Punjab-Haryana High Court
Ujjagar Construction Pvt. Ltd vs Nayati Healthcare And Research ... on 20 November, 2023
Neutral Citation No. : 2023:PHHC:146990
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
291
CR-5837-2023 (O&M)
Reserved on: 20.10.2023
Pronounced on : 20.11.2023
Ujjagar Construction Pvt. Ltd.
. . . Petitioner(s)
Versus
Nayati Healthcare and Research NCR Pvt. Ltd.
and Others
. . . Respondent(s)
CORAM: HON'BLE MR. JUSTICE SANJAY VASHISTH
Argued by: Mr. Puneet Bali, Sr. Advocate
(on 04.10.2023, 06.10.2023, 09.10.2023,
10.10.2023, 11.10.2023, 17.10.2023 & 19.10.2023) and
Mr. Ashish Chopra, Sr. Advocate
(on 06.10.2023, 09.10.2023, 10.10.2023,
17.10.2023, 18.10.2023, 19.10.2023 & 20.10.2023) with
Mr. Gagandeep Singh, Advocate,
Mr. Tushar Sharma, Advocate and
Mr. Parmanand Yadav, Advocate, for the petitioner.
Mr. Vineet Malhotra, Advocate,
Mr. Dinesh Arora, Advocate,
Mr. Vishal Gohri, Advocate and
Mr. Abhinav Dubey, Advocate
for caveator- respondent No.1.
Mr. Akshay Bhan, Sr. Advocate
(18.10.2023 & 19.10.2023) With
Mr. Harsh Gupta, Advocate,
Mr. Rahul Makkar, Advocate, for respondent No.2.
Mr. Chetan Mittal, Sr. Advocate
(on 09.10.2023, 10.10.2023, 17.10.2023
18.10.2023, 19.10.2023 & 20.10.2023) and
Mr. K. Ramakanth Reddy, Sr. Advocate with
Mr. Ashish Rawal, Advocate,
Mr. Himanshu Gupta, Advocate,
Mr. Rohit Khanna, Advocate
Mr. Karan Kaushal, Advocate
Mr. Saurabh Gautam, Advocate
Mr. Ritvik Garg, Advocate and
Ms. Komal Aggarwal, Advocate
for caveator - respondent No.3.
****
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) -2-
SANJAY VASHISTH, J.
1. Present revision petition has been directed against the order
dated 21.09.2023, passed by the Court of Ld. Addl. District Judge,
Gurugram (hereinafter referred to as 'Ld. Appellate Authority'), whereby,
application filed under Order 39 Rule 1 & 2 CPC, filed by the petitioner
(hereinafter referred to as 'the plaintiff'), has been dismissed, by allowing
the civil miscellaneous appeal filed by respondent No.3 (defendant No.3) i.e.
M/s Apollo Hospitals North Ltd., by setting aside the order passed by the
Court of Ld. Civil Judge (Sr. Divn.), Gurugram (hereinafter referred to as
'Ld. Trial Court'), allowing the application.
2. Property, which is the subject matter in the suit filed by the
plaintiff is the land measuring 5.628 acres of land, bearing plot Nos. 1202,
1203 & 1204, situated at DLF City, Phase-I, Gurugram. Undisputedly, till
date, subject cited property is recorded in the record for the purpose of
construction of Health Centre, and Dispensary.
Plaintiff - Ujjagar Constructions Pvt. Ltd., claimed its right in
the property on the basis of the execution of Memorandum of Understanding
(for brevity, 'MOU'), dated 08.04.2022, executed between Ujjagar
Constructions Pvt. Ltd., on the one side as 'Party' (plaintiff), AND M/s
Nayati Healthcare & Research NCR Private Ltd., along with its promoter,
'Ms. Nira Radia', as 'Parties' (being defendants No.1 & 2), for which the
total sale consideration for purchase of the property was fixed as Rs.468.00
Crores.
3. To acknowledge the journey of litigation from its inception, it is
necessary to explain here that at the first instance; aforesaid civil suit was
PRASHANT KAPOOR
2023.11.20 15:50
instituted by the plaintiff against defendants No.1 & 2 before the commercial
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) -3-
courts on 30.07.2022. Defendants No.1 & 2 appeared on that very day on
caveat. On 02.08.2022, plaintiff moved an application for early hearing,
before the concerned Court, however, said application was dismissed.
