Delhi District Court
Also At vs Yes Bank Ltd on 6 May, 2021
In the Court of Shri Sanjiv Jain,
District Judge (Commercial Court)03, Patiala House Courts
New Delhi
CS (COMM) No. 2/2021
Essel Corporate Resources Pvt ltd
22, Tara House,
Oak Drive Mandi Road,
Sultanpur, New Delhi-110030
Also at:
18th Floor, A Wing, Marathon Futurex
N.M Joshi Marg, Lower Parel,
Mumbai- 400013
Also at:
Essel House,
B-10, Lawrence Road, New Delhi-110035 ... Plaintiff
versus
1. Yes Bank Ltd
48, Nyaya Marg,
Chanakyapuri,
New Delhi-110021
2. Greatway Estates Private Limited
B-10, Lawrence Road,
Industrial Area, North West,
Delhi-110035
3. IDBI Trusteeship Services Limited
CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors
Page 1 of 43
At: Asian Building 17,
R Kamani Marg,
Ballard Estate
Mumbai- 400001 ...... Defendants
ORDER
06.05.2021
1. This order shall dispose of an application moved under Order 39 Rule 1 and 2 of the Code of Civil Procedure (CPC) for adinterim injunction whereby the plaintiff has made the following prayers:
i) Pass an ad-interim exparte direction against the defendants thereby restraining the defendant nos. 1 and 3, its officers, agents, servants, assigns and/or executors and/or any persons acting under them, from, either directly or indirectly, itself or through defendant no.2, from dispossessing, selling, parting with possession/creating third party interest in the property admeasuring 2.8 acre situated at 4, Bhagwan Das Road, New Delhi-110001 till final disposal of the suit.
ii) Pass an ad-interim exparte direction against the defendants thereby restraining the defendant nos. 1 and 3, its officers, agents, servants, assigns and/or executors and/or any persons CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 2 of 43 acting under them,from either directly or indirectly, from taking any coercive actions against the defendant no.2, which may in any manner whatsoever, adversely effect the title, ownership and possession of the defendant no.2 upon 2.8 acre plot situated at 4, Bhagwan Das Road, New Delhi-110001.
iii) Pass an ad-interim exparte direction against the defendants thereby restraining the defendant nos. 1 and 3, its officers, agents, servants, assigns and/or executors and/or any persons acting under them from taking any coercive steps against the plaintiff, under, arising, out of or related to the Loan Agreement dated 31.01.2018.
iv) Pass an adinterim ex-parte direction against the defendants directing to maintain status quo in the property admeasuring 2.8 acre situated at 4, Bhagwan Das Road, New Delhi-110001 till the final disposal of the suit.
2. The case of the plaintiff is that the defendant no.2 is the owner of 2.8 acre plot of land situated at 4, Bhagwan Das Road, New Delhi-110001. Sometime, in the year 2017, defendant no.1 approached the plaintiff with a proposition and business plan pertaining to the aforesaid land (project land) indicating that CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 3 of 43 defendant no.2 is aware of the proposition. It was informed to the plaintiff that in 2016, the project land was mortgaged by the defendant no.2 (mortgagor) to the defendant no.1 (mortgagee) as a security for the loans aggregating to approximately Rs. 750 crores granted by defendant no.1 to two entities namely, Pan India Utilities Distribution Companies Ltd and Pan India Infravest Limited.
Both defendant no.1 and defendant no.2 jointly represented to the plaintiff that value of the project land is approximately Rs. 1000 crores and a corporate park and conventional centre shall be constructed on the project land by the defendant no.2. The plaintiff was proposed with a transaction structure whereby the plaintiff would be entitled to a commercial office space of 2,00,000 sq. ft on a long term lease for 9 years in the corporate park and conventional centre and would be able to make profits/gains therefrom. It was represented to the plaintiff that defendant no.1 would sanction a loan facility to the plaintiff which would be immediately payable by the plaintiff to the defendant no.2 as an advance/deposit and the plaintiff could execute a memorandum of understanding (MOU) with the defendant no.2 for a long term lease of the corporate park and the conventional centre.
The plaintiff believed on the representations and agreed to CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 4 of 43 the loan structure as proposed by the defendant no.1 and executed the documents to complete and conclude the transaction. The defendant no.1 by way of sanction letter, offered a sum of Rs. 295.0 crores requiring that the disbursement of the loan received by the plaintiff would be for the payment of advance/deposit to the defendant no.2. The plaintiff executed a memorandum of understanding with the defendant no.2 by which the defendant no.2 agreed and granted a long term lease to the plaintiff against deposit/advance of loan of Rs. 295 crores by the plaintiff to the defendant no.2. The defendant no.1 executed the loan agreement dated 31.01.2018 with the plaintiff. The plaintiff immediately passed on the loan amount to the defendant no.2. It is alleged that tacitly, the defendant no.1 had agreed to be the guarantor of the payment by the plaintiff to the defendant no.2.
3. It is stated that it has now come to its knowledge that after the execution of the above, defendant no.1 and defendant no.2 in collusion with one another, created further mortgages on the project land through defendant no.3 acting as a trustee without the consent/permission of the plaintiff. It has also come to its notice that the defendant no.1 is seeking to create third party rights on the project land to the detriment and exclusion of the CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 5 of 43 right of the plaintiff. It is stated that when a right has crystalized in favour of one party and in this case the plaintiff, any action by the defendant no.1, 2 and 3 in respect of the project land which has the potential of diluting the interest of the plaintiff cannot be permitted. It is stated that the defendant no.2 has not yet constructed the corporate park and the conventional centre on the project land and defendant no.1 has not taken any steps to enable the same, though, the defendant no.1 has been charging interest on the loan amount from the plaintiff.
