to litigate. Consequently, a person cannot be compelled to be sued if the Plaintiff does not seek any relief against them. However, this general rule is subject to the provisions of Order I Rule 10(2) of the CPC, which allows for the impleadment of necessary or proper parties.

357. In the above said case, the Hon‟ble Supreme Court also discussed the principle of „proper and necessary parties‟ where the Hon‟ble Court deemed a necessary party as someone whose absence would prevent the Court from passing an effective decree. If a necessary party is not impleaded, the suit itself is liable to be dismissed as a relief cannot be granted without addition of the said necessary party.

358. On the aspect of „proper party‟, the Hon‟ble Supreme Court explained that a proper party is someone whose presence would enable the Court to completely and effectively adjudicate upon all the issues, even though no relief may be sought against them. While not essential for passing a decree, their involvement aids in the comprehensive resolution of the case.

359. Therefore, the criteria for adding a party in a suit is that the Court can add a necessary party if their absence would prevent an effective decree from being passed. In the case of „proper parties‟, the Court may add them if their presence would aid in the effective and complete adjudication of the dispute. However, the Court may refuse to add a party as a „proper party‟ if their inclusion would alter the nature of the suit or introduce a new cause of action. The decision to add a proper party is based on the specific facts and circumstances of each case.

360. In light of the aforesaid discussions, it is clear that the Courts are empowered to add a party to a suit if a said party is deemed to be a necessary party and therefore, this Court has the powers of impleadment and the said impleadment only needs to meet the criteria as discussed above. Order XXXIX Rule 4 of the CPC (Order for injunction may be discharged, varied or set aside)

361. Since the present applications have been filed under Order XXXIX Rule 4 of the CPC, it is pertinent to discuss the scope and ambit of the said provision. Order XXXIX Rule 4 of the CPC stipulates that the Court may vacate or modify an order of injunction, which is passed without issuing notice to the opposite party.

362. Such vacation or modification is permissible only in the event that the dissatisfied party is able to establish that the injunction has been granted owing to material suppression of facts. Order XXXIX Rule 4 of the CPC further stipulates that even in the case of supression, the Court may not vacate the injunction granted in the event such injunction is necessary in the interest of justice. The relevant part of the said provision reads as under: “39(4). Order for injunction may be discharged, varied or set aside.—Any order for an injunction may be discharged, or varied, or set aside by the Court, on application made thereto by any party dissatisfied with such order: [Provided that if in an application for temporary injunction or in any affidavit supporting such application, a party has knowingly made a false or misleading statement in relation to a material particular and the injunction was granted without giving notice to the opposite party, the Court shall vacate the injunction unless, for reasons to be recorded, it considers that it is not necessary so to do in the interests of justice: Provided further that where an order for injunction has been passed after giving to a party an opportunity of being heard, the order shall not be discharged, varied or set aside on the application of that party except where such discharge, variation or setting aside has been necessitated by a change in the circumstances, or unless the Court is satisfied that the order has caused undue hardship to that party.]‖

363. Upon reading, it is made out that an order vide which the injunction was granted, can be challenged by the aggrieved party under Order XXXIX Rule 4 of the CPC and an application can be filed for recall of such an order.

364. As per the said provision, the condition for recall of such an order would be that the party who has obtained an injunction has done it by falsely stating something to be of material value to obtain such an injunction.

365. Order XXXIX Rule 4 of the CPC lays down that where an order of injunction has been passed after giving to a party an opportunity of being heard, the said order shall not be discharged, varied or set aside except where such discharge, variations or setting aside has been necessitated by a change in the circumstances or unless the Court is satisfied that the order has caused undue hardship to that party.

366. It is no dispute that under Order XXXIX Rule 1 and 2 of the CPC, the Courts are empowered to grant temporary injunction to a party and the same is granted judiciously and on sound legal principles.

367. The scope and ambit of recalling a previous order granting temporary injunction to a party has been discussed in length by the Hon‟ble Supreme Court and this Court time, and again and it is well settled that the Courts are duty bound to exercise the power under the said provision if the aggrieved party is able to establish that the said injunction was granted against the settled rules.

368. Therefore, the powers conferred to the Court under Order XXXIX Rule 4 of the CPC is very narrow and limited to the extent of cases where a party is alleged to have knowingly made a false or misleading representation in relation to an important fact in the application for injunction.

369. As per the settled principles, there are two classes of cases where the Courts are duty bound to exercise its discretion to vacate the injunction granted earlier. Firstly, when an urgent ex-parte order has been passed under Rule 3, Rule 4 will allow the party against whom it has been passed to apply it be discharged or varied or set aside; and secondly, owing to fresh circumstances, when an injunction order already in force has become unduly harsh or unnecessary or unworkable, it would be open to either party to apply under Rule 4 to the Court to discharge, vary or set aside the said injunction order.

370. Therefore, the proviso casts a duty upon the Courts to determine if a party against which an ex-parte injunction has been granted is unduly affected and if the same has caused violation of any legal right of the party.

371. In Shahnaz Husain v. Mohd. Yunus36, the Allahabad High Court held that the Court can only set aside the injunction if it is satisfied that the party in whose favor the injunction has been granted is delaying the process and enjoying the stay. The relevant parts read as under: ―5. Rale 4 of Order 39, C.P.C. says that an order for injunction may be discharged or varied or set aside by the court on application made thereto by any party dissatisfied with an order made under Rules 1 and 2 of Order 39 of the C.P.C. A proviso has been added, by O.P. State Legislature, at the end of this Rule. It reads as under: ―Provided that if at any stage of the suit it appears to the Court that the party in whose favour the order of injunction exists is dilating the proceeding or is otherwise abusing the process of Court, it shall set aside the order for injunction‖.

6. The above rule no doubt empowers a Court to set aside an order for injunction, but only if it comes to the conclusion that the party in whose favour the order of injunction was passed is delaying the proceedings or is otherwise abusing the process of the Court. The learned Civil Judge had allowed both the amendment applications. It cannot be said that the amendments sought were frivolous and intended to delay the proceedings. If some preliminary issues were raised, the Court was bound to decide it at the earliest before it starts hearing the suit. The 1992 SCC OnLine All 807 pleas regarding jurisdiction which cut at the very root of the suit should be decided as preliminary issues. If such issues are left to be decided at the final trial and after evidence the Court comes to the conclusion that it had no jurisdiction to try the suit and returns the Plaint for presentation before another Court, then the Court's valuable time will obviously be lost. Hence it cannot be said that by asking the Court to decide some preliminary issues the defendants had intended to delay the suit. We do not agree with learned counsel for the respondents that issues 14 and 18 could have been decided along with the whole suit.

7. The appellants cannot be held responsible for the application moved by third party under Order 1 Rule 10, C.P.C. It has not been shown to us that there was any evidence on record to indicate that the defendants had actually set up the applicants who had sought their impleadment in the suit as defendants.‖

372. In Jairaj Devidas v. HirabhaiShinwar Jadhav37, the Bombay High Court delved into the scope of vacation of an order under Order XXXIX Rule 4 of the CPC and held as under: ―15. It would therefore, be necessary to refer to Order XXXIX Rule 4 of the Code of Civil Procedure which read thus:

4. Order for injunction may be discharged, varied or set aside.— Any order for an injunction may be discharged, or varied, or set aside by the Court, on application made thereto by any party dissatisfied with such order: [Provided that if in an application for temporary injunction or in any affidavit supporting such application, a party has knowingly made a false or misleading 2021 SCC OnLineBom 13790 statement in relation to a material particular and the injunction was granted without giving notice to the opposite party, the Court shall vacate the injunction unless, for reasons to be recorded, it considers that it is not necessary so to do in the interests of justice: Provided further that where an order for injunction has been passed after giving to a party an opportunity of being heard, the order shall not be discharged, varied or set aside on the application of that party except where such discharge, variation or setting aside has been necessitated by a change in the circumstances, or unless the Court is satisfied that the order has caused undue hardship to that party.]

