Madras High Court
Lakshmi Villas Bank Ltd vs C.Gopalakrishnan ..1St
2025:MHC:1123
C.R.P(MD)No.424 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Reserved on : 06.03.2025
Delivered on : 30.04.2025
CORAM:
THE HONOURABLE MS.JUSTICE R. POORNIMA
C.R.P(MD)No.424 of 2021
and
C.M.P(MD)No.2312 of 2021
Lakshmi Villas Bank Ltd.,
Rep. By its Branch Manager,
Trichy Main Branch,
Trichy. .. Revision Petitioner/Petitioner/ 1st Defendant
Vs.
1.C.Gopalakrishnan ..1st Respondent/1st Respondent/plaintiff
2.The Recovery Officer,
D.R.T. Madurai. ..2nd Respondent /2nd Respondent/Defendant
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C.R.P(MD)No.424 of 2021
PRAYER: This Civil Revision Petition is filed under Section 227 of
Constitution of India to allow the Civil Revision Petition and set aside the
Fair and Decreetal Order dated 31.07.2020 made in I.A.No.03 of 2019 in
O.S.No.165 of 2019 on the file of the I Additional District Judge (PCR),
Thiruchirapalli.
For Petitioner : Mr.Jawahar Ravindran
For Respondents : Mr.B.S.Manjunath – for R1
No Appearance – for R2
ORDER
The Civil Revision Petition has been filed against the Fair and Decreetal Order dated 31.07.2020 made in I.A.No.03 of 2019 in O.S.No.165 of 2019 on the file of the I Additional District Judge (PCR), Thiruchirapalli.
2. Brief averments of the petition are as follows :
i) The 1st respondent/plaintiff has filed the suit against the petitioner for the relief of redemption of mortgage and to return the original title deeds of the suit schedule property on receipt of Rs.2/16
https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/04/2025 04:00:04 pm ) C.R.P(MD)No.424 of 2021 17.50,000/- towards the mortgage money and perpetual prohibitory injunction and other reliefs.
ii) The 1st respondent/plaintiff is a partner of M/s.Sakthi Time Company. The Company was availing credit facility. In the year 1996 they were received OCC limit of a sum of Rs.5,00,000/- from the revision petitioner Bank. As security for the repayment of the said loan, the schedule property was mortgaged by the respondent. Subsequently, the 1st respondent/plaintiff availed an educational loan of Rs.6,00,000/- for his son's education. The mortgage on the schedule property was extended to the educational loan as well. However, the 1st respondent/plaintiff committed default in repaying the amounts due to the Bank. Under the said loan, due to the default of repayment of the loan amount, the revision petitioner/1st defendant bank initiated proceedings under Section 17 of Recovery of Debts and Bankruptcy Act, 1993 before the Debts Recovery Tribunal, Madurai in O.A.No.1108 of 1999 before Debts Recovery Tribunal, Chennai and transferred to Debts Recovery Tribunal, Madurai and numbered as T.A.No.473 of 2007. The 1st respondent/plaintiff has participated the T.A.No.473 of 2007 proceedings. The Debts Recovery Tribunal, Madurai passed the final order in O.S.No. 3/16 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/04/2025 04:00:04 pm ) C.R.P(MD)No.424 of 2021 473/2007 on 11.10.2017. Thereafter, allowed the claim of the revision petitioner. The recovery certificate was also issued. Now the recovery proceeding is pending before the Recovery Officer, Debts Recovery Tribunal, Madurai in R.P.No.248 of 2017 in D.R.C.No.234 of 2017. In order to bring the property for sale the Recovery Officer, Debts Recovery Tribunal, Madurai directed to produce encumbrance certificate, which was obtained by Revision petitioner and it reveals that the respondent /plaintiff created a sale deed on 29.10.1999, in favour of third party a complaint was lodged against the respondent.
iii) The respondent filed a suit for redemption in O.S.No.165 of 2019 on the file of the I Additional District Judge, Trichy. The revision petitioner filed petition under Order VII Rule 11 of Code of Civil Procedure to reject the claim which was dismissed.
iv) As per the Section 18 of the RDDBFI Act 1993, no Court or other authority shall have or be entitled to exercise power of attorney in relation to matters specified the jurisdiction after proceedings initiated under Section 17 of the RDDBFI Act 1993, once the proceedings have been initiated thereunder. Therefore, the present suit is not maintainable before the civil Court.