Again, on 06.08.2022, plaintiff filed an application for early hearing of the
ex-parte stay against the sale of the property. On the said application,
commercial Court issued notice to defendants for 08.08.2022. On
08.08.2022, defendants No.1 & 2 appeared before the Court and sought
sometime to file written statement, and reply to the said application, but
defendants while appearing in the post lunch period, claimed that the
property has been transferred, and sale deed has been registered in favour of
M/s Apollo Hospitals North Ltd. Plaintiff immediately filed an application
under Order 1 Rule 10 CPC, to implead M/s Apollo Hospitals North Ltd., as
a party. There being no objection by defendants No.1 & 2, said application
was allowed by an order to implead the Appollo Hospitals North Ltd., as
defendant No.3.
It is relevant to note that in some arbitration proceedings, titled
as, 'M/s Suman Constructions Pvt. Ltd. vs. M/s Truthmark Realtors Pvt.
Ltd., and another, there was a stay order on the suit property. However,
during the proceedings before the arbitrator, claimant M/s Sumav
Construction Pvt. Ltd. withdrew the application for stay under Section 17 of
the Arbitration and Conciliation Act, and also the main claim from the
arbitral proceedings itself, and as such, arbitration application was
withdrawn on 05.08.2022. Consequently, stay order passed by Ld.
Arbitrator against the alienation of the property in question, stood vacated on
05.08.2022.
Thus, by noticing the factum of withdrawal of the arbitration
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) -4-
application, and also the conduct of the defendants, application for early
hearing was disposed of, and vide its order dated 08.08.2022, commercial
Court directed the parties to the lis to maintain status quo in all respects qua
the suit property, till the next date of hearing i.e. 16.08.2022.
4. During the pendency of proceedings before the Ld. Commercial
Court, the jurisdiction of the Ld. Commercial Court, to decide the case, was
challenged before this Court in FAO-COM-20-2022, wherein, this Court
directed the appellant to file an appropriate application before Ld.
Commercial Court, who shall make an endeavour to decide the same within
a period of six weeks.
Therefore, on an application filed before the Ld. Commercial
Court, seeking return of plaint under Order 7 Rule 10 CPC, Ld. Commercial
Court, vide its order dated 11.10.2022, held that the issue involved herein, is
not covered under the Commercial Courts Act, and thus, invoking the power
under Order 7 rule 10 CPC, returned plaint for appearance of the parties
before the Civil Court on 28.10.2022.
Said Order of return of plaint was challenged first by plaintiff -
Ujjagar Constructions Pvt. Ltd. in FAO-COM-25-2022, wherein, vide order
dated 27.10.2022, this Court upheld the order of Ld. Commercial Court, and
directed Ld. Civil Court to decide the application under Order 39 Rule 1 & 2
CPC within seven days of its filing by the plaintiff.
Said order of return of plaint was also challenged in appeal by
defendant No.1 - Nayati Healthcare & Research NCR Private Limited in
FAO-COM-27-2022, and defendant No.3 - M/s Apollo Hospitals North Ltd.
vide FAO-COM-30-2022 (O&M); before this Court (Punjab and Haryana
High Court), however, said appeals were dismissed vide order dated
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) -5-
03.05.2023.
This way, proceedings are conducted by the Civil Court in an
ordinary suit for possession by way of specific performance and declaration
along with consequential relief for permanent and mandatory injunction.
Thereafter, vide order dated 04.11.2022, Court of Ld. Civil
Judge (Sr. Divn.), Gurugram (in short, 'Trial Court'), allowed the
application under Order 39 Rule 1 & 2 read with Section 151 CPC, and
restrained the defendants No.1 to 3, 'from selling or alienating or creating
any third party interest in the suit property i.e. plot Nos. 1202, 1203, & 1204,
situated in DLF City, Phase-1, Sector 28, Gurugram. Defendants were also
restrained from making any change/alteration in the suit property till the
final decision of the present case'.
5. Assailing the order dated 04.11.2022, passed by Ld. Trial Court,
defendant No.3 - M/s Apollo Hospitals North Ltd., went in appeal by way of
Civil Miscl. Appeal, which was allowed by the Court of Ld. Addl. District
Judge, Gurugram (in short, 'Appellate Court'), vide its order dated
21.09.2023. Ld. Appellate Court primarily discussed Section 34 of the
Securitization and Reconstruction of Financial Assets and Enforcement of
Security Interests Act, 2002 (for brevity, 'SARFAESI Act), which says as
under:-
"34. Civil Court not to have jurisdiction.--No civil court
shall have jurisdiction to entertain any suit or proceeding in
respect of any matter which a Debts Recovery Tribunal or the
Appellate Tribunal is empowered by or under this Act to
determine and no injunction shall be granted by any court or
other authority in respect of any action taken or to be taken in
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) -6-
pursuance of any power conferred by or under this Act or
under the Recovery of Debts Due to Banks and Financial
Institutions Act, 1993 (51 of 1993)."
