Madras High Court
N.Abdul Salam vs The Vice President on 3 January, 2022
1
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 03.01.2022
Coram
The Hon'ble Mr. Justice PARESH UPADHYAY
and
The Hon'ble Mr. Justice SATHI KUMAR SUKUMARA KURUP
O.S.A.No.251 of 2021
and C.M.P.No.20765 of 2021
N.Abdul Salam ..Appellant
Vs
1.The Vice President,
Head, CBB, Corporate Banking,
Axis Bank Limited,192, Anna Salai,
Karumuthu Nilayam, 1st Floor,
Chennai – 600 002.
2.Axis Bank SME Center,
Axis Bank Limited,
192, Anna Salai,
Karumuthu Nilayam, 1st Floor,
Chennai – 600 002.
3.Ramesh,
Vice President
4.Naveen,
Manager (Recovery),
2 to 5 at Axis Bank SME Center,
Axis Bank Limited,
192, Anna Salai,
Karumuthu Nilayam, 1st Floor,
Chennai – 600 002.
5.Vidyasankar,
https://www.mhc.tn.gov.in/judis
2
Assistant Manager,
2 to 5 at Axis Bank SME Center,
Axis Bank Limited,
192, Anna Salai,
Karumuthu Nilayam, 1st Floor,
Chennai – 600 002.
6.Dr.Ramamurthy, Director,
RR Infra Zenith Pvt Ltd.,
131, Paper Mills Road, Peravallur,
Chennai – 82.
7.A.Venkat Ramana Reddy ..Respondents
Appeal preferred under Order XXXVI Rule 11 of O.S. Rules r/w
Clause 15 of Letters Patent against the fair and decreetal order dated
25.03.2021 made in A.No.7239 of 2019 in C.S.No.821 of 2017.
For Appellant .. Mr.A.Sirajudeen,
Senior Counsel
for Mr.R.Rajamani
For Respondents .. Mr.V.V.Sivakumar
for R1 to R4
No appearance for R5 to R7
JUDGMENT
(Delivered by PARESH UPADHYAY, J.)
Challenge in this appeal is made to the order passed by learned
single Judge dated 25 March 2021 recorded on A.No.7239 of 2019 in
C.S.No.821 of 2017. This appeal is by the original plaintiff.
2. In the suit seven defendants are joined. An application was
https://www.mhc.tn.gov.in/judis
filed by original defendants 1, 2, 3 and 4 under Order VII Rule 11 (d)
of the Civil Procedure Code to reject the plaint qua them. The said
application is allowed. It is this order which is under challenge.
3. Learned senior advocate for the appellant has submitted that
the rejection of plaint by learned single Judge qua four defendants is
illegal inasmuch as the appellant/ original plaintiff is left without any
remedy qua those defendants, since according to the appellant/
original plaintiff, he cannot approach any forum other than civil Court
in view of the provisions of the Recovery of Debts and Bankruptcy
Act, 1993 and The Securitisation and Reconstruction of Financial
Assets and Enforcement of Securities Interest Act, 2002. It is noted
that learned senior advocate for the appellant has taken this Court
through the contents of the order to contend that the rejection of
plaint qua those defendants is illegal and the same may be interfered
with in this appeal.
4. On the other hand, learned advocate for the contesting
respondents – who were applicants in the application on which the
impugned order is passed/ original defendants 1,2, 3 and 4 has
submitted that the impugned order can not be termed to be
erroneous in any manner and therefore no interference be made by
https://www.mhc.tn.gov.in/judis
this Court. It is submitted that the plaintiff is the borrower and the
bank seeks to recover that amount from the plaintiff. All defences, as
may be available to him can be taken by him but this arm-twisting by
the plaintiff (of joining the bank and its senior officers as defendants)
should not be permitted and therefore the same is rightly set right by
learned single Judge. It is submitted that this appeal be dismissed.
5. Having heard learned advocates for the respective parties
and having considered the material on record, this Court finds as
under:
5.1 In the plaint there are seven defendants viz.,
“1.The Vice President,
Head, CBB, Corporate Banking,
Axis Bank Limited,192, Anna Salai,
Karumuthu Nilayam, 1st Floor,
Chennai – 600 002.
2.Axis Bank SME Center,
Axis Bank Limited,
192, Anna Salai,
Karumuthu Nilayam, 1st Floor,
Chennai – 600 002.
3.Ramesh,
Vice President
4.Naveen,
Manager (Recovery),
2 to 5 at Axis Bank SME Center,
Axis Bank Limited,
https://www.mhc.tn.gov.in/judis
192, Anna Salai,
Karumuthu Nilayam, 1st Floor,
Chennai – 600 002.
5.Vidyasankar,
Assistant Manager,
2 to 5 at Axis Bank SME Center,
Axis Bank Limited,
192, Anna Salai,
Karumuthu Nilayam, 1st Floor,
Chennai – 600 002.
