Bombay High Court
Bank Of India And Another vs M/S. Maruti Civil Works on 15 December, 2023
2023:BHC-AS:37793-DB
362.21-ao.docx
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
APPEAL FROM ORDER NO.362 OF 2021
IN
COMMERCIAL SUIT NO.6 OF 2019
WITH
INTERIM APPLICATION NO.3092 OF 2021
IN
APPEAL FROM ORDER NO.362 OF 2021
1 Bank of India
A body Corporate Constituted under the
Banking Companies (Acquisition and
Transfer of Undertakings) Act, V of 1970
Having their Head Office at Star House,
Plot No. C-5, G Block, Bandra Kurla
Complex, Bandra (East),
Mumbai - 400051
and also having their one of the branch
amongst other situated at
M/s. Ravria City, Ground Floor, Plot
No.8A, Sector - 18, New Panvel,
Navi Mumbai - 410206
Known as "New Panvel Branch"
2 The Authorized Officer
Bank of India
Having its Branch office at
M/s. Ravria City, Ground Floor, Plot
No.8A, Sector - 18, New Panvel,
Navi Mumbai - 410206
Known as "New Panvel Branch" ..... Appellants
Versus
M/s. Maruti Civil Works
A Partnership firm, duly incorporated
Under the provisions of the Partnership
Act, 1932 having principal place of
Business at : Maruti House, Plot No.63,
Sector No.1, Shirvane, Nerul,
Navi Mumbai - 400706 ..... Respondent
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Mr. O. A. Das for the Appellants
Mr. Kishor P. Vig i/b. Mr. Manish K. Vig for the Respondent
CORAM: DEVENDRA KUMAR UPADHYAYA, CJ. &
ARIF S. DOCTOR, J.
RESERVED ON : OCTOBER 5, 2023
PRONOUNCED ON : DECEMBER 15, 2023
JUDGMENT (PER : CHIEF JUSTICE)
1. For the sake of clarity, the Plaintiff and the Defendants in
the suit shall be referred to as per their original nomenclature
i.e. Appellants herein as the Defendants and the Respondent
herein as the Plaintiff.
2. Heard Mr. O. A. Das, learned Counsel representing the
Defendants and Mr. Kishor P. Vig learned Counsel representing
the Plaintiff.
3. This Appeal filed under Section 13(1A) of the Commercial
Courts Act, 2015 (hereinafter referred to as the Act of
2015) seeks to challenge the order dated 2 nd December 2020
passed by the District Judge - 2, Thane whereby the application
moved by the Appellants - Defendants under Order VII Rule 10
and Rule 11(d) of the Code of Civil Procedure, 1908 (hereinafter
referred to as the "Code") read with Section 19(6) to (10) of
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the Recovery of Debts and Bankruptcy Act, 1993 (hereinafter
referred to as the "Recovery Act, 1993) has been rejected.
4. The facts of the case which can be culled out from the
pleadings available on record and the submissions made by the
learned counsel for the respective parties are that the Plaintiff -
Respondents instituted Commercial Suit No.6 of 2019 against
the Appellants-Defendants for recovery of loss and damages and
compensation of Rs.100 Crores + Rs.10,10,733/- together with
interest on the said amount @ 13.95% p.a. from the date of
institution of the suit till final realization.
5. The said suit has been filed with the plaint allegations,
inter alia, that the plaintiff is a partnership firm engaged in the
business of builders and contractors since 1987 and that the
Defendants fraudulently invoked the measures under the guise
of the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (hereinafter referred
to as the SARFAESI Act) to grab the property of the partner of
the Plaintiff.
6. It has been submitted on behalf of the Appellants that
Defendant No.1 sanctioned and granted cash credit limit of Rs.10
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Crores and further credit facility to the Plaintiff for their working
capital requirement and that the credit facilities were sanctioned
and granted vide sanction letter dated 24th January 2013 and
Modified Sanctioned letter dated 28 th January 2013. Further
submission on behalf of the Defendants is that in order to secure
the credit facility, the Plaintiff executed certain security
documents such as Demand Promissory Note for Rs.10 Crores
dated 5th February 2013 in respect of the Cash Credit Facility,
Bearer Letter for Rs.10 Crores dated 5 th February 2013 in respect
of the Cash Credit Facility, Hypothecation-cum-Loan Agreement
for Rs. 15 Crores dated 15 th February 2013 and a Composite
Agreement dated 5th February 2013. The Defendants further
state that on the request of the Plaintiff, the Defendants issued
Bank Guarantee dated 27th February 2013 for a sum of
Rs.9,67,000/- which was valid till 26th February 2014. It is also
stated that the Defendant No.1 sanctioned and granted
additional cash credit / temporary Over Draft limit of Rs. 1 Crore
to the Plaintiff for their working capital requirement as per the
terms and conditions stipulated in the Memorandum of Sanction
dated 12th October 2013. It is also the claim of the Defendants
that as security towards the additional cash credit limit of Rs.1
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Crores, the Plaintiffs executed loan / security documents on 14 th
October 2013 and further that equitable mortgage was also
extended in respect of certain immovable properties.