And thus, held that suit filed by the plaintiff is nothing but an
off-shoot of the recovery proceedings initiated by M/s Yes Bank Ltd.
Taking note of the various provisions of the SARFAESI Act,
Ld. Appellate Court also held that jurisdiction of Civil Court is completely
barred in the case at hand, so far as, aggrieved person has right of appeal
before the DRT or the Appellate Tribunal, against the measure taken by the
secured creditor under Section 13(4) of the SARFAESI Act, who are there to
determine as to whether there is any illegality in the measures taken.
Appellate Court also went to examine the object of entering into MOU by
the plaintiff i.e. converting the land in question to its commercial use from
healthcare and medical purpose. Ld. Appellate Court further held that there
is nothing available on record that ever at any point of time, after execution
of MOU dated 08.04.2022, plaintiff succeeded in getting CLU or even to
show that there is any policy of the State Government, by virtue of which,
the site meant for health/medical services, can be converted, for its
commercial use.
At last, Ld. Appellate Court concluded that for the purpose of
granting interim injunction under Order 39 Rule 1 & 2 CPC, there is need to
make out a case of granting of temporary injunction, same being covered
with three basic principles, which are:-
(i) Prima facie case;
(ii) Balance of convenience; and
(iii) Irreparable loss or injury;
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) -7-
Learned Appellate Court found that case of plaintiff is not
meeting out with the settled parameters. Further held that in the case at
hand, there is no jurisdiction of Civil Court, and thus, dismissed, the
application under Order 39 Rule 1 & 2 CPC.
Hence, plaintiff is before this Court by way of present revision
petition to challenge the impugned order.
FOR THE SAKE OF CLARITY AND CONVENIENCE, THE GIST OF
MEMORANDUM OF UNDERSTANDING (MOU), BASED UPON
WHICH, THE PRESENT SUIT FOR SEEKING SPECIFIC
PERFORMANCE OF THE ACT IS FILED, IS AS UNDER:-
6. Since, the suit filed by the plaintiff is based upon one and the
only document i.e. MOU dated 08.04.2022, its material features and terms
are required to be understood before entering into the sphere of the pleadings
of the parties. Key terms of the MOU are as follows:-
Date of execution of Memorandum of Understanding (MOU) :
08.04.2022.
First Party to the agreement is the purchaser - Ujjagar Construc-
tions Pvt. Ltd. (plaintiff), AND Nayati Healthcare & Research
NCR Private Limited (defendant No.1) with promoter Ms. Nira
Radia (defendant No.2), as Second Party.
Defendant No.3 and M/s Yes Bank Ltd. or any other person or in-
stitution is not a party/signatory over the MOU.
Thus, MOU is bilateral document, without taking consent of any
third interested party.
Parties to the MOU acknowledge that possession is with 'M/s Yes
PRASHANT KAPOOR
Bank Ltd.'.
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) -8-
RELEVANT CLAUSES OF THE MOU:-
"Memorandum of Understanding
This Memorandum of Understanding ("MoU") is made and executed
on this Friday, 8th day of April 2022 ("Execution Date") by and
among:
1. Ujjagar Constructions Private Limited, a company incorporated
under the provisions of the Companies Act 1956/2013, bearing
CIN:U70109HR2021PTC097764 having its registered office at
Unit No.SB/C/5L/Office/008, M3M Urbana, Sector-67,
Gurugram - 122101 (hereinafter referred to as the "Purchaser")
which expression shall, unless repugnant to the context of the
meaning thereof, include its successors and permitted assigns);
AND
2. Nayati Healthcare & Research NCR Private Limited, a
company incorporated under the provisions of the Companies
Act 1956/2013, bearing CIN: U24233DL2007PTC171542
having its registered office at A-14, Duggal Colony, Devli
Road, Khanpur, Delhi - 110062 (hereinafter referred to as the
"Company", which expression shall, unless repugnant to the
context of the meaning thereof, include its successors and
permitted assigns);
AND
3. Ms. Nira Radia, daughter of Late Mr. Iqbal Narain Menon,
resident of Aakash Ganga, 9 Oak Drive, Dlf Chattarpur Farms,
Chattarpur, New Delhi 110074 (hereinafter referred to as the
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) -9-
"Promoter" which expression shall unless repugnant to the
context of the meaning thereof, include its successors and
permitted assigns)
Each of the Party herein above are referred to individually as a
"Party" and collectively as the "Parties".
A. The Promoter and the Company have represented to the
Purchaser that the Company is the owner of contiguous land
parcels admeasuring approx. 5.629 acres bearing Plot Nos.
1202, 1203 and 1204 situated in DLF City, Phase I, Sector 28,
District - Gurgaon, Haryana, together with building, structures
(hereinafter referred to as the "Said Property").