16. The learned Single Judge of this Court while interpreting the principle underlined Order 39 Rule 4 in case of Manas Shelters Pvt. Ltd. v. MadhavlalPittie, 2017 SCC OnLineBom 1796, has observed thus:— ―8. Whenever a prayer is made under Order 39 Rule 4, Civil Procedure Code, the Court has to pose itself with a question whether there is a change in the circumstances or whether the order of the Court is causing undue hardship to a party? The later part of the question, needless to say, would involve consideration of the order of the Court or which factors would be a consequence of the order of the Court itself. So is the case with the change in the circumstances. Exercising its jurisdiction under Rule 4 abovesaid, the Court may with advantage draw upon the principles revolving around Explanation IV to Section 11 of the Civil Procedure Code and ask itself whether the pleas raised in the application under Rule 4 might and ought to have been raised prior to the passing of the order? If the answer be ‗yes‘, the Court may reject the application. If the answer be in the negative, the Court may very well entertain the application and dispose of the same on merits‖

17. The principle for discharging/varying/setting aside an order of injunction under Order 39 Rule 4 can be well discerned to be whether the claim is instituted by change in circumstances or on account of undue hardship, caused to the applicant. The expression ‗change in circumstances‘ is referable to the change/alteration in conditions or events which revolve around the subject in respect of which an injunction is granted. It would thus contemplate change in the relevant circumstances in form of subsequent events when the exercise of the power would be justified and such circumstance which were not in existence or contemplation when an order of injunction was passed. ―Undue hardship‖ contemplated under the said provision is the inconvenience being caused to a party on account of operation of an order of temporary injunction, which may justify the discharge/variance or setting aside an order of temporary injunction on an oppressive treatment or injunction being brought to the notice of the Court.‖

373. The Bombay High Court again dealt with the scope of powers conferred to the Courts for vacation of the injunction granted under Order XXXIX Rule 1 and 2 of CPC in Marico Ltd. v. K.L.F. Nirmal Industries (P) Ltd.38 and held as under: ―64. Having considered the rival submissions, in my view it is necessary to refer to Order 39 Rule 4 of CPC, under which the present Interim Application has been made. Order 39 rule 4 of CPC is reproduced below for reference: ORDER XXXIX TEMPORARY INJUNCTIONS AND INTERLOCUTORY ORDERS 2023 SCC OnLineBom 2734 (4) Order for injunction may be discharged, varied or set aside.— Any order for an injunction may be discharged, or varied, or set aside by the Court, on application made thereto by any party dissatisfied with such order: [Provided that if in an application for temporary injunction or in any affidavit supporting such application, a party has knowingly made a false or misleading statement in relation to a material particular and the injunction was granted without giving notice to the opposite party, the Court shall vacate the injunction unless, for reasons to be recorded, it considers that it is not necessary so to do in the interests of justice: Provided further that where an order for injunction has been passed after giving to a party an opportunity of being heard, the order shall not be discharged, varied or set aside on the application of that party except where such discharge, variation or setting aside has been necessitated by a change in the circumstances, or unless the Court is satisfied that the order has caused undue hardship to that party.]

65. The essential requirement for vacation of an ex-parte order i.e. where a party has knowingly made a false or misleading statement in relation to a material particular is required to be established in an application for vacation of the ex-parte order under Order 39 Rule 4. Presuming that this has been established, even then under the first proviso to Order 39 Rule 4 this Court may not vacate the injunction if it considers that it is not necessary to do so in the interest of justice.‖

374. Therefore, since the scope of vacation of an injunction under Order XXXIX Rule 4 of the CPC is narrow, the Courts are duty bound to act upon the same only after being satisfied that a party falls into one of the two categories as explained earlier.

375. This Court heard the learned counsel for the applicants and nonapplicant and perused the relevant material on record.

376. In the present applications, the application bearing I.A. No. 9173/2023 has been filed by the defendant No. 7, i.e., the Punjab National Bank. Mr. Rattan, learned counsel appearing on behalf of the defendant No.7 advanced the arguments for recall of the order dated 3rd March, 2023 along with the application filed by him for rejection of the Plaint. During the course of proceedings, Mr. Rattan conceded that the arguments advanced in both the applications are similar and the same may be taken on record.

377. In summary, the arguments advanced by the learned counsel for the defendant No. 7 is that the said defendant has already initiated the recovery proceedings against the Plaintiff and in pursuance of the same, had issued notice under Section 13(2) of the SARFAESI Act. Therefore, the learned counsel submitted that this Court does not have the jurisdiction to adjudicate the issues between the parties as the same falls within the domain of the DRT. Furthermore, Mr. Rattan also contended that the jurisdiction conferred to the DRT does not give an upper hand to the financial institutions and if the Plaintiff is aggrieved by the actions of the defendant Banks, he has the right to file an application under Section 17 of the SARFAESI Act, where, the DRT is empowered to adjudicate the same.

378. Apart from the above said submissions, Mr. Rattan has also filed his written submissions wherein he has relied upon certain judgments and the same have been discussed in the previous application.

379. The other application bearing I. A. 2858/2024 has been filed by the defendant No.6, i.e., Bank of Maharashtra for recall of the order dated 3rd March, 2023. Mr. Sudhir Makkar, learned senior counsel appeared before this Court on behalf of the defendant No.6 and advanced arguments to support the grounds taken in the said application.

380. Apart from the arguments advanced by Mr. Rattan for recall of the same order under the same provision, Mr. Makkar submitted that the Agreements were never implemented between the parties and therefore, the Plaintiff could not approach this Court on the basis of the same seeking specific performance of the Agreements. Mr. Makkar also submitted that the non-implementation of the said Agreements is attributed to the inaction on part of the Plaintiff and therefore, a suit seeking declaration and specific performance is a mere dilatory tactic to delay the payment of debt accrued towards various Banks.

381. On the aspect of the order dated 3rd March, 2023, Mr. Makkar submitted that the said order was passed without taking into consideration the objections by the defendant Banks as none of the Banks were provided any opportunity to be heard at that stage. Furthermore, the said order extending the stay granted by the Predecessor Bench is unwarranted as the defendant Banks had already started recovery under the SARFAESI Act and therefore, the Plaintiff concealed the said fact in order to obtain a favorable order leading to filing of the present application.

