Delhi District Court
Vir Jai Khosla vs Axis Bank Limited on 12 August, 2024
In the court of Ms. Anu Grover Baliga,
District Judge (Commercial Court-04),
South-East District, Saket Courts
New Delhi
CS (COMM) 26/2024
Sh. Vir Jai Khosla Vs. Axis Bank Limited & Ors.
In the matter of:
Mr. Vir Jai Khosla
D-367, Defence Colony
New Delhi - 110 024. ....Plaintiff
Versus
Axis Bank Limited and Ors.
(acting through its Managing Director,
Amitabh Chaudhry)
Trishul - 3rd Floor
Opp. Samartheswar Temple
Near Law Garden
Ellisbridge
Ahmedabad - 380 006. ....Defendants
Date of institution : 15.01.2024
Date of reserving order : 26.07.2024
Date of pronouncement of order : 12.08.2024
Order
1. Vide the present order, I shall decide two applications - the
application filed under Order VII Rule 11 CPC by the Defendant No.1
seeking rejection of the plaint and the application filed on behalf of the
Plaintiff under Section 30 read with Order XI Rules 1 and 2 CPC.
2. The present suit has been filed by the Plaintiff seeking interalia a
declaration that the notices dated 10.01.2023 and 30.03.2023 purporting to
CS (COMM) 26/2024
Sh. Vir Jai Khosla Vs. Axis Bank Limited & Ors. Page 1 of 15
be statutory notices issued by Defendant No.1 under Section 13(2) and
under Section 13(4) of the SARFAESI Act respectively be declared void ab
initio. It has also been sought that this Court must declare that Defendant
No.1 Bank has no jurisdiction or authority to file an application under
Section 14 of the SARFAESI Act before the Ld. ACMM or Ld. District
Magistrate. Compensations and costs have also been demanded from the
Defendant No.1 Bank for the purportedly illegal acts done by its officials,
who have been arrayed as Defendant No.2 to Defendant No.28.
3. This Court vide its order dated 24.01.2024 had held that this Court is
not satisfied that the presence of Defendants No.2 to 28 is necessary or
proper to decide the suit filed by the Plaintiff and had therefore directed that
the summons of the suit be only sent to Defendant No.1 Bank. On the
service of the summons of the suit, the Defendant No.1 Bank has preferred
an application under Order VII Rule 11 CPC asserting therein that this
Court does not have the jurisdiction whatsoever to try the present suit in
view of Section 34 of the SARFAESI Act and Section 11 of the The
Commercial Courts, Commercial Division and Commercial Appellate
Division of High Courts Act, 2015 (hereinafter referred to as Commercial
Courts Act). It is the assertion of Defendant No.1 Bank that the 02 notices
for which declaration is being sought vide the present suit have been issued
by it in terms of the provisions of SARFAESI Act and that the said notices
can only be challenged before the Hon'ble Debt Recovery Tribunal
(hereinafter referred to as DRT) as per the provisions of Section 17 of the
SARFAESI Act. It has also been asserted in the said application that the
notices under Section 13(2) and under Section 13(4) of the SARFAESI Act
were issued by the Defendant No.1 Bank on the basis of the following facts:
CS (COMM) 26/2024
Sh. Vir Jai Khosla Vs. Axis Bank Limited & Ors. Page 2 of 15
a. Plaintiff has availed several loan facilities from the Bank. Plaintiff, along with
two others i.e. Mr. Deepak Khosla and Mrs. Saroj Khosla, is the guarantor/ mortgagor/
borrower of the loan facilities;
b. Said loan facilities are secured, inter-alia, by way of equitable mortgage over
the property being entire 3d Floor, D-367, Defence Colony, New Delhi - 110024 along
with terrace rights ("Property");
c. Undisputedly, the loan facilities are in default;
d. Owing to the default in the loan facilities, the Bank has issued notice dated
10.01.2023 ("Statutory Notice") under Section 13(2) of the SARFAESI Act calling upon
the guarantor/ mortgagor/borrower to pay a sum of Rs. 4,98,90,063/-. In terms of the
said Statutory Notice, the debt owed by the Plaintiff in all the loan facilities has been
classified as NPA on 27.11.2022 itself;
e. Thereafter, the bank has taken symbolic possession of the property under
Section 13(4) of the SARFAESI Act on 31.03.2023;
4. Apart from the above, it has also been asserted in the application that
present suit is liable to be rejected for the Plaintiff has not exhausted the
remedy of pre-institution mediation and that Section 12A of the Commercial
Courts Act specifically bars a suit wherein the Plaintiff has not done so. It
has also been asserted that the alleged interim reliefs sought in the plaint
have been asked only to circumvent the mandatory pre-institution mediation
process and that therefore this Court should outrightly reject the present
plaint.
