Delhi District Court
Shalabh Kumar Sharma vs Kotak Mahindra Bank Ltd on 10 February, 2025
IN THE COURT OF MS. ANKITA BHATIA: CIVIL JUDGE:
NORTH DISTRICT, ROHINI COURTS: DELHI
CS SCJ 35324/16
CNR No. DLNT03-000273-2015
In reference:
SH. SHALABH KUMAR SHARMA
s/o Lt. Shri Bud Dev Sharma
Aged about 56 years
r/o Flat no. A-27R, Rose Apptt.
Sector-14 Extn., Rohini, Delhi-110085. ...........Plaintiff
VERSUS
KOTAK MAHINDRA BANK LIMITED
(Formerly Barclays Bank PLC)
17th Floor, Amba Deep Building,
14, Kasturba Gandhi Marg
Connaught Place, New Delhi-110001. ........... Defendant
Date of Institution : 22.01.2015
Date of reservation of Judgment : 19.12.2024
Date of Judgment : 10.02.2025
CS SCJ 35324/16 SH. SHALABH KUMAR SHARMA Vs Page 1 of 16
KOTAK MAHINDRA BANK LIMITED
JUDGMENT
1. Vide this judgment, I will dispose of the suit filed by the plaintiff against the defendant seeking the relief(s) as contained in the prayer clause of the plaint.
PLAINT:
2. The case of the plaintiff as per plaint in brief is that plaintiff is the former Managing Director, M/S TCL Cables Ltd., office situated at 306-308, Sushma Tower, D-Block, Central Market, Prashant Vihar, Delhi-110085, which is now in liquidation. The defendant is a private sector Indian Bank, who had advanced a business loan to M/S TCL Cables Ltd., vide sanction letter dated 20.06.2011. At the instance of the defendant, M/S TCL Cables Ltd. had given 48 undated cheques as part of sanction of the business loan. Thereafter, the defendant was informed that M/S TCL Cables Ltd is in liquidation and permission is required to be sought by the defendant from the Hon'ble High Court of Allahabad to proceed against the company. However, despite legal remedies being available, the defendant has been sending muscle men/ recovery agents to the residence of the plaintiff, and threatening him and his wife of dire consequences. The defendant is also threatening the plaintiff that he would drag the plaintiff under the provisions of section 138 NI Act, as the cheques bear signatures of the plaintiff. It is further the case of the plaintiff that the plaintiff is not in charge of, and is not responsible to M/S TCL Cables Ltd., and cannot exercise the CS SCJ 35324/16 SH. SHALABH KUMAR SHARMA Vs Page 2 of 16 KOTAK MAHINDRA BANK LIMITED power of the Managing Director, as the company is in liquidation and bank account of the said company has been blocked, and in these circumstances, the cheques in question will be returned with reasons 'Account Blocked'. It is further the case that the plaintiff cannot be held liable under section 138 NI Act as circumstances are beyond the control of the plaintiff.
3. Thereafter, the present suit has been filed by the Plaintiff with the following prayers:
a) to pass a decree of mandatory injunction directing the defendant and its agents not to illegally implicate the plaintiff in any case more particularly after winding up order dated 04.12.2014 in CP No. 24/2014 passed by the Hon'ble High Court of Allahabad as after winding up order the plaintiff is not representing M/S TCL Cables Ltd.
b) to pass a decree of mandatory injunction directing the defendant and its agents not to harass the plaintiff through recovery agents/ musclemen for recovery of dues which are exclusively payable by M/S TCL Cables Ltd-in liquidation and not to take any coercive action against the plaintiff without due process of law.
c) any other relief which the court deems fit.
DEFENCE:
4. Summons was issued to the defendant, upon which Written Statement was filed, wherein it was stated that the suit is false, frivolous and liable to be dismissed. Defense of the defendant in brief is that the present suit has been filed with the motive to obtain blanket ban from legal action against his company, which is under liquidation. The loan was granted to the company and CS SCJ 35324/16 SH. SHALABH KUMAR SHARMA Vs Page 3 of 16 KOTAK MAHINDRA BANK LIMITED cheques were issued on behalf of the company, however, the case has been filed by the plaintiff in his personal capacity, thus, he has no locus standi to institute the present case. No cause of action ever arose in favour of the Plaintiff as the loan was given and utilized by the company, thus, the plaintiff is not entitled to any relief. It is further stated that the defendant had sent legal notice to M/S TCL Cables Ltd to pay outstanding amount, and reserves its right to take appropriate legal action against the plaintiff and the company. Defendant has further denied other pleadings of the plaint and states that the plaintiff and the company is liable to be prosecuted under section 138 NI Act. It is further the defense that the plaintiff is not entitled to any relief in view of section 41 of the Specific Relief Act.