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v) The Debts Recovery Tribunal had the power to adjudicate the liability of the borrower conferring the re-payment. The civil Court do not have jurisdiction over such matter. Since the Execution Proceedings are currently pending before the Recovery Officer any attempt by the 1st respondent/plaintiff to redeem the mortgaged property, must be made by approaching the Recovery Officer of Debts Recovery Tribunal, Madurai and by depositing the requisite money. In such circumstance, the Civil Court lack jurisdiction to entertain the present suit which is therefore, not maintainable.
vi) The plaintiff cannot compel the petitioner/1st defendant to participate in the second round of litigation on the same cause of action. The present suit is barred by the doctrine of res judicata as the issues raised has already been adjudicated in earlier proceedings. Hence, the suit in O.S. No: 165/2019 liable to be rejected with costs being clear abusive of law.
3. The brief averments of the counter are as follows: -
i) The allegations made in the affidavit are false, frivolous and vexatious. The 1st respondent / plaintiff preferred a suit under Order 5/16 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/04/2025 04:00:04 pm ) C.R.P(MD)No.424 of 2021 XXXIV Rule 1 of Code of Civil Procedure for the relief of redemption of mortgage against the petitioner / 1st defendant. The petitioner sought order to reject the plaint on various grounds. But the present suit for redemption of mortgage is not barred under Section 18 of the RDDBFI Act, 1993 and Section 9 of C.P.C or on the ground of res judicata.
ii) The 1st respondent/plaintiff could file an application before the Debt Recovery Tribunal for the redemption of the mortgage.
Since, the Debt Recovery Tribunal having the power to adjudicate the matter of recovery of the debts and determining the liability between the borrower and the creditor. But the Civil Court alone having the jurisdiction of redemption of mortgage, which is not barred under Section 18 of the RDDBFI Act, 1993. The Debt Recovery Tribunal proceedings and the present suit are having the different cause of action. The mortgagor has no right to file a petition or proceedings of the redemption of the mortgage.
iii) At the same, the suit for redemption of the mortgage before the civil Court is maintainable. The 1st respondent/plaintiff never executed and extended the mortgage for the educational loan. But the petitioner creating the documents and clubbing the mortgage loan and 6/16 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/04/2025 04:00:04 pm ) C.R.P(MD)No.424 of 2021 educational loan and initiated the proceedings before the Debt Recovery Tribunal.
iv) In fact, the mortgage loan account cannot go beyond the value of Rs.10,00,000/-. In the above, the Debt Recovery Tribunal, Madurai has decided the case with jurisdictional error and the same the present suit for redemption of mortgage is maintainable. Hence, the petition may be dismissed with costs.
4. Heard the learned counsel on either side and perused the materials available on record.
5. It is admitted that the respondent enjoying various credit facilities from the bank/revision petitioner and borrowed money for his son's higher education by creating an equitable mortgage over the plaintiff's property by depositing title deeds. Since he committed default in the repayment, the bank filed O.A.No.1108/1999 before the Debts Recovery Tribunal, Chennai, which was transferred to Debts Recovery Tribunal, Coimbatore and numbered as T.A.No.473 of 2002 and then transferred to Debts Recovery Tribunal, Madurai renumbered as 7/16 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/04/2025 04:00:04 pm ) C.R.P(MD)No.424 of 2021 T.A.No.473 of 2007. Now the respondent claims that he did not execute any mortgage deed for educational loan. However, he had contested the proceedings before the Debts Recovery Tribunal and after a prolonged period, the said suit was decreed on 11.10.2017. Recovery proceedings were also initiated in R.P.No.248 of 2017. In the meantime, the petitioner sold the property to third party without the knowledge, consent, and permission from the bank executing the sale in the name of that party on 29.10.1999. A criminal complaint is pending against the respondent. The Presiding Officer of Debts Recovery Tribunal, granted time to the respondent to deposit the money into the bank. Instead of depositing the money in the bank or filing an appeal, the respondent filed a Civil Suit before the Additional District Judge, seeking redemption. He had borrowed money and mortgaged the property in the year 1983. However he neither repaid the loan nor take steps to settle the dues until the Bank initiated recovery proceedings. There is no bar to depositing the money before the Debts Recovery Tribunal. However, the respondent without filing any petition seeking permission, to repay the borrowed money participated the proceedings, remained silent for 17 years only after the petitioner obtained recovery certificate and initiate recovery proceedings, 8/16 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/04/2025 04:00:04 pm ) C.R.P(MD)No.424 of 2021 did the respondent filed a suit for redemption before the Additional District Judge, Trichy and also sold the property to third party with intention to further drag on the proceedings.