B. Owing to defaults by the Company in repayment of loans, M/s
Yes Bank Ltd. has taken physical possession of the Said
Property under section 13(4) of the SARFAESI Act vide notice
dated September 10, 2021.
C. Further, DHFL (subsequently merged with Piramal Capital
subsequent to being declared successful resolution applicant by
the NLCT) had also initiated insolvency proceedings under the
Insolvency and Bankruptcy Code against the Company before
the NCLT, New Delhi pursuant to which the Hon'ble Tribunal
granted a stay on sale of the Said Property on September 30,
2021 which was confirmed by NCLAT on January 31, 2022.
(Yes Bank and DHFL collectively referred to as "Lenders").
D. xx xxx xx xxx
E. That the Parties are entering into this MOU to take on record
PRASHANT KAPOOR
2023.11.20 15:50
their mutual understanding and set out the terms and conditions
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 10 -
for undertaking the sale and purchase of the Said Property in
favour of the Purchaser.
NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL
COVENANTS AND PROMISES CONTAINED HEREIN AND
OTHER GOOD AND VALUABLE CONSIDERATION THE
ADEQUACY OF WHICH IS ACKNOWLEDGED, EACH OF THE
PARTIES HEREBY AGREE AS FOLLOWS:
1. PROPOSED TRANSACTION
1.1 The Purchaser hereby agrees to purchase clear, legal and
marketable title of the said Property, free from all
encumbrances, together with all rights, title, interest and
benefits attached thereto and the Promoter and the Company
agree and hereby grant their irrevocable consent to sell and
transfer the said Property to the Purchaser and undertake to do
all acts, deeds and things necessary to enable the Purchaser to
acquire the said Property in its name.
1.2 The Parties agree and acknowledge that the transaction is
proposed to be an outright sale by way of private treaty with
Yes Bank Ltd. and the Promoter and the Company shall provide
all necessary assistance and support to enable the sale through
Yes Bank Ltd.
1.3 Further, the Parties agree that the Promoter and Company shall
be responsible for obtaining all licenses, approvals for change
in land use to commercial in respect of the Said Property
however the cost of obtaining such a license/approvals, if any,
PRASHANT KAPOOR
2023.11.20 15:50
and any subsequent compliances thereto would be borne solely
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 11 -
by the Purchaser.
2. CONSIDERATION AND PAYMENT TERMS
The Parties have agreed that the total consideration is INR 468
Crores [Rupees Four Hundred and Sixty Eight Crores Only]
("Consideration") which shall be payable as follows, subject to
fulfillment of the conditions set out in Clause 3 below:
a) Firstly, payment of INR 400 Crores [INR Four Hundred
Crores or any such amount as agreed with the Yes Bank
Ltd. subject to a maximum ceiling price of the
consideration value] towards consideration for the Said
Property to the Yes Bank Ltd. shall be made, subject to
the Purchaser receiving a copy of the policy from the
Promoter for conversion of land to commercial use.
b) Secondly, payment of all statutory liabilities/all other
liabilities of the Company, subject to a ceiling of the
Cumulative consideration, so as to ensure that the said
Property is unencumbered;
c) Lastly, the balance amounts from the Consideration, if
any, after adjustment against clause 2.1(a) and (b) above
("Balance Consideration") shall be payable by the
Purchaser to the Promoter immediately upon change in
land use for commercial use in respect of the Said
Property.
The purchaser undertakes to bear all statutory charges for
obtaining license for change in land use to commercial in
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 12 -
respect of the Said Property, including procurement of an
alternate parcel of equivalent land parcel as required under
policy, along with stamp duty and registration costs in relation
with the sale and transfer in favour of the Purchaser. These
sums shall not be adjusted from the Balance Consideration.
However, it is clarified that the obligation to obtain such
approvals shall vest solely on the Promoter and Company
however it is reiterated that the costs towards securing these
licenses and approvals would be borne exclusively by the
Purchaser.
3. CONDITIONS PRECEDENT
3.1 The Promoter and the Company shall jointly and severally
undertake the following:
3.1.1 The Promoter and the Company shall cause vacation of
stay on sale of Said Property before NCLT, New Delhi.
3.1.2 The Promoter and Company shall provide its express No-
Objection and consent for the private treaty sale of the
Said Property, to the satisfaction of the Yes Bank Ltd.
3.1.3 The Promoter shall be responsible for obtaining all
approvals including change in land use for commercial
use on the Said Property, etc. in favour of the Purchaser
at the sole cost, if any, of the Purchaser.