4. It is stated that defendant no.1 has now taken steps to take the symbolic possession of the project land and is attempting to create third party rights/interest on the project in derogation to the rights and interest of the plaintiff which has already accrued on the project land and it is endeavouring coercive steps against the defendant no.2 which shall materially prejudice and adversely affect the rights and interest of the plaintiff. It is stated that by virtue of MOU and the Loan agreement, all the three parties are under a legal and equitable obligation to perform their respective obligations and refrain from doing/performing any action which can impair the rights, obligations and/or performance of any other party under the CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 6 of 43 aforesaid agreements.
5. It is stated that though the loan amount was advanced to the defendant no.2 in 2018 but defendant no.2 informed the plaintiff that on account of delay in obtaining the approvals etc., development of the corporate park could not be achieved within the time frame as was agreed in the MOU. On 18.12.2019, on the request of defendant no.2, plaintiff executed an addendum to the MOU which was duly intimated to defendant no.1 extending the time.
6. It is stated that on 23.12.2019, after being informed of the addendum dated 18.12.2019, defendant no.1 vide letter to the plaintiff informed the plaintiff that in view of the substantial delay in the construction of the centre, the plaintiff may initiate a refund of the deposit/advance given by it to the defendant no.2 which the plaintiff replied vide letter dated 07.01.2020 stating that it has been acting under the instructions of defendant no.1 and shall take necessary steps. It is stated that as per the sanction letter and cash flow projections suggested by the defendant no.1, the plaintiff would be required to sublease 2,00,000 sq. ft of lease hold asset at the prevailing rate of Rs. 450 per sq. ft per month for a period of 9 years and rentals CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 7 of 43 receivable would be under escrow and hypothecation of defendant no.1 as a cash security for servicing/repayment of the loan over the period of 9 years which projection was found to be commercially viable by the plaintiff.
7. It is stated that from the portal of Ministry of Corporate Affairs, it came to know that defendant no. 2 created further mortgages on the project land for the benefit of defendant no.1 without the knowledge, consent and/or the information of the plaintiff as per details in para 50 i.e. mortgage created in favour of defendant no.3 on 15.10.2018 as a security against the term loan of Rs. 400 crores availed by Pan India Infraprojects Private Limited, mortgage created in favour of defendant no.3 on 15.10.2018 as a security against the term loan of Rs. 275 crores, mortgage created in favour of defendant no.3 on 15.10.2018 as a security against the term loan of Rs. 125 crores and mortgage created on 11.12.2019 in favour of defendant no.3 as a security trustee for the benefit of defendant no.1 to cover some old existing-NPA declared credit facility of Rs. 500 crores that the defendant no.1 had disbursed to RPW Projects Private Limited which was admitted for winding up vide orders dated 14.02.2019, 14.08.2019, 05.12.2019 and 12.10.2020 passed by the High Court of Bombay in Company Petition No. CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 8 of 43 1296 of 2015. It is alleged that the aforesaid creation of additional mortgages on the project land is fraudulent and patently illegal and to cause detriment to the interest of the plaintiff which is evident from the fact that the mortgage dated 11.12.2019 created by defendant no.2 in favour of defendant no.3 for the benefit of defendant no.1 for the alleged loan granted to RPW Projects Private Limited was after RPW Projects Limited was classified as NPA on 05.07.2019 and admitted to liquidation w.e.f. 01.10.2019. It is stated that this was done to deprive the plaintiff of its legitimate and vested right since the defendant no.1 was well aware on the date of creation of mortgage on 11.12.2019 that RPW Projects Limited was not in position whatsoever to repay the loan amount.
8. It is stated that the defendant no.1 pursuant to creation of mortgage over the project land on 11.12.2019, within 9 days therefrom, issued a demand notice dated 20.12.2019 to the defendant no.2 under SARFEASI Act and on 15.06.2020, issued a possession notice to defendant no.2 and on 05.10.2020, issued e-auction sale notice for the sale of the project land with RPW Projects Private Limited as Borrower and defendant no.2 as mortgagor of a project land at a reserve price of Rs. 430 but the defendant no.1 later withdrew the e-auction notice. It is CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 9 of 43 stated that when the plaintiff vehemently raised objections and concerns with the defendant no.1, it in retaliation initiated illegal willful defaulter proceedings against the plaintiff which the plaintiff has challenged in the District Court Saket in CS
-307/2020 and obtained the stay vide order dated 19.10.2020. It is stated that cause of action in the above suit is separate and distinct from the cause of action of this suit.
9. It is stated that defendant no.2 has failed to comply with its obligation under the MOU along with addendum and defendant no.1 has committed the criminal breach of trust by dishonestly encumbering the project land defrauding the plaintiff and rendering the performance of the loan agreement and MOU impossible. It is stated that if the title of the project land is transferred from defendant no.2, defendant no.2 shall be precluded from performing its obligations under the MOU and addendum which shall result in the failure of performance of loan agreement by the plaintiff and it shall not be able to enforce its right on the commercial office space of 2,00,000 sq. ft. Thus, the plaintiff has sought declaration, permanent and mandatory injunction.
10. On getting summons of the suit and notice of the application, CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 10 of 43 defendant no.1 and 3 filed their replies, however, defendant no.2 did not appear.
11. Defendant no.1 filed its written statement alleging that the plaintiff has not come with clean hands. It is a case of lifting of corporate veil. Plaintiff and defendant no.2 are from the same group of companies i.e. the Essel Group and this suit is merely an attempt to circumvent and avoid the payment of dues to the bank. It is alleged that plaintiff and defendant no.2 have acted in collusion. Both share the same office at B-10, Lawrence Road, Industrial Area, New Delhi. One Mr. P.D Bansal who has signed the MOU dated 20.12.2017 on behalf of defendant no.2 was also authorized vide the Board resolution dated 10.09.2020 to institute this suit. The major share holder of the plaintiff company is Meena Investments Private Limited and major share holders of Meena Investments are Jawahar Lal Goel (31.65%) and Sushila Devi Goel (40.23%). Major share holders of defendant no.2 are Sprit Infra Powers and Multi Ventures Private Limited (SIMPL) and 51% share holding of SIMPL is held between Sushila Goenka (49%) and Puneet Goenka (2%). Sushila Devi Goenka is the wife of Subhash Chandra who is brother of Jawahar Lal Goel and Sushila Devi Goel is wife of Jawahar Lal Goel.
CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 11 of 43
12. It is alleged that the plaintiff is guilty of playing fraud/collusion and is not entitled to any relief. It has no locus to seek/claim any relief for injunction. It has tried to project that the defendant no.1 and 2 have colluded as a result, the plaintiff will not be able to perform its part of contractual obligation which is completely baseless and contrary to the facts.
13. It is stated that till date, the construction has not started on the project land. The plaintiff even neglected in making payments in gross violation of the facility agreement despite repeated reminders from the bank. It did not mention that the defendant no.1 vide letter dated 07.07.2020 has recalled the credit facility. It is stated that the plaintiff and defendant no.2 entered into the addendum dated 18.12.2019 without the knowledge of defendant no.1 and the plaintiff even did not mention that on 23.12.2019, defendant no.1 had asked the plaintiff to initiate refund of the advances from Jai Properties Private Limited and the defendant no.2 and utilize the same towards the repayment of loan which the plaintiff vide letter dated 07.01.2020 agreed but it did not inform the bank about the addendum dated 18.12.2019. It is stated that as per the loan agreement, the CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 12 of 43 defendant no.1 is entitled to assign, transfer and novate all or any other rights in favour of the defendant no.3.
14. It is stated that the plaintiff and its group of companies owe the defendant no.1 thousands of crores till date. They have instituted various litigations and managed to lodge FIR on the bank officials to delay the realization of dues due to the bank. It denied the averments made in the suit and stated that the plaintiff was already aware that the project land was mortgaged by defendant no.2 to defendant no.1 as a security for the loans to Pan India Infra Vest Limited 525 crores, Pan India Utilities Distribution Companies Limited 225 crores, RPW Projects Private Ld. 900 crores and Pan India Infra Projects Private Ltd 400 crores. The mortgages for company no.1 and 2 were created prior to the sanction of facility to the plaintiff while the mortgages over the said property were extended for company no.3 and 4 to cure the breaches in security cover which the plaintiff and other group of companies were well aware. It is stated that creation of mortgage in favour of any person/entity is the prerogative of the owner of the land i.e. defendant no.2 and the plaintiff has no right to state that the said mortgages created by defendant no.2 in favour of defendant no.1 were without the consent of the plaintiff. It is stated that the CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 13 of 43 defendant no.1 is within its right under the SARFEASI Act to take the symbolic possession of the project land to recover its dues under the law and it has taken the symbolic possession because the Essel Group Entities whom the bank had lent the public money over the project land defaulted and its loan became NPA in the books of defendant no.1.
15. Defendant no.3 in its written statement stated on the lines of defendant no.1 and stated that defendant no.1 and 2 entered into the Trustee Agreement with the defendant no.3 vide dated 15.10.2018 and the role of defendant no.3 is limited only to safeguard the transaction document and finance documents in respect of the facilities availed by defendant no.2 from the defendant no.1.
16. In the replication to the written statement filed by the defendant no.1, the plaintiff reiterated what has been stated in the plaint and stated that on 20.02.2021, on a cursory search of the website of Patiala House Courts, it has come to know that defendant no.1 has initiated the proceedings under Section 14 of the SARFEASI Act against RPW Projects Private Limited in respect of the project land and for this reason, it moved an application for intervention. It is stated that though the defendant no.1 is aware of the proceedings of the suit but it CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 14 of 43 willfully did not inform the plaintiff the proceedings under the SARFEASI Act. It is stated that the said application was not allowed by the court vide order dated 06.03.2021 and on 08.04.2021, possession notice was issued to handover the possession of the project land to the defendant no.1 and for this reason, the plaintiff filed the scrutinization application no. 68 of 2021 before the DRT-II, Mumbai.
17. It is stated that at the time, defendant no.1 offered the loan facility to the plaintiff, it was well aware that plaintiff and defendant no.2 were part of the same group of companies. The loan facilities were granted by the defendant no.1 on the fundamental principle that each company is a separate legal entity. The fact that the plaintiff and defendant no.2 are part of same promotor group has no bearing on the facts of the case as the rights and liabilities of the plaintiff emanate from the transaction documents executed by the plaintiff with the defendant no.1 and 2.
18. The plaintiff has admitted that the plaintiff and the defendant no.2 share the same office at Lawrence Road but stated that it had disclosed this fact in the plaint. The aforesaid premises is also shared by the other entities. It is stated that vide Board Resolution dated 10.09.2020, three persons were authorized by CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 15 of 43 the plaintiff to defend the proceedings including PD Bansal and Ankit Pawar and the instant suit has been filed by Ankit Pawar. The plaintiff also admitted the relations among Sushila Devi Goel, Jawahar Goel, Sushila Goenka and Dr. Subhash Chandra and stated that the plaintiff has performed its obligations under the loan agreement read with MOU but the defendant no.1 and 2 in collusion with each other, sought to deprive the plaintiff of its legitimate interest in the property. It is stated that though the creation of any mortgage is the prerogative of land owning entity but the creation of mortgage to the detriment and exclusion of the plaintiff especially in favour of the borrower which has been admitted for insolvency is a grave collusion and connivance between the defendant no.1 and 2. It is stated that the symbolic possession has been taken by the defendant no.1 only in respect of the mortgage created on 11.12.2019 for the alleged loan granted to RPW Projects Private Limited.
19. In replication to the written statement filed by the defendant no.3, the plaintiff reiterated what has been stated in the replication to the WS filed by the defendant no.1.
20. I have heard the arguments advanced by ld. Counsel Sh. Alok Aggarwal assisted by Ms. Ritwika Nanda, for the plaintiff and Sh. K. Krishan Kumar and Sh. Angad Singh, ld. Counsels for CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 16 of 43 the defendant no.1 and 3. The parties also filed their written synopsis.