382. At last, Mr. Makkar concluded his arguments by submitting that the concealment of the initiation of recovery is a compelling ground for vacation of the stay under Order XXXIX Rule 4 of the CPC and therefore, this Court may recall the order passed on 3rd

383. In rival submissions, Mr. Nankani, learned senior counsel appearing on behalf of the Plaintiff has denied the above said allegations and submitted that the Plaintiff had duly apprised this Court about the coercive actions taken against the Plaintiff by the defendant Banks. Mr. Nankani submitted that the original stay order dated 22nd February, 2022 was passed against the Yes Bank by the Predecessor Bench only after being satisfied that a prima facie case is made out against the lender Banks and since the other lender Banks also failed to comply with the Agreements, the said order was extended to them after this Court impleaded them vide order dated 3rd

384. On merits of the instant applications, Mr. Nankani contended that the judgment rendered by the Hon‟ble Supreme Court in Nahar Industries (Supra) and subsequently affirmed by a larger bench in Bank of Rajasthan Ltd. (Supra) settles the position of law regarding parallel adjudication of cases in the DRT and Civil Court as the subject matter of both the cases is different.

385. In conclusion, Mr. Nankani submitted that despite being aware of the stay granted by the Predecessor Bench, the lenders conducted the JLM on various occasions and decided to take coercive actions against the Plaintiff, therefore, clearly conflicting the interim stay granted by the Court vide order February, 2022. Furthermore, the learned senior counsel submitted that both the defendants have chosen to challenge the order dated 3rd March, 2023 and did not challenge the previous orders dated 24th and 2nd March, 2023. Therefore, ultimately leading to non-challenge of the stay order passed by the Predecessor Bench and injunction order passed by this Court.

386. In rejoinder, Mr. Makkar, the learned senior counsel and Mr. Rattan rebutted the aforesaid contentions by stating that since the defendant Banks were impleaded as a party to the suit vide order dated 3rd March, 2023, they could not challenge the previous orders passed by this Court and the Predecessor Bench and therefore, this Court may adjudicate the instant applications on the basis of the challenge made by the respective parties.

387. In view of the same, this Court deems it appropriate to delineate the following issue for adjudication of the instant applications.

March, 2023 can be recalled in view of the bar on the jurisdiction of this Court under Section 34 of the SARFAESI Act? If yes, whether the reliefs as prayed by the defendant Banks can be granted without a challenge being made to the original stay order dated 24th February, 2022 and subsequent order dated 2nd March, 2023 passed by the Predecessor Bench and this Court respectively?

388. The jurisdictional bar imposed upon the Civil Courts for matters concerning the recovery has already been discussed by this Court in the application bearing I.A. No. 8068/2023 (under Order VII Rule 11 of the CPC), wherein, this Court deemed it appropriate to reiterate and discuss the position of law as enunciated and expounded by the Hon‟ble Supreme Court and various High Courts of this Country.

389. As established by the discussions in I.A. No. 8068/2023, there is no dispute regarding the bar imposed upon the jurisdiction of this Court on the issue concerning the recovery made under the SARFAESI Act, however, it would be imperative to determine if the said bar extends to the suit filed for specific performance of the contract as well.

390. As contended by Mr. Nankani, the instant suit under which the present applications have been filed for specific performance of the Agreements entered between the lender Banks and the Plaintiff, and due to alleged failure to complete the same, the Plaintiff had initially approached this Court against the Yes Bank, whereby, the Predecessor Bench agreed to the grievance of the Plaintiff and had granted a stay vide order dated 24th February, 2022. The relevant part of the said order reads as under: ―49. Given the nature of the dispute and keeping in mind the fact that one action, of the respondent, also predicated on the very default which constitutes the basis for issuance of the impugned letter dated 17th February, 2022, already stands stayed by this Court, it would be discrepant for this Court to take an opposing view in this case, at the stage of Order

50. As such, given the nature of the dispute and keeping in mind the order passed by this Court on 6th December, 2021 in IA 16083/2021 in CS (COMM) 626/2021, the Court deems it February, 2022 till 7th March, 2022 and fixing IA 3102/2022 626/2021, on 7th March, 2022. ***

51. Let the Plaint be registered as a suit.‖

391. Upon perusal of the above, it is clear that the Predecessor Bench had granted a stay on the impugned letter dated 17th February, 2022 issued by the Yes Bank (YBL loan recall notice) for recovery of the debts owed by the

392. Thereafter, the lender Banks alleged non-implementation of the terms of the Agreements and therefore, issued similar notices as issued by the Yes Bank on 17th February, 2022. Apart from the said action, the lender Banks also resolved to take coercive action against the Plaintiff in the JLM held on 23rd

393. Aggrieved by the said decision, the Plaintiff had approached this Court by filing an application bearing I.A. 4163/2023 under Order XXXIX Rule 1 and 2 of the CPC for grant of interim stay on the operation and effect of the minutes of JLM dated 23rd January, 2023. This Court heard the parties and passed the order dated 2nd March, 2023 in favor of the Plaintiff. The relevant extracts of the order dated 2nd March, 2023 are as under: ―I.A. 4163/2023 (u/O-XXXIX R-1 & 2 of CPC)

1. The instant application under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, 1908 has been filed on behalf of Plaintiff seeking the following reliefs:- "a. Stay the operation and effect of the Minutes of the Joint Lenders Meeting dated 23.01.2023 and restrain the parties from acting upon the said Minutes, including but not limited to taking any recovery action based on the consent of proposed Defendant No. 5 recorded in the meeting and the appointment of M/s S.S. Periwal & Co. as the forensic auditor; b. Restrain the Proposed Defendant No. 5 from acting as, or holding themselves out as Lenders of the Plaintiff Company, pending an adjudication on the legality of the Assignment of debt by Defendant No. 1 to Proposed Defendant No. 5 by this Hon'ble Court; c. Appoint a reputed Auditor from the list of Empaneled Forensic Auditors For Conducting Forensic Audit of Borrowal Accounts having exposure above Rs. 50 Crores (valid upto 27.08.2023) published by the Indian Banks Association to conduct Forensic Audit as well as Cash Flow Monitoring of the Applicant Company; d. Pass any other order or orders that may deemed fit and proper in the interest of justice."

2. Mr. Vikram Nankani, learned senior counsel appearing on behalf of the applicant/Plaintiff submitted that vide Joint Lenders‘ Meeting dated 23rd January 2023, the decision was taken to initiate recovery action and appoint M/s S.S. Periwal& Co. as a forensic auditor with respect to Plaintiff‘s accounts. The Plaintiff, by way of the captioned suit, has assailed the Notice dated 17th February 2022, whereby the defendant No. 1 sought to recall the loan facilities sanctioned to the Plaintiff in the event of failure of payments detailed thereunder. The Predecessor Bench on 24th passed the interim order restraining the defendants to take any action qua the Notice of 17th February 2022. It is submitted that the question of default by the Plaintiff for the loans assigned to JC Flowers Asset Reconstruction Private Limited is the subject matter of the instant suit and remains to be adjudicated upon by this Court. However, in complete violation and contravention of the orders of this Court, the said Joint Lenders‘ Meeting was held to initiate action against the Plaintiff.

3. It is submitted that the decision taken in the Joint Lenders‘ Meeting is without sanctity and illegal, since the defendants have already been restrained to take any action in terms of the order dated 17th February 2022. It is submitted that proposal was raised in the Lenders‘ Meeting to appoint forensic auditor to audit the accounts of the Plaintiff. The said action was in the teeth of the order passed by this Court and was an attempt to circumvent the said order. The defendant No. 1 and defendant No. 5, in an attempt to overreach and pre-empt the determination of the issues raised in the captioned suit by this Court, have taken actions that are detrimental to the operations of the Plaintiff company.

