Madras High Court
Gkv Properties vs V.Aravindan (Died) on 15 April, 2021
C.R.P.(PD)Nos.244 & 245 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 15.04.2021
CORAM
THE HON'BLE Mr. JUSTICE G.K.ILANTHIRAIYAN
C.R.P.(PD)Nos.244 & 245 of 2018
and C.M.P.Nos.1393 & 1394 of 2018
GKV Properties
A Partnership Firm,
rep. by its Partner,
K.Velumani
No.33/12, Natesar Mill Compound
Perundurai Road,
Erode - 638 011. ... Petitioner in
both CRPs.
Vs.
1. V.Aravindan (died)
2. UGS Impex,
A Partnership Firm,
Rep. by its Partner D.Saravanan
G.K.Fashion,
No.1/171, Indhu Nagar,
Palayapalayam,
Thindal Post,
Erode - 638 012.
3. D.Saravanan
4. K.Vadivel
5. A.Chinnammal
Page 1 of 18
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C.R.P.(PD)Nos.244 & 245 of 2018
6. A.Amuthavalli
7. A.Harikrishna
8. Minor A.Vijaykumar,
Rep by his mother and
Natural guardian A.Amuthavalli
(RR4 to R8 brought on record as
Legal heirs of the deceased first
respondent vide Court order dated
03.02.2021 made in C.M.P.No.7228
of 2019 in CRP.No.244 of 2018) ... Respondents in
CRP.No.244 of 2018
1. K.Sakthi
2. R.Natarajan
3. UGS Brothers
A Partnership Firm,
Rep. by its Partner D.Saravanan
G.K.Fashion,
No.1/171, Indhu Nagar,
Palayapalayam,
Thindal Post,
Erode - 638 012.
4. UGS Impex
A Partnership Firm,
Rep. by its Partner D.Saravanan
G.K.Fashion,
No.1/171, Indhu Nagar,
Palayapalayam,
Thindal Post,
Erode - 638 012.
5. D.Saravanan ... Respondents in
CRP.No.245 of 2018
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C.R.P.(PD)Nos.244 & 245 of 2018
Common Prayer :- Civil Revision Petitions are filed under Article 227 of
the Constitution of India, to strike of the petitions in I.P.Nos.8 & 9 of 2017
respectively, on the file of the Second Additional Subordinate Judge, Erode,
insofar as its relates to the petitioner in the above Civil Revision Petition
and with respect to the petition mentioned property of the petitioner alone in
the above Civil Revision Petition.
(Prayer amended vide order of this Court dated 30.01.2018 made in
C.M.P.No.1676 & 1677 of 2018 in C.R.P.Nos.244 & 245 of 2018
respectively.)
For Petitioner
in both CRPs : Mr.V.P.Sengottuvel
For Respondents
in CRP.244/15
R1 : Died
For R5 & R7 : Mr.S.Kaithamalai Kumaran
For Respondents
in CRP.245/15
For R1 & R2 : Mr.S.Kaithamalai Kumaran
For R3 to R5 : Notice served
COMMON ORDER
These Civil Revision Petitions have been filed to strike of the
petitions in I.P.Nos.8 & 9 of 2017 both on the file of the Second Additional
Subordinate Judge, Erode.
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C.R.P.(PD)Nos.244 & 245 of 2018
2. The learned counsel appearing for the petitioner in both Civil
Revision Petition submitted that the petitioner is the third and fourth
respondent in the petition filed by the first respondent and respondent 1 & 2
respectively. The petitioner purchased the suit property from one
D.Saravanan viz., the third respondent and fifth respondent in both Civil
Revision Petition, by a registered sale deed dated 04.10.2016, registered
vide document No.6144 of 2016 on the file of the Join I Sub Registrar
Office, Erode.
3. Thereafter on the request of the said D.Saravanan, the first
respondent and the respondents 1 & 2 in both Civil Revision Petition had
lent a sum of Rs.30,00,000/- and Rs.6,00,000/- respectively on 20.10.2016
and 15.10.2016 respectively. In order to discharge the said debt and
repaying the same the borrower issued post dated cheques and same were
presented for collection. It was returned dishourned with an endorsement
"funds insufficient".