5. Thereafter, replication was filed by the plaintiff wherein he has denied the averments of the defendant in the written statement and has reaffirmed his pleadings of the plaint. He has further reaffirmed that the plaintiff is not liable to pay any outstanding amount on account of default on the part of the company due to restraining order dated 18.09.2014 and winding up order dated 04.12.2014 passed by the Hon'ble High Court of Allahabad.
ISSUES:
6. On completion of pleadings, the following issues were framed:
a) Whether the Plaintiff is entitled for decree of mandatory injunction as prayed for? OPP
b) Whether the Plaintiff is entitled for decree of mandatory injunction thereby directing not to harass and take any CS SCJ 35324/16 SH. SHALABH KUMAR SHARMA Vs Page 4 of 16 KOTAK MAHINDRA BANK LIMITED coercive action against the plaintiff, his wife or any other Ex-Director of M/S TCL Cables Ltd-in Liquidation? OPP
c) Relief.
EVIDENCE:
7. To substantiate its case, the Plaintiff examined himself as PW-1 by way of affidavit Ex.PW1/A and has relied upon following documents:
1. Copy of order dated 04.12.2014 is Mark A.
2. Letter dated 01.07.2011 by defendant bank is Mark B.
3. Letter dated 27.10.2014 is Mark C.
4. Loan recall notice dated 22.12.2014 is Mark D.
5. Reply dated 01.01.2015 is Mark E.
6. Loan recall notice dated 14.01.2015 is Mark F.
8. Defendant examined one witness, namely Sh. Kundan Arora, Asst. Manager, Kotak Mahindra Bank by way of Ex. DW-1/A and has relied upon following documents:
1. Authority Letter is Ex. DW-1/1.
FINDINGS OF THE COURT:
9. I have heard the arguments of Ld. Counsels for the plaintiff and defendant, and perused the material on record.
10.Before embarking to decide the present case, it would be appropriate to reiterate the burden of proof required to be discharged in civil proceedings. It is a settled principle of law that in civil cases, the burden of proof is not as strict as that in criminal cases. Here, the Plaintiff is required to prove his case only to the standard of preponderance of probabilities.CS SCJ 35324/16 SH. SHALABH KUMAR SHARMA Vs Page 5 of 16
KOTAK MAHINDRA BANK LIMITED
11.In Postgraduate Institute of Medical Education and Research v. Jaspal Singh, (2009) 7 SCC 330, it was held that the burden which ought to be discharged in civil proceedings in not as strict as in criminal cases and in order for any party to succeed, he/it is required to prove his/its case on the preponderance of probabilities. The relevant portion of the aforesaid pronouncement is hereby produced here for the sake of brevity:
"It has been held that there is a marked difference as to the effect of evidence, namely, the proof, in civil and criminal proceedings. In civil proceedings, a mere preponderance of probability is sufficient, and the defen- dant is not necessarily entitled to the benefit of every rea- sonable doubt; but in criminal proceedings, the persua- sion of guilt must amount to such a moral certainty as convinces the mind of the court, as a reasonable man, beyond all reasonable doubt."
12.Further, Section 101 of the Evidence Act, 1872 defines "burden of proof" and laid down that the burden of proving a fact always lying upon the person who asserts the facts. Until such burden is discharged, the other party is not required to be called upon to prove his case. The court has to examine as to whether the person upon whom the burden lies has been able to discharge his burden. Until he arrives at such conclusion, he cannot proceed on the basis of weakness of other party. In view of Section 103 of Evidence Act, the burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the CS SCJ 35324/16 SH. SHALABH KUMAR SHARMA Vs Page 6 of 16 KOTAK MAHINDRA BANK LIMITED proof of that fact shall lied on any particular person. Further, Section 58 of the Indian Evidence Act contains that no fact need to be proved in any proceedings which parties thereto or their agents agree to admit at the herein, or which, before the hearing, they agree to admit by any writing under their hands or which by any rule of pleadings enforce at the time they are deemed to have admitted by their pleadings.
13.Having determined the burden of proof required to be discharged in civil cases, this court will now proceed to give its findings.