4. It is further submitted that during the discussions with regard to future course of recovery actions in the Joint Lenders‘ Meeting, the vote of defendant No. 5 was considered by the Lead Banker illegally. It is submitted that the Minutes of the Meeting clearly record the dissent of one of the lenders. Another lender opposed the appointment of forensic auditor by various emails addressed to the defendant No. 1 Bank. It is submitted that even if it be assumed without admitting, that the assignment to defendant No. 5 by the defendant No. 1 was valid, the consent of the defendant No. 5 itself is in gross violation of the interim injunction dated 24th granted by this Court.

5. Learned senior counsel also stated that in the Meeting of Lenders on the manner of appointment of forensic auditor, one of lenders raised concerns on the unilateral manner in which the appointment was made. The process of inviting proposals, sharing proposals with the lenders, making of presentations by proposed applicants, etc., was completely bypassed. The said action was again in contravention of the order of this Court granting interim restraint.

6. Therefore, it is prayed that this Court may grant a stay on the operation and effect of decisions taken by the Joint Lenders Forum in the Joint Lenders‘ Meeting dated 23rd January 2023 thereby also restrain the defendants and other lenders from taking any action against the Plaintiff.

7. Heard.

8. The captioned suit on behalf of the Plaintiff has been filed assailing the Loan Recall cum Guarantee Invocation Notice dated 17th February 2022 issued by the defendant No. 1. The relevant portion of the Notice is reproduced hereunder:- ―4. Please note that pursuant to submission of request by the Borrower on September 28, 2020, the Bank had approved One Time Restructuring ("OTR'') under the Resolution Framework for Covid-19 Related Stress ("Resolution Framework") dated August 6, 2020 subject to Borrower meeting terms and conditions stipulated under the extant RBI guidelines. Under the OTR scheme, Bank also sanctioned fresh FITL limits amounting to ~INR 321 MM for interest servicing till Mar 2022 apart from extending repayment terms, reducing interest rate and other benefits to the Borrower.

5. However, the Borrower deviated from the Resolution Framework and kept compliances under OTR scheme pending, including but not limited to, implementation beyond 180 days of invocation, documents execution not completed within 180 days of invocation, reclassification of asset exposure as commercial real estate, pending revised independent credit evaluation rating, the Bank was constrained to declare OTR as not implemented. In view of the above, the Borrower is bound by the sanction terms of the Facility as captured in the Facility Agreements. Further, in the joint lender‘s meeting conducted on September 24, 2021, two lenders in the multiple banking arrangement of the Borrower i.e., Indusind Bank Limited and Axis Bank Limited confirmed that in their view OTR have not been implemented/ cannot be considered as implemented. Pursuant to terms and conditions of the Facility Agreements, the Borrower was required to make the payment(s)/repayment(s) towards the Facility promptly on the due dates, without any delay. However, the Borrower did not honor the terms and conditions of the Facility Agreements and neglected in making payment/repayment(s), despite repeated reminder(s) by the Bank. Accordingly, the Borrower has been classified as NPA with effect from December 20,

2020. In such circumstances, the Bank has become entitled to and does hereby recall the Facility and declare the Facility as due and payable by the Borrower to the Bank forthwith. Accordingly, we hereby call upon you, the 'Borrower, and demand of you to pay amount to the Bank at its office at 4th Floor, Max Towers, Sector-16B, Noida, Uttar Pradesh - 201301, within 7 days of the receipt of this notice, the outstanding amount under the Facility together with interest, liquidated damages and other charges of the particulars of which are set out in the Schedule- II hereto together with further interest and other charges thereon at the contractual rates upon the footing of interest until payment/realization.

9. The Bank hereby recalls the Facility as sanctioned/ disbursed to the Borrower and in case you, the Borrower and the Guarantors fail to make the payments as aforesaid, we shall be constrained to take such steps and measures as may be permissible under law for recovery of all the monies due and payable by you, more particularly mentioned in Schedule - II hereto, at your own risk as to the costs and consequences.

10. In the event the monies due and payable as mentioned above are not paid in full within a period of seven (7) days from the date of receipt of this notice by the Borrower and/ or the Guarantors, we shall be constrained to exercise our rights and remedies against the Borrower, the Guarantors and obligors/ security providers.‖

9. A perusal of the order passed by the Predecessor Bench on 24th February 2022 shows that after appreciation of the grounds raised on behalf of the Plaintiff while prima facie satisfying this Court to issue summons in the suit, the Predecessor Bench passed the interim order of restraint on the defendant No. 1 with respect to the impugned Notice dated 17th February 2022. The relevant portion of the said order is reproduced hereunder:- ―50. As such, given the nature of the dispute and keeping in mind the order passed by this Court on 6th December, 2021 in IA 16083/2021 in CS (COMM) 626/2021, the Court deems it February, 2022 till 7th March, 2022 and fixing IA 3102/2022 626/2021, on 7th

59. Till the next date of hearing, Defendant 1 shall remain restrained from taking any action against the Plaintiff on the basis of the impugned letter dated 17th February, 2022.‖

10. At this stage, the instant application has been filed on behalf of the Plaintiff whereby the holding Joint Lenders‘ Meeting and the decision followed by the same has been sought to be stayed. The Minutes of the Meeting dated 23rd January 2023 have been brought on record and produced before this Court. A perusal of the Minutes reveal that the defendant No. 5 as well as other lenders/Banks have sought to make decisions and take actions for the account of M/s Asian Hotel (North) taking note of the fact that an interim order, qua Notice dated 17th February 2022 and any action arising therefrom, is already in operation. The relevant portion of the Minutes of the Meeting is reproduced hereunder:- ―2) Discussion on the status of the account, Suit filing, OTS Status and recovery action by individual Bank BOM asked all the Lenders to inform the current status of the account with all Lenders: · JC Flowers ARC informed that YES Bank has assigned the portfolio to them. YBL has already informed that they have issued LRM and has done pledge invocation. The company has taken stay from high Court on the ground that OTR was implemented and there was no default on the part of Borrower. Next hearing is in the end of Jan-2023. · BOM informed that they have issued 13 (2) under SARFAESI in the said account. The same has been objected by the company. BOM further added that they have replied to the objection raised by the company. BOM further informed that they have conveyed OTS sanction on bilateral basis to the borrower which is not accepted by the borrower as on date. BOM further added that they will go for recovery action and will proceed for all option available i.e. PIRP/CIRP/IBC/DRT. xxxxx · Axis Bank informed that they recalled the loan and have proceeded for recovery action. They have already invoked personal guarantee (not as per Sec-95 of IBC). Axis Bank further added that they will go ahead with BOM for filling of NCLT. He further added any kind of settlement will be looked only after finalisation of forensic audit. xxxxx

5) Discussion on Progress of Forensic Audit BOM informed to all the Lenders that the Forensic audit has been initiated and a list of required documents is already shared to al the Lenders and the borrower for onward submission. BOM further added that the Forensic audit is in initial stages only and will go simultaneously with OTS or recovery action.... BOM requested all the lenders to provide the documents as required by the auditor. Axis bank further added that both recovery action and forensic audit will go hand in hand.... xxxxx

7) Discussion on future course of recovery action- PIRP/CIRP/DRT/NCLT JC flowers ARC enquired BOM about the recovery action initiated by them. BOM replied that as the company has offered OTS offer to all the Lenders and out Bank has also convey OTS sanction to them, which is not yet accepted by the company. Hence they are looking for all the course of recovery action. BOM will proceed for all the option available i.e. PIRP/CIRP/IBC/DRT. BOM further informed to all the Lenders that nay lender can join them for joint recovery action or otherwise they will go individually. All the Lenders except DBS an ECL supported BOM and will be jointly go for recovery action. xxxxx

9) Discussion on the Performance of the Company. Performance of the company was discussed with the Lender. The company officials informed that nine month revenue is Rs.