5. It is a matter of record that though on 04.04.2024, Ld. Counsel
Sh. Khosla had sought time to file reply to the aforementioned application,
no reply was thereafter filed to the said application on behalf of the
Plaintiff. Instead it is the submission of Ld. Counsel Sh. Khosla that this
Court must first allow the application filed by the Plaintiff under Section 30
read with Order XI Rules 1 and 2 CPC vide which some interrogatories
have been sought to be delivered to the Defendant No.1. According to Ld.
Counsel Sh. Khosla, the answers to the said interrogatories will give
jurisdictional information to this Court to effectively decide the application
filed by the Defendant No.1 under Order VII Rule 11 CPC. Detailed written
CS (COMM) 26/2024
Sh. Vir Jai Khosla Vs. Axis Bank Limited & Ors. Page 3 of 15
submissions running into almost 43 pages have been filed on record by Mr.
Khosla to explain this contention.
6. This Court has carefully gone through the aforementioned written
submissions and has also heard Ld. Counsel Sh. Deepak Khosla at length.
Briefly stated, the submissions of Ld. Counsel Sh. Khosla are mainly as
follows:-
(i) Section 34 of the SARFAESI Act bars the jurisdiction of the Civil
Court in only those matters in respect of which the Debt Recovery Tribunal
or the Appellate Tribunal is empowered by SARFAESI Act to determine.
Section 31 (j) of the SARFAESI Act makes it clear that the provisions of the
Act will not apply to any case in which the amount due from a borrower is
less than 20% of the principal amount and interest thereon. Similarly in case
a bank fails to comply with Section 26 D of the SARFAESI Act and its
securities are not registered with the Central Registry, the DRT Tribunal or
the Appellate Tribunal would have no jurisdiction to entertain any
proceedings against a borrower. The jurisdiction of this Court depends not
on whether it has jurisdiction, but on whether DRT does not have
jurisdiction. This is because this Court has jurisdiction if DRT, by virtue
either of breach of Section 31 and / or non-compliance with Section 26D of
the SARFAESI Act, does not have jurisdiction.
(ii) In the present case the Defendant No. 1 bank cannot be stated to
have acted in terms of the powers conferred upon it under the SARFAESI
Act. It is the assertion of the Plaintiff that as on the date of issuance of
notice under Section 13 (2) of the SARFAESI Act, the amount due from
him was less than 20% of the principal amount and interest thereon and
therefore in terms of Section 31 (j) of the provisions of SARFAESI Act, the
Defendant No. 1 bank could not have acted under the said Act. The officials
CS (COMM) 26/2024
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of Defendant No. 1 bank have committed fraud only to ouster the
jurisdiction of this Court and this Court has ample jurisdiction to declare
their acts as a nullity. This Court must resort to the provisions of Section
165 Evidence Act or that of Order X CPC and examine the officials of the
Defendant No.1 to find out the true facts, for it is the bounden duty of this
Court to arrive at the truth.
(iii) This Court must also direct the Defendant No. 1 bank to reveal
the amount due from the Plaintiff as on 10.01.2023 and in case the same is
found to be less than 20% of the principal amount and interest thereon, this
Court must then go ahead and try the present suit. Therefore this Court in
order to decide whether or not it has the jurisdiction to try the present suit,
has to first allow the application filed by the Plaintiff under Section 30 r/w
Order XI CPC , for discovery by issue of interrogatories to the Defendant
No. 1 bank.
