S.V.Subramaniam v. M/s.Cypress Semiconductor Technology India Private Limited

Original Side Appeal No.213 of 2007 against the order of thisCourt dated 17.7.2007 in Appln.No.4145 of 2007 in C.S.No.517 of2007. Original Side Appeal No.214 of 2007 against the order of thisCourt dated 17.7.2007 in Appln.No.4349 of 2007 in C.S.No.517 of2007. For appellant :Mr.N.R.Chandran, Senior Counsel and Mr.Vijay Narayan, Senior Counsel for Mr.R.KannanFor respondent-1 : Mr.P.S.Raman, Senior Counsel, for M/s.Sivam SivanandrajFor respondent-4 : Mr.G.Masilamani, Senior Counsel forM/s.V.Girish Kumar Common JudgmentS.J.Mukhopadhaya,JAs all these appeals have been preferred by the commonappellant (S.V.Subramaniam) (who is the fourth defendant in the suitin C.S.No.517 of 2007) against the common order dated 17.7.2007passed in Application Nos.4144, 4145 and 4349 of 2007 and O.A.No.729of 2007 in C.S.No.517 of 2007, they were heard together and disposedof by this common judgment.2. The suit in C.S.No.517 of 2007 was preferred by theplaintiff (the first respondent herein) for the following relief:(a) Declaration that order dated 10.8.2006 modified by orderdated 30.8.2006 and 31.8.2006 in I.A.No.336 of 2006 in T.A.No.1 of2004 passed by the Debt Recovery Tribunal-2, Chennai, is null andvoid and not binding on the plaintiff's property described inSchedule A.(b) Declaration that Sale Certificate No.53 of 2006, dated31.8.2006 issued by the Debt Recovery Tribunal-2, Chennai, is nulland void and not binding on the plaintiff's property described inSchedule A and(c) Permanent injunction restraining the fourth defendant, hismen, agents, servants or assigns, from in any manner directly orindirectly acting upon the Sale Certificate No.53 of 2006, dated31.8.2006 issued by the Debt Recovery Tribunal-2, Chennai, anddealing with the said property described in Schedule A, in anymanner whatsoever. 3. In the aforesaid suit, the first respondent-plaintiffpreferred the following applications: https://hcservices.ecourts.gov.in/hcservices/ (i) Original Application No.729 of 2007: preferred for interiminjunction restraining the fourth respondent/fourth defendant, hismen, agents, servants or assigns, from in any manner directly orindirectly acting upon the Sale Certificate No.53 of 2006, dated31.8.2006 issued by the Debt Recovery Tribunal-2, Chennai,developing and dealing with the property described in Schedule A tothe Judge's Summons in the Application, in any manner whatsoever,pending disposal of the suit. (ii) Application No.4144 of 2007 : preferred for stay of theoperation of the Sale Certificate No.53 of 2006, dated 31.8.2006,issued by the Debt Recovery Tribunal-2, Chennai, pertaining toSchedule A property, mentioned in Judge's Summons to theApplication, pending disposal of the suit.(iii) Application No.4145 of 2007 : preferred under Order 2Rule 2 of the Civil Procedure Code for grant of leave for reservingits right to claim further consequential relief.A Separate application in Original Application No.4349 of 2007was preferred by the appellant/fourth defendant under Order 7 Rule11, CPC to reject the plaint, as the Court having no jurisdiction.All the four applications were heard together and by theimpugned common order dated 17.7.2007, the learned single Judgewhile allowing the applications in Appln.Nos.4144 and 4145 of 2007and O.A.No.729 of 2007. preferred by the first respondent-plaintiff,rejected the applications in Appln.No.4349 of 2007 preferred by theappellant-fourth defendant, which has given rise to the present fourOriginal Side Appeals. 4. Before noticing the rival contentions and the issuesinvolved in the present appeals, it is desirable to notice therelevant facts as mentioned hereunder: (i) One M/s.M.G.M.Brothers, a Partnership firm, on 28.2.1964,purchased the property under Document No.1457/64, S.R.O. BangaloreNorth, land in S.No.43/3, Hebbal Village (Kasabu), Bangalore Taluk,measuring 2 acres 3-1/2 guntas having boundary: East: Bellary Road,West: K.Nanjappan lands in S.No.43/2, North: small part of landmeasuring 3.5 guntas sold to Nanjappa and M.G.Brothers jointly, andSouth: Military Dairy Farms in S.No.42.According to the first respondent-plaintiff, on the same date,i.e. on 28.2.1964, another small part of the land measuring 3.5guntas in S.No.43/3, Hebbal Village (Kasabu), Bangalore Taluk, wasalso sold, which has been shown in the North side of the other saledeed dated 28.2.1964, as earlier referred to. (ii) On 16.2.1987, an agreement was reached betweenM/s.M.G.Brothers, represented by partner and power agent of otherpartners, namely M.P.Narasappa, with M/s.Dhanalakshmi ConsolidatesTransport Private Limited, by which it was agreed to sell and https://hcservices.ecourts.gov.in/hcservices/ transfer the assets, both movable and immovable properties of thefirm and acknowledged receipt of advance money. The possession ofthe property was also handed over and M/s.M.G.Brothers agreed toexecute necessary conveyance deed as and when required byM/s.Dhanalakshmi Consolidates Transport Private Limited.Subsequently, the entire sale consideration was given, but no saledeed in favour of M/s.Dhanalakshmi Consolidates Transport PrivateLimited was executed. The original title deeds were handed over tothe said Company by M/s.M.G.Brothers. Schedule B to the agreementrefers to various immovable properties. (iii) On 27.11.1987, M/s.Dhanalakshmi Consolidates TransportPrivate Limited obtained loan from M/s.New Bank of India(subsequently merged with M/s.Punjab National Bank) for carrying onbusiness as transporters. The various properties including theproperty at Bangalore, were mortgaged by M/s.DhanalakshmiConsolidates Transport Private Limited, which also handed over theoriginal title deeds to the Bank on 11.2.1988.(iv) M/s.New Bank of India filed a suit on 1st March, 1990 atBombay High Court, namely C.S.No.650 of 1990 against the borrowerfor Rs.1,31,65,122.09 in respect of the term loan andRs.1,81,56,351.67 towards cash credit hypothecation and for furtherinterest.