M/S G R Developers vs M/S Suman Motels Ltd on 30 July, 2010

[Cites 15, Cited by 0]

Karnataka High Court

M/S G R Developers vs M/S Suman Motels Ltd on 30 July, 2010

Bench: V.Jagannathan

2

Regular Saeacand Appeal ﬁled under  

c.P.C.. sit the judgment and ciecrae 
passed in R.A.!To. ZGIEGS8 an    » _ 
Judge, ammo:-a Rum:    
appeal ﬁled awnax-. tha  and.>',_";;¥:a':c3*a§eV 
9.11.200? puma. in o.s.Na.%%i %I45o;2oaen_5 '-1:116.'-:. 't"i;"zre: ':5: my

Civil Judge, ($r.I}n.}, & awe, . L   

123$; appm ¢m%,-W  .3: day, the aourt

   
 A    M the uit ﬁlad by him far
 _ T  poaaasion of the suit. property

rm'   the mm mm and the Iowa-

    eonﬁrxning the trial oourtfs mm' mt by

 p]aintiﬁ's appeal. Thrus, the mx t

    the cxzurts below are mixed in question.

    Brief facts are that, the p1aint;iﬁ', a pm-mmmp
V  and ﬁged in developing Iayoumﬁ mzmstzuctian of

multiatoxiad buildims and otlwr alﬁad buainws,
tzmmianalc a massive pmjact of dzvebping a layout
known as "Grad: Agata" in S.H<:~$.61j2, 51/3. 44, 45

I}//A

s 7'



3

and 46 of Byanahalli vxnagg Jala 
Harm Tahak, afoer obtaitnirzg  

orders and approved layout:  j;   T

Plannirg Authority and Vfczaxfgmci'  

scmauze-I ﬁat anntmx to   In an-daz-
to attract elite  provicm
re::I'sam:ional  therefzzm,
having   good eacperianoe
in   restarts, ttm pla.in1:iﬁ'
  with R-1 on 25.3.1997
mi, 33   the first defexzdant was to

.  mt  of wtablishjng a club and ether

  lane was £9: a period ¢::f99 31% an

   I"2a.100i- and the ﬁat defandant, who is

 Rd  the enﬁre amount ofRs.9,%ﬂ]-.

'     The lease deed was aha paneemed by an  t

   ixutcs betwcen the mrtiea em 12.2.1997. As the
V 1essee:i.e.,R-1haereiz1,fhi1edt£3ﬁ11fﬂthet&¢'3:1sanad

caonditiom cf tha base win: and aha having
defaultxﬁ in paying rim Inseam Tax, the appellant-

3"/5



4%

piasma' issued terznirzatinn rmtice m:%%«%%:&oL;6§2::<33

indicatirag that the base would stand_.. 's:s:;u 
39.6.2903. Exchange of    '

appellant and R-1 and, $312.1   

possession sf the suit   tn the
appellant, the auit     cause of
actian. an 1G.3.20O3VAw5_e;':  ta:-mzmmtaon of
the lease;    The relief
saughg  the defendants to
  Schedule-II in thc piaintiﬁ'
and    deferzdant has-ea to pay
  as damas 13-em 30.5.2003 tin

     ctfpasswsian.

4'-A.    t i.e., the leaaae, did not contest

   daapite amine of notice and meta placed ax-

 _V  The secancl dﬁdaxnt i.e., the Imzome Tax
   through its Tax Rexcovary Gmeer, entered
V' appmrazzzna, but did not contest the suit. Only R-3

herein, who was the third defarﬁant in the: suit,

mute-grad the matter by  the writtan statmnt.

2??



5. 'rm third daﬁexrianfs stand before 
was that the first defcr1dant_;i.~e:._.'ét1<§:§"'1&é§é;c:€' t."g§ .

imam case, had bormwad 

125.300 Mcha and, by agoufizy,  L'

property which   m%x~1'am  and,
foﬂowing the ma    suit schedule:
mm "  am the rm
defcmda.nﬁ:."    deeds with me
 ('the mg' for short)
faﬂgvgﬁzgx'  part. of the ﬁrat dafendant to

      Racomttuction of Fma' mm' 1 Assets

   xzaf Seem-my' Inmrast Asst, 2002 ('the

    Act' for ahartj.

2    , poaseasiaun of the suit property was
 takm and apart from the said prnooeedixm. the

third deéendant, abng with IIBI, as secured cred:i.t'ars,
aha filed an appﬁoatiaon O.A.Nc. 931i20CI1 bafam the:
Debt Recovezy Tribunal ('the DRT' for short) at Mumbai

<92/.



7

5. The mm irialjudge, 'm the light 9;  

stand talesn by the mrtiea, hm  _

issues:

i) Whaathcr plaintm'   3 .

suit schedule E   

an Whetlmr the  the  1A* defc»:1dant
has in pay an: per month
as  dam of delmy
  amcupatitm. of the

  
   pa:-owe that tlﬁs suit is
..    wimout making IE1 as a. party In

   _ 

   Sid defendant prcsws that thia suit in

 mg:  in view if the arbitratian clause

' *   the lease daecl?

    Whether the are defmxdant proves that this suit is

mt maﬁxtainabls in View of tm 3%' defendant
ahmdy talmw. action in the Debm Recormry
Tribunal at Mumbai as eentendeci in para 15 of

the written stabemm?

ﬁg

A



vi) 'Whether the plaintiﬁ is warm 5;: 

praymi fer?

vii) Tu wlmt order or (ii? 

9. Aftcr eviadanoe apgrgcaauog  

learned Cozumel for    ngte of the
decisions cited, the V mm court
axmwered ma;-s--3,    am:-mauve and
against  bash 9f the saicl
 '$81153-1,. 2 and 6 do not
 ﬁar  The dismiasal of the suit cf

 was  of the aferwaéd mxwlusions

   appellate court confirmad. the

    by dismissitg tlm p]a1'nt:iﬁ"s

&  A10;  aeurt, Whila gammy this appea}, had raised

 ﬁalkxwing substantial questions of Law for

eomidaration:

1') Whetherthetrialcourtaxﬂthefirstappellate
court was juaiﬁad in construing Clause-34 «of the
E-xhibii: 13-1, a lame deed, as an arhitraﬁnn change'?

if



9

mm mpmaam-amnaam 210.3 mt  an

application aecnmpatlied by  
prov1d' .-mg ﬁn'   %%

have been en *?..fie 

armmﬁm?       

in the abgarzace Aqfﬁ   between the
pmmm  Awrmmw tin: suit
  on the ground that

  the provisions ef

sea . f'   :1 of Finanma1'

V'  'Aasetﬁ  of Security Intarwt Act,

'    cxzurm bekaw were just1fwa' in holding

  suit was had for mrrrjaizmder of the

%% * mum: Invvwnnumt Bank af man, in the:

--  513% af any parivity tsf mnkact betweezzt the

plaintiffaxzd the said entity'?

Whether, in View of d f 33.3 having invoked
the proviakzm cf the Smuritiaation and
Rmonstrucftizn of Financial Assam and

&/

I \v



30

EI'1fOI'C81%I1t of Security Intmest 

jurisdiction of thc civil aourw was   "  _  

 I have M  m  

H.S.Dwaralmmﬁ1 far the    ed;t1me'i' L'

Shri Varadaraj    'aim? Bank in
quaatison, am also  fxravind K.V. for
R-2 Tax    t.