6.Dr.Ramamurthy, Director,
RR Infra Zenith Pvt Ltd.,
131, Paper Mills Road, Peravallur,
Chennai – 82.
7.A.Venkat Ramana Reddy”
5.2 The grievance is principally against the sixth defendant.
Averments in that regard are made in the plaint, relevant of which
reads as under:
“8. But, contrary to the terms of the loan and
operation of the account, the 6th defendant had,
in collusion with the officials of the 1st defendant
bank, had withdrawn the funds from the said
account with his sole signature in the cheque and
misappropriated it. Cheque signed by a single
director is not at all valid and the 1st defendant
could not pass that cheque. Most of the funds
were transferred by the 6th defendant to his
private account opened in the name "RR
Enterprises" in the 1st defendant bank. After a
https://www.mhc.tn.gov.in/judis
large amount was withdrawn, the said factum
came to the plaintiff's knowledge. On 13.10.2014,
the plaintiff brought the matter of violation to the
knowledge of the 1st defendant in writing. Inspite
of this letter, the 1st defendant had deliberately
permitted the withdrawal and misappropriation of
the loan amount. Since the signatures of the
plaintiff are not available in those cheques, the
plaintiff is not at all liable for the withdrawal of
the funds which exceeded Rs.3,00,00,000/-.
........
10.Further, the terms of the loan specifically
stated that the loan amount should not be used
for any other purpose nor diverted. Without the
knowledge of the plaintiff and in clear violation of
the terms of loan, the 6th defendant had opened
another account in the same bank in the name of
the company itself. The account number was
914020015055598. Instead of depositing all the
receipts in the account in which cash credit was
sanctioned, the receipts to the company were
deposited in the above second account and it was
misused by the 6th defendant at his sole
discretion. Major part of the credit sanctioned was
also diverted to his personal account opened in
the name "RR Enterprises". The officials of the 1st
defendant were fully aware of the opening and
operation of these accounts and in the diversion
of funds, they were also hand in glove with the
https://www.mhc.tn.gov.in/judis
6th defendant. Thus, by their deliberate collusion
with the 6th defendant, the officials of the 1st
defendant had caused a monetary loss of more
than Rs.3,00,00,000/-.
.................
13. Further, an account can be opened in the
name of the company only if the forms are signed
by all the directors and only based upon the
resolution of the board. But in collusion with the
officials of the defendant who are the defendants
3 to 5 herein, the 6th defendant had opened the
second account bearing No.914020015055598 in
it only with his sole signature, diverted the loan
amount to this account and misappropriated it.
Further, he had opened one more account in the
name of RR Enterprises. Both were solely
operated by the 6th defendant. The credit
sanctioned to the account bearing
No.914030016465850 was illegally and
fraudulently, in collusion and connivance with the
officials of the 1st defendant who are the
defendants 3 to 5 in this suit were diverted to
these two accounts and used at the sole
discretion of the 6th defendant. ....."
5.3 The prayer clause in the suit reads as under:
“a. directing the defendants jointly and
severally to pay to the plaintiff a sum of
https://www.mhc.tn.gov.in/judis
Rs.3,50,00,000/- (Rupees thirty six lakhs three
thousand and twenty five) with future interest @
18% per annum from the date of filing of this suit
till realisation:
b. cost of the suit; and
c. grant such further or other reliefs as this
Hon'ble Court may deem fit and proper in the
circumstances of the case and thus render
justice.”
5.4 Defendants 1 to 4 filed the application, principally
contending that the suit was not maintainable against those
defendants. With the impugned order, the suit still continues
including against the sixth defendant, who according to the plaintiff
has played fraud.
6. We do not find any illegality in the impugned order. The bank
or its officers should not unnecessarily be asked to face the ordeal of
civil litigation, if they are in a position to satisfy the Court that,
unnecessarily they are being dragged into the litigation. Even
otherwise, on the original defendants 1 to 4 being relieved, the suit
could not be termed to be barred for non-joinder of necessary parties.
https://www.mhc.tn.gov.in/judis
No such plea is either taken by the sixth defendant before learned
single Judge nor in this appeal though notice was already issued on
03 August 2021.
7. In totality, we find that no prejudice can be said to have
been caused to the plaintiff/ present appellant by the impugned
order. Even otherwise, the impugned order can not be said to be
erroneous in any manner. This appeal therefore needs to be
dismissed.
8. For the above reason this appeal is dismissed. No costs.
Consequently, connected C.M.P. would not survive.
(P.U.J.,) (S.S.K.J.,)
03.01.2022
Index:Yes/No
mmi/33
To
The Sub Assistant Registrar,
Original Side,
High Court, Madras.
PARESH UPADHYAY, J.
and
SATHI KUMAR SUKUMARA KURUP, J.
https://www.mhc.tn.gov.in/judis
mmi
O.S.A.No.251 of 2021
03.01.2022
https://www.mhc.tn.gov.in/judis