Findings with respect to Issue no. 1: Whether the Plaintiff is entitled for decree of mandatory injunction as prayed for? OPP
14.Onus to prove the issues was upon the Plaintiff.
15.First and foremost, it is pertinent to discuss the admitted facts.
The factum of advancement of loan to M/S TCL Cables Ltd for an amount of Rs. 30,00,000/- by the defendant, for which 48 undated cheques were handed over, has been admitted by the defendant.
16.Now, the plaintiff has sought relief of mandatory injunction directing the defendant and its agents not to illegally implicate the plaintiff in any case, more particularly after winding up order dated 04.12.2014 in CP No. 24/2014 passed by the CS SCJ 35324/16 SH. SHALABH KUMAR SHARMA Vs Page 7 of 16 KOTAK MAHINDRA BANK LIMITED Hon'ble High Court of Allahabad, as after winding up order the plaintiff is not representing M/S TCL Cables Ltd. To prove this, the plaintiff examined himself as PW-1 and relied upon Mark A i.e. the order dated 04.12.2014 of the Hon'ble High Court of Allahabad, whereby the company is directed to be wound up. It is stated by PW-1 in her cross examination that the company was the borrower of the loan, and at the time of taking loan, he was the Managing Director.
17.The main defense of the defendant is that no cause of action has arisen in favour of the plaintiff as the case has been filed in his personal capacity, however, the loan was advanced to and utilized by the company.
18.Perusal of the prayer clause reveals that the plaintiff has not instituted the present case in the capacity of Managing Director of the company, but in his individual capacity for a personal cause of action. Vide the present suit, the plaintiff seeks the relief of restraining the defendant from illegally implicating him as well as to restrain the defendant from harassing the plaintiff. It is specifically stated that the defendant has sent muscle men/ recovery agents to the house of the plaintiff for recovering the loan amount. Thus, the cause of action is personal in nature.
19.The defendant has further raised the defense that the plaintiff is not entitled to any relief in view of section 41 of the Specific Relief Act. It has been argued by the defendant that mandatory CS SCJ 35324/16 SH. SHALABH KUMAR SHARMA Vs Page 8 of 16 KOTAK MAHINDRA BANK LIMITED injunction cannot be allowed so as to safeguard the plaintiff against all future suits. It is further impressed upon by the Ld. Counsel for the defendant that the defendant bank has right as per law to initiate civil/criminal proceedings against the defendant, thus, in view of bar of section 41 SRA, the plaintiff is not entitled to any relief. The defendant has further stated that the plaintiff, being the then Managing Director, is still liable to be proceeded under section 138 NI Act and his liability is not extinguished by virtue of pendency of proceeding of winding up.
20.Per contra, it has been argued by the Ld. Counsel for plaintiff that since the company is a separate juristic entity, its directors are not personally liable for the debts of the company, and has relied upon various judgments in this regard. It is further argued that the defendant has legal remedy to file his claim before the Official Liquidator. Further, while advancing oral arguments as well as in written synopsis, it has been rightly conceded on behalf of the plaintiff that the plaintiff is not seeking any injunction on institution of proceedings of criminal nature in view of section 41 SRA.
21. At this stage, it becomes pertinent to mention the relevant provision in this regard. Section 41 of the Specific Relief Act provides that:
"41. Injunction when refused.--
An injunction cannot be granted--CS SCJ 35324/16 SH. SHALABH KUMAR SHARMA Vs Page 9 of 16
KOTAK MAHINDRA BANK LIMITED
(b) to restrain any person from instituting or prosecuting any proceeding in a court not subordinate to that from which the injunction is sought;
(c) ...
(d) to restrain any person from instituting or prosecuting any proceeding in a criminal matter;"
22. Section 41 (d) of SRA, thus, places a clear restriction on grant of injunction to prosecute any proceeding in a criminal matter. Further, clause (b) also bars grant of injunction so as to restrain any person from instituting or prosecuting any proceeding in a court not subordinate to that from which the injunction is sought. The above bar is applicable in all kinds of proceedings, whether civil or criminal.