184.09 crore approx. as compared to previous year 9 month sale Rs. 97.85 crore. Revenue for the quarter is Rs, 70.50 crore. The company also informed that the EBITA as on 31.12.2022 is around 21%. BOM enquired company officials why there is decline in the cash flows for the Dec-22 and Jan-23 months. The Company officials informed that maximum revenue comes from corporate bookings. But from 15.12.2022 to 15.01.2023, there is minimal corporate bookings as due to New Year Eve and Christmas all over the world. Even the weddings are minimal due to some religious issues. Hence the sale declines. Lenders asked the company officials to inform the estimated revenue for this FY. Company informed that it will be around Rs. 250.00 crore.‖

11. A conjoint reading of the order dated 24th and the aforementioned paragraphs of the Minutes of the Meeting dated 23rd January 2023 reveal that the action that has been taken on behalf of the defendant No. 5 and the other lenders is in the teeth of the interim order passed by this Court. The lenders/Banks have either initiated or have decided to initiate recovery action against the Plaintiff despite clear directions from this Court restraining the defendant No. 1 Bank to take any action in furtherance of Notice dated 17th February

2022. Hence, at this stage, this Court is inclined to issue notice of the application to the defendants.

12. Since learned counsel for the defendants No. 1 and 5 and learned counsel for defendants No. 2, 3 and 4 appear on advance notice, there is no need for issuing a formal notice of the application. The learned counsel appearing on behalf of the defendants vehemently opposed the instant application and prayed for some time to file reply/objection to the application. Let the same be filed within two weeks.

13. List on 29th

14. Since a prima facie case is made out on behalf of the Plaintiff, all defendants are directed to restrain from taking any action in pursuance of the Minutes of the Meeting dated 23rd January 2023, till the next date of hearing.‖

394. Upon perusal of both the orders, i.e., order dated 24th and 2nd March, 2023, it is crystal clear that on previous occasions, the Plaintiff had satisfied the Court on the aspect of non-performance of the contract by the defendant Banks, and therefore, the Predecessor Bench and this Court granted a stay on any coercive action to be taken against the Plaintiff by the consortium of lenders.

395. Now coming to the arguments advanced by the learned senior counsel for the defendant No. 6 and learned counsel for defendant No.7 for vacation of the stay extended by this Court vide order dated 3rd

396. The order dated 3rd March, 2023 was given by this Court in the impleadment application bearing I.A. No. 1746/2023 filed by the defendant No. 9 for impleadment of the rest of the lender Banks as the same were contended to be „proper and necessary party‟ to the suit originally filed against the Yes Bank.

397. On perusal of the said order, it is made out that this Court had commented upon the discretion to add the parties and held that it is empowered to add any party at any stage of the proceedings if their presence is necessary to enable the Court to effectually, efficiently, completely, and effectively adjudicate upon the disputes.

398. This Court had also noted that the applicant and other lenders/Banks have collectively executed the Master Amendment Agreement and are subject to the OTR scheme. These Agreements involves all lenders, making their presence necessary in the case.

399. The reference to specific paragraphs from the Plaint, emphasizing the collective involvement of all lenders, including the applicant, in the Master Amendment Agreement and related agreements (TRA and FITL) makes it evident that it was not only the Yes Bank, rather all the lender Banks were equally responsible for execution of the Agreements.

400. Now coming to the contention of the defendants for recall of the aforesaid order, both the defendants in the instant applications have vehemently argued that the extension of the said stay order is untenable in law as the recovery measures taken by the lender Banks were done under the SARFAESI Act, therefore, barring the jurisdiction of this Court to adjudicate upon the same.

401. In response to the same, the learned senior counsel for the Plaintiff has denied the above said submission and contended that the suit assails the specific performance as the lender Banks resiled from the terms of recovery earlier agreed by them.

402. Furthermore, the learned senior counsel also apprised this Court that the defendants have not sought their deletion from the suit, rather have only filed the application for vacation of the stay, therefore, making it evident that there is no dispute regarding the defendants being the necessary and proper parties.

403. Another argument heavily contested by the defendants is that the Agreements entered into by the parties were never implemented and therefore, a suit seeking specific performance cannot be adjudicated as the same is seeking performance of a contract which never came into existence.

404. In rebuttal, the learned senior counsel for the Plaintiff submitted that the Plaintiff had duly taken steps for implementation of the same and it was the defendants who did not comply with the requisite procedures.

405. In support of the said contention, the learned senior counsel for the Plaintiff referred to the documents placed on record, whereby, it is evident that the documents, as supplied by the lawyers appointed by the defendants, were never approved by the Yes Bank, therefore, leading to nonimplementation of the Agreements.

406. Furthermore, the e-mail communications between the defendant NO. 1, 6 and the Plaintiff on 20th October. 2021, 21st October, 2021, 27th October, 2021, 2nd November, 2021 and 15th November, 2021 attest to the said claim of the Plaintiff.

407. This Court has perused the material placed on record referred by both the parties, and it clear that the Bank of Maharashtra was appointed as the lead Bank by the consortium of lenders and therefore, it was duty bound to ensure the compliance with the necessary procedures put in place, however, the failure on part of the Yes Bank and the other lender Banks can be attributed towards failure on part of the lead Bank for effective implementation of the Agreements entered into by the parties.

408. Since the Plaintiff has already filed the application seeking amendment of the Plaint, which stands allowed vide the judgement of the even date in application bearing IA No. 10671/2023, wherein, the Plaintiff has sought reliefs against the newly impleaded lender Banks, this Court is of the view that the pleadings in the amended Plaint extends the cause of action towards the other lender Banks as well, including but not limited to the applicants of the present applications.

409. The perusal of the previous orders i.e. orders dated 2nd and 3rd March, 2023 also depicts that the Court was duly apprised of the recovery actions taken under the SARFAESI Act and this Court had only granted stay to the minutes of JLM dated 23rd January, 2023 after thoroughly reviewing the minutes of the said meeting.

410. Evidently, this Court was aware of the actions taken by the defendants despite stay order by the Predecessor Bench and in this backdrop, this Court had allowed the impleadment of the parties vide order dated 3rd March, 2023 and the same is under challenge in the present applications.

411. Therefore, it cannot be said that there was any material suppression by the Plaintiff to obtain the stay on the JLM meeting dated 23rd From the pleadings, it is clearly established that the defendants/applicants have not approached this Court for vacation of stay on the JLM minutes January, 2023 and have only restricted their prayer for recall of March, 2023, therefore, this Court is of the view that there is no basis to contend that the grant of stay by this Court is under challenge by way of the instant applications. Issue A is decided accordingly.

412. Now, coming to the issue B, i.e. the contention of complete bar on the proceedings before this Court. In order to support the parallel adjudication of the dispute, the learned senior counsel for the Plaintiff had referred to the judgment rendered by the Hon‟ble Supreme Court in the Nahar Industries (Supra) and the validity of the said ruling has already been tested by the larger bench of the Hon‟ble Court in the Bank of Rajasthan Ltd. (Supra).