(v) A case under the Payment of Gratuity Act, was institutedagainst M/s.M.G.Brothers and the Controlling Authority under thePayment of Gratuity Act and Assistant Commissioner (Central),Bellary passed an order on 31.8.1990 impleading M/s.DhanalakshmiConsolidates, since M/s.M.G.Brothers sold the properties to it.(vi) On 16.7.1991, Mr.M.P.Narasappa, Partner ofM/s.M.G.Brothers, appeared before the Industrial Tribunal-cum-LabourCourt, Anantapur, in M.P.No.7 of 1990, wherein during hisexamination, he admitted that the agreement of sale dated 16.2.1987with M/s.Dhanalakshmi Consolidates Transports Private Limited, wasexecuted and the original documents were handed over to the saidCompany.(vii) According to the plaintiff, M/s.M.G.Brothers LorryService, on 22.8.1994 executed nine sale deeds.By one of the sale deeds, it sold to T.N.Chandra 8 guntas ofland in S.No.43/3, Kaneshamari, Hebbal Village (Kasaba), Hobli,Bangalore North Taluk with three square meters of house with ACsheet building, boundaries by East: Bellary Road, West: Privateproperty, North: portion of land sold to T.Barathi and South:portion of land in S.No.43/3 sold to T.N.Ramesh, DocumentNo.4686/94.The second sale deed was executed on the same day byM/s.M.G.Brothers Lorry Service in favour of oneSmt.Rukmani.Manoharlal, 8-1/2 guntas of land in S.No.43/3,Kaneshamari portion of 502 Hebbal Village (Kasaba) Hobli, BangaloreNorth Taluk with three Sq.Mts. of house with AC Sheet bounded by https://hcservices.ecourts.gov.in/hcservices/ East: Bellary Road, West: private property, North: portion of landsold to Manoherlal K.Narang in S.No.43/3, South: lands in S.No.43/3,sold to Ravi in Document No.3222/94.The third sale deed was executed by M/s.M.G.Brothers LorryService on the same day in favour of N.Ravi and sold 8-1/2 guntas ofland in S.No.43/3, Kaneshamari portion of 502, Hebbal Village(Kasaba) Hobli, Bangalore North Taluk, with three Sq.Mts. of ACSheet house, bounded by East: Bellary Road, West: private property,North: portion of land sold to Rukmani Manoharlal in S.No.43/3,South: lands sold to Neelakanta Nadar - vide Document No.4680/94.The fourth sale deed was executed by M/s.M.G.Brothers LorryService in favour of T.N.Chandra in respect of eight guntas of landon the same day in S.No.43/3, Kaneshamari portion of 502 HebbalVillage, (Kasaba) Hobli, Bangalore North Taluk, with three Sq.Mts.of AC sheet house, bounded by East: Bellary Road, West: privateproperty, North: portion of land sold to Susheelamma and South:portion of land in S.No.43/3, Document No.4692/94. The fifthsale deed was executed by M/s.M.G.Brothers Lorry Service in favourof T.N.Bramresh, in respect of eight guntas of land on the same dayin S.No.43/3, Kaneshamari portion of 502 Hebbal Village, (Kasaba)Hobli, Bangalore North Taluk, with three Sq.Mts. of AC sheet house,bounded by East: Bellary Road, West: private property, North:portion of land sold to T.N.Chandra in S.No.43/3, and South:portion of land in S.No.43/3 sold to T.M.Thirumalesh - DocumentNo.4684/94.The sixth sale deed was executed by M/s.M.G.Brothers LorryService in favour of T.N.Thirumalesh (plaintiff's vendor's vendor)in respect of eight guntas of land on the same day, with 3 Sq.Mts.AC sheet house in S.No.43/3, Kaneshamari portion of 502 HebbalVillage, (Kasaba) Hobli, Bangalore North Taluk, bounded by East:Bellary Road, West: private property, North: portion of land sold toT.N.Bramresh and South: by Village Road - Document No.4682/94. The seventh sale deed was executed by M/s.M.G.Brothers LorryService in favour of Susheelamma, in respect of 8-1/2 guntas of landwith 3 Sq.Mts. AC sheet house, on the same day in S.No.43/3,Kaneshamari portion of 502 Hebbal Village, (Kasaba) Hobli, BangaloreNorth Taluk, bounded by East: Bellary Road, West: private property,North: portion of land sold to Neelakanda Naidu and South: portionof land in S.No.43/3 sold to Bharathi, Document No.5944/94. The eighth sale deed was executed by M/s.M.G.Brothers LorryService in favour of Manoharlal K.Narang, in respect of eight guntasof land with 3 Sq.Mts. AC sheet house, on the same day in S.No.43/3,Kaneshamari portion of 502 Hebbal Village, (Kasaba) Hobli, BangaloreNorth Taluk, bounded by East: Bellary Road, West: private property, https://hcservices.ecourts.gov.in/hcservices/ North: by Road and South: portion of land in S.No.43/3 sold toRukmani Manoharlal - Document No.4688/94. The ninth sale deed was executed by M/s.M.G.Brothers LorryService in favour of Susheelammal in respect of 8-1/2 guntas of landwith 3 Sq.Mts. AC sheet house, on the same day in S.No.43/3,Kaneshamari portion of 502 Hebbal Village, (Kasaba) Hobli, BangaloreNorth Taluk, bounded by East: Bellary Road, West: private property,North: portion of land sold to N.Ravi in S.No.43/3 and South:portion of land in S.No.43/3, Document No.5946/94 sold to NeelakantaNaidu.(viii) Subsequently, the following properties (including theabove said nine properties) were purchased by M/s.Arcus Technology(P) Limited in between June and August 1995, as detailed hereunder:On 7.7.1995, T.N.Tirumalesh sold to M/s.Arcus Technology (P)Ltd., 8712 Sq.Ft. and 3 Sq.Mts. House in Kaneshamari bearingNo.710/801, Hebbal Village, bounded by: East: Bellary Road, West:private property, North: property belonging to T.N.Ramaresh andSouth: Village Road, Doc.No.3702/95.On 5.7.1995, T.N.Bramresh sold to M/s.Arcus Technology (P)Ltd., Doc.No.3635/95–land bearing Kaneshamari No.502 presentlybearing No.712/801, Hebbal Village, Kasaba Hobli, Bangalore NorthTaluk, measuring 8712 Sq.Ft. with 3 Sq.Mts., bounded by: East:Bellary Road, West: private property, North: property belonging toT.N.Chandran and South: property to TM.Thirumalesh, measuring 8712Sq.Ft.On 9.8.1995, T.Bharathi sold to M/s.Arcus Technology (P) Ltd.,Doc.No.4696/95–land bearing Kaneshamari No.502 presently bearingNo.709/801, Hebbal Village, Kasaba Hobli, Bangalore North Taluk,measuring 8712 Sq.Ft. with 3 