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C.R.P.(PD)Nos.244 & 245 of 2018
4. Therefore, the first respondent and the respondents 1 & 2 in
both Civil Revision Petitions filed petition in I.P.Nos.8 & 9 of 2017
respectively to adjudicate the third respondent and the fifth respondent in
both Civil Revision Petitions. As the creditors in both petitions, they also
prayed direction directing the Official Assignee to take charge of the
property which was purchased by the petitioner herein from the said
D.Saravanan for administration and to sell the same in order to pay the
amounts due to the first respondent and respondents 1 & 2 in both Civil
Revision Petitions.
5. He further submitted that the property was duly purchased for
valid sale consideration vide registered sale deed dated 04.10.2016, whereas
the loan borrowed only after the sale deed viz., on 15.10.2016 &
20.10.2016. Therefore at the time of purchasing the property, there was no
borrowal of money by their vendor. While being so, the first respondent and
the respondents 1 & 2 in both Civil Revision Petitions filed petition to
adjudicate the borrower as an insolvent and bring the petition mentioned
property for sale, after setting aside the sale executed in favour of the
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C.R.P.(PD)Nos.244 & 245 of 2018
petitioner herein. It is nothing but clear abuse of process of law and the
second prayer in the insolvency petition is not at all sustained as against the
petitioner and it is liable to be strike of. In support of his contention, he
relied upon the following reported judgments:-
i) 2002 (1) SCC 100 - Roshan Deen Vs. Preeti Lal
ii) 1998 (3) SCC 573 - K.K.Modi Vs. K.N.Modi
iii) 2013 (2) SCC 398 - Kishore Samrite Vs. State of UP & ors
iv) 2000 (3) CTC 74 - Seeni @ sundarammal Vs. Ramasamy
Poosari & ors.
v) 2010 (4) CTC 690 - South and Rajamani Transport Pvt. Ltd., Vs.
Srinivasan & ors
vi) 2013 (4) Online Mad 3302 - S.R.Nanda Kishore Vs. The Body
of Villagers & Ors.
6. Per contra, the learned counsel appearing for the respondents 1
& 2 in CRP.No.245 of 2018, submitted that while borrowing the loan the
petition mentioned property was shown to the respondents 1 & 2 and seeing
the said property the respondents 1 & 2 had lent money to the borrower. He
further submitted that the petition mentioned property's guideline value
comes to Rs.1,81,85,000/- whereas the petitioner had paid the deficit stamp
duty of Rs. 10,21,000/-, which shows that there is a clear collusion between
the borrower and purchaser and only to defeat the amount borrowed from
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C.R.P.(PD)Nos.244 & 245 of 2018
the respondents 1 & 2. Therefore he prayed for dismissal of the Civil
Revision Petition in CRP.No.245 of 2018.
7. Heard Mr.V.P.Sengottuvel, learned counsel appearing for the
petitioner, Mr.S.Kaithamalai Kumaran, learned counsel appearing for the
respondents 5 & 7 in CRP.No.244 of 2018 and the respondents 1 & 2 in
CRP.No.245 of 2018. Though notices served and name printed in the cause
list, no one is appeared on behalf of the other respondents in both petitions.
8. The first respondent in CRP.No.244 of 2018 and the
respondents 1 & 2 in CRP.No.245 of 2018 filed insolvency petitions in
I.P.Nos.8 and 9 of 2017 respectively, to adjudicate the respondents 2 & 3 in
CRP.No.244 of 2018 and respondents 3 to 5 in CRP.No.245 of 2018 as
insolvent and also for direction to direct the Official Assignee to take
charge of the petition mentioned property for administration and to sell the
same in order to pay the amount due to the first respondent and respondents
1 & 2 in both Civil Revision Petitions.
9. On perusal of records revealed that the petitioner purchased the
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C.R.P.(PD)Nos.244 & 245 of 2018
petition mentioned property by the registered sale deed dated 04.10.2016
vide registered document No.1644 of 2016 on the file of the Join I Sub
Registrar, Erode. Admittedly, only after purchase of the property, the first
respondent and the respondents 1 & 2 respectively in both Civil Revision
Petitions had lent money to other respondents. In fact, on the date of
disbursement of the loan amount, the borrower also issued post dated
cheques. All the cheques were presented for collection and returned
dishonoured with an endorsement insufficient funds. Therefore, there is
absolutely no connection between the purchaser of the property with the
borrowal of loan. Admittedly, no documents in respect of the petition
property were deposited while borrowing the loan by the borrower and also
there was no mortgage in respect of the petition mentioned property.
