Disposed

Meridian Promoters Pvt. Ltd. v. Sri Harini and Co.

Andhra Pradesh HC10 Dec 2020CMA/497/2019

Case brief

AI extract

What is this about?

The High Court disposed of an appeal against an order dismissing a stay application. Finding that the appellant pursued remedies in two forums simultaneously, the Court dismissed the appeal but observed that the original order impacted the merits of the suit and kept the matter open for the DRT proceedings to conclude without such influence.

What did the court decide?

The Civil Miscellaneous Appeal was disposed of, keeping it open for the plaintiff/appellant to pursue the interlocutory application before the DRT, Visakhapatnam.

Meridian Promoters Pvt. Ltd. Vs Sri Harini and Co. — Banking and Recovery | Andhra Pradesh HC (2020)

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HON’BLE SRI JUSTICE A.V.SESHA SAI & HON’BLE SRI JUSTICE K.SURESH REDDY

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CIVIL MISCELLANEOUS APPEAL NO.497 OF 2019

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JUDGMENT: (Per AVSS,J)

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The plaintiff in O.S.No.160 of 2019 on the file of the Court of II Additional District Judge, Visakhapatnam is the appellant in this Civil Miscellaneous Appeal, preferred under Order 43 Rule 1 of the Code of Civil Procedure,1908 (for brevity “CPC).

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2 . The appellant herein instituted the said suit for recovery of a sum of Rs.6,45,82,700/- from the 1^st defendant/1^st respondent herein and for permanent injunction to restrain the defendant Nos.1 and 2 from selling or otherwise alienating the suit schedule property so long as charge over the same in favour of the plaintiff is in force. The plaint schedule property is an extent of 326.16 square yards or 272.66 square meters of site together with RCC commercial building consisting of entire Cellar floor admeasuring 2400 sft and entire Ground floor admeasuring 2400 sft and entire First floor admeasuring 2400 sft and entire Second floor admeasuring 2400 sft, bearing D.No.47-1-107, situated at 5^th lane, Dwarakanagar, Visakahaptnam.

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3 . Along with the said suit, the appellant herein also filed I.A.No.534 of 2019 under the provisions of Order 39 Rules 1 and 2 r/w.151 CPC praying for an ad interim injunction to restrain the defendants and their men from selling or otherwise alienating the suit schedule property. The 1^st defendant/1^st respondent herein did not contest the application. The

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AVSS,J & KSR,J CMA_497_2019

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2^nd defendant/2^nd respondent-the Karnataka Bank Ltd., filed a counter resisting the said application. The learned II Additional District Judge, Visakhapatnam, by way of the impugned order, dated 01-10-2019, dismissed the said I.A.No.534 of 2019. This appeal, filed under Order 43 Rule 1 of CPC, challenges the validity and legal sustainability of the said order.

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4 . Heard Sri A.Radhakrishna, learned counsel for the appellant/plaintiff and Sravan Kumar Mannava, learned counsel for the 2^nd respondent. The appeal against the 1^st defendant/1^st respondent is dismissed as withdrawn as not pressed by the appellant.

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5 . It is contended by Sri A.Radhakrishna, learned counsel for the appellant/plaintiff that the questioned order is highly erroneous, contrary to law and opposed the very spirit and object of the provisions of Order 39 Rules 1 and 2 CPC; that the learned II Additional District Judge grossly erred in making certain observations touching the merits of the main suit; that except sale deed, dated 09-02-2016 and Memorandum of Understanding, dated -2-2016, the learned II Additional District Judge did not consider any of the documents available on record; that the findings of the learned II Additional District Judge that the civil suit is barred under Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act,2002 ( for brevity “the Act”) is neither sustainable nor tenable in the eye of law; that the Debts Recovery Tribunal(DRT) is only a forum with limited jurisdiction and is not empowered to examine complicated