Sq.Mts. house, bounded by: East:Bellary Road, West: private property, North: property belonging toM/s.Arcus Technology (P) Ltd. and South: property belonging toChandran. On 19.7.1995, N.Ravi sold to M/s.Arcus Technology (P) Ltd.,Doc.No.4337/95–land bearing Kaneshamari No.502 presently bearingNo.715/801, Hebbal Village, Kasaba Hobli, Bangalore North Taluk,measuring 9256 Sq.Ft. with 3 Sq.Mts. house, bounded by: East:Bellary Road, West: private property, North: property belonging toRukmani Manoharlal and South: property belonging to NeelakantaNaidu. On 16.8.1995, Smt.Rukmani Manoharlal sold to M/s.ArcusTechnology (P) Ltd., Doc.No.4832/95–land bearing Kaneshamari No.502presently bearing No.717/801, Hebbal Village, Kasaba Hobli,Bangalore North Taluk, measuring 9256 Sq.Ft. with 3 Sq.Mts. house,bounded by: East: Bellary Road, West: private property, North:property belonging to Manoharlal K.Narang and South: propertybelonging to N.Ravi. On 9.8.1995, T.N.Chandra sold to M/s.Arcus Technology (P) Ltd.,Doc.No.4695/95–land bearing Kaneshamari No.502 presently bearingNo.713/801, Hebbal Village, Kasaba Hobli, Bangalore North Taluk, https://hcservices.ecourts.gov.in/hcservices/ measuring 8712 Sq.Ft. with 3 Sq.Mts. house, bounded by: East:Bellary Road, West: private property, North: property belonging toSmt.T.Bharathi and South: property belonging to T.N.Bhramaresh.On 14.6.1995, Sushalamma sold to M/s.Arcus Technology (P) Ltd.,land bearing S.No.47/3, Kaneshamari portion of 502, presentlybearing No.716/801, Hebbal Village, Kasaba Hobli, Bangalore NorthTaluk, measuring 9256 Sq.Ft. with 3 Sq.Mts. house, bounded by: East:Bellary Road, West: private property, North: property belonging toN.Neelakanta Naidu and South: property belonging to T.Bharathi—Doc.No.2896/95.On 17.7.1995, Manoharlal K.Narang sold to M/s.Arcus Technology(P) Ltd., Doc.No.4969/95, land bearing Kaneshamari No.502, presentlybearing No.711/801, Hebbal Village, Kasaba Hobli, Bangalore NorthTaluk, measuring 8712 Sq.Ft. with 3 Sq.Mts. house, bounded by: East:Bellary Road, West: private property, North: Road and South:property belonging to Rukmani Manoharlal. On 16.8.1995, M.Neelakanta Naidu sold to M/s.Arcus Technology(P) Ltd., Doc.No.4831/95, land bearing Kaneshamari No.502, presentlybearing No.714/801, Hebbal Village, Kasaba Hobli, Bangalore NorthTaluk, measuring 4644 Sq.Ft. with 3 Sq.Mts. house, bounded by: East:Bellary Road, West: private property, North: property of Ravi andSouth: property belonging to M/s.Arcus Technology (P) Ltd. On 17.8.1995, M.Neelakanta Naidu sold to M/s.Arcus Technology(P) Ltd., Doc.No.4870/95, land bearing Kaneshamari No.502, presentlybearing No.709/801, Hebbal Village, Kasaba Hobli, Bangalore NorthTaluk, measuring 4612 Sq.Ft. with 3 Sq.Mts. house, bounded by: East:Bellary Road, West: private property, North: property of Ravi andSouth: property of M/s.Arcus Technology (P) Ltd. (ix) Pursuant to an earlier agreement of sale executed betweenM/s.Arcus Technology (P) Ltd. with M/s.Cypress SemiconductorTechnology India Pvt. Ltd. on 30.12.1999, the sale deed was executedon 5.7.2000 for consideration of Rs.1 crore and 55 lakhs. Thefurther case of the first respondent-plaintiff is that on 5.7.2000,M/s.Arcus Technology (P) Limited sold to the first respondent-plaintiff by Document No.4065/2000, the land bearing house listNo.58/709/801/502, being a portion of Kaneshamari No.502, HebbalVillage, Kasaba Hobli, Bangalore North Taluk at CMC Bhataryanaauraad-measuring370 feet x 182.5 feet + 253 feet2equivalent to 80567.5 Sq.ft. bounded on the East: Bellary Road,West: private property; North: private property and South: privateproperty. (x) In the meantime, a Company Petition in C.P.No.139 of 1991was preferred, in which, this Court, on 18.10.1997, passed an orderto wind up M/s.Dhanalakshmi Consolidates Transport Private Limitedand the suit pending in Bombay High Court was ordered to be https://hcservices.ecourts.gov.in/hcservices/ transferred to this Court and on transfer of the suit pending inBombay High Court in C.S.No.650 of 1990, it was re-numbered asC.S.No.276 of 1998 before this Court. In the said suit C.S.No.276 of1998, in the end of 2002, the Bank (now on its merger with PunjabNational Bank) filed an application in Appln.No.4602 of 2002 totransfer the suit C.S.No.276 of 1998 pending in this Court to theDebt Recovery Tribunal, Chennai, which was ordered by this Court on19.11.2002. Pursuant to the same, the case was transferred to DebtRecovery Tribunal-II, Chennai and re-numbered as T.A.No.1 of 2004. (xi) In the suit before the Bombay High Court which wassubsequently transferred to this Court and then to Debt RecoveryTribunal-II, Chennai as T.A.No.1 of 2004, according to the firstrespondent-plaintiff, it was not impleaded as a party. In the saidcase, the Bank filed I.A.No.336 of 2006 on 30.6.2006 to sell theproperties of different places including the properties situated atBombay, Bangalore, Andhra Pradesh, etc. including the properties inquestion, for Rs.2 crores to S.V.Subramaniam (the appellant herein).One Devendra, a partner of M/s.M.G.Brothers appeared on 1.8.2006 andstated that they were aware of the mortgage and expressed 'noobjection' for the sale. (xii) In view of the agreement reached between the parties, theDebt Recovery Tribunal-II, Chennai, passed an order on 10.8.2006 forsale of all the said properties situated at different places inIndia, for a sum of Rs.2 crores and directed to issue the SaleCertificate on payment of Rs.2 crores.(xiii) On 29.8.2006, a Memo was filed by the Bank stating thatS.V.Subramaniam (the appellant herein) was aware that the originaldocuments with regard to the properties, were misplaced by the Bankand that he should not insist on the production of the originaldocuments.On 30.8.2006, the Debt Recovery Tribunal-II, Chennai recordedthe Memo of the Bank and directed to handover the possession toS.V.Subramaniam (the appellant herein) and the amount of Rs.2 croresdeposited by the appellant was directed to be kept in short depositfor three months for the purpose of satisfying the claim of theworkmen, if any.