12.     appellant, at tm
oumeé,   court clid not rem-rd any
 but,mr1 the other haxﬁ, only
mggiﬂered 'V  .4 and 5 touching upon that

  ma court in the light ofthe Mam

 V   that is a serious daefwt in the trial
  aubnﬁsaion, the lea:-nm enamel far the
    argued that the ﬁndingn awarded by the trial
  an issuw-3, 4 am 5 caxmat be sustained eithcrr

un&c1:sarin1awa1x1t1t1etria.1courtir3ta11yen~aiin
holding that the suit of the plainm' was not

%



"£1

mamtmr1a' ' bka in view' afthe am pnzceedigs 

{IE} and R-3..

13. R&ex'rmg' tn the issue    

new not mamtasmbse in  tha  A %

in the hearse deed,    af the
AW Ceurt as wen    the Ieamea
not at    ﬂwrefore, thvt:
appeﬂgnt'   the ambit:-atinsxx clause.
In   cyamxat be driven to take

up    as against the lessee i.e.,

 &e£m.dann  ﬁh a suit a@m' t the th;Ird'
  and, therefere, there was rm defect in

 plaJ'.ntiﬁ' and the plaintiﬁ' charming tn go

     civil caurt against all the dafendanm.

"    It was aka his subminmﬁan that the presence of 121%

 };xT'bitrat'£an clause in the Xmas dead will mt oust the

civil c:::urt'a jm-imdicﬁnn. Marecavm, the appellant and
the third defendant cantcatod the maﬁa' before the civil
caurtbyﬁ1ingthm'rreapacti:weplaadingsand'mau:es

)2



13

As such, the trial erzmrth reasoning can 

cannm: be sustained in law.

15. as far as the {imam nrtxmxigt  

mmcrmd, the harm  63%:  V L'

that the triai court  £a§t §:ight~~-Qf :1;e'*Lm  down
by the Apex Court    of the
civil court   BET. It was
  an applﬁcatian before
the  éppelhnt, theréone, wuki
net   DR'? in rmpect of the: relief

 V'     in its suit. It was argued that

   by the appellant was inaapabb of being

 mm.

'A  on the Apex Court decisien in the case of

  V   Irzdustrial Entepﬁsm Ltd, Vs. Hong Kong &
 Bcmﬁkwzg Corporation, and other cusses,

reported in (2GO9}8 SEC 646, the warned cornzzsel far

ﬂmappenamarguﬁ thatinview afthe barcontained

under Section 3.3 afthe KIRT Act, the subxmlsaiorz made
9/

mi



I4»

is that, the said prowﬁsinn can have m 

case 01' the appellant and further,   

cc:ntmned' under the Secur@' ' 1'i€5 i'1"I'*'a'3:_t 

prmsad into sserviae in the; 

appellant had not ﬁled any  tm 'V

DRT or before the   A '
18. 'lhereﬁore, relym' ' V     demlsian in

 

3 *  in respect of the
  V 2.111511'  18, which' has a dmect'

 17, that 1a 1:0 say that the

  a debt payable to a Bank at +3

  and an application before the DRT

  at the iriastancae {if the Bank or the

 %%%ﬁ&t1an¢'?1aL?'iI:atitution for recovery ef ins debts. Thearefcvre.

%    ed at: the ham of the a&resa1d' law laid

'   ...d€::wn by tha Apa Court that the View taken by the trial

 courtthat1'hep3a2xzt1ff"'s s12it?1snntmam'tazxza' bis

following the third clefandant-Bank having 



15

action beﬁzre the DRT, Mumbai, ::::.-mrmt be 

law.

19. Annthar m;zbm3a' airm put     i. .

counacl fer the appellant   V }'

berm mi aondizimg   &e:2.ri  the
provhiam of Sectioav   9f Property Act
woulaci. go to   under' the
lease  riglam but

not

  the lesser. In athsr

 

W'¢31'd5:V» "'-'-- '. 'V193.   cazntaxw in Se::t1o' 11
zosgqy, (hj'gf):Vt;»fAt1_§}e'*2'.P.Act, the auhmission made an

  '13 in only :::rw1:i12g a martgage

  only imaihr as the mm-wz. cf me

  leased pmperty is concerned but not

 ﬂmrcfcm, as them was viczlation crf the

A     * _  11%. as the Inmme Tax authnrmaa' ' alas
A    héld ixxﬁtiated proeaedirzgs foilowim the: default
 "  wmmitbed by R-1 in payirg the Inmzzae Tax, there was

vﬁalatﬁon of the terma and cvonditinm of the lease and
the apmﬂant, therefore, insuxad bmrmirmtian natioe and
:32

E



16

asd ~1and2havemt:mntsstedthemaVttgrhy

ﬁng writeten statement, the violatisn cf the 

c:ondmo' ' IE of the Emma, thamﬁora, had bk   

saw me is 3 ﬁnding to tha  

court.

20. Concerning   £.§°noﬁce,
the laarnad anunselv  a;.tbImtted' that
whsan no 311;:-31    tm swand

    it had not: ﬁled any

wm1en'  '  Mm, tum-mm, deem 1:13
 m this rqatd, the iaearmd

 .1..»'g.:,]ﬁn.e' 5  .....  onanﬁpex Caurt i . 50%

Viiubmiaaion put fezward by the learnad

V    appellant is that, the origﬁnal ﬁtk deeds

K *-atiifwitlx the appeﬁant and. therefore, tlm quwticcn

    am amaaans; having sect):-ax! loan by depoaiting

 Wthe title deeds, therefore, cannot axis: and if the cm

dﬂdanthadadwanoﬁﬂuelaanamxzuntontllebaaim
ofthe docummta gﬁen by that first defmdant, the third
 &meﬁm,ﬁEmwmnmﬂmrhkef

9'/,



'1'?

mpﬁmﬂmdm1menmwmchd memtﬂw
original éccumexzta. In support of the 

wntvenﬁmm, the learﬁ caurzsei also  

dscunments can reward which are   

paper book and also referred'    V

who had admitted V   f'rz'§t  mat
performing its abligatﬁéizg 'V  deed. The
decisions,     comma}

for tlutf 3' of En camentiom, are

 (2ae§)é.k%s]{:'¢: k%%'6§5, AIR 2cm so 1379, IL}?

  AIR 2003 Karnataka 97, AIR

  AIR mag Gujarat}: 31, am 2903
c:g:jasgt1{%'%14$;%{i:oos;2 sec: 502, (200735 sec 510, Am

  L' 19%:  133, (193-4)35 Roma 197, Am 2002 33

 1%1 Assam 70, AIR 2907 st: 712 and Am

V' %. It is, thenafare, argued by the Eaarmad ccauzzsaal ﬁor

thc appellant that tha judﬁnt of tht': trial court is
whoﬁy umusminahle Ex: law in respect of the ﬁndizga

2»

_ K



15

racardeclbyitonisaues-3,4a:r1<i S in particular  the
suit ef the. plaintiﬁ coum not have bass: 

the very aanm rmsarm, the lower appeliaté 

mmmma the mo: in  ~--.    L

ﬁndings" w1tho' ut belong' ism   

@rda the oustsr of civil  guns' 3 '  

ofthe mum    mch, the
judmenta at' both the.  be set aside

by   Vof law in favour

23. _  haml, Earned Comma}

  a  for the 3'3

  contendad that the View takes) by the

'ﬁnd just and propm azﬁ the lease deed will

 .'¥aIu_. 'be read in mrzjunction. with ﬂue ag1'e%1t

'    earher between the mrws on 12.12.1997 as

  said pmperty was morgagad to DB1 and Purge' b

 "  Hatzinxml Bank. Bath (if them have parﬁu charge aim"

ﬂmmidpmpwtymndaahscbokatthamﬁnus
Claus-maf1easedeadgotosI:u3wthatthehesaeei.e.the

ﬂy

'Pk



19

moﬂgagé and deposit of title daeds in  af  

eccheduie pmpez-ties in favnur of 

dim ropaymmt. and dhclmrge oftb;-;@mT  
onmaectb n he referred '£33  (23)*uf   deedk kk

wmch is pmduaed atEz..AP.   _ .