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AVSS,J & KSR,J CMA_497_2019

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questions of fact and law and cannot grant decree for recovery of money in favour of the appellant, who is the third party to the securitization proceedings under the Act and who is claiming lien over the property on which the security interest is said to have been created by the 1^st respondent in favour of the Bank; that Section 34 of the Act does not prohibit any suit or other proceeding by a third party to the proceedings initiated before the DRT by the Bank. It is further submitted by the learned counsel for the appellant that the DRT is empowered to examine the validity of the measures taken in terms of the provisions of Section 13(4) of the Act only. It is also the submission of the learned counsel for the appellant that the learned II Additional District Judge failed in noting that the ratio of the judgments, cited on behalf of the 2^nd respondent, is of no application to the case on hand since in the said cases the debtor who created the security interest filed either the suits or writ petitions. In support of his contentions, the learned counsel for the appellant takes the support of the judgments in Kaaiser Oils Private Limited

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& Ors vs. Allahabad Bank & Ors(¹ ) and Pyari Devi Chabiraj Steels Pvt.Ltd., vs. Axis Bank Limited(² ).

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6 . On the contrary, it is strenuously contended by Sri Sravan Kumar Mannava, learned counsel for the 2^nd respondent-Bank that there is absolutely no error nor there exists any infirmity in the impugned order and in the absence of the same, the questioned order is not amenable for any correction under Order

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1 2017(4) CHN 410

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2 AIR 2020 CAL 36= MANU/WB/0334/2020

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AVSS,J & KSR,J CMA_497_2019

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43 Rule 1 CPC. It is the further submission of the learned counsel that since the plaintiff/appellant herein has already approached the Debts Recovery Tribunal, Visakhapatnam by way of filing S.A.No.347 of 2019 prior to passing of the impugned order and also filed an application seeking stay of sale of the property, it is not open for the plaintiff/appellant herein to pursue the matter further before this Court. It is also the further submission of the learned counsel that having regard to the documents referred to in the impugned order, the learned II Additional District Judge is perfectly justified in passing the order under challenge.

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7 . It is absolutely not in controversy that subsequent to the institution of the suit and after filing the counter in the present I.A.No.534 of 2019 and prior to passing of the impugned order, the plaintiff/appellant herein approached the Debts Recovery Tribunal, Visakhapatnam by way of filing S.A.No.347 of 2019 against the measures taken by the 2^nd respondent-Bank under the provisions of the Act. It is also not in dispute that the plaintiff/appellant herein also filed an interlocutory application before the DRT in the said S.A.No.347 of 2019, seeking stay of sale and the pendency of the same is also not in dispute. Therefore, in the considered opinion of this court, the appellant herein cannot maintain two applications and cannot be allowed simultaneously to pursue two remedies before two fora . It is also pertinent to note that the learned II Additional District Judge dismissed I.A.No.534 of 2019 mainly on the ground of maintainability by referring the Section 34 of the Act. According

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AVSS,J & KSR,J CMA_497_2019

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to the learned counsel for the appellant, as stated supra, the said statutory bar cannot be construed as an absolute bar for maintaining the suits where the Tribunal constituted under the Act cannot adjudicate the issues. It is significant to note that, as rightly pointed by the learned counsel for the appellant, undoubtedly the learned II Additional District Judge made certain observations in the impugned order touching the merits of the suit, which are not warranted having regard to the controversy in the case, because the said observations would impact ultimately adjudication in the main suit

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8 . Therefore, having regard to the facts and circumstances of the case and controversy involved, this Court deems it appropriate to dispose of the Appeal, keeping it open for the plaintiff/appellant to pursue the interlocutory application in S.A.No.349 of 2019 before the DRT, Visakhapatnam and also by observing that the suit and the securitization application and the I.A. filed therein shall be disposed of without being influenced by the observations in the order impugned before this court, passed in I.A.No.534 of 2019.

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Accordingly, with the above observation, the Civil Miscellaneous Appeal stands disposed of. No costs.

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Miscellaneous applications pending, if any, shall stand closed in consequence.

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_______________ A.V.SESHA SAI,J

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___________________ K.SURESH REDDY,J

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10^th DECEMBER,2020 TSNR

Meridian Promoters Pvt. Ltd. v. Sri Harini and Co.

Case brief

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Meridian Promoters Pvt. Ltd. v. Sri Harini and Co.

Case brief

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