7. In support of his contention that this Court is bound to follow the
aforementioned course, Ld. Counsel has relied upon the following
judgments:-
i. Udit Narayan Singh vs. Board of Revenue, Bihar (AIR 1963 SC 786).
ii. Prabodh Verma vs. State of Uttar Pradesh (AIR1985 SC 167).
iii. State of Punjab Vs. Davinder Pal Singh Bhullar & Ors. [2011 STPL
(Web) 1035 SC].
iv. United India Insurance Co. Ltd. v. Rajendra Singh and others (AIR 2000
SC 1165).
v. Bishunath Tewari vs. Mst. Mirchi LAIR 1955 Patna 66].
vi. Vithalbhai Pvt. Ltd. v. Union of India (AIR 2005 SC 1891).
vii. Nawabkhan Abbaskhan vs. State of Gujarat - ( 1974) 2 SCC 121.
viii. Bilkis Bano vs. Union of India - SC - WP (Crl.) No. 491 of 2022
judgment dated 08.01.2024.
ix. 10. Kiran Singh Vs. Chaman Paswan (AIR 1954 SC 340).
x. Parmod Bagga vs. State (2008 CrilLJ 792).
xi. S. P. Chengalvaraya Naidu (dead) by L.Rs. v. Jagannath (dead) by L.Rs.
and others (AIR 1994 SC 853).
xii. A. V. Papayya Sastry and Ors. v. Government of A.P. and Ors. (AIR 2007
SC 1546).
CS (COMM) 26/2024
Sh. Vir Jai Khosla Vs. Axis Bank Limited & Ors. Page 5 of 15
xiii. Harkness vs. Bells Asbestos And Engineering Ltd. [1966 3 All ER 843;
1996 LawSuit (UKCA) 116].
xiv. S. A. L. Narayan Row and Anr. vs. Ishwarlal Bhagwandas and Anr. (AIR
1965 SC 1818).
xv. N. Natarajan vs. B. K. Subha Rao (AIR 2003 SC 541 - para 8; 2003 CriLJ
820; 2003 (2) SCC 76; 2003 (1) Crimes 235 (SC).
xvi. Salem Advocates Bar Association, Tamil Nadu vs. Union of India (2005 6
SCC 344).
xvii. Hasham Abbas Sayyad v. Usman Abbas Sayyad and Ors. [AIR 2007 SC
1077(1)]
xviii. Maria Margarida Sequeira Fernandes And Others versus Erasmo Jack De
Sequeira (dead) Through LRs (2012) 5 Supreme Court Cases 370.
xix. Oil And Natural Gas Corporation Limited versus Discovery Enterprises
Private Limited And Another (2022) 8 Supreme Court Cases 42.
xx. Ramrameshwari Devi and Ors. Versus Nirmala Devi and Ors., Civil
Appeal Nos. 4912-4913 of 2011 (Arising out of SLP (C) Nos. 3157-3158
of 2011)
8. In reply to the aforementioned contentions, Ld. Counsel for
Defendant No.1 Bank, Sh. Anupam Singh has vehemently contended that in
view of the provisions of Section 34 of the SARFAESI Act, this Court has
no jurisdiction at all to proceed with the present suit and therefore there
arises no question of this Court directing any interrogatories to be served
upon the Defendant No.1 Bank, to reveal the outstanding amount due from
the Plaintiff as on 10.01.2023. He has further submitted that even otherwise,
the notice issued by Defendant No.1 Bank to the Plaintiff under Section 13
(2) of the SARFAESI Act categorically records that Rs.4,98,90,063/- was
due from the Plaintiff as on 10.01.2023. It is his submission that the
contentions regarding the ouster of jurisdiction of DRT under Section 31(j)
and 26D therefore are only being made to mislead this Court and it is clear
that the Plaintiff is falsely asserting before this Court that the amount due
from him was less than 20% of the principal amount and the interest due
thereon. He further submits that Section 13 (3A) of the SARFAESI Act
provides that if on receipt of the notice under sub-section (2), the borrower
has any objection he can make a representation to the secured creditor and
the creditor is bound to consider the said representation or objection. He
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therefore submits that in case the Plaintiff was aggrieved by the amount due
shown in the notice issued to him under Section 13 (2) , he should have
represented to the Defendant No.1 Bank who, would have then been bound
to consider the said objection. It is his further submission that the Plaintiff
however chose not to respond to the said notice and therefore the Defendant
No.1 Bank was fully entitled to take recourse to Section 13 (4) of the
SARFAESI Act to recover its secured debt. He further points out that in
case the Plaintiff / borrower still had any grievances against the issuance of
notices to him under Section 13 (2) and Section 13 (4) of the SARFAESI
Act, he should have approached the DRT under Section 17 of the said Act