7. Further submission of the Defendants is that the Plaintiff
committed default in repayment and accordingly, the account
was declared as Non Performing Assets (NPA) on 27 th July 2014
and accordingly action under the SARFAESI Act was initiated by
issuing Demand Notice under section 13(2) of the SARFAESI Act.
It is further asserted on behalf of the Defendants that since the
outstanding dues were not paid by the Plaintiff even after receipt
of the notice under Section 13(2), symbolic possession of the
mortgage properties was taken on 3rd March 2015 under Section
13(4) of the SARFAESI Act and further that the Defendants took
physical possession of the property at Maruti House, Plot No.63,
Sector 1, Shiravane, Nerul and also Bungalow named GODATEER
at Plot No.11A Sector 21, Nerul, Navi Mumbai.
8. Learned Counsel for the Defendants has further stated that
the Defendants have filed Original Application bearing No.575 of
2017 against the Plaintiff before the Debts Recovery Tribunal
No.3 at Mumbai (Vashi) for the recovery of a sum of
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Rs.18,81,66,435/- which according to the Defendants is due
against the Plaintiff on account of default in repayment of the
credit facility sanctioned and granted to the Plaintiff. The said
Original Application has been preferred under Section 19 of the
Recovery Act, 1993.
9. It has been further stated by the Defendants that in the
Commercial Suit No.6 of 2019 filed by the Plaintiff an Application
under Order VII Rule 10 and 11(d) of the CPC was preferred by
the Defendants with a prayer that the plaint be rejected on the
ground that jurisdiction to entertain the suit between the
borrower and the Bank i.e. the Plaintiff and Defendants is with
DRT at Mumbai and not the learned Trial Court. The Application
moved by the Appellants further prayed, alternatively, that the
plaint be returned to the Plaintiff for filing before appropriate
forum.
10. The said Application was contested by the Plaintiff. Learned
Trial Court, by means of order dated 2nd December 2020 which is
under challenge before us in this appeal, rejected the said
Application by observing, inter alia, that the suit filed by the
Plaintiff is based on the assertion of fraud and accordingly
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declaration has been sought along with other reliefs and that
such a relief as sought by the Plaintiff can be entertained by it,
as the jurisdiction of the DRT is confined to hold inquiry and to
adjudicate the issues brought before it within the scope of
Section 17 of the Recovery Act, 1993. It has further been held
by the learned Trial Court in the judgment under appeal herein
that scope of inquiry relating to commission of any alleged fraud
by the bankers is outside the scope of Section 17 of the
Recovery Act, 1993 and hence, the prayer made by the
Defendants in the Application moved under Order VII Rule 10
and Rule 11(d) of the CPC was liable to be rejected.
11. It is this order dated 2nd December 2020 passed by the
learned Trial Court which is under challenge in this appeal filed
under Section 13 (1A) of the Act of 2015, whereby the
Application moved by the Defendants with the prayer for
rejecting the plaint or in the alternative, for returning the plaint
has not been acceded to.
12. At the outset of the arguments, the question which cropped
up for consideration of this Court is to the maintainability of this
appeal before the Division Bench of this Court keeping in view
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the proviso appended to Section 13(1) of the Act of 2015 which
provides that an appeal shall lie from such orders passed by a
Commercial Division or a Commercial Court which are
enumerated specifically under Order XLIII of the CPC and
Section 37 of the Arbitration and Conciliation Act, 1996. The
objection as to the maintainability of this appeal, thus, is that
since the order under challenge herein is not enumerated under
Order XLIII of the CPC and hence this appeal, in view of
operation of the proviso appended to Section 13(1A) of the Act
of 2015, is not entertainable and hence is liable to be dismissed.