21. Ld. counsel for the plaintiff, argued on the lines of the plaint and the replication and submitted that the MOU and the loan agreement were interrelated and linked. By the execution of the above, Plaintiff, defendant no.1 and defendant no.2 stood bound by the terms and conditions therein and were under an obligation for the performance of the agreement and are under equitable and legal duty to refrain from doing any action which would frustrate or otherwise make it impossible for any other party to perform its obligation under the agreements. Ld. Counsel stated that the entire transaction was at the behest of defendant no.1 as evident from the offer/sanction letter of the defendant no.1 and the loan amount was given by the plaintiff as an advance/deposit to defendant no.2 at the behest of defendant no.1. Ld. Counsel stated that the plaintiff performed its obligation under the loan agreement and MOU and gave the entire loan to defendant no.2 which fact defendant no.1 was well aware. The plaintiff also paid the interest to the defendant no.1 on the loan amount but the defendant no.1 and 2 in a clandestine manner created further mortgages on the project land without the knowledge and consent of the plaintiff. The CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 17 of 43 mortgage dated 11.12.2019, created on the land against the loan of RPW projects Limited which was already admitted to liquidation evidences that the said mortgage was created for the purposes of enforcement/creation of title of the defendant no.1. Ld. Counsel stated that defendant no.1 has taken the symbolic possession of the project land and seeks to create further third party rights which is detrimental to the interest of the plaintiff which has accrued and vested in it. It has failed to recognize the rights and interest of the plaintiff. Ld. Counsel stated that defendant no.1 is not a party alien to the rights of the plaintiff rather, it is under a legal obligation not to take any action that will prejudice the interest of the plaintiff in the project land. Defendant no.1 being party to the transaction acquiesced to the undertaking that dehors the right of defendant no.1 as a mortgagee of the project land, the rights of the plaintiff shall be preserved and protected. Ld. Counsel stated that defendant no.1 has committed a criminal breach of trust by dishonestly encumbering the project land defrauding the plaintiff and causing wrongful loss to the plaintiff by illegally trying to set off the outstanding liabilities of the other companies.
22. Ld. Counsel referred the doctrine of lis pendens i.e. Section 52 of Transfer of Property Act which essentially prohibits CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 18 of 43 alienation of immovable property when a dispute relating to the same is pending in a competent court of law, it interalia provides that during the pendency in any court having authority, by suit or proceeding (which is not collusive) in which any right to immovable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to effect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the court and on such terms as it may impose. Ld. Counsel placed reliance on the case, Jaya Ram Mudaliar v/s Ayyaswamy, 1972 (2) SCC 200 wherein it was held that purpose of Section 52 is not to defeat any just and equitable claim but only to subject them to the authority of the court which is dealing with the property to which claims are put forward. Reference is also made of the cases Rajinder Singh and Ors v/s Santa Singh and ors, 1973 (2) SCC 705, Sanjay Verma v/s Manik Roy and ors, 2006 (13) SCC 608, Thomsan Press (India) Limited v/s Nanak Builders and Investors Private Limited, 2013 (5) SCC 397 and K.N Aswathnarayna Setty v/s State of Karnataka and ors, 2014 (15) SCC to contend that the whole object of doctrine of lis pendens is to subject parties to the litigation as well as others, who seek to acquire rights in CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 19 of 43 immovable property which are the subject matter of a litigation, to the power and jurisdiction of the court so as to prevent the object of a pending action from being defeated. It is a principle of public policy and no question of good faith or bonafides arises rather it is necessary for the administration of the justice. The principle of lis pendens is in accordance with the equity, good conscience and justice because they rest upon an equitable and just foundation that it will be impossible to bring an action or suit to make successful termination if alienations are permitted to prevail.
23. Ld. Counsel stated that Section 52 of Transfer of Property Act is essentially to ensure that any pendentelite transfer/alienation does not render the suit infructuous and the plaintiff remediless, to protect the rights and interest of an innocent third party to whom the property may be transferred pendente-lite without knowledge and information of the suit and to protect the interest of the plaintiff and also any innocent third party. Ld. Counsel stated that any transfer by defendant no.1 to any innocent third party without the knowledge/information of the pendency of the suit shall be gravely prejudiced if this court finally decrees the suit in favour of the plaintiff.
CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 20 of 43
24. Ld. Counsel further contended that DRT is created under the recovery of debts due to banks and financial institutions and it being a creature of a statute is bound by the terms of a statute. Ld. Counsel referred Section 9 CPC and stated that the courts shall have jurisdiction to try all suits of a civil nature excepting the suits of which their cognizance is expressely or impliedly barred. A suit in which the right to property is contested is a suit of a civil nature.
25. Ld. counsel stated that Section 13 of SARFEASI Act gives power to a secured creditor to take action against any 'secured asset' and Section 17 of the DRT Act confers jurisdiction to the DRT for enforcement of measures available to the banks and financial institutions under the SARFAESI Act. The power of DRT is not plenary or omnipotent as is the case of civil courts under Section 9 CPC. Section 34 of the SARFEASI Act bars the jurisdiction of the civil court in respect of any matter which the DRT is empowered under the SARFEASI Act to determine and thus, the aforesaid bar shall not be applicable to any other matter/rights/claim that may arise. Ld. Counsel stated that in the instant suit, the plaintiff has sought an adjudication of its rights and interest on the property and not any adjudication as to whether the action taken by the defendant no.1 in respect of CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 21 of 43 the property is in accordance with the SARFEASI Act and Rules thereunder.
26. Ld. counsel stated that alienation of the suit property shall strike at the root of the transaction as envisaged under the sanction letter, loan agreement and MOU. Ld. Counsel stated that plaintiff has performed its obligations under the agreements but the defendants in a malafide manner have sought to impair and render impossible the enjoyment of the benefits under the agreements to the plaintiff. It shall suffer irreparable harm and injury if reliefs as prayed are not allowed.