413. The ratio of the above said judgments has already been dealt with by this Court in the application filed by the defendant No.7 for rejection of the Plaint under Order VII Rule 11 of the CPC and therefore, this Court does not deem it necessary to discuss the above said cases again.

414. The discussions, as made in the application for rejection of the Plaint, makes it clear that the Civil Courts are not precluded from entertaining a dispute arising out of a contractual agreement and therefore, the bar imposed under Section 34 of the SARFAESI Act does not apply to the suit filed for specific performance of a contractual agreement.

415. The above cited judgments also make it clear that the DRT is empowered to adjudicate the issues related to recovery of the debts and the powers of the said Tribunal is confined to the recovery aspect only, therefore, the issue of non-conformity with an agreement is a subject matter of the Civil Courts.

416. At last, this Court also deems it imperative to deal with the cases cited by the defendants/applicants to support their contention of jurisdictional bar on this Court to adjudicate the instant suit. As reproduced earlier, the learned counsel for the defendant No. 7 placed various judgments to supplement his contention of jurisdictional bar upon this Court.

417. In IFCI Venture Capital Funds Ltd. (Supra), this Court had dealt with the issue of jurisdictional bar imposed by Section 34 of the SARFAESI Act. The relevant paragraphs of the said judgment have been perused by this Court.

418. The perusal of the relevant paragraphs of the aforesaid judgment makes it clear that even though the suit filed by the party was a declaratory suit, the question before the Court was whether the decision of declaration of the NPAs by the Bank can be adjudicated by the Civil Courts or not. While answering in negative, this Court held that the said issue is exclusively under the domain of the DRT and therefore, the bar imposed by Section 34 of the SARFAESI Act operates in the said case.

419. Similarly, the other case cited by the learned counsel for defendant No.7 is the judgment rendered by the Co-ordinate Bench of this Court in the case of Riddhi Aggarwal &anr v. Aditya Bhutani &anr in CS(OS) 9/2023 & O.A. 60/2023. In the said case, the Co-ordinate Bench of this Court had opined on the jurisdictional bar and held that the challenge of proposed sale by the Bank was a subject matter to be adjudicated by the DRT and not a Civil Court.

420. The relevant paragraphs of the aforesaid case make it clear that the question in both the cases was not similar to the issues raised by the Plaintiff in the instant suit. The paragraph No. 10 of the judgment rendered by the Co-ordinate Bench in Riddhi Aggarwal & anr v. AdityaBhutani & anr (Supra), also makes it evident that the Court therein did not comment upon the maintainability of the specific performance suit in view of the jurisdictional bar imposed by the special legislation.

421. Therefore, the cases supplemented by the learned counsel for the applicant/defendant are not on a similar footing and a distinction can be drawn from the same.

422. It is not in dispute that the Plaintiff has filed the captioned suit seeking specific performance of the Agreements entered into by the parties and nowhere in the pleadings, it is prayed that the proceedings under the SARFAESI Act may be stayed, therefore, the argument of the jurisdiction of this Court being barred under Section 34 of the SARFAESI Act is misconceived as this Court is adjudicating the dispute of non-performance of the contractual agreement.

423. The defaults cited by the defendant No. 7 are identical to those alleged by the defendant No. 1 in the YBL recall notice. The averments in the vacation application filed by the defendant No. 7 are also identical to the pleadings filed by defendant No. 1 in the suit. Therefore, indisputably, defendant No. 7 is identically placed as defendant No. 1. In these identical circumstances, the Predecessor Bench of this Court had passed the order February, 2022 staying the operation of the YBL recall notice and restrained defendant No. 1 from taking any coercive recovery measure against the Plaintiff.

424. The aforesaid order has been extended to the other newly impleaded defendants vide order dated 3rd March, 2023. These orders have not been challenged by any defendants and therefore, the same was not vacated or modified and is binding till date.

425. It is also revealed from the records that the stay order was brought to the knowledge of defendant No. 7 during the JLM held on 14th March, 2022 and despite having knowledge of the stay order, the findings of this Court, and the interim directions passed, the defendant No. 7 deliberately issued the loan recall notice on identical grounds as defendant No. 1.

426. Since the original Plaint was filed against the Yes Bank seeking specific performance of the Agreements and the Predecessor Bench had already granted a stay on the notice issued by the Yes Bank, the other lender Banks were duty bound to adhere to the said order as they were also on similar footing to the Yes Bank.

427. The issuance of similar notices by the defendant Banks makes it clear that the said notices issued to the Plaintiff were in teeth of the interim stay and therefore, were ought to be stayed by this Court.

428. Furthermore, it is also clear from the perusal of the order dated 3rd March, 2023 that the stay originally granted by the Predecessor Bench was merely extended to the other parties, which in normal course of event should have been assumed.

429. Therefore, this Court is of the view that the proceedings in the instant suit have nothing to do with the recovery measures, rather the defendants have been restricted from violating the terms agreed upon by them when they entered into the Agreements in question with the Plaintiff.

430. At this stage, this Court also finds it appropriate to deal with the contention of vacation of stay as extended to the newly impleaded defendants vide order dated 3rd March, 2023. In order to adjudicate the said issue, it is pertinent to peruse the prayer clause of both the applications. The same reads as under: ―PRAYER in I.A. 9173/2023 In view of the abovementioned facts and circumstances, and taking into account the grounds stated above, it is, therefore, most respectfully prayed that this Hon'ble Court may kindly be pleased to: (a) Pass an order thereby Recall / Set aside the Order dated March 3, 2023 passed by this Hon'ble Court in I.A. No. 1746 of 2023 in CS (Comm) No. 128 of 2022 in the interest of justice, equity and fair play; (b) Pass an order thereby Recall / Set aside / Modify the Order dated March 3, 2023 passed by this Hon'ble Court in I.A. NO. 1746 of 2023 in CS (Comm) No. 128 of 2022 permitting the Applicant/ PNB to file its claim petition under Section 19 of the RDB Act, 1993 before the Debt Recovery Tribunal, New Delhi, for the recovery of its legitimate dues amounting to Rs.181, 56, 42, 608.00 ( Rupees One Hundred and Eighty One Crores Fifty Six Lacs Fourty Two Thousand Six Hundred and Eight ) alongwith interest clue thereon w.e.f O 1.01.2023 till date, against the Plaintiff and defendants No.3 and 4, before 26.05.2023, so that the loan / Guarantee documents signed by the Plaintiff and Defendant No.3 and 4 do not get time barred on 26.05.2023, in terms of Balance Confirmations executed by Plaintiff and Guarantor in favour of the Applicant/PNB, in the interest of justice, equity and fair play. c) Pass an order thereby Recall / Set aside / Modify the Order dated March 3, 2023 passed by this Hon'ble Court in I.A. NO. 1746 of 2023 in CS (Comm) No. 128 0f 2022 permitting the Applicant / PNB to proceed with the SARFAESI, measures under the SARFAESI Act, 2002, qua the secured assets/mortgaged properties of Plaintiff as per law, in the interest of justice. d) Pass such other order or orders as this Hon'ble Court may deem fit and proper under the circumstances of the case.‖ ―PRAYER in I.A. 2858/2024 It is, therefore, most respectfully prayed that this Hon‘ble Court may graciously be pleased to:

431. A perusal of the prayers of both the applications makes it clear that the defendants have only challenged the order dated 3rd March, 2023 and have not challenged the orders in which the original stay was granted, i.e., the order dated 24th February, 2022 and the order by which a stay on the minutes of JLM meeting dated 23rd January, 2023 was granted, i.e., order dated 2nd

432. During the course of proceedings, this Court had put forth its concern of the said non-challenge before the respective learned counsel for the defendant Banks, to which Mr. Makkar had replied by stating that the defendant can only challenge the orders after their impleadment in the suit and since it was not a party to the suit before the order dated 3rd March, 2023, it could not challenge the previous orders passed by this Court and the Predecessor Bench.

