Dismissed

B.a.Varadarajachar v. Reliance Asset Reconstruction Company Limited

DRAT18 Apr 2024MISC APPEAL/40/2023

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal dismissed the appellant's appeal against an order dismissing an interlocutory application seeking a stay. The Tribunal held that a later civil suit seeking declaration that documents are void does not oust the DRT's jurisdiction or mandate staying proceedings on an earlier recovery application.

What did the court decide?

Appeal dismissed with costs; all pending interlocutory applications stand closed.

B.a.Varadarajachar versus Reliance Asset Reconstruction… — Banking and Recovery | DRAT (2024)

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MA 40/2023

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 18^th of April, 2024

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PRESENT: Hon’ble Mr. Justice S. Ravi Kumar CHAIRPERSON

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MA 40/2023

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[IA 724/2022 in OA 173/2015 on the file of DRT-I, Bengaluru)

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Between

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Sri B. A. Varadarajachar, S/o. Anjaneyachar,

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Aged 64 years, Residing at No.45, Banaswadi Main Road, Krishnarajapuram , Hobli, Bengaluru – 560 043.

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….Appellant

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AND

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M/s. Reliance Asset Reconstruction Company Limited,

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Acting in its capacity as a trustee of the Reliance ARC 010 Trust, represented by its Authorised Signatory Mr. Rajesh Suresh Bichitkar Having its office at Reliance Center, North Wing, 6^th Floor, Off Western Express Highway, Santacruz, East Mumbai – 400 055.

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…..Respondent Counsel for Appellant : Mr. Madhukar Deshpande Counsel for Respondent : Mr. Raman and Associate

MA 40/2023

ORDER

This Appeal is against Order dated 20.06.2023 of DRTI, Bengaluru, in IA 724/2022 in OA 173/2015.

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Brief facts leading to this Appeal are as follows:-

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Respondent (originally Lakshmi Vilas Bank Ltd.) filed OA 173/2015 for recovery of a sum of Rs.12,97,04,007/together with interest from Defendants.

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Appellant, who is Defendant No.9 in OA, filed Written Statement disputing the claim, mainly contending that the claim is based on forged and created documents. Appellant herein filed OS No. 688/2019 before XXXV Additional City Civil Court, Bangalore, against Respondent herein, seeking declaration of documents mentioned in Schedule ‘B’ to the

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Suit as void and illegal, and prayed for discharge from liability.

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MA 40/2023

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Appellant also filed an Interlocutory Application in IA

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724/2022 in OA, seeking a prayer to stay further proceedings in OA, till disposal of Suit filed by him in OS No.688/2019 before Additional City Civil Judge, Bangalore.

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Said Application is opposed by Respondent herein on the ground that the Application is not maintainable.

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Tribunal below, on a consideration of contentions and

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rival contentions of both parties, dismissed Interlocutory Application. Aggrieved by which, present Appeal is preferred.

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3. Heard both sides.

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4. Advocate for Appellant submitted, as the plea of fraud

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and forgery, cannot be decided in OA, Appellant filed Suit before City Civil Court, in respect of documents on the basis

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of which OA claim is made. He submitted, until the Suit is

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MA 40/2023

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decided, OA cannot be proceeded with, and for that reason, Application is filed to stay the OA proceedings; but, Tribunal below, dismissed said Application accepting the objection of Respondent herein that the Application is not maintainable. He submitted, Hon’ble Supreme Court in Allahabad Bank, Calcutta Vs. Radha Krishna Maity and Ors., reported in (1999) 6 SCC 775 , held that under Section 22(1) of RDB Act, 1993, Tribunal can exercise powers contained in CPC and can even go beyond the Code as long as it passes orders inconformity with principles of natural justice. He submitted, in view of said decision, OA can be stayed even invoking powers under CPC.

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5. Advocate for Respondent contended that the

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jurisdiction of a Civil Court to try a Suit filed by Borrower against a Bank or Financial Institution is not ousted by virtue of the scheme of RDB Act, 1993, and proceedings under RDB Act, 1993, will not be impeded in any manner by

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filing of a separate Suit before Civil Court by Borrower. To

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MA 40/2023

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support his arguments, he placed reliance on judgement of

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Hon’ble Supreme Court in Bank of Rajasthan Limited Vs.

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VCK Shares and Stock Broking Services Limited , reported in (2023) 1 SCC, and he submitted, Tribunal below rightly dismissed Interlocutory Application.

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6. I have perused the material papers and Application in IA 724/2022.

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7. Appellant herein, invoked Section 22 (2) (h) of RDB Act, 1993 and Section 151 of CPC, for claiming relief in the Application. It is not in dispute that Section 151 of CPC, will only apply when there is no specific provision in CPC for the relief claimed. Here, the contention of Appellant is, as already a Civil Suit is filed in respect of the same subject matter, OA has to be stayed. Section 10 of CPC deals with such a situation. Even if the judgement relied on by Appellant is to be considered, at best, Section 10 of CPC,

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has to be examined, to decide whether the relief claimed can

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MA 40/2023

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be entertained or not. Without accepting that Section 10 of

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CPC is applicable, for argument sake, said provision is examined to see whether the same can be applied or not. Section 10 of CPC reads as follows:-

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“1 0. Stay of suit .—No Court shall proceed with the trial of any suit in which the matter in issue is also directly and substantially in issue in a previously instituted suit between the same parties, or between parties under whom they or any of them claim litigating under the same title where such suit is pending in the same or any other Court in 1 [India] have jurisdiction to grant the relief claimed, or in any Court beyond the limits of 1 [India] established or continued by 2 [the Central Government 3***.] and having like jurisdiction, or before 4 [the Supreme Court].

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MA 40/2023

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Explanation.—The pendency of a suit in a foreign Court does not preclude the Courts in 1 [India] from trying a suit founded on the same cause of action.”

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From a plain reading of above Section, it is clear that where

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the matter in issue is between the same parties, the later Suit has to be stayed. Here, admittedly, OA is filed in the year 2015 and Appellant filed the Suit in the year 2019. Therefore, even if Section 10 of CPC, is applied, the later proceedings, which is the Suit filed by Appellant, has to be stayed, but not the OA, which is much earlier in point of time. So, as rightly contended by Advocate for Respondent, there is no impediment for the proceedings under RDB Act, 1993, in view of Suit filed by Appellant.

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8. On a consideration of material papers and the judgements relied on by both parties, I am of the considered view that, Tribunal below rightly dismissed the Application

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as it cannot stay the OA, even by invoking Section 10 of

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MA 40/2023

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CPC. As such, it is held that Tribunal below rightly dismissed the Application and there are no grounds to interfere with Order of DRT-I, Bengaluru.

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9. For the reasons stated above, it is held that, Appeal is devoid of merits and liable to be dismissed.

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10. In the result , the Appeal in M A 40/2023 is dismissed with costs. All pending IAs, if any, stand closed.

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