27. Ld. Counsel for the defendant no.1 and 3 reiterated what has been stated in the written statement and stated that this suit has been filed by the plaintiff to thwart the efforts of the defendant no.1 to recover the money due to the bank. Ld. Counsel stated that Essel Group of Companies owes the defendant no.1 thousands of crores till date. The plaintiff and defendant no.2 are from the same group of companies i.e. Essel Group. Ld. Counsel stated that this court has no jurisdiction to entertain the suit in the light of Section 17, 34 and 35 of SARFEASI Act. Ld. Counsel stated that the plaintiff, defendant no.2, RPW Projects Private Limited, Pan India Infravest Limited, Pan India CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 22 of 43 Utilities Distribution company limited and Pan India Infra Projects Limited are all part of Essel Group of Companies. The total exposure of the bank on the property in question is Rs. 2345 crores in principal without interest. The bank has taken the symbolic possession under the SARFAESI Act on 15.06.2020. The defendant no.2 has filed an appeal before the DRT being SA No. 118 of 2020 on 05.10.2020 and till date, DRT has not granted any stay/injunction in relation to the property in question. Ld. Counsel stated that defendant no.2 also filed Section 340 CrPC application before the ACMM which was dismissed. The plaintiff had filed an intervention application before the ACMM which was also dismissed vide order dated 06.03.2021 and a court receiver has been appointed to take the possession of the property. Ld. Counsel stated that plaintiff and defendant no.2 being controlled by the same group have filed various cases in many Forums to deny the defendant no.1 of its legal right to auction the property and recover the dues. The plaintiff despite having filed this suit also filed SA No. 68 of 2021 before DRT-II, Mumbai along with the application for stay and tried to do Forum Shopping. Ld. counsel contended that when the plaintiff executed the addendum to MOU, it kept the bank entirely in dark extending the time by 18 months. Ld. Counsel contended that the plaintiff CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 23 of 43 also committed repeated defaults to repay the installments.
28. I have considered the submissions and perused the record and the case laws (supra).
29. A perusal of pleadings and documents reveal that the defendant no.2 was the owner of 2.8 acres plot of land situated at 4, Bhagwan Das Road, New Delhi. It had mortgaged this land to the defendant no.1 as a security for the loans aggregating to Rs. 750 crores granted by defendant no.1 to its group of companies i.e. Pan India Infravest Limited and Pan India Utilities Distribution Company Limited i.e. company no.1 and 2 in 2016. The plaintiff which is also the company of Essel Group of Companies on 20.12.2017, entered into an MOU with the defendant no.2 to take a commercial office space of 2,00,000 sq ft on a long term lease for 9 years in the corporate park and conventional centre to be constructed by the defendant no.2. As per the MOU, advance payment of Rs. 295 crores would be payable by the plaintiff to defendant no.2 with the execution of MOU and this shall be immediately refundable in case of termination of MOU. Defendant no.1 offered the plaintiff the credit facilities vide letter dated 15.12.2017 of Rs. 295 crores and executed the loan agreement with the plaintiff CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 24 of 43 on 31.01.2018. The plaintiff transferred the loan amount to the defendant no.2 for the construction of the project as per the MOU. As per the sanction letter, the plaintiff would be required to sublease the leasehold assets @ Rs. 450 per square feet per month for a period of nine years and the said rentals would be paid to the defendant no.1 over a period of 9 years. There is no mention in the sanction letter or the loan agreement as alleged that the defendant no.1 has allowed the plaintiff to invest in the project of the defendant no.2. As per the MOU, the area was to be handed over by the defendant no.2 to the plaintiff within 2 years. The defendant no.2 however did not raise the construction. The plaintiff then entered into an addendum with the defendant no.2 on 18.12.2019 and extended the time period of construction by 18 months on the same terms and conditions. Till date, no construction has been raised on the land in question by the defendant no.2.
30. Record reveals that defendant no.2 created further mortgages on the above land in favour of defendant no.1 through defendant no.3 acting as a trustee to its group of companies including RPW Projects Private Limited. RPW Projects Private Limited was admitted for winding up as its loan was classified as NPA. The defendant no.1 issued a SARFAESI notice dated CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 25 of 43 20.12.2019 to the defendant no.2 and on 15.06.2020, it issued the possession notice since RPW Projects Private Limited was its borrower and the defendant no.2 was the mortgagor of the land in question.
31. It is pertinent to mention here that plaintiff is challenging mortgage transactions between the defendant no.1 and defendant no.2. It is the categorical, consistent and strenuous stand of plaintiff that defendants no. 1 and 2 have created charge over suit property without the consent and knowledge of plaintiff. However, facts belie the contentions of plaintiff and show beyond doubt that plaintiff has concealed material facts from the Court purely with a view to mislead this Court.
32. It is also pertinent to mention that Plaintiff and Defendant no.2 are the group companies and share same office address. It is also relevant to state that the MOU dated 20.12.2017, strongly relied upon by the Plaintiff to buttress its contentions, has been signed by one P.D Bansal on behalf of the defendant no.2. Same person i.e. P.D Bansal was also authorized by the plaintiff vide Board Resolution dated 10.09.2020 to represent the plaintiff. As such, it is apparent that plaintiff and defendant no.2 are arms of each other and have been working in tendem with each other. Hence , ignorance projected by Plaintiff with CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 26 of 43 regard to mortgage transactions between Defendant no.1 and Defendant no. 2 appears to be feigned and sham and a ploy to aid and assist the Defendant no.2 in wriggling out of liability of Defendant no.2 towards the Defendant no.1. It appears that present suit is a step in the said direction and is vitiated by collusion between the Plaintiff and the Defendant no.2.
33. Dehors that, it is pertinent to mention that Defendant no. 2 is the recorded owner of the property in question and cannot be restrained from dealing with its property. It is also pertinent to mention that the plaintiff has nowhere impugned or challenged the transactions executed between Defendant no.2 and Defendant no.1, creating charge on the suit property. It is apparent that Defendant no.2 has entered into a legally valid transaction with the Defendant no.1 , creating charge on the property in question. Now, when Defendant no.1 has invoked charge on the property in question, present suit has been filed by the Plaintiff as a proxy litigation by the Defendant no. 2 to protect the interest of Defendant no.2, who is arm of same organization to which Defendant no. 2 belongs. It is tempting to repeat here that it was deliberately concealed by the Plaintiff in its plaint that Plaintiff and Defendant no.2 are group companies. Same has been sheepishly admitted by the Plaintiff CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 27 of 43 in its Replication/ Rejoinder only after the said fact was expressly stated by the Defendant no.1 bank in its written statement.