10. Insofar as the insolvency petitions are concerned, it were filed
for direction directing the Official Assignee to take charge of the petition
mentioned property for administration and to sell the same and order to pay
the amounts due to the first respondent and respondents 1 & 2 in both Civil
Revision Petitions, which is not sustainable. In this regard, the learned
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C.R.P.(PD)Nos.244 & 245 of 2018
counsel appearing for the petitioner relied upon the judgment reported in
2002 (1) SCC 100 in the case of Roshan Deen Vs. Preeti Lal, which reads
as follows :-
"12. We are greatly disturbed by the
insensitivity reflected in the impugned judgment
rendered by the learned single Judge in a case
where judicial mind would be tempted to utilize all
possible legal measures to impart justice to a man
mutilated so outrageously by his cruel destiny. The
High Court non-suited him in exercise of a
supervisory and extraordinary jurisdiction
envisaged under Article 227 of the Constitution.
Time and again this Court has reminded that the
power conferred on the High Court under Article
226 and 227 of the Constitution is to advance
justice and not to thwart it. {vide State of Uttar
Pradesh vs. District Judge, Unnao and ors. (AIR
1984 SC 1401)}. The very purpose of such
constitutional powers being conferred on the High
Courts is that no man should be subjected to
injustice by violating the law. The look out of the
High Court is, therefore, not merely to pick out any
error of law through an academic angle but to see
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C.R.P.(PD)Nos.244 & 245 of 2018
whether injustice has resulted on account of any
erroneous interpretation of law. If justice became
the byproduct of an erroneous view of law the
High Court is not expected to erase such justice in
the name of correcting the error of law."
11. He also relied upon the judgment reported in 1998 (3) SCC
573 in the case of K.K.Modi Vs. K.N.Modi, in which the Hon'ble Supreme
Court of India held as follows :-
"43. The Supreme Court Practice 1995
published by Sweet & Maxwell in paragraph
18/19/33 (page 344) explains the phrase "abuse of
the process of the court" thus: "This term connotes
that the process of the court must be used bona
fide and properly and must not be abused. The
court will prevent improper use of its machinery
and will in a proper case, summarily prevent its
machinery from being used as a means of vexation
and oppression in the process of litigation........
The categories of conduct rendering a claim
frivolous, vexatious or an abuse of process are not
closed but depend on all the relevant
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C.R.P.(PD)Nos.244 & 245 of 2018
circumstances. And for this purpose
considerations of public policy and the interests of
justice may be very material."
44. One of the examples cited as an abuse
of the process of court is re-litigation. It is an
abuse of the process of the court and contrary to
justice and public policy for a party to re-litigate
the same issue which h as already been tried and
decided earlier against him. The re-agitation may
or may not be barred as res judicata. But if the
same issue is sought to be re-agitated, it also
amounts to an abuse of the process of court. A
proceeding being filed for a collateral purpose, or
a spurious claim being made in litigation may also
in a given set of facts amount to an abuse of the
process of the court. Frivolous or vexatious
proceedings may also amount to an abuse of the
process of court especially where the proceedings
are absolutely groundless. The court then has the
power to stop such proceedings summarily and
prevent the time of the public and t he court from
being wasted. Undoubtedly, it is a matter of
courts' discretion whether such proceedings
should be stopped or not; and this discretion has
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C.R.P.(PD)Nos.244 & 245 of 2018
to be exercised with circumspection. It is a
jurisdiction which should be sparingly exercised,
and exercised only in special cases. The court
should also be satisfied that there is no chance of
the suit succeeding."
12. He also relied upon the judgment reported in 2013 (2) SCC
398 in the case of Kishore Samrite Vs. State of UP & ors, as follows :-
"32. The cases of abuse of the process of
court and such allied matters have been arising
before the Courts consistently. This Court has had
many occasions where it dealt with the cases of
this kind and it has clearly stated the principles
that would govern the obligations of a litigant
while approaching the court for redressal of any
grievance and the consequences of abuse of the
process of court. We may recapitulate and state
some of the principles. It is difficult to state such
principles exhaustively and with such accuracy
that would uniformly apply to a variety of cases.