6. Section 18 of the RDDBFI Act, 1993, provided as follows :
“18. Bar of jurisdiction.—On and from the appointed day, no court or other authority shall have, or be entitled to exercise, any jurisdiction, powers or authority (except the Supreme Court, and a High Court exercising jurisdiction under articles 226 and 227 of the Constitution) in relation to the matters specified in section 17:
[Provided that any proceedings in relation to the recovery of debts due to any multi-State co-operative bank pending before the date of commencement of the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2012 (1 of 2013) under the Multi- State Co-operative Societies Act, 2002 (39 of 2002) shall be continued and nothing contained in this section shall, after such commencement, apply to such proceedings.
7. The learned counsel for the petitioner has relied upon the judgement in The Hongkong and Shanghai Banking Corporation Ltd, 9/16 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/04/2025 04:00:04 pm ) C.R.P(MD)No.424 of 2021 (HSBC) Vs. R.Subramanian & Ors. reported in 2017 (3) CTC 526, wherein this Court has held as follows:
“Code of Civil Procedure, 1908 (5 of 1908), Order 7. Rule 11 & Section 9 - Recovery of Debts Due to Banks and Financial Institution Act, 1993 (51 of 1993) Sections 17 & 18 – Suit to declare guarantee executed by 1st Respondent in favour of Applicant-Bank as null and void - Earlier Applicant- Bank had initiated Recovery proceedings before DRT - Applicant-Bank seeking rejection of Plaint - Question whether Suit is barred under Provisions of RDDB Act - Jurisdiction of Civil Court is ousted with regard to dispute relating to Recovery proceedings initiated by Bank - Civil Court has jurisdiction to decide issue only if any fraud had been played by Secured Creditor - In other cases, only Tribunal has power to decide dispute - Tribunal is not mere collection agent to pass Orders with regard to issue of Recovery Certificate - 1st Respondent having filed similar Application before DRT and DRAT cannot re-agitate said issue by filing present Suit- Tribunal has ample power under Sections 17 & 18 of RDDB Act for entertaining Application, filed by Bank for recovery of Loan amount - If present Suit is entertained, no Bank would be able to recover money from unscrupulous defaulters - Suit is clearly barred under Section 18 of RDDB Act - It is nothing but abuse of process of law - Application allowed.” and also relied upon a judgment of a Division Bench of this Court in Cambridge Solutions Limited, Bangalore Vs. Global Software Limited, 10/16 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/04/2025 04:00:04 pm ) C.R.P(MD)No.424 of 2021 Chennai – 18 & Ors. reported in 2017 (1) CTC 497, wherein the Division Bench of this Court has held as follows:
“Code of Civil Procedure, 1908 (5 of 1908). Order
7. Rule 11 - Rejection of Plaint Cause of Action Illusion of cause of action Implied bar to maintain Suit - Suit instituted to nullify Orders passed by Recovery Officer under RDDB Act - Plaintiff alleged that Defendants and claim - Allegation of fraud and collusion between Defendants to obtain Decree from Tribunal - Plaintiff has not pleaded that fraud has been played on Tribunal and Orders were obtained - Averments in Plaint are drafted to give impression that Defendant have colluded and obtained Decree from Tribunal - Tribunal had not committed any grave illegality as alleged in Plaint -
Averments regarding fraud, collusion are non-existent and have been made only to sustain Suit - Procedural irregularities by Tribunal not affecting parties concerned cannot amount to fraud - Duty of Court to carefully analyze as to whether cause of action pleaded in averments in Plaint is real or fictitious - Plaint must be rejected threshold with Costs where cause of action pleaded in Plaint is illusory - Aggrieved party has remedy to challenge Orders of Recovery Officer before DRT - Plaintiff having already invoked jurisdiction of DRT cannot sustain Suit by invoking original jurisdiction of 11/16 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/04/2025 04:00:04 pm ) C.R.P(MD)No.424 of 2021 High Court - Suit is barred by provisions of RDDB Act and Plaintiff has no cause of action to maintain Suit - Plaint rejected.”