34. It is also pertinent to mention that no concrete jural or legal rights have been created in favour of the Plaintiff by the Defendant no.2 conferring any proprietary title of any nature in favour of the Plaintiff in respect of the property in question. On the other hand, valid and subsisting charge has been created in favour of Defendant no.1 by the Defendant no.2 in respect of the suit property.
35. In any case, agreement between plaintiff and Defendant no.2 is terminable in nature. If Plaintiff is aggrieved by any action of Defendant no.2 , Plaintiff is free to seek damages against the Defendant no.2. However, Plaintiff is not entitled to seek injunction against a third party i.e. Defendant no.1 bank.
36. The plaintiff has claimed that it had duly intimated the defendant no.1 of executing the addendum dated 18.12.19 to the MOU dated 20.12.2017 but the defendant no.1 has strongly denied this fact. There is not a single document available on record as to the plaintiff informing the defendant no.1 about the said addendum. Record rather shows that the defendant no.1, CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 28 of 43 vide letter dated 23.12.2019 had told the plaintiff that it had requested to inform the progress of development of commercial space in the proposed corporate park being constructed by the defendant no.2 but it understands that the development is substantially delayed. It requested the plaintiff to initiate the refund of advances from the defendant no.2 and utilize the proceeds towards the repayment of loan. The plaintiff had replied to the letter vide its letter dated 07.01.2020 that it has been acting under its instructions and it will follow its instructions for initiating the refund of advance from the defendant no.2. It fortifies the case of defendant no.1 that when the plaintiff entered into the addendum dated 18.12.19 with the defendant no.2, it never informed the defendant no.1 nor took its consent rather kept it in dark and made a false commitment vide letter dated 07.01.2020. There is not even a single document or letter to show that the defendant no.1 had any time consented or permitted the plaintiff to enter into the addendum and extend the time period. The defendant no.1 also recalled the credit facility sanctioned to the plaintiff vide letter dated 07.07.2020 alleging that it did not honor the terms and conditions of the facility agreement and neglected in making the payments. It also asked the plaintiff to repay the outstanding as on 30.06.2020 along with the interest etc. CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 29 of 43 Further, there is not a single document showing any step taken by the plaintiff to initiate the recovery proceedings against the defendant no.2 after the receipt of the letter.
37. Record shows that when the defendant no.1 initiated the action against the defendant no.2 for taking the possession of the property in question, the defendant no.2 challenged its action before the DRT, Delhi but it could not obtain any stay or injunction. Defendant no.2 also filed an application under Section 340 CrPC against the defendant no.1 which was dismissed after the detailed arguments. The plaintiff had also filed an intervention application in the court of the ACMM, New Delhi which was disposed of vide detailed order dated 06.03.2021. It is relevant to reproduce some of the contents of the order.
"Suffice it to say, Ld. Counsel for intervenor primarily seeks intervention in the present proceedings on the strength of sanction letter dated 15.12.2017, vide which Petitioner Bank had offered term loan for a sum of Rs. 295 crores to the intervenor. A separate loan agreement dated 30.01.2018 was also executed to that effect, wherein Rs. 295 crores were given to intervenor by Petitioner Bank, which amount was later on given as advance, deposit by intervenor to Respondent no. 2 for the purposes of taking commercial office of 2 lacs sq. ft. alongwith all fitouts and other amenities on lease in proposed Corporate Park and Convention Centre, to be constructed by Respondent no. 2. It was though fairly conceded by Ld. Counsel for intervenor, during course of the arguments, that no lease agreement qua suit property had been executed between CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 30 of 43 the parties till date.
So far as the agreement regarding term loan granted to intervenor by Petitioner Bank and consequent advance deposit made by intervenor in favour of Respondent no. 2, separate suit has already been instituted by intervenor before Ld. District Judge (Comm.), Patiala House Courts, New Delhi and admittedly no injunction order could be obtained by them in the same. Even otherwise, it is no longer res integra that this Court exercises administrative functions for providing assistance to the secured creditor to take over possession of the property and is not required to adjudicate contentious issues raised by the concerned parties. Reliance may be placed upon the case of Authorized Officer, Indian Bank v. D. Visalakshi & Anr., 2019 SCC Online SC 1242.
With respect to another plank of argument of Ld. Counsel for intervenor that present petition under Section 14 of SARFAESI Act pertains to a single mortgage by Respondent no. 2 on 11.12.2019, the same is factually incorrect as the property in question i.e. secured asset has been mortgaged by Respondent no. 2 qua loan account of Respondent no. 1 on two separate occasions i.e. vide Memorandum of Entry dated 15.10.2018 i.e. Mark-A (colly) and another Memorandum of Entry dated 11.12.2019 Mark-B (colly). The contention raised by Ld. Counsel for the intervenor that intervenor has right to participate in the present proceedings in lieu of pendency of other suit qua secured asset pursuant to Section 52 of Transfer of Property Act is also without merit and not tenable in view of Section 35 of SARFAESI Act. The credit facility/loan was taken by Respondent no. 1 from Petitioner Bank qua sanction letters dated 30.12.2016, 28.06.2017 and 01.12.2017 qua property in question i.e. "All that Part and parcel of Plot No. 4 (Formerly known as Plot No. 11, Block-160), Area ad-measuring 2.80 Acres situated at Bhagwan Das Road, New Delhi-110001". The property in question belongs to Respondent no. 2 which created security in favour of Petitioner Bank qua aforesaid loans vide Memorandum of Entry dated 15.10.2018 Mark-
A (colly) and Memorandum of Entry dated 11.12.2019 Mark-B (colly). Thus, intervenor has no locus to CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 31 of 43 participate in the present proceedings initiated by Petitioner Bank for default in payment schedule by Respondent no. 1. Application for intervention is accordingly dismissed."
