M.S Adil vs Syndicate Banks & Ors
2015 Latest Caselaw 2100 Del

$~
*     IN THE HIGH COURT OF DELHI AT NEW DELHI

                                          Judgment Reserved on: 26.02.2015
                                       Judgment Pronounced on: 11.03.2015
+     CS(OS) 2182/2013

      M.S ADIL                                    ..... Plaintiff
                          Through      Mr.Asutosh Lohia, Mr.Satish Kumar
                                       and Ms.Soumya Kumar, Advocates
                          Versus

      SYNDICATE BANKS & ORS            ..... Defendants
                   Through  Ms.Reena Jain Malhotra and
                            Mr.S.V.Tyagi, Advocate for D-
                            1/Bank
      CORAM:
      HON'BLE MR. JUSTICE JAYANT NATH

JAYANT NATH, J.

IA No. 17981/2013 (u/O 39 R 1 & 2 CPC) and 17982/2013 (u/S 5 of the Limitation Act seeking condonation of delay of 5566 days in filing the suit)

1. IA No. 17981/2013 is an application under Order 39 Rules 1 & 2 CPC. On 11.12.2013 this court had restrained defendant No.1-Bank from recovering any sum from the plaintiff in terms of the sanction letter dated 09.12.1993.

2. The accompanying suit is filed for declaration, permanent and mandatory injunction by the plaintiff. The plaint states that defendant No.2 entered into a Bank Guarantee Limit Agreement with defendant No.1 on 09.12.1993. It is urged that as newly appointed Executive Director, the plaintiff on the asking of the Bank signed certain blank papers in the form of

a guarantee as guarantors to the B.G. Limit issued in favour of defendant No.2. It is further stated that defendant No.1forwarded the format of bank guarantee to its Zonal Office which had certain objections. It is urged that defendant No.1 thereafter unilaterally altered/changed the bank guarantee limit vide slip dated 01.03.1994 and converted the same into an inland letter of credit. Contemporaneously, the Bank also increased the period of credit limit from 45 days to 60-90 days. The plaintiff is said to have protested vide letter dated 12.05.1994. Hence it is the contention of the plaintiff that defendant No.1 has unilaterally altered/changed the terms of the bank guarantee. Various other contentions are raised. Based on these contentions, a decree of declaration is sought declaring that the plaintiff is not liable to pay any sum to defendant No.1 Bank. A decree of permanent and mandatory injunction is also sought restraining defendant No. 1 from recovering any sum from the plaintiff in terms of sanction letter dated 09.12.1993 by which the Bank Guarantee Limit Agreement was executed.

3. Learned counsel appearing for the plaintiff has submitted that there are clear variations in the terms of the contract without the consent of the plaintiff. Hence, it is stated that the present suit for declaration has been filed as the same is not barred under Section 18 of the Recovery of Debts Due to Banks & Financial Institutions Act, 1993 (hereinafter referred to as „DRT Act).

4. Learned counsel appearing for defendant No.1 has strenuously urged that the interim order passed by this court on the earlier date be vacated. She submits that on 11.03.2013, the Debt Recovery Tribunal-II (hereinafter referred to as DRT) in an O.A. No. 09/1997 filed by defendant No. 1 had passed a recovery certificate in favour of defendant No. 1 and against

amongst others the plaintiff for a sum of Rs. 20,75,604/- with simple interest @ 23.5% per annum from 10.12.1996. She also submits that the submissions and contentions raised by the plaintiff regarding variations in the credit facility granted to defendant No. 1 have also been raised by the plaintiff before the DRT. It is submitted that further against the order of the DRT, the plaintiff had filed a writ petition being WP(C)5104/2013 titled as Mahender Singh Adil vs. Union of India & Ors. and the writ petition was dismissed. Liberty was granted to avail the appellate remedy as available to the plaintiff. It is urged that instead of filing of an appeal before DRAT and complying with the appropriate condition, the plaintiff has filed the present suit. No such suit for declaration would lie.