" nm Lassamg  by
mortgage   of  igi ieapect at'
second  Vin iifavjam of ﬁnancial
irLatit11ti_q1;s"v.f§§f LJ%=132¢   dimzharge of
term £nt}e.re.st etc., and aha
crmta c'-barge   prapertiw both
pm-went    LESSGRS,  ,

 aclti?e"t§1z.b..pu-opwty abxg with the club
  ﬁlmncial institutimx, mm er

 for the dcvelapmmt cf the said plat.

"V.,'Howe1;-:gr":.ﬂ1e ksaers are not Iiabls no amwar any

x  V 4' '  jj ~.si.1¢h.A 
 Coumel aim nderred to all the

  A  -~ci$c1mta mmgr, Ex.D.13 which is the Mctmrandum

 '  afEntz'3.r.'!'}1esaiddot":%twm.1}dgotoshow thatthe

suit achcdule promty was mclmﬁ-Sad by the 1*

ﬁx



23

raponéent-Iassm and the docunlenta were 

am depoaitcd mm ml which was acmg 

and aha is an agmzt of Punjab Ratiorml Ban1'_    ., 

awumm: waukl further mama 

granted 3. mm loan :11' Rs.30Q    

akmg with the exiatirg  1  ﬂavour of
$1 for im 'harm ban   'I'Ii e§1';'-v::f'<:re, the
quwtion of 1&8»?-_¢   mortgage the
wit  title deeds does
not   he also rcfermd to rm.
of aommum  uaepmma with an Bank in

 queaisian.  ceumel alas: referred no the

 to suhxnit that, as per the lease

_ V  of second Schwuke pmperty, the
 1* 

'A    as; Ciiub was abo run and thmzfore, raferrm to the

   of PW.1, the submhsinn made 'm that the

.  V  _   rwpommt has even put up a building in tha leased

1a.ncIan:iapax'tfr'on1this,th£eproceedingu 
umm' the Securiﬁmation Act also would ge to show that
posswsiacsn was t.a.km1 by the 3**=* rapondm1t--Bank.

%

/5'



21

Eiocumzm Em.D.6 tn 13.9 are the proof 

being takan by the Bank purawmt to   

Section 13(4) of the 

Ccumel fer thc 32¢ r4ea3por1ci=a1;;j;  msj-«+ L

of the Semxrziﬁsatﬁan Act In  mg:   will
for the appellant  Retxsvexy
'WW1   pwding ma
by the  as ofthe ma Act, it
was   of the S  ' ﬁon
 '~.~':'"«*ee5" ' L' ' "

ﬁzct mae1*-was  and therefore the suit of

V tI'1e,ia5"mia cor1c¢i\nad.

    % fwiiazxnsez Sr§.Varadar&j R1-iavaldar furtIm'

  1'?' and tlmefaw, the appellant if ha 73
A      by the proceeding irziﬁama reading to
V  ..p&s¢s$£on being talaen by the Bank, appellant has ta
 é  take recourse mam» smmn 17 afthe Act by mnving

in (L: 1
Debt Reaovery Tribunal. As such,  Cc:-urt has

ncjnrisdictiaru. Morevrvrmewezzifﬁwematterisbokad

}/

o 'I



21

ﬁmrn the angle of equity, the appellant 
eannct take away the bujldizg that 5%   ., 

leased land and the Ieaaa      

lessor shall not take away  bﬁﬂtﬁxxq th,-:3:  L.

the Imad pmpmy. As far 
issued by the appel1e%_iL~    Courmel
for the 3"'  mabezrial was
placed to   has committed
this regard. Simiiarly, aa par
the    mm-med, thxzaugh the

  §mLsV"a1VtVa;.fi,;gf;§iA:ahout that in its plaint, the said

_ V  has mt stated arlytlﬁng about the
 f1-amgfi by the respandems. 'I'her:e£are, thme is no

   W the 1' rwpomient Imam and as

  the pzaintars ham failed in embxsh that thﬁfe

.  V  _  '  valid reaaom for terxuinatirg than lmae.

26. As far as the jurisdiction of the Civil Court to
emertain the suit 1:; cxzncerned, Iaariued Gamma! 

3?,"



23

cm the decisians reporbeti Em AIR 1995 SC A

M 113 submxhted that civil suit is 

Submisskm made by   

raspozﬁenbﬁank "m that    to
inwke clause 34 cf    not dam
so, auit of the    As
mi 'mt     with Punjab
   a party is also a
 dergétéafjma  case and rightly the Trial
Caurt   taken in this regard by the

 3rd,.£§épende:it; as mt issuing a notice under

    Tn £ﬁ , submission made ?n

 Tax Deparment has been made as the

   t in the suit and no notice was issued ax:

   undw Section 80 cf CFC. Thareicre this ciefwt
   the mat ofthe matter, because the plainﬁﬂhaa

  fer the rzslief cf poaawsirm amen agamt the 2&5

dﬁdant ie. the Ixmcsme Tax %par@ent. Hence
relym on the dwision rcported in AIR 1995 S6 873 it

33/



245

is argued that the suit cf the p1aintJ'.ﬁ' is 

want of Secﬁon 89 mime.

27. As far as the aec::ssons y¢isead%by%:hé; 

Caumei for the   

made by E-':ri.Varad}}:an;faj  :i'st,'   case
rcportacl in (2009) 3  did not
mmidm      Securitisation

A652.

28.  the; submissions made on
the  learned Coumei for the 3:5

 _   dismissal of the appeal.

'I'

 » _    ac
   ca %1carmd Comma} for tits: 2'14

  Tax Demrmsnt on his part

 that the wit property is attached by the
*   Tax nepa;-mm £'u11owmg' the deﬁault mmm1'tted

  the 1* mponﬁent in paynmnt cf income tax axﬁ

 " re£ez*x'E1agmSecti0n293oftheIz1ca12;ae 'I'axAct,a

at1bmiasixmistzx.s.d¢:tothew'e»ctthati:1rwpectofar1y
praoeedix1gtaleex1bytheIncumeTaxDepar'm;mm1der

§/

/ J



25

the Inrzmne Tax Act, no suit mu be brought 

Court and tum-stare the suit that 

clearly barred by virtue arms 

Income Tax Act.

30. mg-M    tn Secﬁmn

281 of  that any

;   pcendcncy of any

511311   §'  tramfer of the
suit  froﬁrths 1-: defendant, Section 231

$3 WW5  %%%%%  * W Mm is'

    has got any grievance, he will have to

 urxder the Inmme Tax Act as

~;:rqx:ide::'*mmm~ Rube 11 of H-scmame to the Act. Rukm

< V'   11 uf II %uh tharnemfore Wm attractaad in

' VA   rqard. Submission is made its the eﬁ'e.c1: that the
V question of plaintﬁ a  the Civil Court for

reliefwauld arise only if the stage mentiormd under Ruk:
11 Chasm 1 to S are axhaumzed axﬁ mt bwfere that.

/"3<--,/

5-



25

In support of this subuzﬁnainn, barﬁ 

reﬁanoe on the aformaid dwision report.¢zi,.'  

so 113 me jmtssw the  

31. In the light of    ﬁxrth
rgard ht:   have raised for
ee:m:ideratisa%£1:'::."!:§;i3:%"'  fastiﬁcation of the
    and evanﬁrxnation
cf the   'jépkneﬂam Court maasum will
haw' tg   Béfore pmoeaditg tr: emsider the

   of law raked, it is also pertinent

   weary out set that the Trial Court had

 suit cf the phmﬁ after rm:-ding 513

  that en issum 3. 4 and 5 which sauce cenmrs
'   5 the maintainability at' the pwnum suit.

   the findixag in the amrmative in rmpewt of

 %  issues 3, 4 and 5,them.1itofthe pxainwwas dismissed.