At this stage, AR Sh. Ayush Agrawal has tendered his evidence by way of affidavit as Ex. C-1.
I have perused relevant original sanction letters, loan agreements to the tune of Rs. 900 crores, original sale deed of secured asset i.e. property in question and Memorandum of Entry dated 15.10.2018 and 11.12.2019. The documents have also been produced in support of the submission that notice under Section 13(2) of the SARFAESI Act was duly served upon the respondents through speed post and email and despite service the outstanding amount has not been paid within the stipulated period. It is submitted by Ld. counsel for Petitioner Bank that there is no suit/stay pending in any other Court of law regarding the property in question.
Section 14 of SARFAESI Act makes it mandatory for the CMM/ACMM to order taking possession of the assets mortgaged and the documents relating thereto and forward such assets and documents to the secured creditor and for the purpose of securing compliance, the Court may take or cause to be taken such steps and use or cause to be used, such force, as may, in his opinion, be necessary."
38. The ACMM dismissed the application of the plaintiff and appointed Sh. Amandeep, Advocate as a receiver to take possession of the land in question with the help of police. It was held that the objections if any by whomsoever concerned should be made before the DRT and no objection shall be entertained in this court.
CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 32 of 43
39. It is pertinent to mention that RPW Projects Private Limited and defendant no.2 had filed applications under Section 340 CrPC before the ACMM, New Delhi alleging that the bank had approached the court with unclean hands by concealing the material information. During the course of arguments, RPW Projects Private Limited did not press its application but defendant no.2 proceeded with the application which has the reference of the suit pending in this court. The bank/defendant no.1 in response to the application had submitted that in terms of Section 17 of SARFEASI Act, any objection to any of the recovery measures taken by the secured creditor shall be filed before the DRT only. Reliance was placed on the case M/s Transcore v/s Union of India, 2008 (1) SCC 125 that if a borrower is dispossessed not in accordance with the provisions of SARFAESI Act, DRT is empowered to put the clock back by restoring status quo ante. It was also submitted that the respondents had already filed an appeal before the DRT to get a stay on the present proceedings yet failed to obtain any favourable order till date and this application has been filed to thwart the proceedings before the court and to delay and obstruct the bank i.e. secured creditor from taking physical possession of the mortgaged property and stop the recovery of huge public money involved to the tune of Rs. 1082 crores.
CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 33 of 43 Reference was also made of the case, Priyanka Srivastava and anr v/s State of UP and Ors, 2015 (6) SCC 287. It was stated that the security trustee agreement dated 15.10.2018 between the defendant no.1 and 3 was already in place vide which, defendant no.3 was appointed to act as a security trustee in favour of the bank to secure the documents pertaining to the property in question. It was also submitted that even otherwise, there is specific bar upon the civil courts under Section 34 of the SARFEASI Act to entertain any suit or proceedings in respect of any matter which is subject matter before the DRT or the Appellate Tribunal.
40. The ACMM found merits in the contention of the bank/defendant no.1 that there is specific bar under Section 34 of the SARFEASI Act to entertain any suit or proceedings in respect of any matter which is subject matter before the DRT or the Appellate Tribunal. The ACMM also considered the contention of the defendant no.2 that the lease deed qua the property has been created in favour of the plaintiff by the defendant no.2 and held that Section 17 (4A) of SARFEASI Act clearly provides that any person who claims any tenancy or leasehold rights upon the secured asset, the exclusive jurisdiction vests with the DRT not with this court (ACMM CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 34 of 43 court). It was also held that since the defendant no.2 has appointed the defendant no.3 as security trustee in favour of defendant no.1 to secure the documents, so the objections raised by it that the property in question was not mortgaged with the bank and the bank was not the lender is without any merit. It was held that the loan agreement and the security trustee agreement clearly show that bank is the lender and RPW Projects is the borrower. The fact that the bank granted loans to them in 2016, 2017 and 2018 is otherwise not in dispute. So the contention that the bank used its dominion position and forced RPW Projects Private Limited and defendant no.2 to execute Memorandum of entities in favour of defendant no.3 much after the disbursement of loan is merely a bald contention without merit.
41. The ACMM dismissed the application vide order dated 25.02.2021.
42. The plaintiff also filed the SA no. 68 of 2021 before the DRT- II, Mumbai but did not get any success since it was held by the DRT-II, Mumbai that it has no territorial jurisdiction to entertain the application.
43. I find force in the contention of Ld. Counsel for the defendant CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 35 of 43 no.1 and 3 that the plaintiff knew every development in respect of the property in question and the transactions amongst the defendant no.1, defendant no.2 and the companies of Essel Group and it is not right to say that after the execution of the loan agreement dated 31.01.2018 and the MOU, defendant no.1 and 2 in collusion with one another fraudulently created further mortgages, without the knowledge of the plaintiff, to cause detriment to the interest of the plaintiff rendering the performance of the loan agreement and MOU impossible. There is no denial of the fact that the land in question belongs to the defendant no.2 and it had every right to mortgage or alienate its property.
44. Facts and circumstances show that what the defendant no.2 could not achieve directly, it has tried to achieve through the plaintiff to circumvent the proceedings under the SARFAESI Act.
45. As regards the doctrine of lis pendens, Section 52 of Transfer of Property Act (TPA) essentially prohibits alienation of immovable property when a dispute relating to the same is pending in a competent court of law. It interalia provides that during the pendency in any court having authority, by suit or proceeding (which is not collusive) in which any right to CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 36 of 43 immovable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to effect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the court and on such terms as it may impose. Purpose of Section 52 TPA is not to defeat any just and equitable claim but only to subject them to the authority of the court which is dealing with the property to which, the claims are put forward. It is a principle of public policy and no question of good faith or bonafide arises. It is in accordance with equity, good conscience or justice. Any transfer by any party to an innocent third party without the knowledge and information of the pendency of the suit, would cause grave prejudice to the third party if the court finally decrees the suit in favour of the second party.
