The party felt aggrieved and dissatisfied with the impugned judgment which was passed by the High Court of Madras in 19th November 2017. The High Court was dissatisfied by the revision application which was preferred by the Canara Bank, who is the appellant in this case. The bench had confirmed the orders of the trial court of Tamil Nadu in dismissing the application which was preferred by the appellant in the exercise of powers provided under Order 7, Rule 11 of the CPC.
Facts of the Case:-
The appellant had granted and sanctioned an amount of Rs 49,50,000/- to M/s Coimbatore Hatcheries, a partnership firm in which Mr Ravichandran and G. Suresh Babu was a partner, in the year 1995. The loan was secured by the firm through the mortgage of immovable property which belonged to the said firm and the land situated at surveys Nos. 472 and 488 of Sanganur Village which belonged to the guarantor to this loan, M.C Kallikutty. The subject matter of the dispute is the land belonging to the guarantor, M.C Kallikutty and he had signed the guarantor deed on 28th September 1995 and created equitable mortgage by deposit of Title Deeds ofthe disputed lands in question. The original loaner wasn’t able to repay the loan to the original borrower before the Debt Recovery Tribunal in the month of October 1997 at Chennai. An order was passed on 2001 to proceed ex-parte against the guarantor and the appellant bank decreed by the Debt Recovery Tribunal (DRT) with an interest of 18 per cent per annum, Recovery Certificate was issued on 16th September 2003 which was in favour of the appellant bank for a sum of 57,35,770/- under an interest of 18 per cent per annum. There was a notice which was issued by the Debt Recovery Tribunal (DRT) to the principal borrower and Guarantor directing them to pay the sum of 1,55,75,443/- which was decreed in 2002. Later, the Guarantor filed a writ petition in the High Court of Madras in which he denied his guarantee and requested for the creation of EMT and sought a direction to the crime branch- CID to register an FIR and investigate into the matter. The Crime Branch of CID, Coimbatore submitted the final report under Section 173(2) CrPc which was in response to the offences under Section 120B read with 465, 466, 467, 468, 471, 420 and 419 under the Indian Penal Code, 1860 (IPC) against the principal partners of the firm and also against the Agriculture Extension Officer of the Appellant Bank. The properties belonging to the Partnership Firm was auctioned in the pursuance of the Recovery Certificate in favour of Appellant- Canara Bank and they were able to recover 38 lacs in 2007.
The bench consisting of Justices U.U Lalit, Indira Banerjee and MR Shah noted the Judgment which was given in 2006 of the Punjab National Bank against O.C Krishnan and others, AIR 2001 6 SCC 569 which held that, without the exhaustion of remedies under RDDBFI Act, the High Court ought not be exercised under the Article 226 of the Constitution of India. Be that as it may, considering the pleadings/averments in the suits and the allegations of fraud, we believe that the allegations of fraud are illusory and only to get out of the judgment and decree passed by the DRT. The bench unanimously gave the decision that the suits are vexatious and are filed with a mala fide intention to get out the judgment and decree passed by the DRT. The plaint which was filed by the appellant pending in the Court of Additional Subordinate Court, Coimbatore was rejected. Both the courts materially erred in not exercising the jurisdiction vested in them.
- The basic relief of challenging the decree passed by the DBT is not maintainable.
- The suits were filed in challenging the decree passed by the DBT.
- The application of the appellant was rejected by both the Trial Court and the High Court.
- The bench noted the Judgment in the case of Punjab National Bank vs. O.C. Krishnan & Others, AIR 2001, 6 SCC 569.
- Fit case to exercise the powers under Order 7 Rule 11 (d) of the CPC.
Edited by J. Madonna Jephi
Approved & Published – Sakshi Raje
Canara Bank vs. P. Seethal and Others etc. etc., CIVIL APPEAL NOS.18631864 OF 2020