3.2 That Purchaser acknowledges that immediately upon vacation
of stay on the sale of the said property by the NCLT, New
Delhi, M/s Yes Bank ltd., under the provisions of the
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 13 -
SARFAESI Act would be required to dispose the said property
either by private treaty or a public auction within a span of 30
days. Accordingly, the Purchaser would be required to
complete the said Transaction within a maximum time limit of
30 days (or such extended time as agreed with the lender) from
the date of vacation of stay failing which M/s Yes Bank Ltd.
would be required to dispose the said property and this MOU
would stand infructuous.
3.3 xx xxx xx xxx
3.4 xx xxx xx xxx
4. BINDING AGREEMENT
The terms and conditions of this MOU constitute legal and
binding obligations of each Party and each Party agrees to
perform (or assist in the performance of) all further acts and
things (including the execution and delivery of, or assisting in
the execution and delivery of, all deeds and documents that may
be required or as may be necessary, required or advisable) as
the other Party may reasonably require to effectively carry on
the full intent and meaning of this MOU and to complete the
transactions contemplated hereunder.
5. GOVERNING LAW AND DISPUTE RESOLUTION
5.1 xx xxx xx xxx
xx xxx xx xxx"
-*-*-*-*-*-
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 14 -
7. THE PARTICULARS OF OTHER PARALLEL LITIGATIONS
QUA THE LAND IN QUESTION, ARE DETAILED HERE-UNDER
IN TABULATED FORM:-
Date(s) Key Events Proceedings Proceedings in the Arbitration
under the Insolvency and Proceedings
SARFAESI Act, Bankruptcy Code, (Between M/s
2002 2016 Sumav
(Initiated by M/s (Initiated by Diwan Constructions Pvt.
Yes Bank Ltd.) Housing and Ltd. and M/s
Finance Ltd., now Truthmark
Piramal Ltd.) Realtors Pvt. Ltd.)
29.03.2011 DLF Qutab Enclave -- -- --
Complex Medical
Charitable Trust
sold disputed land
to OSL Healthcare
Pvt. Ltd. (Nayati
Healthcare)
10.09.2021 -- M/s Yes Bank -- --
Ltd. took
possession of
the disputed
land by
initiating
proceedings
under Section
13(4) of the Act.
30.09.2021 -- -- In an Insolvency --
Petition, National
Company Law
Tribunal (NCLT),
New Delhi, granted
stay.
08.04.2022 MOU signed -- -- --
between M/s
Ujjagar
Constructions Pvt.
Ltd. and M/s Nayati
Healthcare &
Research NCR
Private Limited &
Ms. Nira Radia
(Promoter)
19.04.2022 -- -- Insolvency Petition --
along with stay
dismissed by NCLT.
06.05.2022 -- -- Appeal instituted by --
M/s Diwan Housing
Finance Ltd. (now
Piramal Ltd.),
against order of
dismissal in
National Company
Law Appellate
Tribunal (NCLAT),
New Delhi.
12.05.2022 -- -- NCLAT ordered that --
'any action of the
parties shall be
subject to the
outcome of the
PRASHANT KAPOOR
2023.11.20 15:50
appeal.'
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 15 -
Date(s) Key Events Proceedings Proceedings in the Arbitration
under the Insolvency and Proceedings
SARFAESI Act, Bankruptcy Code, (Between M/s
2002 2016 Sumav
(Initiated by M/s (Initiated by Diwan Constructions Pvt.
Yes Bank Ltd.) Housing and Ltd. and M/s
Finance Ltd., now Truthmark
Piramal Ltd.) Realtors Pvt. Ltd.)
02.06.2022 -- -- NCLAT allowed the --
sale of property
subject to sale
amount being
deposited in a
separate amount.
06.07.2022 Sale-deed executed -- -- --
between M/s Nayati
Healthcare &
Research NCR
Private Limited and
M/s Apollo
Hospitals North
Ltd.
07.07.2022 -- Debt Recovery -- --
Tribunal (DRT)
allowed the sale
of the disputed
land to M/s
Apollo Hospitals
North Ltd.
15.07.2022 -- -- -- Stay order against
the sale of
property by Sole
Arbitrator.
20.07.2022 -- -- NCLAT allowed the --
appropriation of the
sale consideration
received from M/s
Apollo Hospitals
North Ltd.
05.08.2022 -- -- -- Claimant - M/s
Sumav
Constructions Pvt.
Ltd. withdrew the
application for
stay u/s 17 of the
Arbitration Act.
08.08.2022 Sale-deed registered -- -- --
between M/s Nayati
Healthcare &
Research NCR
Private Limited and
M/s Apollo
Hospitals North
Ltd.