(xiv) On the next date, i.e. on 31.8.2006, the DRT-II, Chennaidirected that a sum of Rs.20 lakhs to be deposited being the valueof two properties belonging to Dhanalakshmi Company for settlementof workmen dues. The Recovery Officer issued the Sale Certificate on31.8.2006 and by force, the possession of the property which wasclaimed to have been purchased by the plaintiff, vide sale deeddated 5.7.2000, was taken on 4.9.2006.(xv) The first respondent-plaintiff initially filed a Writ https://hcservices.ecourts.gov.in/hcservices/ Petition in W.P.No.40073 of 2006 before this Court on 16.10.2006,wherein, initially, interim order was passed on 19.10.2006,restraining the respondents therein from dealing with the property.In the said Writ Petition, a petition was filed by S.V.Subramanaim(the appellant herein) on 26.10.2006 to vacate the interim order andthe interim order having been vacated on 19.12.2006, the firstrespondent-plaintiff preferred Writ Appeal No.62 of 2007, but boththe Writ Petition and the Writ Appeal were heard and dismissed on6.6.2007 with the following observation:"36. In view of our findings ... holdingthe writ petition, not maintainable, we leftopen all other points agitated by both theparties before this Court so as to be decidedby an appropriate forum."Thereafter, after the dismissal of the aforesaid Writ Petition andWrit Appeal, the first respondent-plaintiff instead of moving beforethe Debts Recovery Tribunal (for short, "DRT") or the Debts RecoveryAppellate Tribunal (for short, "DRAT"), preferred the suit inquestion, namely C.S.No.517 of 2007 before this Court, for therelief as noticed above and in the suit, already interim order hadbeen passed and a petition under Order 7 Rule 11 CPC which waspreferred by the fourth defendant (the appellant herein), wasrejected, giving rise to all these Original Side Appeals. 5. Mr.N.R.Chandran, learned Senior Counsel appearing for theappellant-fourth defendant, mainly took the plea that the suit wasnot maintainable in the Original Side of this Court under Clause 12of the Letters Patent, as it is "suit for land" and all the suitproperties are situated outside the jurisdiction of this Court.6. Mr.G.Masilamani, learned Senior Counsel appearing for thefourth respondent-Bank (Punjab National Bank), in fact, madeelaborate argument, which was adopted by the learned Senior Counselappearing for the first respondent-plaintiff and the following pleawas taken by Mr.G.Masilamani while he prayed to dismiss the presentsuit :(i) There is an alternative remedy under Section 20 of theRecovery of Debts due to Banks and Financial Institutions Act, 1993(for short, "1993 Act") and not only the party to the case, but "anyperson" aggrieved by the order passed by the Debt Recovery Tribunal,can prefer an appeal before the Debt Recovery Appellate Tribunal. Itis not the case of the plaintiff that the appeal before the DRAT isnot an efficacious remedy.(ii) "Doctrine of Election" is not permissible to the plaintiffin view of Section 18 of the 1993 Act. When a remedy is available, aperson is supposed to resort to such a remedy, and he should do so.If it is allowed, it will give room for "forum shopping", which isnot permissible. It is a 'special provision' for 'special remedy',as a matter of policy to achieve the larger positive benefit with https://hcservices.ecourts.gov.in/hcservices/ reference to Indian context of Banking business. The 1993 Act is aspecial Legislation made by the Legislature carving out a specialproceeding, excluding the general or common law remedy.The 1993 Act is a well-defined law upheld by the Supreme Courtand if the law declares a particular thing to be done in aparticular manner, it should be done in such a manner. The generallaw or civil suit, therefore is barred.(iii) The power already with the civil Court, once divestedwith the civil Court by the 1993 Act, cannot be allowed to continuewith more rigorous way, that too, to set aside an order passed bythe Tribunal.Nobody can work out the remedy to move before a civil Courtwhich has been divested with powers.Learned Senior Counsel appearing for the appellant and thefourth respondent-Bank, both while referring to Sections 17 and 18of the 1993 Act and the dates/events, also submitted as follows:(a) The list of events will show that the plaintiff is thepurchaser "pendete-lite".(b) The Bank has not played fraud. It cannot be imagined thatthe Bank itself played fraud.Learned Senior Counsel appearing for the first respondent-plaintiff, while referring to the original plaint as was filedbefore the Bombay High Court, the amended plaint fled before theDRT, copies of one one or other sale deed(s) dated 28.2.1964, theorder passed by the DRT on one or other date(s), made the followingsubmissions:(a) The plaintiff having alleged fraud played by the partiesbefore the DRT and the Recovery Officer to obtain one or otherorder, a suit against such order of the DRT/Recovery Officer ismaintainable.(b) The relief sought for in the suit cannot be termed to bethe "suit for land". Therefore, this Court from its Original Side,has jurisdiction to decide the issue under Clause 12 of the LettersPatent.(c) The appeal under Section 20 of the 1993 Act against aconsent decree, is not maintainable, and therefore, the remedy ofappeal under Section 20 of the 1993 Act is not available to theplaintiff.(d) Section 18 of the 1993 Act does not bar a civil Court togive a declaration relating to the fraud, as the DRT is not requiredto determine such issue under Section 17 of the said Act.