5. In rejoinder argument, learned counsel for the plaintiff has pointed out that the counter claim that was filed by the plaintiff before the DRT was permitted to be withdrawn. He submits that along with the present suit an application under Section 5 read with Section 14 of the Limitation Act has also been filed being IA No.17982/2013. He further states that there was no decision on merits on the submissions of the plaintiff, the present suit for declaration has been filed.

6. It is further urged that the fact that the plaintiff was perusing a wrong remedy by way of a counter claim before the Tribunal would entitle the plaintiff to relief under Section 14 of the Limitation Act.

7. Few things are noteworthy. Firstly, what is troubling the plaintiff is some changes made by defendant No.1 Bank in the credit facilities granted on 01.03.1994. As per the plaintiff, the plaintiff protested then and there on 12.05.1994. Thereafter the plaintiff took no steps. He has no doubt filed some counter claim before DRT. The Tribunal on the request of the plaintiff

to withdraw the counter claim notes that the plaintiff has not paid the court fees on the counter claim. The Tribunal noted that the application filed by the plaintiff was to withdraw the counter claim with liberty to file the same before the appropriate court. The Tribunal noted that having agitated the matter to this length of time, permission cannot be granted with liberty to file counter claim on the same cause of action. The counter claim was however dismissed as withdrawn. The relevant portion of the order of DRT reads as follows:-

"Therefore the defendants were directed to remit the required court fee. D4 filed IA No. 156/2013 seeking permission to withdraw the counter claim with liberty to file the same before appropriate court. Having agitated the matter to this length of time, permission can never by granted with liberty to file counter claim on the same cause of action. The court fee has not been paid. The counter claim by D4 is dismissed as withdrawn."

8. Defendant No.4 was the plaintiff before the Tribunal. Hence from the above observation it is clear that the Tribunal has not granted liberty to the plaintiff to file a counter claim in an appropriate court based on the same cause of action. Liberty was declined taking into account the background conduct of the plaintiff i.e. O.A. having been filed in 1997 to seek withdrawal in 2013 of the counter claim was obviously frowned upon by the Tribunal. In fact no court fees had been paid on the counter claim.

9. Even otherwise, the relief which is being sought by the plaintiff is in fact an attempt to undo the order and the recovery certificate issued by the Tribunal against amongst others the plaintiff on 11.03.2013. It is an indirect method of impugning the judgment of the Tribunal.

10. The relief of discretion is a discretionary relief which has to be

exercised and grant and refusal of it is to be according to sound principles of law. The court cannot convert itself into an instrument of injustice. The Supreme Court in the case of American Express Bank Ltd. Vs. Calcutta Steel Company & Ors., 1993 (2) SCC 199 in para 22 held as follows:-

"22. Undoubtedly declaration of the rights or status is one of discretion of the court under Section 34 of the Specific Relief Act, 1963. Equally the grant or refusal of the relief of declaration and injunction under the provision of that Act is discretionary. The plaintiff cannot claim the relief as of right. It has to be granted according to sound principles of law and ex debito justitiae. The court cannot convert itself into an instrument of injustice or vehicle of oppression. While exercising its discretionary power, the court must keep in its mind the well settled principles of justice and fair play and the discretion would be exercised keeping in view the ends of justice since justice is the hall mark and it cannot be administered in vacuum."

11. The effect of any final relief that will be granted as sought by the plaintiff is only to nullify the recovery certificate issued by DRT.

12. Given the above weakness in the case of the plaintiff, in my view the plaintiff has failed to make out a prima facie case. Balance of convenience is also in favour of defendant No. 1 as it cannot be restrained from implementing the recovery certificate issued by DRT in this manner that too belatedly. The challenge to the alleged variation of the credit limit is after 20 years. The present applications are dismissed.

13. The interim order passed by this court on 11.12.2013 is vacated. CS(OS) 2182/2013 List before the Joint Registrar on 07.04.2015 for further proceedings.

                                                      (JAYANT NATH)
MARCH 11, 2015/rb                                        JUDGE