These are:
(i) Courts have, over the centuries, frowned
upon litigants who, with intent to deceive and
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C.R.P.(PD)Nos.244 & 245 of 2018
mislead the Courts, initiated proceedings without
full disclosure of facts and came to the courts with
‘unclean hands’. Courts have held that such
litigants are neither entitled to be heard on the
merits of the case nor entitled to any relief.
(ii) The people, who approach the Court for
relief on an ex parte statement, are under a
contract with the court that they would state the
whole case fully and fairly to the court and where
the litigant has broken such faith, the discretion of
the court cannot be exercised in favour of such a
litigant.
(iii) The obligation to approach the Court
with clean hands is an absolute obligation and has
repeatedly been reiterated by this Court.
(iv) Quests for personal gains have become
so intense that those involved in litigation do not
hesitate to take shelter of falsehood and
misrepresent and suppress facts in the court
proceedings. Materialism, opportunism and
malicious intent have over-shadowed the old ethos
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C.R.P.(PD)Nos.244 & 245 of 2018
of litigative values for small gains.
(v) A litigant who attempts to pollute the
stream of justice or who touches the pure fountain
of justice with tainted hands is not entitled to any
relief, interim or final.
(vi) The Court must ensure that its process
is not abused and in order to prevent abuse of the
process the court, it would be justified even in
insisting on furnishing of security and in cases of
serious abuse, the Court would be duty bound to
impose heavy costs.
(vii) Wherever a public interest is invoked,
the Court must examine the petition carefully to
ensure that there is genuine public interest
involved. The stream of justice should not be
allowed to be polluted by unscrupulous litigants.
(viii) The Court, especially the Supreme
Court, has to maintain strictest vigilance over the
abuse of the process of court and ordinarily
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C.R.P.(PD)Nos.244 & 245 of 2018
meddlesome bystanders should not be granted
“visa”. Many societal pollutants create new
problems of unredressed grievances and the Court
should endure to take cases where the justice of
the lis well-justifies it."
The Hon'ble Supreme Court of India repeatedly held that the Court must
ensure that its process is not abused and in order to prevent abuse of process
of Court, it would be justified even in insisting on furnishing of security and
in cases of serious abuse, the Court would be duty-bound to impose heavy
costs. Further the process of Court must be used bonafide and property and
must not be misused or abused. It is the duty of the Court to prevent
improper use of its machinery. The Court has to see that it is not used as a
means of oppression and the process of litigation is free from vexatiousness.
13. In the case on hand, the petition mentioned property was
purchased by the petitioner as early as on 04.10.2016, whereas the amount
was borrowed by his vendor only on 15.10.2016 and 20.10.2016. Therefore,
the petition mentioned property is no way connected with the borrowal of
loan. Therefore, the impugned proceeding is nothing but clear abuse of
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C.R.P.(PD)Nos.244 & 245 of 2018
process of law and it cannot be sustained as against the petitioner. Hence
the prayer "(b)" in both petitions I.P.Nos.8 and 9 of 2017 is hereby struck
of. Insofar as the other prayers are concerned, the insolvency petition can be
maintainable as against the respondents 1 & 2 in I.P.No.8 of 2017 and
against the respondents 1 to 3 in I.P.No.9 of 2017 on the file of the II
Additional Subordinate Court, Erode.
14. Accordingly, both the Civil Revision Petitions are allowed.
There shall be no order as to costs. Consequently connected miscellaneous
petitions are closed.
15.04.2021
Internet : Yes
Index : Yes/No
Speaking order/Non-speaking order
rts
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C.R.P.(PD)Nos.244 & 245 of 2018
To
1. The II Additional Subordinate Judge,
Erode.
2. The Section Officer,
V.R. Section,
Madras High Court,
Chennai.
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C.R.P.(PD)Nos.244 & 245 of 2018
G.K.ILANTHIRAIYAN, J.
rts
C.R.P.(PD)Nos.244 & 245 of 2018
and C.M.P.Nos.1393 & 1394 of 2018
15.04.2021
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