'I'herﬂ'orc, the Trial Court did mt gs into the iasum 1, 2'

andﬁ. Qgﬂzeaforeaaidfactorsintgg

9/

C':



2'?

bac:1~:grouM, the substantial qumtiuns of 

to be amwemd.

 

'l'hese quatéons of law    of

cIawse--34 of the legae   $1-
arbitration. The tz-1al'  ._the gait of the
plmn' tiﬁ is       the arbitration
clause. in  "  ._   clause 'm the
Iaase gaeaa is;  as under:
  . % ._=;!,11:;§v~1';'§';4;_'I:¢«;;;f:t;:(:.:'::'£;1-ising as mgams thc
 or  Amie car as zmarda
..  meaning or eﬁast of ttﬁs
  at as rmda tlm ﬁghts duties, or
of the parﬁw hmwetc shall he
  ta mediation; comprised of We
  one person to be appointed as

 n   by the LESSORS and the atlrnr by
  LE-SSEES and E bath the Mediators are

unabk: to decide and twelve the cliaputnt:
a:31?1mblyWit1m%1aper£9«dof3£}daysﬁ'omtk1e
date at' thsir appointmant, than the mrtsiw
shallbeﬁﬁetatakesuchlagalstemaa they
may deem E2; in which  m% aﬁ
 out of £111'  tn the

$21.5



23

Ammu andlor tms Ease mad or

mmlitémraa set -amt herein shall be     ~

Bmalere j1.u"$dictian <m1y.V 

It has been weed  

that all matters! cIisp1ite3__ au£'0fA:~--r  §o..3
this Aim': or 
herein ahaﬂ be%%%k%auh§e¢t%  of
Comm of     

33. Re13rh:g_m:;&kt}:e  am lease dead,
the. trial ammg that am 511% of tbs:
p1am'  £93:   mew' -nf the arbitration

clause,

    contantiem put forward by the

  §:oz.:;-max ﬁr the parﬁm mad the dacisiorm aim

  of the facts and won' mama of this

   the was finding czfthe um cmxrt can be

k   a§:s'm« jnaﬂ' ble. m law is the point for eamaeration.

'   H A ckasc reading of the afereaaid clause 34 of the

 dead will go to show that the part1e' 3 via, tk

p]ainfm'aml the 1* defendant agreed to have the:

9'./x



2.9

tfmpute refernad 33:: Mediation and the said 

further pmvidas that aﬁ matteml diapuws 

the Ewe  t shall be subject 12::   

of the oourm at' Bangalore only. :i't"'ia"  V

the aamitma fame that the partJe_ 1   axm. 

34 mm «only maan thc   aide 

as the Essex' and t11es'::i!;*é_  image on the
cther. The suit' is   only agmm' t
the lessee   Tax Department
as   Bank who am the
   and the ram' is sought

 _  all thé 3V_,§=f®;danta.

    is 9.13:) mt £111 cantrswmy betwc;-am tha

 appeﬁant as wail as the 3" rmpondent

 " ma Bank have ﬁled their pmam and

  also have hem: framed thereaﬁaer and both

   ' Bad evidmme. Tam all maze factors inta
Va:c:oa11r1t,c:e1:s:1i!:}::e said thatthe suitofthephimiﬁks

mt maintaitmble. In the ease sf We11i:ngton Assocﬁatm

Lixrétad Vs Mr. Khﬁ. Mehta {AIR 2366 S.C.13'?9) the

'B16



33

Apax Court. while dealing with Sectimxgff f

Arbitraﬁmx and Conciliatian Act, 1996  re:-N  

short} Inn laid that Secﬁon   

where the parﬁca agree  gr.a"'V't§a1§:i1;."

that they may aka go to  "

37'. In the maze of     Rat:
am 2007 ;3z5:;j; Judge of this
ceurt has  tiiavjégrawment providw that
the ma have excmaive
jmmdicatgn,  a t has an be
read_.a§   mmmn of the pamzes wiil

 V'    id1if. It was further held that it ?m oniy E

  ia;  t mam it clear mm: the para»

   jurisdiction of the civil court and all

 dispimw refen-ed ta arbitration and that they did
A   nu: Qm: any of the disputes adjtuiicatad by the civil

' v%    that the civil courts jufmdieﬁan would be austcd.

V Gtlrmise, ewcclusinn of civil comm jxniadimtizan shank}

not be readily i:nfe:rred.¥

%



31

38. A3 far as ﬁling of the statezznmzt as 

seem-.n 3 oftfm 1995 Act ia mneemned,   

ti £01' imm-pr-etattian befcam    

before this oeurt En aeam'a1.a:a_§:w. ' 

39. In the case of    Va
'  (AIR    by this court
that an    mm be 5% at
 "  cnmiriered the sauna
  Ispat Nigam Limited
Vs hits   Campany (AIR 2006 5.02800)

    '3 meant byﬂﬁrst stammené)

  explanatulm 'ﬁrm: statement' must be:

 'hm with the e.-mmion mm'

  and elabcratim 131%, time. Apex Ceurt want on

%    k%:a§1d at para..34 that, what is there£oz~e needed is ex

  on the part of thc judicial authority tmt the

 pa.rtyhaswaivedh'3arighttninvoLnethearbitz-ation

clause and Wm an applimtian. is ﬁled be-fﬁrﬁ actually
ﬁiing the ﬁrs: stabemm on the mzbstance (sf the

27



31-

dispum, a party cannot be said an have 

or aequimeeaai himaeif to the juriaclictim at' 3 V'  .,  

41. As ruqprds waivar of tm   

defendant in canon-nod,     tlmX 

aromaa decision thag  xeighi «sziu  part of
the-. deferﬁant muat   fact simatam
case, the?  mm: atatmnt,
  ,%   both mm mm
mm   

 4259 far  cat' the cause cf ashlar: Tm

  the suwisamn surf the appellant':

 appellant canmst proceed  t the

  b%re the arhétratar and at the same

 ~   'goH'aga1m' t the rwpondenm 2 arﬂ 3 before the. civil

 A§$:1:#1x*ti:2aamnch&athe1'esponde11Is2a11d3w:ax'enot

 partiw to that lease dead am! the agreemmt was

anlybetweentw piahxﬁﬁasﬁwimeoramthe 1'9
rwpondent as the leases. Whether bifurcatinn h
parmissibk is therefore the qusastion, The Apm: Court in

}

../'



33

the very saw dembn undm 

thus in tms regard. __ x V
ugaooftély, theme is   

Act that wzm tin subjwt»mu§r   
includm sub_iect--mait::@*'~.V_%of  tE1:_:;  
agaermxt as fzvell  
matter is    to
arbiuaﬁoxx. Timvs in   ﬁzz-
 cﬁrﬁﬁﬁjéér  mi WW

sue  of i]ﬂ 1eV:""V:é;uit m the

  

  L %  which requires

 ﬂ" them is no provisicn

; *    the dispute to arbitraﬁnn,

"  wlmthm #i1<':i:1' a eourae is possibha under

  _ In an: view. it would be

.  give. an ixxterpretatirm to Section 8
  Awhich biftucaation of the causa of
 thai m no say, the subject-nmtiaar of

  the suit or in acme maﬁa hiﬁ1z'cam?:r1 of the
' suitbetwm=n1par't$eswhoarepartiasmthe
arbitx-afmn  . and atlw is possible.
'I'his-aouldbelayingdawuamtallyzcmew
pmwdure not mxxtempiated wmder the Act.