but instead of doing so, he is resorting to frivolous legal proceedings against
the Defendant No.1 Bank . It has been pointed out by Ld. Counsel Sh. Singh
that the Plaintiff apart from filing the present suit, has also filed a
commercial civil suit at Ahmedabad titled Deepak Khosla vs. Axis Bank &
Ors. bearing CS(Comm.) No.78/2024. He has submitted that the said suit
has been filed in the name of the guarantor of the Plaintiff borrower, namely
Sh. Deepak Khosla (Ld. Counsel who is representing the Plaintiff, his son in
the present case), on the basis of exactly the same averments and
contentions as the present suit. Ld. Counsel has placed a copy of the order
dated 11.03.2024 of the Ld. Commercial Judge, Ahmedabad vide which the
said suit has been rejected. It is thus the contention of Ld.Counsel Sh. Singh
that the Plaintiff is only abusing the process of law and the prayer therefore
is that the present plaint must be rejected with heavy costs. In support of
his contentions Ld. Counsel for Defendant No. 1 bank has relied upon the
following judgments:-
i. United Bank of India vs. Satyawati Tandon & Ors. (2010) 8 SCC 110.
ii. Jagdish Singh vs. Heeralal & Ors. (2014) 1 SCC 479.
iii. Authorized Officer, State Bank of India vs. Allwyn Alloys Pvt. Ltd. and Ors.,
(2018) 8 SCC 120.
CS (COMM) 26/2024
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9. In rebuttal to the aforementioned contentions, Ld. Counsel Sh. Khosla
has urged that this Court take into consideration that the amount of
Rs.4,98,90,063/- demanded by the Defendant No.1 Bank in its notice issued
under Section 13 (2) cannot be taken as the amount due from the Plaintiff
as on 10.01.2023, for that is the amount of the total recalled loan. He has
also sought to contend that even if it is assumed that the Plaintiff could
have approached the Hon'ble DRT with his grievances, the same cannot be
said to be a efficacious remedy for him . He has submitted that before the
DRT the Plaintiff will be bound to deposit 50% of the claim raised by the
Defendant No. 1 bank which will cause much inconvenience to the Plaintiff
and it therefore cannot be stated that approaching the DRT is an efficacious
remedy for the Plaintiff. He has also sought to contend that while an order
passed by DRT can be sought to be declared by this civil court to be a
nullity in law, however, the reverse is not permissible i.e. DRT has no
jurisdiction to 'declare' an order passed by this Hon'ble Court to be a nullity
in law. He therefore submits that in this sense, this Court being superior to
the DRT must exercise its jurisdiction to grant relief to the Plaintiff and hold
that DRT has no jurisdiction in the present case. According to Ld. Counsel
Sh. Khosla in view of the judicial dicta laid down by the Hon'ble Supreme
Court in the case titled and reported as Dhulabhai Vs. State of Madhya
Pradesh AIR 1969 SC 78, this Court must not exclude its own jurisdiction
readily. As regards the order passed by the Ld. Commercial Judge,
Ahmedabad, the submission is that a review petition has been preferred
against the order of rejection of the plaint.
10. Having carefully considered the submission of Ld. Counsels, this
Court is of the considered opinion that there is no force in the contentions
made by Ld. Counsel Sh. Khosla. It is no longer res integra that Section 34
of the SARFAESI Act ousts the jurisdiction of a Civil Court in respect of
CS (COMM) 26/2024
Sh. Vir Jai Khosla Vs. Axis Bank Limited & Ors. Page 8 of 15
matters, which a DRT or an Appellate Tribunal is empowered by or under
the SARFAESI Act to determine. The provisions of Section 34 are as
follows:
Section 34. Civil court not to have jurisdiction.-No civil court shall have
jurisdiction to entertain any suit or proceeding in respect of any matter
which a Debts Recovery Tribunal or the Appellate Tribunal is
empowered by or under this Act to determine and no injunction shall be
granted by any court or other authority in respect of any action taken or
to be taken in pursuance of any power conferred by or under this Act or
under the Recovery of Debts Due to Banks and Financial Institutions
Act, 1993 (51 of 1993).