(e) The DRT passed the order pursuant to which the propertieshaving been sold, without auction-sale and without following theDebts Recovery Tribunal (Procedure) Rules, 1993, such order and saleis a nullity in the eye of law. The learned Senior Counsel appearing for the first respondent-plaintiff, while highlighted the facts to allege fraud played by theBank, also placed reliance on the decisions of the High Court(s) and https://hcservices.ecourts.gov.in/hcservices/ the Supreme Court in support of his plea. 7. In a nut-shell, the following facts were highlighted:(a) M/s.M.G.Brothers Lorry Service purchased the properties inS.No.43/3, Hebbal Village (Kasabu), Bangalore Taluk, by two saledeeds, both dated 28.2.1964. One sale deed related to the landmeasuring 2 acres 3-1/2 guntas in S.No.43/3 and the other sale deedrelated to 3-1/2 guntas in S.No.43/3, reference of which, has beenmade in the northern boundary of sale deed dated 28.2.1964 inrespect of the above said 2 acres and 3-1/2 guntas of land. (b) In the suit C.S.No.650 of 1990 preferred by M/s.New Bank ofIndia (merged with Punjab and National Bank) on 1.3.1990 before theBombay High Court, reference to different lands have been showntherein, including a piece of land measuring 3-1/2 guntas, out ofwhich S.No.43/3 is situated at Hebbal Village, (Kasaba), Hobli,Bangalore North Taluk. Reference of such 3-1/2 guntas of land out ofS.No.43/3 of the said village (Kasaba), has been made at thefollowing places in the plaint in C.S.No.650 of 1990 (in therespective paragraphs) filed before the Bombay High Court:Paragraphs: 5(f), 29 (xi), 30(xi), 36(e)(viii), 36(g)(xi) and36(h)(xi)Description of the property as:"A piece of land ad-measuring 3-1/2 guntas out of SurveyNo.43/3 situated at Hebbal Village, Kasaba Hubli, Bangalore (North)Taluk."No reference has been made in respect of 2 acres 3-1/2 guntasof land of S.No.43/2 at Hebbal Village, Kasaba Hubli, BangaloreNorth Taluk. (Emphasis supplied).When the suit was transferred from Bombay High Court to thisCourt and registered as C.S.No.276 of 1998, therein also, the areaof 3-1/2 guntas in the respective Survey No. S.No.43/3, has beenshown and no reference has been made in respect of 2 acres of 3-1/2guntas of land of S.No.43/2 of the said village and no amendment tothe plaint was brought for either before the Bombay High Court orbefore this Court, when the suits were pending. In the valuation report of Karnataka, the land schedule showsthat the land measures only 3-1/2 guntas of S.No.43/3, situated atHebbal Village, (Kasaba), Hubli, Bangalore North Taluk. When thesuit in C.S.No.276 of 1998 which was pending before this Court, wassubsequently transferred to the DRT, vide order of this Court dated19.11.2002, the Punjab National Bank filed the so-called amendedplaint, without any order of the Court, therein, in all those sixplaces, the area of the land was changed as 2 acres and 3-1/2 guntasin the place of 3-1/2 guntas only, showing the same survey No.43/3situated at Hebbal Village, Kasaba Hubli, Bangalore (North) Taluk.This is how the fraud was played by the Punjab National Bank beforethe Tribunal, which amended the plaint without the order of theCourt. https://hcservices.ecourts.gov.in/hcservices/ It is only after the final order was passed by the DRT on30.8.2006, a petition was filed for amendment of the plaint, whichwas not permissible.(c) One Devendra, partner of M/s.M.G.Brothers, when notice wassent to him, it returned with a note that the addressee has "leftthe place". But the said Devendra, partner of M/s.M.G.Brotherssuddenly appeared and filed a counter affidavit with the same postaladdress on 1.8.2006, stating that they are aware of the mortgage andexpressed 'no objection' for the sale. Though Devendra, partner ofM/s.M.G.Brothers, had no right over the properties, i.e. 2 acres and3-1/2 guntas of Survey No.43/3 situated at Hebbal Village, KasabaHubli, Bangalore (North) Taluk, purchased by the plaintiff by thesale deed dated 5.7.2000, they having sold the entire property in1994 to others, re-purchased by M/s.Arcus Technology PrivateLimited, the vendor of the property, but he was made to appear tofile a counter affidavit showing 'no objection'. This is how theparties colluded and played fraud on the Tribunal to obtain theorder.(d) No auction-sale was made as required under law.(e) No parties were intimated that the properties situated atdifferent places, will be auction-sold. The Bank suddenly madeS.V.Subramaniam (the appellant herein) to appear who agreed topurchase the properties in question for a sum of Rs.2 crores, whoagreed and deposited it on 31.8.2006, that is the total claim amountwhich the Bank wanted to recover.(f) The Tribunal did not choose to see that the propertieswhich are situated at Pune, Bombay, Bangalore, etc and at differentparts of Andhra Pradesh, the cost of the same will not be less thanRs.70 to 100 crores, but they colluded and playing fraud on theTribunal, the total property was purchased without the auction bythe appellant-S.V.Subramaniam for a petty sum of Rs.2 crores. TheTribunal did not follow the procedure as stipulated under the DebtsRecovery Tribunal (Procedure) Rules, 1993. There are other facts which were also highlighted to show howthe fraud was played by the Bank in collusion with one Devendra, thepartner of M/s.M.G.Brothers and the appellant-S.V.Subramanaim to getan order from the DRT including the Sale Certificate. But we are notdeliberating on those facts, which has been noticed by the learnedsingle Judge, vide impugned order dated 17.7.2007. It is also notpossible for us to give such a declaration at this stage, when thesuit is already pending.8. We have heard the learned counsel appearing for the partiesand noticed the rival contentions. The questions for determinationin this case is whether the suit in question under Clause 12 of theLetters Patent, for the relief as sought for, is maintainable andwhether the suit in question is barred by Section 18 of the 1993Act. https://hcservices.ecourts.gov.in/hcservices/