13. To appreciate the issue concerning maintainability of this
appeal, it will be apposite to consider the provisions of Section
13 of the Act of 2015 before and after its amendment which has
been effected w.e.f. 3rd May 2018. Section 13 which existed prior
to its amendment in the year 2018 is quoted hereunder:
"Section 13 : Appeals from decrees of Commercial
Courts and Commercial Divisions- -
(1) Any person aggrieved by the decision of a
Commercial Court or Commercial Division of a High Court
may appeal to the Commercial Division of that High Court
within a period of sixty days from the date of judgment or
order, as the case may be.
Provided that an appeal shall lie from such orders
passed by a Commercial Division or a Commercial Court
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that are specifically enumerated under Order XLIII of the
Civil Procedure Code, 1908 as amended by this Act and
Section 37 of the Arbitration and Conciliation Act, 1996."
(2) Notwithstanding anything contained in any other law
for the time being in force or Letters Patent of a High
Court, no appeal shall lie from any order or decree of a
Commercial Division or Commercial Court otherwise than in
accordance with the provisions of this Act."
14. Section 13, after its amendment vide Act No.28 of 2018
reads as under:
"13. Appeals from decrees of Commercial Courts and
Commercial Divisions. -
(1) Any person aggrieved by the judgment or order of a
Commercial Court below the level of a District Judge may
appeal to the Commercial Appellate Court within a period
of sixty days from the date of judgment or order.
(1A) Any person aggrieved by the judgment or order of a
Commercial Court at the level of District Judge exercising
original civil jurisdiction or, as the case may be,
Commercial Division of a High Court may appeal to the
Commercial Appellate Division of that High Court within a
period of sixty days from the date of the judgment or
order:
Provided that an appeal shall lie from such orders
passed by a Commercial Division or a Commercial court
that are specifically enumerated under Order XLIII of the
Civil Procedure Code, 1908 as amended by this Act and
Section 37 of the Arbitration and Conciliation Act.
(2) Notwithstanding anything contained in any other law
for the time being in force or Letters Patent of a High
Court, no appeal shall lie from any order or decree of a
Commercial Division or Commercial Court otherwise than in
accordance with the provisions of this Act."
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15. If we compare the unamended provision with the amended
provision of Section 13 of the Act of 2015, what we find is that
earlier an appeal was provided against a "decision" of a
Commercial Court or Commercial Division of a High Court to the
Commercial Division of that High Court, whereas, after the
amendment the expression "decision" has been substituted by
the expression "judgment or order". It is also noticeable that the
proviso appended to sub section (1) of section 13 which earlier
existed has been retained in the amended provision as well. To
determine as to whether the instant appeal is maintainable, we
may also refer to sub section (2) of section 13 of the Commercial
Courts Act which begins with a non-obstante clause and provides
that notwithstanding anything contained in any other law for the
time being in force or Letters Patent of a High Court, no appeal
shall lie from any order or decree under Section 13 otherwise
than in accordance with the provisions of the said Act.
16. In our opinion, sub section 2 of Section 13 unequivocally
provides that any appeal against a decree or order of a
Commercial Court or Commercial Division shall lie only in
accordance with the provisions of the Act and in view of what
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has been provided for in sub section 2 of Section 13, the proviso
appended to Section 13 assumes importance.
17. Sub Section 1A of Section 13 provides that a person
aggrieved by a judgment or order can file an appeal, however,
the said provision is to be read in conjunction with the proviso
which specifically states that an appeal shall lie only from orders
which are specifically enumerated under Order XLIII of the CPC.
The occurrences of the expression "shall" and "specifically" in the
proviso has to be noted for correctly understanding the
legislative intent in framing the scheme of Section 13 of the Act
of 2015. It is also noteworthy that the order under challenge in
this appeal has been passed by the learned trial court rejecting
the Application moved by the Defendants under Order VII Rule
10 and Rule 11(d) of the CPC. Such an order is not enumerated
in Order XLIII of the CPC, though Rule 1(a) of Order XLIII
enlists an order passed under Order VII Rule 10 for returning the
plaint. Thus, Order XLIII enlists the order passed on an
Application under Order VII Rule 10 if it is allowed, however, it
does not enlist the order in case such an Application is rejected.
Order XLIII also does not enlist any order passed on an
Application under Order VII Rule 11(d) of the CPC.
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18. Learned Counsel for the Appellant, however, has
emphasized that in view of the law laid down by Delhi High Court
in the case of D & H India Ltd. Vs. Superon
Schweisstechnik India Ltd.1 and in the case of Delhi
Chemical and Pharmaceutical Works Pvt. Ltd. Vs. Himgiri
Realtors Pvt. Ltd. and Another2 , this appeal is maintainable.