11. The submission of Ld. Counsel Sh. Khosla that since the jurisdiction
of DRT is barred in the present case in view of provisions of Section 31 (j)
or Section 26D of the SARFAESI Act, the provisions of Section 34 of the
said Act do not bar the jurisdiction of this Court, is completely fallacious
and misplaced. The notice dated 10.01.2023 issued by the Defendant No.1
Bank to the Plaintiff under Section 13(2) of the SARFAESI Act has been
filed by the Plaintiff alongwith his plaint. The same reflects that vide the
said notice the Defendant No.1 Bank in terms of the provisions of Section
13(2) of the SARFAESI Act had informed the Plaintiff that he has been
defaulting in repayment of the loan granted to him and that his account has
been declared as NPA and that therefore the Defendant No.1 Bank is
recalling the entire loan granted to him and the Plaintiff must now discharge
in full his liability to the Defendant Bank within 60 days of the date of
notice. The second notice issued by the Defendant No.1 Bank under
Section 13(4) of the SARFAESI Act also filed alongwith the plaint reflects
since the Plaintiff did not make any payment to the Defendant No.1 Bank,
the bank resorted to the measures available to it under Section 13(4) of the
SARFAESI Act. The grievance of the Plaintiff is that since the amount due
from him as on 10.01.2023 was less than 20% of the principal amount of the
loan and interest thereon, the Defendant No.1 Bank could not have issued
CS (COMM) 26/2024
Sh. Vir Jai Khosla Vs. Axis Bank Limited & Ors. Page 9 of 15
him the aforementioned notices. In other words, his grievance is with
respect to the measures taken by Defendant No.1 Bank under the provisions
of Section 13(2) and 13(4) of the SARFAESI Act. The said grievances of
the Plaintiff cannot at all be looked into by this Court in view of the specific
provision of Section 34 of the SARFAESI Act and the judicial dicta laid
down by the Hon'ble Supreme Court in the cases referred to by Ld. Counsel
Sh. Anupam Singh. The Hon'ble Supreme Court in Jagdish Singh's case
(supra - the judgment cited by Ld. Counsel for Defendant No.1) has laid
down the following judicial dicta in respect of Section 34 of the
SARFAESI Act;
The opening portion of Section 34 clearly states that no civil court shall
have the jurisdiction to entertain any suit or proceeding "in respect of
any matter" which a DRT or an Appellate Tribunal is empowered by or
under the Securitisation Act to determine. The expression "in respect of
any matter" referred to in Section 34 would take in the "measures"
provided under sub-section (4) of Section 13 of the Securitisation Act.
Consequently, if any aggrieved person has got any grievance against any
"measures" taken by the borrower under sub-section (4) of Section 13,
the remedy open to him is to approach the DRT or the Appellate
Tribunal and not the civil court. The civil court in such circumstances
has no jurisdiction to entertain any suit or proceedings in respect of
those matters which fall under sub-section (4) of Section 13 of the
Securitisation Act because those matters fell within the jurisdiction of
the DRT and the Appellate Tribunal. Further, Section 35 says, the
Securitisation Act overrides other laws, if they are inconsistent with the
provisions of that Act, which takes in Section 9 CPC as well........
We are of the view that the civil court jurisdiction is completely barred,
so far as the "measures" taken by a secured creditor under sub-section
(4) of Section 13 of the Securitisation Act, against which an aggrieved
person has a right of appeal before the DRT or the Appellate Tribunal, to
determine as to whether there has been any illegality in the "measures"
taken. (emphasis applied)
The Hon'ble Supreme Court has reiterated the above dicta in
its judgment pronounced in the case of United Bank of India vs.
Satyawati Tandon, 2010 (8) SCC 110 and has held as follows:
"5. Section 34 lays down that no Civil Court shall have jurisdiction to
entertain any suit or proceeding in respect of any matter which a Tribunal or
CS (COMM) 26/2024
Sh. Vir Jai Khosla Vs. Axis Bank Limited & Ors. Page 10 of 15
Appellate Tribunal is empowered to determine. It further lays down that no
injunction shall be granted by any Court or other authority in respect of any
action taken or to be taken under the SARFAESI Act or the DRT Act.