9. For determination of such issues, it is necessary to noticethe relevant provisions of law and decisions of High Courts andSupreme Court.10. Maintainability of the suit under Clause 12 of the LettersPatent:(a) Clause 12 of the Letters Patent (Madras) initially fell forconsideration before a Full Bench of this Court in the decisionreported in 1929 (Vol.57) MLJ 190 (Vellappa Chettiar vs. SahaGovinda Doss). In that case, the suit was preferred for specificperformance. A question was framed having regard to the Indianauthorities, "Is a suit by a purchaser of the land situate outsideMadras for specific performance of a contract to sell made in Madrasby parties resident therein, a suit for land within the meaning ofClause (12) of the Letters Parent, and so not cognizable by the HighCourt in its Ordinary Original Civil Jurisdiction?" Having noticedthe relevant provision, the Court was of the view that in a suit forthe acquisition of title to or control over land, if the plaintiffgets a decree for specific performance, he does not get any titleto, but only a right to get a title to the land and it cannot betermed as a "suit for land". (b) In the decision reported in 65 CWN 881 (Sk.Moula Buksh vs.Dharamchand), the Calcutta High Court, while noticing similar Clause12 of the Letters Patent (Calcutta) which deals with the meaning of"suit for land", noticed the earlier judgment reported in AIR 1950FC 83 (Moolji Jaith & Co. vs. The Khandesh Spinning & Weaving MillsCo. Ltd.), wherein Fazal Ali,J at page 96 observed as follows:"This question is said to be an importantone since there has been considerable divergenceof opinion in regard to it and if I had reallyfelt that I was called upon to decide it I wouldhave agreed with the line of cases in which ithas been held that broadly speaking theexpression 'suit for land' covers the followingthree classes of suits:(1) Suits for determination of title toland;(2) Suit for possession of land; and(3) Other suits which the relief claimed ifgranted would directly affect title to orpossession of land."(c) Clause 12 of the Letters Patent of the High Court ofJudicature at Bombay, which is similar to Clause 12 of the LettersPatent of the High Court of Judicature at Madras, fell forconsideration before the Supreme Court in the decision reported in2001 (4) CTC 39 (SC), (Adcon Electronics Pvt. Ltd. vs. Daluate),wherein, the Supreme Court held as follows:"15. From the above discussion it follows https://hcservices.ecourts.gov.in/hcservices/ that a "suit for land" is a suit in which therelief claimed relates to title to or deliveryof possession of land or immovable property.Whether a suit is a "suit for land or not has tobe determined on the averments in the plaintwith reference to the reliefs claimed therein;where the relief relates to adjudication oftitle to land or immovable property or deliveryof possession of the land or immovable property,it will be a "suit for land". We are inrespectful agreement with the view expressed byMahajan,J. in M/s.Moolji Jaitha's case (supra)."(d) The decision in M/s.Moolji Jaitha's case reported in AIR1950 FC 83 (cited supra) and the decision in the case of AdconElectronics Pvt. Ltd. vs. Daluate, reported in 2001 (4) CTC 39(cited supra) were also followed by a Division Bench of this Courtreported in 2006 (1) CTC 270 (Thamiraparani Investments Pvt. Ltd.vs. Meta Films Pvt. Ltd.).(e) In the present case, the plaintiff has not preferred thesuit for determination of the title of the land, nor is it a suitfor possession of the land. It cannot be stated that if the reliefis granted, it would directly affect the title or the possession ofthe land as no person can claim any right on the basis of a decree,if found to have been obtained by fraud. A declaration with regardto the order passed by the DRT having been sought for, which isalleged to have been obtained by playing fraud on the Tribunal, wehold that the suit is not covered by the expression "suit for land"under Clause 12 of the Letters Patent (Madras) and the suit cannotbe dismissed on that ground.11. Bar of jurisdiction under Section 18 of the 1993 Act :-(a) In the case of Lala Ram Swarup and others vs. Shikar Chandand another, reported in AIR 1966 SC 893, the Supreme Court noticedthe observation of the Privy Council in the case of Secretary ofState vs. Mask & Co. (67 I.A. 222), wherein, the Privy Councilobserved that even where jurisdiction is excluded, the civil Courtshave jurisdiction "to examine into cases where the provisions of theAct have not been complied with, or the statutory Tribunal has notacted in conformity with the fundamental principles of judicialprocedure. In the said case of Lala Ram Swarup (cited supra), theSupreme Court observed that, "in our opinion, the bar created byrelevant provisions of the Act excluding the jurisdiction of thecivil courts cannot operate in cases where the plea raised beforethe civil court goes to the root of the matter and would, if upheld,lead to the conclusion that the impugned order is a nullity."(b) In the case of State of A.P. vs. Manjeti Laxmi Kantha Rao,reported in 2000 (3) SCC 689, the Supreme Court observed that, "Thenormal rule of law is that the civil courts have jurisdiction to try https://hcservices.ecourts.gov.in/hcservices/ all suits of civil nature except those of which cognisance by themis either expressly or impliedly excluded as provided under Section9 of the Code of Civil Procedure .... where a statute gives finalityto the orders of the Special Tribunals, jurisdiction of the civilcourts must be held to be excluded if there is adequate remedy to dowhat the civil courts would normally do in a suit and suchprovision, however, does not exclude those cases where theprovisions of the particular Act have not been complied with or thestatutory tribunal has not acted in conformity with the fundamentalprinciples of judicial procedure." (c) We have noticed the aforesaid observations, as in thepresent case, one of the grounds taken is that the DRT has notfollowed the procedure contemplated under the Debts RecoveryTribunal (Procedure) Rules, 1993 and the impugned orders werepassed, which are nullity in the eye of law.