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 16 -
8. PLEADED SUIT OF THE PLAINTIFF
Plaintiff - Ujjagar Constructions Pvt. Ltd.
VERSUS
Defendant No.1 - Nayati Healthcare & Research NCR Private Limited
Defendant No.2 - Ms. Nira Radia
Defendant No.3 - M/s Apollo Hospitals North Ltd.
A. Plaintiff pleaded that defendants No.1 & 2 projecting
themselves to be owners of the land/plots in question, situated
in DLF City, Phase-1, Sector 28, District Gurugram (Haryana),
executed a MOU dated 08.04.2022, for the purpose of the sale
of said area to the plaintiff for a total sum of Rs.468.00 Crores.
There were insolvency proceedings pending under the
Insolvency and Bankruptcy Code, 2016 against defendant No.1,
at the instance of one Diwan Housing Finance Corporation Ltd.
(DHFL), which later merged with M/s Piramal Capital &
Housing Finance Limited. Said proceedings were pending
before the National Company Law Tribunal (NCLT), New
Delhi. NCLT had granted stay on the sale of the suit property
vide order dated 30.09.2021. Subsequently, said application
filed by M/s Piramal Capital & Housing Finance Limited before
the NCLT, was dismissed on 19.04.2022. Thus, stay order was
vacated.
B. M/s Piramal Capital & Housing Finance Limited went in an
appeal before the National Company Law Appellate Tribunal
(NCLAT) on 12.05.2022, wherein, Ld. Tribunal recorded that
PRASHANT KAPOOR
any act of defendants No.1 & 2 would be subject to the
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 17 -
outcome of the appeal.
However, NCLAT did not grant any specific stay order on the
suit property, in favour of M/s Piramal Capital & Housing
Finance Limited.
On 02.06.2022, NCLAT directed that in case of sale of suit
property, the consideration received from the said sale shall be
kept in a separate account, which shall be subject to the orders
to be passed in this appeal.
This way, plaintiff pleaded that actually, stay over the suit
property got vacated on 02.06.2022, when for the first time,
sale of the property was permitted and not on 19.04.2022.
However, such sale was ordered to be subject to the order of the
appeal pending before the NCLAT.
C. After 02.06.2022, plaintiff approached the defendants with the
information that the balance payment, as contemplated under
the MOU, is ready with it. However, defendants sought some
time to deal with the M/s Yes Bank Ltd., and assured for
providing details of the requisite Bank account for making
payment.
D. For the purpose of execution of sale-deed, plaintiff also
purchased stamp papers worth Rs.28,32,00,000/- (Rupees
Twenty Eight Crores and Thirty Two Lakhs only) on
31.05.2022.
E. It is also pleaded that during one of the meetings prior to
02.06.2022, it was informed by the defendants that they were
incapable of obtaining the Change of Land Use (CLU)
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 18 -
permission, at such a short period. Upon this, plaintiff agreed
to purchase the property, on 'as is, where is' basis, and deferred
the remaining obligations in terms of clause 2 of the
Agreement. Plaintiff has also appended their Bank account
statements for the purpose of showing of sufficient balance, in
the account of the plaintiff company to complete their
obligations as per the said MOU.
F. On having some doubt over the defendants No.1 & 2, of dealing
with some third party, anticipating the situation, plaintiff filed
objections before the Tehsil Office on dated 13.07.2022,
expressing their right of priority over the suit property.
G. Plaintiff also pleaded that in fact, defendants No.1 & 2 started
asking for a higher amount i.e. Rs.550.00 Crores, as
consideration of the property, as they were getting higher offers
from the other parties.
H. At last, pleaded that defendants have made a mockery of the
justice system and succeeded in getting the registration of the
sale-deed, in a clandestine manner by misleading the Courts.
Thus, while seeking enforcement of its right, by way of seeking
a decree of specific performance by way of possession, also
pleaded in alternative for relief in the form of damages.
As per para 23 of the plaint, plaintiff claimed that it would have
easily earned revenue of a sum of Rs.3000 to Rs.4000 Crores,
and profit of a sum of Rs.1000 Crores, upon the sale of asset
after undertaking the full construction of the project. By
claiming that, plaintiff would have earned profit of Rs.1000
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 19 -
Crores, plaintiff claimed damages of Rs.468 Crores in a
conservative manner.