...........................................................................................
17. There is another reason why the impugned order should be set aside. If respondent No. 1 had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14, then she could have availed remedy by filing an application under Section 17(1). The expression any person' used in Section 17(1) is of wide import. It takes within its fold, not only the borrower but also guarantor or any other person who may be affected by the action taken under Section 13(4) or Section 14. Both, theTribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective.
Again in the case of Authorised Officer, State Bank of India vs. M/s Allwyn Alloys Pvt. Ltd., 2018 (8) SCC 120, the Hon'ble Supreme Court has reiterated as follows:
"6. After having considered the rival submissions of the parities, we have no hesitation in acceding to the argument urged on behalf of the Bank that the mandate of Section 13 and, in particular, Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, "the 2002 Act"), clearly bars filing of a civil suit. For, no civil court can exercise jurisdiction to entertain any suit or proceeding in respect of any matter which a DRT or DRAT is empowered by or under this Act to determine and no injunction can be granted by any Court or authority in respect of any action taken or to be taken in pursuance of any power conferred by or under the Act.
12. The aforementioned judicial dicta makes it clear, beyond any doubt whatsoever, that in case the Plaintiff is aggrieved by any of the measures taken by the Defendant No. 1 bank either under Section 13 (2) or under Section 13 (4) of the SARFAESI Act, he is bound to approach the DRT or the Appellate Tribunal for redressal of his grievances. Section 17 of the SARFAESI Act confers a right of appeal upon the borrower to approach the DRT, if he is aggrieved by any of the "measures" taken by the secured creditor under Section 13(4). A further appeal can also be preferred to the Appellate Tribunal under Section 18 of the SARFAESI Act. The endeavour CS (COMM) 26/2024 Sh. Vir Jai Khosla Vs. Axis Bank Limited & Ors. Page 11 of 15 of Ld. Counsel Sh. Khosla to refer to Section 31(j) and 26D of the SARFAESI Act in order to invoke the jurisdiction of this Court is nothing but a means to circumvent the law laid down by the Hon'ble Supreme Court. The Hon'ble Supreme Court has made it clear in the aforementioned judgments that the Hon'ble DRT has ample powers to determine whether or not a creditor was justified in taking measures against the debtor under Section 13 of the SARFAESI Act. The corollary of the said dicta is clearly that the DRT also has ample powers to determine what was the amount due from the Plaintiff to the Defendant No.1 Bank and whether or not the Defendant No.1 Bank was justified in taking measures against the Plaintiff under Section 13 of the SARFAESI Act. The submission of Ld. Counsel Sh. Khosla that since the finding of a Civil Court will be binding upon DRT, this Court must clothe itself with the jurisdiction to try the present suit and determine the amount due from the Plaintiff, is in teeth of the law laid down by the Hon'ble Supreme Court in the aforementioned judgments referred to by Ld. Counsel Sh. Singh. At one point of time when Ld. Counsel Sh. Singh was submitting before this Court that the Plaintiff was bound to have approached the DRT, Ld. Counsel for the Plaintiff Sh. Khosla had sought to contend that it is the Plaintiff's choice and that if he wishes he can approach the ''Oak Tree, the Banyan Tree or the DRT" and that the Defendant No.1 has no right to dictate to the Plaintiff as to which forum the Plaintiff is bound to approach. Suffice to say that the Plaintiff 's arboreal choices are his own but this Court is bound to follow the law laid down by the Hon'ble Supreme Court.
13. Further in view of the dicta laid down by the Hon'ble Supreme Court, the Plaintiff also cannot be heard to contend that taking resort to DRT is not an efficacious remedy for him for he will be required to deposit 50% of the amount being claimed by Defendant No.1. Taking note of such submissions CS (COMM) 26/2024 Sh. Vir Jai Khosla Vs. Axis Bank Limited & Ors. Page 12 of 15 being made on behalf of creditors, the Hon'ble Supreme Court in its judgment in the case titled and reported as Mardia Chemicals Ltd. Vs. Union of India (2004) 4SCC 311, has clearly held that even if effect of some of the provisions of the SARFAESI Act may be a bit harsh for some of the borrowers, the same cannot be a ground to hold the provisions of the SARFAESI Act unconstitutional or inapplicable. Even in United Bank's case (supra), it has been held by the Hon'ble Supreme Court that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective.
