Desh Dinkar Jain v. Bank of Baroda & Ors.

1. This application has been filed by the defendant no.1 under Order VII Rule 11 of the Code of Civil Procedure, 1908 (hereinafter referred to as the ‘CPC’) seeking rejection of the plaint, stating therein that the present suit is barred under Section 18 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (in short, ‘RDDBFI Act’) and under Section 34 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short, ‘SARFAESI Act’).

2. The learned senior counsel for the applicant/defendant no.1, placing reliance on the judgments of this Court in Neha Aggarwal v. PNB Housing Finance Ltd. & Ors., 2016 SCC OnLine Del 3765; and Onil Sadh v. Federal Bank Ltd. & Ors., 2015 SCC OnLine Del 13351, submits that in the present suit, the plaintiff has alleged fraud against his own brother, namely late Mr. Amit Jain, in the execution of the Sale Deed dated 07.02.2007 based on the purported Power of Attorney dated 07.12.1987 executed by the plaintiff in favour of late Mr.Amit Jain. He submits that based on such allegations, it cannot be said that the defendant no.1 was also a part of the fraud purportedly perpetuated and alleged, thereby bringing it within the exception to the exclusive jurisdiction of the Debt Recovery Tribunal as laid down by the Supreme Court in Mardia Chemicals Etc. Etc. v. Union of India & Ors. Etc. Etc. (2004) 4 SCC 311. He submits that by clever drafting, the plaintiff cannot make the present suit maintainable.

3. On the other hand, the learned counsel for the plaintiff submits that the present suit alleges the connivance between late Mr.Amit Jain and the Officials of the defendant no.1 Bank in extending the loan facility to late Mr.Amit Jain based on the purported documents of the Sale Deed dated 07.02.2007.

4. He submits that the Impugned Sale Deed dated 07.02.2007 has been executed by late Mr.Amit Jain in his own favour purportedly based on the alleged Power of Attorney dated 07.12.1987, which has not seen the light of day. Even in the written statement filed by the defendant no.1, the defendant no.1 now claims that the plaintiff had executed another Power of Attorney dated 26.11.1987 alongwith a purported Agreement to Sell and a Will of the same date. On the said date, however, the plaintiff was not in India, and this is evident from the copy of the passport that has been filed alongwith the Plaint. Even otherwise, the fact remains that in the purported Sale Deed dated 07.02.2007, the date of the Power of Attorney is mentioned as 07.12.1987 and not as 26.11.1987 as now alleged in the written statement.

5. He further submits that by the purported Sale Deed it is claimed that the plaintiff had transferred his undivided 25% share in the suit property in favour of late Mr.Amit Jain. The Bank, that is, the defendant no.1 has not filed any document to show any due diligence done by it before extending the loan facility to late Mr.Amit Jain based on such documents. The learned counsel for the plaintiff submits that the plaintiff has alleged that the officials of the defendant no.1 were equally part of the fraud perpetuated on the plaintiff in extending the loan facility to late Mr.Amit Jain based on the above documents. He submits that therefore, the present suit would be maintainable before this Court.

6. I have considered the submissions made by the learned counsels for the parties.

7. In the present case, it is evident that the loan transaction has been extended by the defendant no.1 in favour of late Mr.Amit Jain based on the purported Sale Deed dated 07.02.2007, which has been executed by late Mr.Amit Jain in his own favour acting as a Power of Attorney of the plaintiff. The said Sale Deed refers to the Power of Attorney as dated 07.12.1987, which has not seen the light of day. The Sale Deed is of an undivided share of the plaintiff in the suit property. The plaintiff has also filed the documents to show that the Vigilance Department of Punjab National Bank and the State Bank of India have found that similar facilities of loan were availed by late Mr.Amit Jain in connivance with their officials, based on the security of the same property.

8. It is settled law that at the stage of consideration of an application under Order VII Rule 11 of the CPC, it is only the contents of the plaint and documents filed therewith that are to be considered. The defence of the defendant cannot be considered at this stage.

9. In my view, the plaintiff has been able to make out at least a prima facie case in support of his allegation of fraud against the Officials of the defendant no.1 in extension of alleged loan facility in favour of late Mr.Amit Jain. The suit, therefore, cannot be held to be not maintainable.

10. The application is accordingly dismissed. However, it is clarified that any observation made in the present order shall not prejudice the rights of the defendant no.1 in the trial of the suit; the same being confined only for the purpose of the present application. I.A. 13200/2015

11. The learned counsel for the plaintiff submits that the plaintiff still remains in possession of the suit property.

12. The parties shall maintain status quo with respect to the suit property during the pendency of the present suit.

13. The application is disposed of in the above terms.

14. The learned senior counsel for the defendant no.1 submits that due to the pendency of the application under Order VII Rule 11 of the CPC, the defendant no.1 could not file the Written Statement to the Amended Plaint. He prays for further time to file the Written Statement.

15. Though, this prayer is not opposed by the learned counsel for the plaintiff, he submits that the defendant no.1 should be visited with some costs.