Learned Counsel for the Defendants has also referred to a
judgment of Division Bench of this Court in the case of Skil-
Himachal Infrastructure & Tourism Ltd. & Ors. Vs IL and
FS Financial Services Ltd.3
19. So far as the judgment of the Delhi High Court in the case
of D & H India Ltd. (supra) is concerned, it is to be noticed
that the appeal in the said case was filed before a Commercial
Appellate Division of the High Court from an order passed by the
Commercial Division of that High Court. It is noteworthy that
the appeal before the Commercial Appellate Division of the High
Court in this case was filed against an order under Order VI Rule
17 of the CPC by the learned Single Judge exercising jurisdiction
of Commercial Division of the High Court under the Commercial
1 268 (2020) Delhi Law Times 15 (DB)
2 2021 SCC Online Del 3603
3 2022 SCC Onine Bom 3152.
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Courts Act. The Hon'ble Delhi High Court in the case of D &
India Ltd. (supra) held the appeal to be maintainable by
observing that the Court in that case was not concerned with the
challenge to the order passed under Order VI Rule 17 of the
CPC, rather under Order V of Chapter II of the 2018 Rules of the
High Court, which reads as under:
5. Appeal against Registrar's Order -
Any person aggrieved by any order made by the
Registrar under Rule 3 of this Chapter may within 15
days of such order appeal against the same to the
Judge in Chambers. The appeal shall be in the form of
the petition bearing court fees of Rs.2.65".
20. We may also notice that as per the facts narrated in the
judgment in the case of D & H India Ltd. (Supra) under the
Rules of Delhi High Court, an Application to amend the plaint,
petition, written statements, the Application or subsequent
proceedings where amendment sought is formal in nature, is
decided by the Registrar and in the said case such an Application
was decided by the Registrar against which a Petition was filed
before the Learned Single Judge who passed an order in his
capacity as Commercial Division of the High Court against which
an appeal was preferred before the Division Bench i.e. before the
Commercial Appellate Division of the High Court. It is in these
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facts it has been held by the Delhi High Court that the appeal
was maintainable giving the reason that it emanated from the
order passed under rule 5 of Chapter 2 of Delhi High Court
Original Side Rules and thus the Commercial Appellate Division
of High Court was concerned with the order referable to Rule 5 of
the Chapter 2 of the Delhi High Court Original Side Rules and not
with the order referable to Order VI Rule 17 of the CPC.
21. In the aforesaid facts of the case the Delhi High Court held
the appeal to be maintainable, whereas, in the instant case the
appeal before us has been filed against the order of the learned
District Judge in his capacity as a Commercial Court under the
Act of 2015. The order passed by a Court rejecting an
Application preferred under Order VII Rule 10 and Rule 11(d) of
the CPC, is not enumerated in order XLIII. Thus, the judgment
of Delhi High Court in the case of D & H India Ltd. (supra) is
clearly distinguishable and does not have any application to the
present case.
22. As far as the reliance placed by the learned counsel for the
Defendants on the judgment of the Delhi Court in the case of
Delhi Chemical and Pharmaceutical Works Pvt. Ltd.
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(supra) is concerned, we find that in the said judgment itself
the Division Bench expressed doubts as to the correctness of the
view taken in the judgment of D & H India Ltd. (supra),
however, did not feel any need to make a reference of the
question to a larger bench for the reasons disclosed in the said
judgment. Paragraph 25 of the judgment in the Delhi Chemical
and Pharmaceutical Works Pvt. Ltd. (supra) is extracted
hereinbelow:
"25. Though we, with due deference to the members of the
Division Bench in D&H India Ltd. supra, entertain doubts as
to the correctness of the view taken in D&H India Ltd. but
do not, in the facts of the present case, feel the need to
make a reference of the question to a larger bench; the
reason is, that Bhandari Engineers & Builders Pvt. Ltd.
supra, on which the impugned orders are based, while
laying down the law laid down therein, also directs all
Courts to abide thereby, resulting in plethora of similar
challenges as made herein and it is deemed expedient to
settle the law in that regard and which would remain
pending if the question of maintainability of the appeal
were to be referred to a larger bench."
23. Thus, in view of the observations made by the Delhi High
Court in paragraph 25 of the judgment in the case of Delhi
Chemical and Pharmaceutical Works Pvt. Ltd. (Supra), the
said judgment also does not have any application so far as the
instant appeal is concerned.