If biﬁxmation of the subject-mattgr of a suit

was centsmpiated, the lgklature wauid

3??



3%

have med appmpriatc lamma ta 
311911 a ctmrae. Sixwe than is 13:: sushi-«._ _T*~..V

ixxdinaﬁon in me Language it fanawa  %  _

bﬁtncaaiann of the subject-manger cf 

brought beﬁore 3. judicial,"é§::i;.'n:;rity,.ia$ ~r;;:§~.T.  L

akﬁi"

43. In amther decision  iipm;  Am;

Smg,h' and others  '  others
((200332 s.c.c..% 502)  a party
agaztm tw}mr§2'éLfg*1§-'itrafn:?."§DI;  i: V€'i.s.:V§aught5m foundtu

be: miga   t on the bask
of wh1ch' "  = V'      , in such a case csnly a civil

  can   1:he quwﬁiwn and reference ta

'_ .A   not possible.

   on. hand aka, the 3"' raspnmzlent Bank

 waﬁ  tn the arbitration  t faund in

VA   of the lease dead. The aforesaid pr:xncz' 'p1ea are

  2 9- s:c*e,=L
 aka the Viﬁw % by the Gujarat Hm Ceurt in the

  83., Am 2%8148, in
wmch can: it was held that ounce tkm written stawmerit;

is ﬁkad and Tnauea am iii it mum be caonstrued that

3/



35

the parties have waived the right 1:: invczlm 

clause and (2007; 5 sec 510 5a amzher    

Ape: Court wherém it has     2 9 --

rchef' claims' at 13: the ajppmani   

arbitration  t and    not 

a party to: the    subject
mariner of arbinjaﬁzan  of the suit,
in such  Vbe referred tn
  of the suit or the
  at' the subject
matter   under the 1995

  % %5 *%%  eftbe principim ma dawn by the Apt}:

1  as well as aﬁm High Courm and

ha'iiéingv«._ ,-egg'. % M tn the facm and cum' zmtanees of my

   bath. mm' mm am mmmm and

_ --'   have been framed leading to evidcme beim let in
  the pamzea, the suit afthe pmnmmum not race

been held to be barred bacausw ef c1ausc.34 cf' the lease
41%. Inctherwtmds, theﬁndh:1gr~ecordﬂbytIr1e trial

,3'?



Eﬁ

court on issue No.4 camot. be sustaizmd both"

as wall as in law having regard to   

pmx.-* $1' $5. Ac.~,cordm1y' ,aubstanﬁai««q;z;.§sti.%§:§§.g;if W  L

and 2 are amwered.

 

'Ime mo questinm V    "i'33ue:" 
around the initiatkm. 5:'  the Debt
Rec-every Trihmggjal A t'I:§R?z'*   by the am
 jicsmsion of achedule--2 of
the suit'  mm mar by :m Bank

 the  of Secruritisatiaon am!

   Assets and Enfcrczement nf

   Act, 2092 ('Secmitiaation Act' for

igpéanéim before the Debts Recovery Tribunal in

% x   af tlrm pctaaaasion taken over by the Bank ﬁtam

 13*-' respondent, tha CM} Court will have no

Vj11r;?Isdictir1nan«dina1T1v:Ig" atth?mf'md1ng' ,th.ehaarned Judge teak note of the pmvisions eontaimci in Sacticsm 34a11d35ofth:aSm:uri&ationAct.Asfarast}1esaid % 3'?

mung as mm-ma, before going into Sec;ﬁm:} 331k j§£jine afznmaaid Ant, it is nwsary ta eonaidar stsftc; there was any privity af estate V ' than 1" rawpormlent as Lassa: ar1d :"1-,'s:§ég3§«:§ betwwn the phirxﬁ and 35*

47. The suit ef ma 'me deed entered mm between 1-t detﬁendant rm = for the 3"! xiii Havaldar relied on m1m.2s* .3; m cxmteml that the Emacs;-:_ ﬂax security by martgaae of " ., dew' 3' whether the }ease 1&3 auch permﬁ morgaga the pmperty in qumtion, ' . Both sides planed rehance' an pkoiéisions {sf Sections 105 and 108 sf the Transfer % Act.

C Section 105 of the Transfer of Property Act daﬁnm %% Iaeaseaa a tramfer omgmm enjoy sue}: property which is the suhjwt matter cf iease. Thercfere, wbaatlmr the 38 as privity of estahe betwaan the lessor and ta be ceanaﬁdczreai.

49. The aﬁareaaﬁ. sections oomideration before: the h.agJ:*' :.___of. thg ' L' case of Kasnavzax '"%"ﬁ Shivaram Adhysnz LAW REPORT

197) and Kt, c..;., and mi. whiie analysizg the mm am duties of that the deﬁnition of lease ula_1_05 21¢: tra:nafm' of any mtate but it I'e£_¢;r3' a,;m~ fé- d'f'rgh1' ' no ezztjay the property and there i"a,_T.rf1i::sA astatn betwwn the mortgagee and the The relavant observations winch' requ1res' "In ardar to auooeed in cstabiialuirg w claim agaimt aha mm-gages, the laser must prcve, ﬁrst, that the docs:-131:3 as to privity af emtate betwewt Ease: and lame applies in lmiia, and, awondly, if it dew, tlmt tamer the quesﬁzzn am has tn look at the paraviaizms :31' the lessee was 11-amwznaci. In ii» \.a-

39 deaﬁng with this qumtian me has to kzrok at. % the provisions of the: Tramfsr sf k Act. Sectixm 105 % imvable property as a to enjoy such property, &ﬁ;a2_:f a:a. 1 tinm, mtpzw or in1pIim, pex-pctu. ' 'I1v' mmideraﬁnn of memioma. 1:; is m Ixamama gteﬁpizim aim mt refmjm a it refers 'a cxvjoy the um fact that the mama mam pmmity.

-the comma law 91' it name that the secticn any rﬁerence to the df».:,a11»astam, aims the tran3fm' to . the estate in perpetuity would a gant sf the ﬂee simple. Sectixm " 1c»3%%a.:s§ 1-«rm both under Sub-clause (c) Sub-amuse (5) to the interns: cf the V' A' in the pmpcrty, and mat to thc estatc. V' 'Sub-clause Li) empowers the lcasee to tramfmr absolutely :91' by way of mznrtgage or Bub-leaaethewholeorazzypartoflim iritemst in the pm-ope:-1;r and providzas that the lemma shall mt, by mason anly of auch uamﬁer, cease to be subject ta any ad" the % 40 ziabimes aaachmg to the me; that:.~«i.§ % say, it gnaw the liability of K under W contract "

assrgnmen' 1;. But the wl-mm or mt the to an the aszavenmtzta in 109 deafa with me z¥i_'a{ the kassor, mum with the ..3iabi1i1;e*V« §£V a-- ' ﬁ*om the 1esaae,s_"a1:§;1:V1'it mver this %s%e:;2§%%af%%tIxg «czaum in Inclia the doctrine sf 4::§at§aztu§.'.. '' "

ihét the aacmne cf nabimy '__¢atate does apply in India as Ewan: am kasaw, I am clmrly ef the nmrtgage in this 08.313, dam not transfer the atate af ﬂaw .V so as in izntreduce that dnszitrine. All it 'A is a ta possession and "24. TM fact that the lessee Jim tbs right ef tramfezrring his mtwat under Section 108(i) cf the Transfer cf Property Act, but that by reason only of such traxxsfer, he tines not cease tn be subject 'be the liabilitim aﬁacbing (9/..