46. The words used in Section 52 TPA are 'any suit or proceedings (which is not collusive) and in which any right to immovable property is directly and specifically in question. In this case, there is apparent collusion between the plaintiff and the defendant no.2. Further, no leasehold right has been created by the defendant no.2 in favour of the plaintiff. Only a memorandum of understanding was executed. In the case of CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 37 of 43 Harshad Govardhan Sondagar v/s International Assets Reconstruction Company Limited and ors, MANU/SC/0377/2014, the appellant had claimed to be the tenants and in possession of the premises which were mortgaged to the different banks as a securities of loan advanced by the banks/secured creditors. The borrowers had defaulted in the payment of their secured debts and their accounts were classified by the secured creditors as NPA. The borrowers failed to discharge their liability in full within the period of 60 days from the date of notice under Section 13 (2) of SARFAESI Act, 2002. The security creditors exercised their right under Section 13 (4) of the Act to take possession of the secured assets of the borrower. They made a request under Section 14 (1) of the Act to the CMM to take possession of the premises and handover to the secured creditors. The appellants contested the suit stating that they were not borrowers but lessors of the borrowers and were entitled to remain in possession of the secured assets. It was held that where before the mortgage is created in respect of the immovable property and borrower had already leased out the immovable property in favour of the lessee in accordance of Section 7 of TPA, the lessee will have the right to enjoy the lease property irrespective of whether a subsequent mortgagee has knowledge CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 38 of 43 of such a lease or not but after receipt of notice under Section 13 (2) of the Act, no borrower shall lease any of his secured assets without the prior written consent of the secured creditor and the said lease will not be a valid lease. The DRT has power to restore possession of the secured asset to the borrower only and not to any person such as a lessee. When action is sought to be taken by the secured creditor under Section 13 of the Act or by the CMM under Section 14 of the Act, the court cannot grant injunction to prevent such action by the secured creditor or by the CMM. It was held that if any of the appellants claim that they are entitled to possession of a secured asset for any term exceeding one year from the date of the lease made in its favour, he has to produce the proof of execution of a registered instrument in his favour by the lessor. If he relies on an unregistered instrument or oral agreement accompanied by delivery of possession, the CMM will have to come to the conclusion that he is not entitled to the possession of the secured asset for more than an year from the date of the instrument or from the date of delivery of possession in his favour by the landlord. This was also reiterated in the case of Bajrang Shyam Sunder Aggarwal v/s Central Bank of India and ors, AIR 2019 SC 5017.
CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 39 of 43
47. In the instant case, there is no lease agreement between the plaintiff and the defendant no.2 nor the plaintiff is in possession of the property in question as lessee. MOU and the addendum are the unregistered documents. The plaintiff very well knew that the defendant no.2 had mortgaged the property in the year 2016 itself in respect of the credit facilities extended by the defendant no.1 to the group of companies of the plaintiff and the defendant no.2. Facts and circumstances go to show that the plaintiff knew about the defendant no.2 creating further mortgages in favour of defendant no.1 in the year 2018 for its group company namely, RPW Projects Private Limited. It never objected as to the defendant no.2 creating mortgage in favour of defendant no.1 qua the loan facility availed by RPW Projects Private Limited nor it any time, recalled the advances granted to the defendant no.2 to the tune of Rs. 295 crores for the construction on the land in question nor acted on the letter of the defendant no.1 to recover the advances from the defendant no.1 rather, it stood with the defendant no.2 to thwart the action of the defendant no.1 to recover its dues or taking possession of the mortgage property to realize its dues. Facts and circumstances rather show that the action of the plaintiff is not just or in equity or in good faith.
CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 40 of 43
48. Section 34 of the SARFEASI Act clearly bars the jurisdiction of the civil court to grant an injunction in respect of any action taken in pursuance of power conferred under the SARFAESI Act. Section 35 provides that the provision of this act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. Section 17 provides that any person including borrower aggrieved by any of the measures referred to in 13 (4) of the Act taken by the secured creditor under this chapter, may make an application to the DRT having jurisdiction in the matter within 45 days from the date on which such measures had been taken.
49. In this case, the defendant no.2, the mortgagor has already taken recourse before the DRT, Delhi against the action of the defendant no.1, however, it could not obtain any stay/injunction. The plaintiff also tried to take recourse before the DRT-II, Mumbai but its application was dismissed for want of territorial jurisdiction.
50. The injunction is a relief on equity. A person coming in the court must come with clean hands. It should not suppress the facts from the court. In this case, the plaintiff has suppressed the material facts from the court that it and defendant no.2 are CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 41 of 43 of the same group of companies and have intertwined and common interests, which they are jointly working to protect in collusion and connivance with each other.
51. In the instant case, the defendant no.1 is a secured creditor. It has to recover the money owed by the group of companies of the plaintiff and defendant no.2. Public money is involved in this matter. The SARFAESI Act clearly gives right to the plaintiff to take recourse. The defendant no.1 has already taken the physical possession of the property by the orders of the ACMM . By virtue of Section 34 of the SARFAESI Act, this court being the civil court has no jurisdiction to grant injunction in respect of any action taken by the bank/secured creditor or defendant no.1 in pursuant to the power conferred by the Act.
52. From the aforesaid discussions, it is clear that the plaintiff is not entitled to the discretionary relief of interim injunction in view of its conduct. Further, interim relief claimed by the plaintiff is also otherwise barred by law, as detailed herein above.
53. The application is dismissed.
CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 42 of 43
54. Nothing mentioned herein above shall tentamount to be an expression of opinion on the merits of the case.
Announced in open court through video conferencing today i.e. 06.05.2021 (Sanjiv Jain) District Judge (Commercial Court)03 New Delhi CS (COMM) No. 2/21 Essel Corporate Resources P.ltd v/s Yes Bank Ltd and ors Page 43 of 43