9. PLEADINGS IN THE JOINT WRITTEN STATEMENT OF
a. Defendant No.1 - Nayati Healthcare & Research NCR Private
Limited had purchased the suit property for the purpose of
building a hospital vide conveyance deed dated 29.03.2011
from M/s DLF Qutab Enclave Complex Medical Charitable
Trust. Thus, it is clear that erstwhile management had intention
to construct the hospital over the suit property. For the said
purpose, erstwhile promoter obtained a term loan from M/s Al-
lahabad Bank. When erstwhile promoter was unable to com-
plete the construction, current promoter group of defendant
No.1 - Company took over the charge by repaying the full out-
standing dues of M/s Allahabad Bank.
b. For building the project of hospital, in 2018, defendant No.1
further availed a term loan of an amount of Rs.650.00 Crores
from M/s Yes Bank Ltd., of which, Rs.315.250 Crores, was dis-
bursed by M/s Yes Bank Ltd.
In the year 2020, with the advent of Corona virus pandemic,
defendant No.1 was under severe financial stress, and thus, was
unable to fulfill its financial obligations towards M/s Yes Bank
Ltd.
Further, defendant No.1 also borrowed an amount of Rs.210.42
Crores from M/s Dewan Housing & Finance Ltd. (DHFL), for
PRASHANT KAPOOR
2023.11.20 15:50
which, no security was created. Thus, on the default of said
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 20 -
loan, proceedings under Section 7 of the Insolvency and
Bankruptcy Code, 2016, were initiated against defendants No.1
& 2, by DHFL (now Piramal).
c. Notice under Section 13(2) of the SARFAESI Act, was issued
by M/s Yes Bank Ltd. to the defendants. Resultantly, to dis-
charge its obligations, defendant No.1, voluntarily handed-over
the physical and symbolic possession of the asset to M/s Yes
Bank Ltd. on 10.09.2021.
d. Further, pleaded that NCLT cleared in its order dated
30.09.2021 that physical possession of the suit property was
with M/s Yes Bank Ltd., and not with defendant No.1.
e. Also pleaded that one un-registered and unstamped MOU dated
27.11.2020, was executed between M/s Basant Bansal (B.B.)
through his associate company M/s Truthmark Realtors Pvt.
Ltd., for the purchase of the suit property. However, said MOU
was never acted upon, and had become infructuous.
f. Also pleaded that subsequent thereto again, plaintiff company,
in fact which is owned and controlled by the same B.B., who
earlier also had entered into MOU with the defendants/defen-
dant No.1 - company, again entered into MOU.
g. Further pleaded that plaintiff was under obligation to complete
the transaction within maximum time limit of 30 days from the
date of vacation of stay i.e. by 19.05.2022.
h. Issuance of No Objection Certificate (NOC) to defendant No.1
vide letter dated 25.04.2022, by M/s Yes Bank Ltd. for repay-
ment of an amount of Rs.358,30,78,500.65/- towards full and
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 21 -
final settlement of dues and release of security including the
suit property and permitting the sale of the suit property, were
well within the knowledge of the plaintiff, and same has been
purposely concealed.
i. Defendant No.1 also took steps to seek CLU for commercial
use of the suit property, but later on realized that such change is
impossible and MOU could not be performed, as the land in
question was allocated by the Govt. for the construction of a
hospital, and could not be used otherwise.
Consequently, defendant No.1 was unable to seek CLU for
commercial use of the suit property, and on 19.05.2022, 30
days period had elapsed, after vacation of the stay order by
NCLT.
DEFENDANT NO.3 - M/S APOLLO HOSPITALS NORTH
LTD.
j. In regard to sale of property to defendant No.3 - M/s Apollo
Hospitals North Ltd., it is pleaded that sale-deed had been exe-
cuted on 07.07.2022. Entire consideration of INR
Rs.425,05,00,000/- (Rupees Forty Hundred Twenty Five Crores
and Five Lakhs) was deposited by defendant No.3 with M/s Yes
Bank Ltd. on 06.07.2022 itself, and consequently, physical pos-
session of the suit property had also been taken on the same
date by defendant No.3. Suit property has been sold in favour
of respondent No.3, which was preceded by two judicial orders
i.e. (i) order dated 02.06.2022 of Hon'ble NCLAT in Company
Appeal (AT) (Insolvency) No.540 of 2022; and (ii) order dated
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 22 -
07.07.2022 of Ld. DRT in OA No.817/2021, permitting the sale
of suit property to M/s Apollo Hospitals North Ltd. (defendant
No.3).
k. Further pleaded that on account of the fact that no CLU was ob-
tained, the MOU was neither executable nor enforceable.
Moreover, after vacation of stay by NCLT vide order dated
19.04.2022, limitation for depositing of amount of the entire
consideration, by the plaintiff, expired within 30 days there-
after, i.e. before 19.05.2022, entire consideration was required
to be deposited by the plaintiff.
l. Further pleaded that after the fixed period of making of pay-
ment, the MOU in question was also rendered infructuous.