8. Without considering the facts and records, the District Court allowed the petition. As per Section 18 of RDDBFI Act, 1993 explicitly restrict the suit of the civil Court in the matter by the Debts Recovery Tribunal. If the petitioner wanted to repay the money he should have approached the Bank at the earliest, or filed redemption suit before the Bank initiated proceedings against him. But he had not paid any money from 1983 to 2017 till the suit was decreed. But only in the year 2020, when the Bank initiated recovery proceedings, he had filed a petition to redeem the mortgage. The respondent during argument stated that he had offered to pay the money at the earliest, but the Bank not accepted the payment for which he has not produced any document before the trial Court to show that he has ready to pay the money which was rejected by the Tribunal.
9. In order to drag on the proceedings he had filed a suit with prayer to redeem the mortgage money which is barred by the Act. But the 12/16 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/04/2025 04:00:04 pm ) C.R.P(MD)No.424 of 2021 trial Court dismissed the rejection petition by relying upon the judgment reported in "Shakeena and another (Vs) Bank of India And Ors, on 20 August, 2019 in CIVIL APPEAL NO(S) 8097-8098 OF 2009, Supreme court of India" has held as follws :
“29. A fortiorari, it must follow that the appellants have failed to exercise their right of redemption in the manner known to the law, much less until the registration of the sale certificate on 18th September, 2007. In that view of the matter no relief can be granted to the appellants, assuming that the appellants are right in contending that as per the applicable provision at the relevant time (unamended Section 13(8) of the 2002 Act), they could have exercised their right of redemption until the registration of the sale certificate which, indisputably, has already happened on 18 September, 2007. Therefore, it is not possible to countenance the plea of the appellants to reopen the entire auction process. This is more so because, the narrative of the appellants that they had made a valid tender towards the subject loan accounts before registration of the sale certificate, has been found to be tenuous. Thus understood, their right of redemption in any case stood obliterated on 18th September, 2007, Further, the amended Section 13 (8) of the 2002 Act which has come 13/16 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/04/2025 04:00:04 pm ) C.R.P(MD)No.424 of 2021 into force w.e.f. 1st September, 2016, will now stare at the face of the appellants. As per the amended provision, stringent condition has been stipulated that the tender of dues to the secured creditor together with all costs, charges and expenses incurred by him shall be at any time before the date of publication of notice for public auction or inviting quotations or tender from public or private deed for transfer by way of lease assessment or sale of the secured assets. That event happened before the institution of the subject writ petitions by the appellants which is not applicable to the present case. The object of The Recovery of Debts and Bankruptcy Act, 1993 to set up special Tribunals for expeditious adjudication and recovery of debts due to bank and financial institution and for matter connected therewith or incidental thereto.
10. In view of the specific bar under Section RDDBFI Act, 1993 no Court be entitled to execute any jurisdiction in relation to matters specified in Section 17 and the trial Court should not have entertained the suit under Order 7 Rule 11(D) of CPC as well as Section 18 of RDDBFI Act and the petition. Further if these types of suit are entertained the object of the enactment will be defeated. 14/16 https://www.mhc.tn.gov.in/judis ( Uploaded on: 30/04/2025 04:00:04 pm ) C.R.P(MD)No.424 of 2021
11. Accordingly, the Civil Revision Petition is allowed and the fair and decreetal order dated 31.07.2020 made in I.A.No.03 of 2019 in O.S.No.165 of 2019 on the file of the I Additional District Judge (PCR), Thiruchirapalli are set aside. No costs. Consequently, connected Miscellaneous Petition is closed.
30.04.2025
Index : Yes / No
NCC : Yes / No
RM
To
The I Additional District Judge
PCR Court,
Thiruchirapalli
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C.R.P(MD)No.424 of 2021
R. POORNIMA, J.
RM
C.R.P(MD)No.424 of 2021
30.04.2025
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