(d) Section 17 of the 1993 Act relates to "jurisdiction, powersand authority of Tribunals, as quoted hereunder:"Section 17. Jurisdiction, powers and authorityof Tribunals.--(1) A Tribunal shall exercise, onand from the appointed day, the jurisdiction,powers and authority to entertain and decideapplications from the banks and financialinstitutions for recovery of debts due to suchbanks and financial institutions.(2) An Appellate Tribunal shall exercise,on and from the appointed day, the jurisdiction,powers and authority to entertain appealsagainst any order made, or deemed to have beenmade, by a Tribunal under this Act." On the other hand, Section 18 of the 1993 Act imposes a "bar ofjurisdiction", which reads as follows:"Section 18: Bar of jurisdiction — On and fromthe appointed day, no Court or other authorityshall have, or be entitled to exercise, anyjurisdiction, powers or authority (except theSupreme Court, and a High Court exercisingjurisdiction under articles 226 and 227 of theConstitution) in relation to the mattersspecified in section 17."From the aforesaid provisions, it would be evident that thereis no total ouster of jurisdiction of the civil Court. The ouster isby virtue of Section 18 of the 1993 Act, which sets out that noCourt or other authority can try matters of recovery of debts.Insofar as the reliefs which do not pertain to debts, on a plainreading of Section 17 of the 1993 Act, are concerned, there can beno doubt that the civil Court will still retain the jurisdiction https://hcservices.ecourts.gov.in/hcservices/ (Centurion Bank Ltd. vs. Indian Lead Ltd. (2000) 100 Comp.Cas.537 ).(e) In the case of Allahabad Bank vs. Canara Bank, reported inAIR 2000 SC 1535, having noticed Sections 17 and 18 of the 1993 Act,the Supreme Court while observing that, "it is clear from Section 17of the Act that the Tribunal is to decide the applications of theBanks and Financial Institutions for recovery of debts due to them",held as follows: "21. In our opinion, the jurisdiction ofthe Tribunal in regard to adjudication isexclusive. The RDB Act requires the Tribunalalone to decide applications for recovery ofdebts due to Banks or financial institutions.Once the Tribunal passes an order that the debtis due, the Tribunal has to issue a certificateunder Section 19(22) (formerly under section 19(7) ) to the Recovery Officer for recovery ofthe debt specified in the certificate. Thequestion arises as to the meaning of the word'recovery' in Section 17 of the Act. It appearsto us that basically the Tribunal is toadjudicate the liability of the defendant andthen it has to issue a certificate under Section19(22). Under Section 18, the jurisdiction ofany other Court or authority which wouldotherwise have had jurisdiction but for theprovisions of the Act, is ousted and the powerto adjudicate upon the liability is exclusivelyvested in the Tribunal. (This exclusion does nothowever apply to the jurisdiction of the SupremeCourt or of a High Court exercising power underArticle 226 or 227 of the Constitution). This isthe effect of Sections 17 and 18 of the Act.22. We hold that the provisions of Sections17 and 18 of the RDB Act are exclusive so far asthe question of adjudication of the liability ofthe defendant to the appellant Bank isconcerned." (f) Section 17 of the 1993 Act, again fell consideration beforethe Supreme Court in the decision reported in 2006 (5) SCC 72(Indian Bank vs. ABS Marine Products (P) Ltd.), wherein, theSupreme Court made the following observation:"15. It is evident from Sections 17 and 18of the Debts Recovery Act that civil court'sjurisdiction is barred only in regard toapplications by a bank or a financialinstitution for recovery of its debts. The https://hcservices.ecourts.gov.in/hcservices/ jurisdiction of civil courts is not barred inregard to any suit filed by a borrower or anyother person against a bank for anyrelief. ...... ""16. .... What is significant is thatSections 17 and 18 have not been amended.Jurisdiction has not been conferred on theTribunal, even after amendment, to tryindependent suits or proceedings initiated byborrowers or others against banks/financialinstitutions, nor the jurisdiction of civilcourts barred in regard to such suits orproceedings. The only change that has been madeis to enable the defendants to claim set-off ormake a counterclaim as provided in sub-sections(6) to (8) of Section 19 in applications alreadyfiled by the banks or financial institutions forrecovery of the amounts due to them. In otherwords, what is provided and permitted is across-action by a defendant in a pendingapplication by the bank/financial institution,the intention being to have the claim of thebank/financial institution made in itsapplication and the counterclaim or claim forset-off of the defendant, as a single unifiedproceeding, to be disposed of by a commonorder." (g) While dealing with the question of grant of injunctionrestraining the enforcement of the orders passed by the Tribunal, inthe case of Industrial Investment Bank of India Ltd. vs. Marshal'sPower & Telecom (I) Ltd., reported in 2007 (1) SCC 106, the SupremeCourt observed as follows:'"8. .... That apart, to grant an injunctionrestraining the enforcement of orders passed bythe Tribunal having jurisdiction to pass suchorders cannot normally be granted unless it is acase of fraud or the existence of some suchvitiating factors is established or prima faciemade out. Even then, the order of injunction asnow granted could be granted only in exceptionalcases." (emphasis supplied)(h) In the present case, as the plaintiff is neither theBank/financial institution nor the borrower, the provisions ofSection 17 of the 1993 Act are not attracted. It is not the case ofthe Bank that they filed an application for recovery of its debtfrom the plaintiff. The plaintiff who is not a party before the DRT,has only alleged fraud played by the parties to obtain orders from https://hcservices.ecourts.gov.in/hcservices/ the DRT and therefore, in view of the