M/S GURU EXIM v. INDIAN OVERSEAS BANK & ANR

1. This is an application seeking condonation of delay in filing the reply to the application under Order VII Rule 11 of the Code of Civil Procedure, 1908 (in short, ‘CPC’).

2. For the reasons stated in the application, the delay is condoned.

3. The application is disposed of. I.A. 8716/2024

4. This is an application filed by the defendants praying for vacation of the interim Order dated 30.01.2017 passed by this Court, which was thereafter confirmed by the Order dated 22.09.2017.

5. It is stated in the application that the account of the plaintiff was declared as NPA on 31.12.2015. Thereafter, the defendants have initiated proceedings against the plaintiff under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short, ‘SARFAESI Act’) by issuing a notice dated 20.02.2016 to the plaintiff demanding repayment of the amount of around Rs.3,10,05,939/- from the plaintiff, which, as on the date of the application, has swelled to Rs.15,14,15,034/-. In the said proceedings under the SARFAESI Act, the plaintiff is using the ad interim Order passed by this Court to stall the recovery of the amount due from the plaintiff.

6. The learned counsel for the defendants/applicants has taken me through the Order dated 30.01.2017, wherein the plaintiff confined its prayer for an interim injunction to the following effect: “It is prayed that defendant No.1 be directed to maintain status quo in respect his overdraft account No.049002000022251.”

7. On 30.01.2017, as the counsel for the defendant no.1, who was appearing on advance notice of the Suit, was seeking an adjournment on the said date to verify the facts relating to verification of documents and its acceptance by the buyer, that is, EM Bank, and to find out as to why the money against the alleged LC had not been credited. The Court, while adjourning the matter, made the following observations: “…it is expected that the bank will not take any coercive steps till then”

8. Pertinently, the said order also records that the learned counsel for the plaintiff, after some arguments, had not pressed the prayer for grant of interim injunction restraining the defendant from initiating any proceedings arising out of non-credit of payment against LC and to maintain status quo qua the credit account, and restricted the prayer only to the grant of status quo order in respect of the credit account of the plaintiff with the defendant-bank. I may quote from the order as under:- “The learned counsel for the plaintiff has insisted for grant of interim injunction restraining the defendant from initiating any proceedings arising out of non-credit of payment against LC and to maintain status quo qua the credit accounts of plaintiff during the pendency of the present proceedings. However, at the stage of arguments, the learned counsel for the plaintiff has restricted his relief only to the grant of status quo order in respect of the credit account of the plaintiff with defendant No. 1-Bank. It is submitted that plaintiff had entered into an agreement with the buyer and as per the terms of agreement LC No. EMB201586153GEP for a sum of USD 4,97,750/- dated 29.08.2015 was opened with defendant No.1. It is further submitted that the documents under agreement to sell were presented to defendant No.1-Indian Overseas Bank and the said defendant had sent those documents to EM Bank. The EM Bank had taken the acceptance of buyer. It is submitted that despite this, the defendant No.1 has not credited the LC amount in the accounts of the plaintiff and instead threatening to take action by declaring the plaintiff a defaulter and declaring his account as Non Performing Asset (NPA) and had also issued a notice under SARFAESI Act. It is prayed that defendant No.1 be directed to maintain status quo in respect his overdraft account NO.04900200002225L At this stage, learned counsel for defendant No. I has requested for a short adjournment to verify all the facts relating to verification of documents and its acceptance by the buyer an EM Bank and to find out as to why the money against the alleged LC had not been credited. List the matter on 13.02.2017 and it is expected that the bank will not take any coercive steps till then.”

9. It is stated that treating the above to be an interim Order of protection to the plaintiff, the plaintiff has been stalling the proceedings that have been initiated by the defendants under the SARFAESI Act.

10. The learned counsel for the defendants submits that the above Order was confirmed by this Court vide its Order dated 22.09.2017, however, the same would again not come in the way of the defendants from pursuing its remedies in accordance with law.

11. On the other hand, the learned counsel for the plaintiff submits that by the Order dated 22.09.2017, this Court has fixed the present Suit for final hearing. He submits that, therefore, the present application should not be entertained at the present stage.

12. On being asked by this Court to make his submissions on the Suit itself, the learned counsel for the plaintiff prays for some time to prepare the case.

13. I have considered the submissions made by the learned counsel for the parties.

14. The present Suit has been filed by the plaintiff praying for the following reliefs: “(i) The plaintiff prays that a decree of permanent and mandatory injunction be passed against the Defendant thereby directing them to give the credit of duly negotiated LC by Defendant Bank to Plaintiff's account with effect from due date;

(ii) Pass a decree for damages to the tune of