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24. Reliance placed by the learned counsel for the Defendants
on the judgment of a coordinate bench of this court in the case
of Skil-Himachal Infrastructure (supra) is also highly
misplaced. The said judgment analyses the unamended as also
the amended provisions of Section 13 of the Act of 2015 along
with various other provisions of the Act of 2015 and has, inter
alia, thus concluded that an appeal from order granting
conditional leave to defend any summons for judgment in a
commercial summary suit is not maintainable. It is to be noticed
at this juncture that an order granting conditional or
unconditional leave to defend any summons for judgment passed
under Order XXXVII Rule 5 of the CPC is not enumerated in
order XLIII of the CPC.
25. The Division Bench of this Court in the case of Skil-
Himachal Infrastructure (supra) has taken note of the
judgment in the case of Shailendra Bhadauria Vs. Matrix
Partners India Investment Holdings LLC 2018 SCC OnLine
Bom 13804 wherein it has been held that the judgments in the
case of Hubtown Ltd. Vs. IDBI Trusteeship Services Ltd.,
2016 SCC OnLine Bom 9019 and Sigmarq Technologies
Pvt. Ltd. Vs. Manugraph India Ltd. 2017 SCC OnLine Bom
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9191. Paragraph 44 of the judgment in the case of Shailendra
Bhadauria (supra) is relevant which is extracted hereunder:
"44. Now, the Commercial Courts (Amendment) Act, 2018
amends the Act 4 of 2016 and deletes the word "decision"
from Section 13. We have already reproduced it above.
Thus, the earlier view in Hubtown Limited (supra) and
Siqmarq Technologies (supra) will have to give way and all
the more after the Judgments of the Hon'ble Supreme
Court delivered in the case of Fuerst Day Lawson Limited v.
Jindal Exports Limited, reported in (2011) 8 SCC 333 and
the authoritative and binding pronouncement in the case of
Kandla Export Corporation (supra). The statute has to
confer a right of appeal. That has to be conferred in clear
words. We cannot, as suggested by Mr. Andhyarujina, by
an interpretative process carve out a right of appeal, when
the law is not creating it."
26. The judgment in the case of Skil-Himachal
Infrastructure & Tourism Ltd. & Ors. (supra) also takes
note of the law laid down by the Supreme Court in the case of
Kandla Export Corporation Vs. OCI Corporation (2018) 14
SCC 715. The observations made by the Division in paragraph
44 of the Skil-Himacahal Infrastructure & Tourism Ltd. &
Ors. (supra) is also relevant which is extracted hereunder:
"44. In the Supreme Court decision in Kandla Export
Corporation, Section 13 was addressed like this. First, that
Section 13(1) of the CC Act is in two parts. The main
provision deals with appeals from judgments, orders and
decrees to the Commercial Division of the High Court. To
this, the proviso is an exception. Second, the proviso must
be construed harmoniously with the main provision, not in
derogation of it. It operates in the same field. If main
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provision is in clear language, the proviso cannot be used
to 'interpret' the main part, or to exclude - let along by
implication - any part of the main provision; except, of
courts, if the proviso plainly contemplates such an
exclusion. Under the proviso, appeals against orders are
restricted to those orders under Order 43 of the CPC, and
Section 37 of the Arbitration Act. Therefore, no appeal lies
to the Commercial Appellate Division against any order not
specifically listed in Order 43 of the CPC (or an order not
under Section 37 of the Arbitration Act).
27. Referring to the order which was under appeal in Skil-
Himachal Infrastructure & Tourism Ltd. & Ors. (supra), the
Division Bench in this case held that an order of conditional leave
under Order XXXVII of the CPC is not enumerated in Order XLIII
and that it is only an order and not a decree and therefore, in
view of the law laid down in Kandla Export Corporation and
Shailendra Bhadauria (supra), such an order is not
appealable under the Act of 2015.
28. Thus, from the discussion made above, we are clear in our
mind that an appeal under Section 13(1A) of the Act of 2015 would
lie only against the judgment and orders which are enumerated or
enlisted under Order XLIII of the CPC. An order rejecting an
Application moved under Order VII Rule 10 or Order VII Rule 11(d)
of the CPC is not enumerated or enlisted in Order XLIII of the CPC
hence, such an order is not appealable following the law
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laid down by this court in the case of Skil-Himachal
Infrastructure & Tourism Ltd. & Ors. (supra).
29. For the discussion made and the reasons given above, we
are of the considered opinion that the instant appeal is not
maintainable which is liable to be dismissed.
30. Resultantly, the appeal is dismissed. However, there will be
no order as to costs.
31. The Interim Application, if any, also stands dismissed.
(ARIF S. DOCTOR,J) (CHIEF JUSTICE)
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