23. Herein the judgment of the Hon'ble Apex Court namely Cotton Corporation Of India v. United Industrial Bank, 1983 AIR 1272, becomes relevant, wherein it was held as under:
"As a necessary corollary, it would follow that the court is precluded from granting an injunction restraining any person from instituting or prosecuting any proceeding in a court of co-ordinate or superior jurisdiction. This change in language deliberately adopted by the Legislature after taking note of judicial vacillation has to be given full effect... ...To begin with, it can be said without fear of contradiction that anyone having a right that is a legally protected interest complains of its infringement and seeks relief through court must have an unhindered, uninterrupted access to law courts. The expression 'court' here is used in its widest amplitude comprehending every forum where relief can be obtained in accordance with law. Access to justice must not be hampered even at the hands of judiciary. Power to grant CS SCJ 35324/16 SH. SHALABH KUMAR SHARMA Vs Page 10 of 16 KOTAK MAHINDRA BANK LIMITED injunction vests in the court unless the Legislature confers specifically such power on some other forum. Now access to court in search of justice according to law is the right of a person who complains of infringement of his legally protected interest and a fortiori therefor, no other court can by its action impede access to justice. This principle is deducible from the Constitution which seeks to set up a society governed by rule of law. As a corrolary, it must yield to another principle that the superior court can injunct a person by restraining him from instituting or prosecuting a proceeding before a subordinate court. Save this specific carving out of the area where access to justice may be impeded by an injunction of the court, the Legislature desired that the courts ordinarily should not impede access to justice through court. This appears to us to be the equitable principle underlying sec. 41 (b). Accordingly, it must receive such interpretation as would advance the intendment, and thwart the mischief it was enacted to suppress, and to keep the path of access to justice through court unobstructed."
24. Thus, it is clear that one cannot be restrained from enforcing his legal remedy in a court of law by grant of injunction. The main essence of restriction on grant of injunction is to protect the right of an individual to pursue their case in a court of their preference, without encountering any pre-emptive limitation through injunctions. This guarantees the preservation of legal independence and prohibits unwarranted interference in the quest for justice by imposing restrictions on the liberty to file lawsuits in different jurisdictions.
25. Every person whose right has been infringed, can approach the doors of justice for seeking relief. Whether he is entitled to such CS SCJ 35324/16 SH. SHALABH KUMAR SHARMA Vs Page 11 of 16 KOTAK MAHINDRA BANK LIMITED legal remedy or not, is a matter of trial, and would be decided by that forum. However, the court cannot in any way curtail right of a person to institute legal proceedings or 'implicate' any person in a judicial proceeding. Whether a person has been legally or illegally implicated is a matter of trial. In case the person is even found to be illegally implicated by a court, there are appropriate legal remedies for the same. However, a court cannot by way of injunction grant a blanket ban from instituting proceedings against a person.
26. In the present case, the plaintiff has sought to restrain the defendant so as to 'not to illegally implicate the plaintiff in any case'. Grant of such relief would seriously harm the rights of the defendant to approach the courts of law or any other appropriate forum for enforcing his legal right. Whether the defendant is entitled to grant of relief is a matter to be decided by that forum, but this court cannot restrain the defendant from enforcing such right against the plaintiff. Whether the plaintiff has been implicated rightly or not, is a matter of trial in that proceedings.
27. Similarly, the arguments pertaining to whether plaintiff is liable for the debts of the company or whether the plaintiff is liable after the company went into the process of winding up, are not of any significance for adjudicating the present suit as the same are not in issue before this court. Thus, the said arguments are CS SCJ 35324/16 SH. SHALABH KUMAR SHARMA Vs Page 12 of 16 KOTAK MAHINDRA BANK LIMITED not relevant and thus, not legally tenable in the present suit for injunction.
28. In view of the above discussion, the issue is decided against the plaintiff.
Findings with respect to Issue no. 2: Whether the Plaintiff is entitled for decree of mandatory injunction thereby directing not to harass and take any coercive action against the plaintiff, his wife or any other Ex-Director of M/S TCL Cables Ltd-in Liquidation? OPP
29. The onus to prove this issue was upon the plaintiff. To prove the same, the plaintiff i.e. PW-1 has deposed that the defendant has been sending recovery agents/ muscle men to the residence of the plaintiff and threatening him and his wife with dire consequences. It was further deposed that the defendant is threatening to drag the plaintiff under the provisions of section 138 NI Act. During cross examination of PW-1 dated 27.02.2024, it has been stated:
"The harassment by agents/ muscle men of the defendant started as soon as the defendant company was informed about the liquidation. It continued from December, 2014 and the entire year of 2015. No police complaint on 100 no. was lodged by me because i was depressed and could not find time for it."