433. Therefore, this Court deems it apposite to deal with the said contention and discuss the principles regarding challenge made to a subsequent order.

434. It is a settled position of law that the parties aggrieved by a subsequent order are legally required to challenge the original order. In Govt. of Maharashtra v. Deokar's Distillery39 the Hon‟ble Supreme Court affirmed the position of law and held as under: ―38. This apart, the High Court was also not right in rejecting the writ petition of the respondents at the threshold. The High Court has failed to notice another important factor that the statutory provision under Article 309, namely, the notification dated 10-12-1998 and the consequential administrative instructions/orders issued for carrying out the executive function under Section 58-A of the Prohibition Act and Article 162, namely, the circular letter dated 30-7-1999 had not been challenged by the respondents herein and, therefore, they were not entitled to challenge the demand notice which was merely a consequential communication. The High Court therefore, is not right in quashing the demand notice issued by Appellant 4, namely, the Sub-Inspector of State Excise, in charge of the manufactory of the respondent, without examining the validity of or quashing the Rules of 1998 and the consequential circular letter dated 30-7-1999 issued by Appellant 2, namely, the Commissioner, since the demand notice was merely a consequential communication issued in furtherance of the Rules of 1998 and the circular letter dated 30-7-1999.‖

435. The above said position of law was reiterated by the Hon‟ble Supreme Court in the case of EdukantiKistamma v. S. Venkatareddy40, wherein, the Hon‟ble Court referred the judicial precedents to affirm the position of law. The relevant parts read as under: ―22. It is a settled legal proposition that challenge to consequential order without challenging the basic order/statutory provision on the basis of which the order has been passed cannot be entertained. Therefore, it is a legal obligation on the part of the party to challenge the basic order and only if the same is found to be wrong, consequential order may be examined (vide P. Chitharanja Menon v. A. Balakrishnan [(1977) 3 SCC 255: 1977 SCC (L&S) 378: AIR 1977 SC 1720]; H.V. Pardasani v. Union of India [(1985) 2 SCC 468: 1985 SCC (L&S) 482: AIR 1985 SC 781]; and Govt. of Maharashtra v. Deokar's Distillery [(2003) 5 SCC 669: AIR 2003 SC 1216] ).‖

436. The above said position of law was reiterated by the Division Bench of the Allahabad High Court in the case of Indian Council of Agricultural Research (Icar) v. Central Administrative Tribunal and Another41. The relevant part reads as under: ―6. It has been repeatedly held that if the substantive order is not: challenged, no order can be passed so as to nullify it. -In

2018 SCC OnLine All 6627 Court has also followed the above law of the Apex Court in Gaony Shiksha Samiti, Auraiya v. State of U.P.‖

437. Therefore, the perusal of the above cited judicial dicta makes it evident that a party affected by a subsequent order needs to challenge the original order on the basis of which a subsequent order was passed.

438. It is also clear that the parties are obligated to challenge the original orders and in absence of such challenge, a subsequent order cannot be challenged as the Courts do not have the power to examine the subsequent order, if the stay operates from the original order.

439. Now adverting to the instant case. Upon reading of the order dated 3rd March, 2023, it is clear that the said order had merely extended the stay granted by the Predecessor Bench and therefore, the aggrieved parties ought to have challenged the said order along with the subsequent orders, i.e. the order dated 2nd

440. In the instant applications, the non-challenge to the orders dated 24th February, 2022 and 2nd March, 2023 makes it clear that the defendants chose to nitpick their relief, a practice forbidden as per the settled position of law.

441. Now coming to the contention of the defendants that they are not legally required to challenge the said orders. The said argument has been advanced by Mr. Makkar, the learned senior counsel for the Bank of Maharashtra and the same has been duly supported by Mr. Rattan as well.

442. In response to the same, Mr. Nankani submitted that the above said argument is misconceived as a third party getting affected by an order are also empowered to challenge the same and therefore, since the parties, i.e., the defendants/applicants are allegedly affected by the original stay order February, 2022 and further grant of injunction to the minutes of the JLM dated 23rd January, 2023 vide order dated 2nd March, 2023, they ought to have challenged the same.

443. It is not in dispute that the action as agreed to be taken by the defendants/applicants were decided in the JLM dated 23rd January, 2023 and therefore non-challenge to the stay order would mean that the defendants/applicants chose to not challenge the stay granted by this Court, and the same would be contrary to the reliefs sought in the present applications.

444. It is also pertinent to note that even though the Predecessor Bench of this Court had granted a stay on the recall notice dated 17th issued by the Yes Bank, the other lender Banks opted for the same method and issued recall notices to the credit facilities provided to the Plaintiff herein.

445. Furthermore, the subsequent decisions taken by the lender Banks were stayed by this Court vide order dated 2nd March, 2023 and the defendants failed to challenge the same, therefore, leading to a situation where the defendants are seeking a relief not prayed for in the pleadings.

446. It has been settled by the Hon‟ble Supreme Court and this Court time and again that a party seeking a relief not prayed for in the pleadings cannot be adjudicated by the Court as the Courts are duty bound to confine to the pleadings if the party decides to not amend the same and include the reliefs exactly sought.

447. In Bachhaj Nahar v. Nilima Mandal42, the Hon‟ble Supreme Court expounded the principles regarding the same and held as under: ―10. The High Court, in this case, in its obvious zeal to cut delay and hardship that may ensue by relegating the Plaintiffs to one more round of litigation, has rendered a judgment which violates several fundamental rules of civil procedure. The rules breached are:

(i) No amount of evidence can be looked into, upon a plea which was never put forward in the pleadings. A question which did arise from the pleadings and which was not the subjectmatter of an issue, cannot be decided by the court.

(ii) A court cannot make out a case not pleaded. The court should confine its decision to the question raised in pleadings. Nor can it grant a relief which is not claimed and which does not flow from the facts and the cause of action alleged in the Plaint.

(iii) A factual issue cannot be raised or considered for the first time in a second appeal.

11. The Civil Procedure Code is an elaborate codification of the principles of natural justice to be applied to civil litigation. The provisions are so elaborate that many a time, fulfilment of the procedural requirements of the Code may itself contribute to delay. But any anxiety to cut the delay or further litigation should not be a ground to flout the settled fundamental rules of civil procedure. Be that as it may. We will briefly set out the reasons for the aforesaid conclusions.