43 to the lease, must of caumc be wmicmauon. Socthn 37 and other hand mfer ta cam wharf; 'V irzterwt is mmsrmed. mm mm: ﬁ;1.is£ perform his duty % traxmferee; but the 'no be liable to elects to treat: the pamzm mmhw "25, got my to a 9f' the laser. It _t._he absanee of any ﬁroiﬂsiﬁn case of a is net naewaarily to tér oxmrasght, ms augmted in _ v; &&&&& «K3. and Bras (1925) 27 VA The Iesaark intaarat in the in axistencre prior tn the time came into reiaﬁon. witlm the Eassee. 1ma.ar'5 inherwt dues not rm': upon or ' "a:r'me eat of the cxmtract batsmen 111111' arﬂ his la-saw. 'I'1'm Iaw, thmaforc, oontmplatcs ﬁamfcr cf the 1aes<>r's mtermt indepmidanﬂy of the base, and af ﬂm raiation that the lease creates between the partim to the Image. The Imsaﬂa intaemt, on theotherhand,i5 acreamre zsfthe contract 29/ 42 betwaen tlm lea-esor and tkw mace. contract was within tlhe mvntml puma' .. and presu.mbly the para-sea will in mk3ng' ﬁar the a 3 '34. A mere by the mortgwr ha ma-mte prrivity pf ;:=;s;.*.abé.:A and the lower Courts have the ruling in = %jv; gm.-m Savant (1905;

1."; 29 f That View has bmx "<i::$"scx1ted fram 11:1 'I'hetha1an gram Rajah. Calicut (1966) I.L.R. _ ma. 1111] Iagree with the view talwl f ]% . tm chm' Justice that the ruhng _ as good autlwrity. I vwuld, AA alkawtheapmlwitlz mam." The Apes: Cam-1: in the case at' Raghuram Rae & others Vs Eric P. Maﬂczias and cthm (am 2002 S.C.7'9'?) dealing with section 108 {j} has held thus:

3, 43 "For de me Ime 'Elm % are nemsaxy parttm. Principle is, " H wntract is betwecn ﬁn ,1wa<:y1f _ and not betwem the trazmﬁerees. If mamas af that is no my, than it gim .§3p'tiq:sx' iesa«=:a::=' E tn detae1:'mme' the _ let cam... . Fax! 333353 is a wank! be ' . B.ut wiﬁtwut thus "s.§f. ---..._}__g,é$® came: be

-'for paasaasion of the £n favmzr ef the V.1essoz7';"V_ _ Sundari Blmttacharya Vs Deb 8; atlxm [AIR 1951 ASSAM 70) 'V Court :3.-saﬁng with lease and a cam . .. , WEW lessee had transﬁerred his ixuetnast by way of hﬂld that a morgagae: eculd net be mgarded T asaigme af lmaeéa m:13:ira interest 22% want an to observe that the rmcly 51' 1:13 rmrgagae is in anfsroe lzismaartgageandxmttomsiatdecreeforejrwtmmt obtained by lessor awhmt the Image. R K

52. In the ﬁght of the aforesaid. aemzaiam me and in particular the analysis :31' _ 108 of the T.P.Ac:t by the Bambay .

Barnara case, it carmot be said uhatme enjoy the pcroperty when givxajgz power to mcrtgage thcz the 3rd rmpondmt Bank. argued by the mm eotmgel the appellant, a what he possesses ma the rezliaf that :3 sought by the cafni6--t said that the appellant carznct V. civil court merely bmause the 3?':

has énwkaed the provisions of intheabeerwe cafprivity betwmn thc apmﬂant and the 3'4 mmm M. As far as Seem' 1': 34 at' the Sectmﬁaation Act 73 C0 , nu tioubt, the said aectinn provides tmt :11:

civil murw have jurisdiction in antm-tain any auﬂ: er in mspect of any matter whéch the Debt: 3/ 45 Recovery Tribunal 01* the Appellate is mpowaced tar detwmirm. The suit of the 'fqr pmaemian 8121 chi and the suit is $11' any pmeeednga' mm under -- A a tightly commaea by mg ' 1 55;- «%g1-g appellant, in reapact af i.:h¢ V suit, the appellazztyagg Debt Rwovezry Tribunal by the very provisians Amt. Apart from to rafer to few sf the awn' M mama} Ear the palm V subject efjtzrisdictitm ef the civil Rectmvezy Tribunal, in the 1tgm (If undm the Securitisation Act 13 and 34, came up far m;m1der' atinn 'V VA Apac Court in the case of j Industrial E Limibed Va Hzmgkong am V Shamhai Ban.k'i.ng ca:-perautm {(233933 sec 546).

54. Iﬂtheaaidcaaatlrleapzaellanthadﬁmasuitin the Civil Cmzrt at Ludﬁmm seeking declaraﬁnn basing .3?

14$ an foreign exchazge d%'tI've cunxrncm between tha appeliant; and the fer decimation that the said ' illegal and violative ef Fgrfﬁagrx *' Act, 2006 aﬁ that: Bank V in tha aaid case had' Viaefare the Eight cf dues undm* the Denva' ﬁve at' the said facts in wsanége the mtmiderad the provimbm of the DR'? arose as to High (Sour: or ﬂ powar ta tranafer the case Ram tn Debt Recovery Tribunal deaﬁng with in Recovery cf Dem Due to Banlm Iratfmxtﬁoms Act, 1993 mam Ace in Exam). Court while aealm with the conflict: of jun-smug' n betwemi the Civil Court and the Tribmml, u 'made the {allowing absmvaﬁom at para.39.

"39. Flhalﬁyshaﬂ aﬂzaxzhto the arrivedatmidihadhymuchcfﬁmtwo wIt%n' ' its rmpac1:1'w 4% #5?

the Tribunal shall opaate as res and shall bixm the mt:

the: civil mutt by virtue sf if Section 11 Civil ; % the civil mun shall to'n1§c*:'iz!Vé: issuea as 3 jmgamﬁem cawtexacte. If ..'§1:1_at decide an mmk se'w¢2dV--. _E}y am Vrecardw by the the imam at' cm: override: and sapéfaeiiﬁ rmrded by the a .':::t:aAi;a.r'Vt ' i1s a mutt and tr°ihLma.1 »' only a mi ._ of natural justiw as the as-Q pwmz the mm cc-art sumed up its ' ' V .. ..£:¢z:is1ii&5ian;a thus: "42. Ta sum up cur axmwma tn the questix:srnsre£anadtniz1para7aboveare:

I. A unit the subﬁact maﬁa' whereof Iiw within the juriadirztiszanal m :::f the E?

as Tribuxzwel cannct be refxxm ta be a'a.3:mferre>d by a. civil court: to the Tribunal because a areas auit at a saunter claim been mad 0:' preferred berm the civil % _

2. A crass suit 91:' crema_::3£:ir:1 se;»;~.*'é'1:'»}::§-gaa. the nature of set-oﬁ' the Tribunal mm w3'i!.:}3_, mmui: witttﬁtﬁéh it is msmsaaaa ma is k transferred tn mg '

3. A plea of s;:'3:V-$3.5 ﬁled by at cramwt be b3: wouki in game the igy czivii ceurt befm it if nag sim§eg¢: mm. of suit ﬁes within tie ék j1L"k<diqtiehé;1"" mmpctmae of tn"bum1 before the Debt Recevery and 2% Cixdl Court aka came up ﬁtn- %.%éf%%a¢1g.%¢;aaraunn and at pa.ra.108, 110 and 111 the court . the ﬁzxllawing Obsavaﬁansz "103. Ccsnszrededly in the proceeding beferre the {Debt Raoovery Triburlal datakd mcaminatiun; crussmexaminatllons, pxnvisiom sf the Evﬂence Act as aka applicatiari of ﬁﬁ 49 rather pmvsmm ar the Code cf Prooedureliim inmmgam;-sea, * decumts and a&mTmsien:ne¢d into. Taking rammﬁe to:-3u{;h.. wrzuid be an mceeptigeirag kcua u proceedings beﬁora Deb't_V_"R.;55couery.'f: M '1'ribrL1na1 " ' 2-ecawble dtwﬁ' cff .A _'