14. The reliance of Ld. Counsel Sh. Khosla on the judgment of Hon'ble Supreme Court in Dhulabhai's case (supra) to contend that this Court must not readily ouster its own jurisdiction, is also completely misplaced. In the said case by virtue of notifications issued by the State Government under Section 5 of the Madhya Bharat Sales Tax Act 1950, sales tax was imposed and collected from the appellants, who had then filed suits for refund of the tax on the ground that it was illegally collected from them. The notifications in question were declared void by the Hon'ble High Court and in such facts, the Hon'ble Supreme Court held that since the Sales Tax Act contained no machinery for refund of tax collected in excess of constitutional limits, a suit lies. In the present case, as noted hereinabove, the the Hon'ble Supreme Court has repeatedly held that the provisions of SARFAESI Act provide a complete mechanism for adjudication of the disputes between a secured creditor and borrower and that no suit lies before a civil court in matters covered under the Act. In view of the law laid down by the Hon'ble Supreme Court in its aforementioned judgments, the Plaintiff cannot be at all allowed to seek from this Court any declaration with respect to the notices issued by the Defendant No.1 Bank under Section 13(2) and 13(4) CS (COMM) 26/2024 Sh. Vir Jai Khosla Vs. Axis Bank Limited & Ors. Page 13 of 15 of the SARFAESI Act. If he has any grievance regarding the principal amount due from him as on the date of issuance of the notice under Section 13 (2) or the measures taken by the Defendant No.1 Bank under Section 13(4) of the Act, his only remedy is to approach the Hon'ble DRT under Section 17 of the SARFAESI Act. There arises no question for this Court to serve any interrogatory upon the Defendant No.1 Bank to explain to this Court the amount due from the Plaintiff as on the date of issuance of the notice under Section 13(2) of the SARFAESI Act or to declare the notices issued by the Defendant No.1 Bank under Section 13(2) and 13(4) of SARFAESI Act as null and void. Further the other reliefs sought by the Plaintiff namely that it be declared that Defendant No.1 Bank has no jurisdiction to file an application under Section 14 of the SARFAESI Act before the Ld. ACMM and that the Plaintiff be awarded compensation and costs for the alleged illegal acts of the Defendant No.1 also cannot be granted by this Court at all for the same are merely only consequential to the reliefs sought with respect to the notices issued by Defendant No.1 Bank under Section 13(2) and 13(4) of the SARFAESI Act.
15. In view of the discussion herein above, the application filed by the Plaintiff under Section 30 read with Order XI Rules 1 and 2 CPC stands dismissed and the application filed by the Defendant under Order VII Rule 11 CPC stands allowed. The present suit therefore stands rejected. As regards costs, Ld. Counsel Sh. Anupam Singh has prayed that exemplary costs be imposed upon the Plaintiff because despite being aware of the law laid down by the Hon'ble Supreme Court, the Plaintiff has been filing vexatious suits not only before this Court but also before the Ld. Commercial Court Ahmedabad and that despite the rejection of the suit before the Ahmedabad's Court, he has chosen to continue with this suit.
CS (COMM) 26/2024 Sh. Vir Jai Khosla Vs. Axis Bank Limited & Ors. Page 14 of 15 Though Ld. Counsel Sh. Khosla has sought to contend that a review petition has already been preferred against the order of Ld. Commercial Court, Ahmedabad and that this Court is not bound by the order of the Ld. Commercial Court, Ahmedabad, it does appear to this Court that the Plaintiff has been abusing the process of law. It has to be held that despite being aware of the law laid down by the Hon'ble Supreme Court in cases like the present, the Plaintiff chose to file the present suit without any legal basis whatsoever. As such, costs of Rs.25,000/- are hereby imposed upon the Plaintiff to be paid to the Defendant No.1 Bank.
This file be consigned to Record Room after due compliance.Digitally signed by
ANU ANU GROVER
GROVER BALIGA
Date: 2024.08.12
BALIGA 21:18:35 +0530
Announced in the Open Court (Anu Grover Baliga)
on 12th August, 2024 District Judge (Commercial Court-04)
South-East District/Saket Courts
New Delhi
CS (COMM) 26/2024
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