12. The object and purpose of pleadings and issues is to ensure that the litigants come to trial with all issues clearly defined and to prevent cases being expanded or grounds being shifted during trial. Its object is also to ensure that each side is fully alive to the questions that are likely to be raised or considered so that they may have an opportunity of placing the relevant evidence appropriate to the issues before the court for its consideration. This Court has repeatedly held that the pleadings are meant to give to each side intimation of the case of the other so that it may be met, to enable courts to determine what is really at issue between the parties, and to prevent any deviation from the course which litigation on particular causes must take.

13. The object of issues is to identify from the pleadings the questions or points required to be decided by the courts so as to enable parties to let in evidence thereon. When the facts necessary to make out a particular claim, or to seek a particular relief, are not found in the Plaint, the court cannot focus the attention of the parties, or its own attention on that claim or relief, by framing an appropriate issue. As a result the defendant does not get an opportunity to place the facts and contentions necessary to repudiate or challenge such a claim or relief. Therefore, the court cannot, on finding that the Plaintiff has not made out the case put forth by him, grant some other relief. The question before a court is not whether there is some material on the basis of which some relief can be granted. The question is whether any relief can be granted, when the defendant had no opportunity to show that the relief proposed by the court could not be granted. When there is no prayer for a particular relief and no pleadings to support such a relief, and when the defendant has no opportunity to resist or oppose such a relief, if the court considers and grants such a relief, it will lead to miscarriage of justice. Thus it is said that no amount of evidence, on a plea that is not put forward in the pleadings, can be looked into to grant any relief.‖

448. Recently, the Hon‟ble Supreme Court reaffirmed the said positions in the case of Rajasthan Art Emporium v. Kuwait Airways43 and held as under: ―26. However, on this point also, we approve and sustain the order passed by NCDRC for the reason that in its comPlaint under Section 21(a)(i) of the Consumer Protection Act, 1986, the complainant/appellant has sought damages for Rs 20 lakhs only as compensation for loss of business and reputation. It is a trite law that a party is not entitled to seek relief which he has not prayed for. For this proposition we may profitably refer to this Court's judgments in Trojan & Co. Ltd. v. Nagappa Chettiar [Trojan & Co. Ltd. v. Nagappa Chettiar, (1953) 1 SCC 456], Krishna Priya Ganguly v. University of Lucknow [Krishna Priya Ganguly v. University of Lucknow, (1984) 1 SCC 307: AIR 1984 SC 186], Om Prakash v. Ram Kumar [Om Prakash v. Ram Kumar, (1991) 1 SCC 441: AIR 1991 SC 409], Bharat Amratlal Kothari v. DosukhanSamadkhan Sindhi [Bharat Amratlal Kothari v. DosukhanSamadkhan Sindhi, (2010) 1 SCC 234: (2010) 1 SCC (Cri) 757: AIR 2010 SC 475] and Manohar Lal v. Ugrasen [Manohar Lal v. Ugrasen, (2010) 11 SCC 557: (2010) 4 SCC (Civ) 524].‖

449. The perusal of the above cases makes it amply clear that the parties are required to restrict themselves to the pleadings and the Courts can only rule upon the reliefs sought by them in the pleadings.

450. Furthermore, the above cited cases also act as a directive to the Courts to adhere to the rule of law where a relief cannot go beyond the pleadings or otherwise the same would lead to defeating the purpose of the procedural laws.

451. In the instant case, the stay on the coercive action stems out from the orders dated 24th February, 2022, i.e., the original stay order passed by the Predecessor Bench and further, the stay on the minutes of the JLM meeting January, 2023 was granted by this Court vide order dated 2nd

452. Therefore, the non-challenge to the same would mean that the defendants/applicants have failed to challenge the original order by which the stay came into existence.

453. The contention regarding the non-challenge is unacceptable as the settled position of law empowers the subsequently impleaded party to challenge the previous orders and since the order 3rd March, 2023 is only extending the stay granted by the Predecessor Bench, the affected party (if any) is legally bound to challenge the original order.

454. In view thereof, the challenge made only to the order dated 3rd March, 2023 does not serve any purpose as the said order merely extends the stay granted by the Predecessor Bench vide order dated 24th

455. Apart from the non-challenge to the original order, the defendants also chose not to challenge the order dated 2nd March, 2023, wherein, a stay was granted by this Court against any action to be taken as per the decision of the JLM held on 23rd

456. Therefore, this Court is duty bound to confine itself to the pleadings of the present applications and it is held that no case is made out for recall of the said order. In light of the same, this Court is of the view, the parties have failed to establish that the jurisdictional bar imposed upon the Civil Courts under Section 34 of the SARFAESI Act is applicable to the suit filed for specific performance, and the defendants have also failed to challenge the original order by virtue of which the stay was granted by the Predecessor Bench, therefore, it is apt to say that the reliefs as sought by the applicants cannot be granted without a challenge made to the original order.

457. At last this Court also deems it imperative to comment upon the allegation levelled by the applicants on the Plaintiff with regard to conduct of the forensic audits.

458. During the pendency of the captioned applications, an application bearing I.A. No. 4163/2024 was filed by the Plaintiff for appointment of the forensic auditors, and this Court had disposed off the said application vide order dated 6th February, 2024 and appointed a forensic auditor namely Jain Jagwat Kamdar and Co. at the instance of the Plaintiff and consent given by the defendant Banks to inquire into the affairs of the Plaintiff‟s finances.

459. Thereafter, the said forensic audit report was submitted by the auditor and the same was taken on record by this Court vide order dated 22nd July,

2024. Pursuant to the same, the said report was furnished by the defendant No. 6 by an application bearing I.A. 35395/2024 and the said application was allowed by this Court vide order dated 5th August, 2024 and duly recorded by the Joint Registrar in order dated 19th September, 2024.

460. Therefore, the allegations of non-cooperation on part of the Plaintiff for forensic do not hold any water as the issue stands resolved now.

461. The present applications were filed for vacation of the order dated 3rd March, 2023 whereby, the applicants, i.e. the defendant nos. 6 & 7 had filed for recall of the said order.

462. During the course of proceedings, the learned senior counsel for the defendant No. 6 and learned counsel for the defendant No.7 had primarily argued that the Plaintiff had concealed the initiation of recovery actions against them, and since the same action is proscribed to be scrutinize by the Civil Courts, a ground is made out for vacation of the stay order.

463. In response, the learned senior counsel for the Plaintiff had referred to the material on record to rebut the above said argument.

464. In the foregoing paragraphs, this Court dealt with the above said contention and it is established beyond doubt that the Plaintiff did not conceal any fact to obtain stay order. Furthermore, this Court also took into account the settled position of law regarding bar on the jurisdiction of the Civil Courts in matters concerning SARFAESI Act.

465. Apart from the above said findings, this Court also discussed the implications of non-challenge made to the original order, whereby, it was held that the said non-challenge would lead to believe that the relief as argued by the applicant is not sought in the pleadings.

466. Upon analysis, this Court is of the view that the contentions advanced by the learned counsel for the applicants/defendants are misconceived and not cogent enough to recall the order dated 3rd march, 2023.

467. In view of the discussions in foregoing paragraphs and the factual position in the instant case, both the applications bearing I.A. No. 9173/2023 and 2858/2024 filed by the defendant Nos. 6 & 7 under Order XXXIX Rule 4 of the CPC seeking recall of the order dated 3rd March, 2023 are dismissed being devoid of any merits.

468. The Judgment be uploaded on the website forthwith.

JUDGE OCTOBER 7, 2024 gs/av/ryp/mk