119. we betwm mum and the Iéiecéutlae tribunal is mtitleci tn detérm%1rm a.n'V i~.'.¢_sT*i'zt.:¢'L'i11v::1'.r1r1g em} nature, the:

b3¥.__ i1':se.§:' would mt ma to the _ {acimiugmn it is a. civil mart. For the VA as rmticeti herﬂibefsre, a is xrequsiraﬁ m be araated beﬁtxre have aﬁ attributes at' a civil mun. baa mutt providﬁ it crauki pam 31 decrm arﬁ 11: had an the atu-ibutea :32' a civil court irzeludixlg undertalm cf a 11111 ﬂedged trial in term of the provlsicvns of the Cede crf Civil Premdure and! or tha Evidence Ast. E6 56

111. It 's new trite Eaw that ju2*;*w:dictio:;..¢éf't £t:.5"LI'r:..

court must be detennined havirg * , 4_ the purpoaae and object ei' A<;t."'v't}s¢V'~.V V pa:-namxt, 1mp*mg in may m¢pm:m¢$;¢ ' { J T maﬁa tribuna}. as debts mzpeamouéxy __px'ov1'a§m"m contaJned' in t}1gVV1£_}}'ed,e §£'fV:(:ii;ii' as also t.I1§eEVVVL»:V"_.i.4ﬂﬁ*:i;_§f.>e.-,'ﬂ;V3t..';*'1.'; mmaarily be i¢;;i;s::m;, by taking éacwhia of purpesive jmisdictian mimic be mzm-a~z%%:;p¢n "as ta mam thia Caurt _ _ 13:: ﬁ-om the civii -mutt in a ~ to the limitad jusrmzman the the D.R.'I' Act, the Ape: Court has ' " thus at para.}.19.

"I19/I"he 'I'ribuna1 was cnxmﬁttutad with a spaciﬁx: purpme as is evident Bum its statmneuxt af objects. 'F112 pr%h1e af tlw Actalaoisapointcrtothattsa. We have aha mticeci the scheme at' the Act. It has a Iimitsd jmisdicﬁsn Under the. Act, as it L 2/"

Rd! 51 cnrighaily steed, aid not war:

powar to enter*ta.'v:x as alaim erf wt * 4' €30§.3.I}1'ﬁ3I'*G]ﬂi111. No V can be initiated before jjﬂ§E2bf§ﬁ;';*--. debtor under the mmmn }é*3§' t2f £3 V' alien in tarms cf have em 'awn mm as that right.

J n of    mama
is   of the
  'ﬁgema within the
  "  and mt
  Ccurt, thssrefara,

W3:}1_ jurhdiction. Even in _ jxf .$et 'vo§'" ar counterclaim, af summmm (5) " % E11.}:éf__Sect7h3n 19 ofthe Mtg it is evidexxtz"

as the exaclusion of tiw civil court gm-macaw, thc Apam com um mu that it is clﬁ''1cu1t '4 that the smmmry prvcvxs" imzzs :*::::31:ta1r1e' :3. in % 3:.' In 17 and 13 aim 13.12.? Act will have the eﬁact of oumg the _§u1°isdict.'wr: of the cm: Caurt am in t;N$ aonmt, held mm at para.126. "126.'I.'im Civil {hurt kﬁﬁpumhly $5 the juxisdictinnﬂiyasuit. Ifthe snitis Sn, 52 vmatieua or ctherwisa not mafmtainablg. action can be talaan B11 reepwt. thereof term of the Ceda. But 3 all suita f _ tlm Civﬁ' wurm, vamather % wxmected with the -:

the am by the institutions are thaV:smmé i2é2§u1d. amunt to augtim Civil Courts "V'$;;;g§§--..f;1ga dabtor my or tn the W ﬁmmmi' ii;:?.zut'-- jfarv' Vgtirposc cormmt of It is ﬁx:-thmre to eantentions of the _ "the statumxy pr-owﬁnioxm 17 and 13 caf the mm' A the juﬁadictinn of the civil said pmviainrm ckarly state juriadicﬁon af the civil wart is in relatﬁon only to appiieatiom ﬁom i 3331116 and rmamial institutions fer mmvmy L cf debts due tn such banks and ﬁnancial instituﬁanaf

58. Apart from the afermaﬁ observaﬁgana, thc Apex Court take: even; rm tn observe that the jurisdimﬁcn cf the Civil Court wauki be omm manly in rmpeet ef the .9/ A $3 mam:-:m cantained in secticx: 13 which correlatian with section 1?' mareaf, that K the matter nmat reigns an a ﬁnancial imtitutiacon and 'I'nbuna1' wmzld lie anly at or V the fmancial imtﬁuﬁcﬁgfar 9f iéfiﬁbt.

59. C.P.{3 mi mamas am, the Apex has not been ﬁﬁ try inclapendsant suim or 'iworroﬁvara sf cthers against the 3V ' mr thaejm"$dic'£:inn of civil in rgard ts sussh swlta er prowedixm. ma light of the amesmd' Iaw has am by the l3;>urt, in the case on hand, the p1a;int:'ﬁ'was mt & tn the tramacﬁan betwaen the 1*? defendant arm! 'the 334 defendant and thatefere. thc phmﬁ cannot a%I1tI'1eDebt1?tacaveI'3r'1'1'ihnna1fcr the mliefthat ﬁasoughtintlmsxxit. Itisenly thecivileczurtthatcan adjudiszzatatherightsoftllepartlim. Hasaingregardto 9:/6 54 the limited scope cf the promedinga before Reoevery Tribunal, the quwtic-n cf the auitj "

p1a.1I1' am' beam not ' ' hie because af.-_pe:a : 5 ' an appmcmon before ma mb: A L ﬁnarﬁare camt arise. The ail thase aapecm of the ' that there is a ﬂeht Recovery Tribunal, sight of the aromsaia mA :..-W4 the error in _' --.a 0f the plaintiff is mt ' the aré defmdant havn':g' , & tho: Debt Rwowq; Tribunal. 451; the mam an issue No.3 is earzwcrrwd, held that tlw mxit £5 mt ma1ntan13' ' me

7._fer Imlasa parlyto thesuit. A3 was this 'A '" ' 'm mmnaﬁ, the trial court has hast sight of the that there is no privity af cxmtract betwwn the phinﬁﬁ and the HE}, but it was cnly be1:weez1 the 1* defsmdant and the. IIBI and the Punjab ﬁatianal Bank. Inather words, whetn the appeﬁant haé scathing 'ho do }/ 35 withthe IIBIar1xi merely hecauae IE1 Isms taken $333133 aver ﬁrm pmperty held in posaeaaixm by the imelf mm: be a mum' tmme. to hnid ma:

the plaimin" as mt mm' tama' b1e£'_1§: n§.3_ WA 332% party. In the decisiaaxi 2002 3.0.797 the Apex em kk of coz1't:rax;:t is and not between the Iesger on to hank! that the parties, but mt aférmaid mm, in the 'mstant case a135,' _ the error in _ " is" for mt making WI aa mus axmwmed ail the suhsﬁﬂ q'u¢stzin1'§s cf law raked far eensidaratﬁan, the other ofthe matjsw which' wiﬂ have tn be ccnsiﬁered in fg light :31' the submissians nzadc by the learned ooumel for the 2"' raspondant Ixmorzm Tax Qepartment is cenaernsed, Sactizm B.80m1n'c¢ was mt given by the appelhnt is a. &ct which is mt 'm diaspwae. But whether I' 5?