30. It has been further deposed that:
CS SCJ 35324/16 SH. SHALABH KUMAR SHARMA Vs Page 13 of 16KOTAK MAHINDRA BANK LIMITED "The muscle men approached me both at my house as well as his office. They were four in number. I never checked IDs of the muscle men as I was not allowed to do the same."
31. During the cross examination of DW-1, DW-1, has denied that on 25.10.2014 at around 09:45 PM, the defendant bank sent musclemen at plaintiff's residence for recovery of loan from him. He has further deposed as follows:
"No musclemen/ recovery agents have been ever sent for recovery of loan amount from him. Hence, no question arises of sending musclemen/ recovery agents in the future to the Plaintiff's residence or his workplace"
32. Perusal of the record and above discussed testimonies makes it hard to believe the case of the plaintiff that musclemen/ recovery agents were sent by the defendant. Especially in light of the deposition by the plaintiff that the alleged harassment of sending musclemen/ recovery agents by the defendant continued for a period of over one year, however, no police complaint was lodged to this effect. Even no neighbor or employee has been called as a witness to prove the alleged incidents of harassment. Further, no evidence has been led by the plaintiff to establish the identity of the muscle men/ recovery agent, if any, as regard whether such recovery agents/ muscle men were actually sent by the defendant.
33. Even otherwise, the prayer sought i.e. to restrain the defendant from harassing the plaintiff, is incapable of being enforced by this court and thus, cannot be granted. In this regard, it is CS SCJ 35324/16 SH. SHALABH KUMAR SHARMA Vs Page 14 of 16 KOTAK MAHINDRA BANK LIMITED apropos the mention the judgment of Hon'ble High Court of Bombay namely Wife vs. Husband MANU/MH/2336/2017, wherein it was held as under:
"Then comes the challenge by the wife to that part of the decree by which the learned Judge of the Family Court has granted a permanent injunction restraining the wife from harassing the husband in any manner whatsoever. The word harassment is a subjective term. The judgment is silent on the scope and meaning of the word harassment. On plain reading of the said part of the decree, apart from the fact that there is a serious doubt whether such a decree could have been passed, the said decree is incapable of being enforced. The law on this aspect is very well settled. No Court or Tribunal can grant relief which is incapable of being enforced. One such decision in which the law is reiterated by a Division Bench of this Court in the case of MRF Ltd. Goa v. Goa MRF Employees Union, Goa and another, MANU/MH/0969/2003 : 2003 (4) LLN 1182. Relevant paragraph is paragraph 10 which reads thus:
"10...No Court or Tribunal will grant a relief if it is incapable of enforcing it either by execution or otherwise. We have earlier noted that the expression "incidental"
would not include an interim relief by way of preventive injunction. No judgment of the Apex Court has been cited to show that the matter has been concluded by any judgment. On the contrary in Delhi Cloth and General Mills (MANU/SC/0188/1966 : AIR 1967 SC 469) (vide supra), the Apex Court has noted that the judgment of Management, Hotel Imperial the question was posed but not answered. Therefore, even if it was held that there was such a power to grant relief there is no power or mechanism for the relief to be enforced. If there be a power to grant relief there must also be power to enforce the relief. In that context it must be held that no power is conferred on the Tribunal or the other authorities under Chp. II to grant relief of injunction." Therefore, the said part of the decree cannot be sustained."
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34. The upshot of the above discussion is that a court cannot grant a relief which is incapable of being enforced. In the present case, the relief as to restrain the defendant from harassing the plaintiff is in the considered opinion of this court one such relief which cannot be enforced by the court.
35. Thus, in light of evidences and above discussion, this court is of the view that plaintiff has not been able to discharge his burden of proof, and therefore, the issue is decided against the plaintiff.
36. In view of the above discussion and precedents cited, the present suit is dismissed. No order as to cost.
37. Decree sheet be prepared accordingly.
38. All pending applications (if any) are hereby disposed of as not pressed.
39. Accordingly, file be consigned to record room after necessary compliances.
Announced in the open Court on 10.02.2025 (ANKITA BHATIA) CIVIL JUDGE (NORTH) ROHINI/DELHI/10.02.2025 Digitally signed by ANKITA ANKITA BHATIA BHATIA Date:
2025.02.11 15:18:13 +0530 CS SCJ 35324/16 SH. SHALABH KUMAR SHARMA Vs Page 16 of 16 KOTAK MAHINDRA BANK LIMITED