decisions of the SupremeCourt, as referred to above, we hold that the present suit is notbarred by the provisions of Section 18 of the 1993 Act.12. Fraud on Court:(a) Section 29 of the 1993 Act reads as follows:"Section 29: Application of certain provisionsof Income-tax Act. -- The provisions of theSecond and Third Schedules to the Income-taxAct, 1961 (43 of 1961) and the Income-tax(Certificate Proceedings) Rules, 1962, as inforce from time to time shall, as far aspossible, apply with necessary modifications asif the said provisions and the rules referred tothe amount of debt due under this Act instead ofto the income-tax: Provided that any reference underthe said provisions and the rules to the"assessee" shall be construed as a reference tothe defendant under this Act." Section 29 of the 1993 Act stipulates that the provisions ofthe Second and Third Schedules to the Income Tax Act, 1961 (43 of1961) and the Income Tax (Certificate Proceedings) Rules, 1962, willapply with necessary modifications, as if the said provisions andthe Rules referred to the amount of debt due under the Act insteadof the income tax. In view of Section 29 of the 1993 Act and Rule 9of Second Schedule to the Income Tax Act, 1961, which is applicable,wherein, while jurisdiction of the civil Court has been barred,under proviso to the said Rule 9, it has been made clear that suchbar is not applicable in respect of a suit which can be filed incivil Court if order has been obtained on fraud.(b) In the case of S.P.Chengalvaraya Naidu vs. Jagannath,reported in 1994 (1) SCC 1, the Supreme Court observed that, "it isthe settled proposition of law that a judgment or decree obtained byplaying fraud on the Court, is a nullity and non-est in the eyes oflaw. Such a judgment/decree--by the first Court or by the highestCourt--has to be treated as a nullity by every Court, whethersuperior or inferior. It can be challenged in any Court even incollateral proceedings." (emphasis supplied).(c) In State of Andhra Pradesh and another vs. T.SuryachandraRao, reported in 2006 (1) L.W. 547 (SC), the Supreme Court observedas follows:"10. "Fraud" as is well known vitiatesevery solemn act. Fraud and justice never dwelltogether. Fraud is a conduct either by letteror words, which includes the other person orauthority to take a definite determinativestand as a response to the conduct of the https://hcservices.ecourts.gov.in/hcservices/ former either by words or letter. It is alsowell settled that misrepresentation itselfamounts to fraud. Indeed, innocentmisrepresentation may also give reason to claimrelief against fraud. A fraudulentmisrepresentation is called deceit and consistsin leading a man into damage by willfully orrecklessly causing him to believe and act onfalsehood. It is a fraud in law if a partymakes representations, which he knows to befalse, and injury enures therefrom although themotive from which the representations proceededmay not have been bad. An act of fraud on courtis always viewed seriously. A collusion orconspiracy with a view to deprive the rights ofthe others in relation to a property wouldrender the transaction void ab initio. Fraudand deception are synonymous. Although in agiven case a deception may not amount to fraud,fraud is anathema to all equitable principlesand any affair tainted with fraud cannot beperpetuated or saved by the application of anyequitable doctrine including res judicata. (SeeRam Chandra Singh v Savitri Devi and Ors. (2003(8) SCC 319 = 2004-2-L.W.70).I"(d) In the case of A.V.Papayya Sastry vs. Govt. of A.P.,reported in 2007 (4) SCC 221, while dealing with the meaning of"fraud", the Supreme Court observed as follows: "21. Now, it is well-settled principle oflaw that if any judgment or order is obtained byfraud, it cannot be said to be a judgment ororder in law. Before three centuries, ChiefJustice Edward Coke proclaimed:"Fraud avoids all judicial acts,ecclesiastical or temporal." 22. It is thus settled proposition of lawthat a judgment, decree or order obtained byplaying fraud on the court, tribunal orauthority is a nullity and non est in the eye ofthe law. Such a judgment, decree or order—by thefirst court or by the final court—has to betreated as nullity by every court, superior orinferior. It can be challenged in any court, atany time, in appeal, revision, writ or even incollateral proceedings."(e) In view of the authoritative pronouncement of the SupremeCourt and referred to above, we find no ground to interfere with the https://hcservices.ecourts.gov.in/hcservices/ impugned order passed by the learned single Judge. 13. Alternative Remedy:It was argued by the learned Senior Counsel appearing for theappellant and the Bank as noticed above, that the plaintiff couldhave preferred appeal before the Debts Recovery Appellate Tribunal,under Section 20 of the 1993 Act. But in our view, such a submissionis misconceived, in view of sub-section (2) of Section 20 of the1993 Act, which reads as follows:"Section 20: Appeal to the Appellate Tribunal:(1) .....(2) No appeal shall lie to the AppellateTribunal from an order made by a Tribunal withthe consent of the parties."In the present case, admittedly, the order passed by the DRTand the Recovery Order also have been passed by the Tribunal withthe consent of the parties, and therefore, the plaintiff cannotprefer any appeal under Section 20 of the 1993 Act. As the plaintiff cannot be made remedy-less, we are of the viewthat the learned single Judge has not committed any error whilerejecting the application preferred by the appellant/fourthdefendant under Order 7 Rule 11 C.P.C. to reject the plaint.14. We find no merit in these appeals, which are accordinglydismissed. But there shall be no order as to costs. Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.csToSub-Assistant Registrar,Original Side,High Court, Madras.4 cc to Mr.R. Kannan, Advocate, Sr. 21061 cc to M/s. Sivam Sivanandaraj, Advocate, Sr. 2395O.S.A.Nos.211 to 214 of 2007BV (CO)kk 28/1