wrmmem-, it is obvious that the and aamaan:

raise any pm at' want of matisee. As _ said mm: the 2% defendant had uggima rm%g;m%[a%; gag %; « The Apmc Ccrurt "m the my sam§.§4de;-ﬁéisaiz the learned counsel far ' abserved that where the in the origizzal E abnut mm issuc ef n¢%:ic¢A'--1;r1d¢;t:"' Qzahe had mt raked t at additiozml W1'xttex' -'suit, tT are it is deemeé in have

65. ;t11e.Vca3s e"ax1 'ho..z1t1, the 2"' defeﬁant had not . ﬂ'=12& """ 2: before the trial court and as wam of mtbe that-%re will have to be bos:enwa1ved' .

as sacticzus 2'93 and 281 cf the Income Tax K relevant Runs 11 at' the Inmme Tax Act baing ' tn by the mm mums} ﬁr the Income Tax tmewnmnw,itﬁmtammwhwetm appellant is before the Izmarw Tax autlmoriﬁas in any % ,, 1 $$ nor can it be said that the appellant wag an assaasae who had created a charge cm the the appellant aim not having eﬁeched during pencicnoy of any autlmritziea under the Inmmg Sectm' 11 281 bang' atm'aeted"f):>:jft.1:x«E; will V' not at-'Em.

67. Lnmwiae, fﬁirm bag? in 293 :11' the sad inta swam' as the questiankg the order of atxa: ~hmez1§i;' that is sought by the % ht mesiuit is anly the posaeéa-ion arﬂ the defendants. Even if mm is tixleen maear by the 334 rmpondant Bank attachment order aka being 'waned by the Tax t, wmtbex the suit 9f the plaintiﬁ ' said to be barredis thsaqumtionto be conaidered axnzlinthis c:onx1e£:t5.onit1nuseﬁ11tare£arts::adecisicn ofthia CceurtrepcrtJedir1AR2OO8KAR25 inthe can at' Waya Comperaﬁve Bank Limibﬁ Vs Keezthana & Him ,i9>;:"

3?:

wkrein a laarnad single Judge uf this dea1mg' mm' Sectm' n 34 of the regardirg mater tar? Civil Caurtﬁ that though the. subject v.£$i'.. is a property nmrtggged in of tlm V' bank had axmady in mpg,-at of ma taken poaag%§i¢$f:z:V:§f it ahcaulari mt be comtnwd is attracind to amt the 5 Tha relevant obaenratﬁom .. Even subjact--mntt:-;:r of 111:: suit, if:r,0pert3' xnormaged in favour ef the V of said pmpmty uﬁ.,er the

- "V ' titan Act and had taken pmssinn n of "the very property, it should not be * oozmtrued that s.34- of the Act is attracted to mast tkm jurisdiction of the-. Civil Ceaurt for ﬁmsimhreasonﬁmtﬁmpmpertlamam morgmed in only that of a. wanted creditor. That; right rcmaim 'mtact. It is far the enﬁcrment czf that security the bank mcftheﬁct. W11e&it W mm the provision of $.13 er approa;snag&[%%%%%%kTL, the izzebua Reetasvery Tribunal for _ is only for ﬁrm amfearmaarxt Vqf the: sacufiiy - _ u remvenr of the amnunt amunt lent by . 3' absaliutzaly nu acﬁon. avail if ia filed subject-

mam ms. is    tn be
.. th§ I fax (31113: a
    W
 [immgager and if
  in th:: suit

au:3é¢:%é¢cl suit abs. that will my _ way of the pe'&i:c:na=:z-Bm1k mat the pmmzm get 3 share it will be aubject to the favour of the petﬁinner-Bank A Bjat sﬁéh aspects are not one which have the crf ezxcludim the jurisékztisn of the AA Civil Ceurt to czantwtain a pa;-ﬁtion suit exam V g in rwpect csf the mm."

t1wsuit:aft1*mpIai:atiﬂ'isbam::[email protected] eznimed intu between the appcﬁant as the lame: an the oxwsideaxﬂtlie 1'*rwpt::£entasa1easeea.r:dthe In time ﬁght ofthe aftzvrwaici position in iaw and as 92 61 appelhnt not being a party 11: any of the ﬁther before the 25% rwpondent or Recovery 'i'ri'm1na}, in the light cffﬁie the Apex Court particulazfly ([2CX39)8 sec 646}, the the thme mum m, 3,':4'**!5 t be sustained on as 59, by mm mm deck 5:; rape" 33.113 has also been I6 coumal and an far as the 1995 3.6.872 is concerned, when the pawtﬁaiwns af INLP. ee1lmg' ' on Act (29 af 1960} was in ﬁzmm arxl cm-c new that the jmfmdiction ef the cm had been barred in respect afarxy qumtixm settled A -~c.:é' decman made 0:: mm dealt with by the Compatcnt V Auﬁwrity under the said act.

70. intha was on hand, for the raaaom ahweaéy atatw bymsarﬂhawringregardtaothefacinsamicirmzmstarm .% "'"u & of the mm and the nature of new appellant basing on the lease tiwd, deck ion therefore canmzt come 'as the aseis,_ta : V /ﬁjczf ., 3:5 rwgondaxzt.

questions at' law as ffsxzeuree of acms' :1 m be taken

72. The trial caurt bf the p1aiz1tiﬁ' mam}y' t'e=rA ' ﬁve farxdxm an issue 13:33.3, as alrmdy mmrtiuned A mm um maimainabimy of the suit. ;«za«.zsnga;z=g.41:za.ec1 that the am: af mg-. plahiﬁﬁ is not sviaew of um: ammzive ﬁncum rewrded by 4' ofiaaue 11:15.3, 4 and 5, the: ma' Icaurt in thaught it ﬁt mat; tn mmidw the basic ' ii!-§su';m on which the suit cf the p1aiz1t?ﬂ'was waged xfm, issue Hea.1, 2 and 6. 'Km kawer appellate court also did not take much tmuble but hazi just confirmed tm judi1t crfths trial csaurt having haw. that the. mm 153 of the trial aaurt on issues 3, 4 and 5 austaizmd in law. « 7'3. For afarittﬁnnxed zmnzfrxsg' vim mm: me said ﬁ21dir1@_ cf Has.3, 4 axﬂ 5 will have V will have ta be im ﬁrﬁixags can 133123 ﬂas, 1 § court cannot, axttzng' ' in 1, 2 and 6 the he be remanded {for the afezsreaaﬁ to mam-ci ﬁnditm an issue:

the appeal Tm aﬁcwed and judmenm a f below are set aside. The matter is tn the trial «wart tn rewrci ita fmdm on 5 t AA 'i'L\'€..ﬂ.""; 175. ﬁmvgiu ON lit"-st Nt:ﬁ3.1, 2 arxl éilarad & tn dispose of the '5 in accerdance: with law. Since tbs {matter is being waded unly 501' the limited puma of recording the fmditg% an the afar:-.sa£d isaue 13943.1, 2 and 6, the trial tzaurt ?£ Emztpzcwaed upon to dispose af the suit imﬁ % 64 within three months am. the date of mmjp: f ardmx Earth the parﬁca tn ca-opmfaic dzu-acted' in appear befnre the '£i:V::iurté_ Send. back the raaardajkiorthssaritrgze %

Unlock Advanced Research with PRISMAI

Karnataka High Court