Moreover, defendants relied upon Section 41 of the Specific
Relief Act, 1963, and submitted that plaintiff is not entitled for
any order in the nature of injunction.
PLEADINGS IN THE WRITTEN STATEMENT OF
DEFENDANT NO.3
i. It has been pleaded that there was no authority with defendants
No.1 & 2 to execute the alleged MOU, and same is not even an
agreement to sell. It is merely an agreement to agree. There-
fore, such MOU is not of any consequence. At best, it should
be a case of breach of contract against defendants No.1 & 2, for
which, relief of damages has already been claimed by the plain-
tiff in the suit. Sale has been effected in favour of defendant
No.3 after following the due process of law. Alleged MOU is
PRASHANT KAPOOR
2023.11.20 15:50
without any clause for specific performance, and even is with-
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 23 -
out any consideration. Therefore, no question arises for any
specific performance by either side.
ii. Objection is also taken regarding the jurisdiction, as MOU itself
talks about the jurisdiction of New Delhi.
iii. Objection of not affixing of requisite ad valorem court fee is
also taken, and pleaded that plaint is worth to be rejected under
Order 7 Rule 11 of CPC.
Further pleaded that stay was vacated on 19.04.2022 and after
19.05.2022, as per term; MOU had been rendered infructuous.
iv. It is pleaded that one Letter of Intent (LOI) dated 22.05.2021
had already been executed between M/s Apollo Hospitals North
Ltd. (an associate of defendant No.3) and defendant No.1, for
sale of said land with construction thereon, and a part consider-
ation of Rs.3,50,00,000/- (Rupees Three Crores and Fifty Lakhs
only) was also paid to defendant No.1 on 02.06.2021 i.e. much
prior to the date of alleged MOU dated 08.04.2022.
v. It is also pleaded that as per sale-deed dated 29.03.2021, by
virtue of which, defendant No.1, purchased the land in question,
it was specifically stipulated that the land is reserved and meant
for hospital and dispensary only.
10. SUBMISSIONS OF THE PLAINTIFF/PETITIONER:
A. READINESS AND WILLINGNESS OF PLAINTIFF TO
PERFORM HIS PART OF AGREEMENT:Ld. Senior counsel
for the petitioner (plaintiff) submits that plaintiff was always
ready to perform his part of agreement, and on 31.05.2022, had
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 24 -
also purchased stamp paper worth Rs.28,32,00,000/-.
Moreover, plaintiff has annexed the Bank statement of the
company, from where it is clear that plaintiff always had
sufficient amount to pay the sale consideration. Therefore, it is
the defendant-company, and its promoter, who have illegally
sold the suit property to third party i.e. defendant No.3 - M/s
Apollo Hospitals North Ltd.
B. REASON FOR NO CONSIDERATION: Ld. Senior counsel
further submits that as per Clause 2(a) of the MOU dated
08.04.2022, there was a condition that firstly payment will be
made to M/s Yes Bank Ltd., which can range from Rs.400.00
Crores upto the maximum of total consideration of the MOU
i.e. Rs.468.00 Crores. Therefore, in case M/s Yes Bank Ltd.
would have asked for Rs.468.00 Crores itself, then, there would
have been no occasion to pay even a single penny to defendants
No.1 & 2.
Further, submits that in view of this clause, no consideration
was paid in furtherance of MOU to defendants No.1 & 2,
because, it was only after settlement of dues of M/s Yes Bank
Ltd., amount to be paid to defendants No.1 & 2, could have
been determined, which in all possibilities could even be 'Nil'.
Ld. Senior counsel further submits that as per Section 2(d) of
the Indian Contract Act, 1872, consideration can either be past,
present or future. Therefore, even if there is a promise to do or
to abstain from doing something in furtherance of any
agreement, it is considered as an appropriate consideration as
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 25 -
per the settled law.
Ld. Senior counsel further submits that even as per definition of
'sale' as provided under Section 54 of the Transfer of Property
Act, 1882, sale can be exchanged for the price paid or promised
or part paid and part promised. Thus, even as per the Transfer
of Property Act, 1882, the MOU dated 08.04.2022, is
absolutely valid and fulfill all legal conditions.
Further submits that even in the MOU dated 08.04.2022, it is
clearly stated that 'NOW THEREFORE, IN
CONSIDERATION OF THE MUTUAL COVENANTS AND
PROMISES CONTAINED HEREIN AND OTHER GOOD
AND VALUABLE CONSIDERATION THE ADEQUACY
OF WHICH IS ACKNOWLEDGED...'. Therefore, in the
MOU dated 08.04.2022, there is adequate future consideration
in the form of promise, and hence, such MOU cannot be stated
to be void in absence of consideration.
C. CONDITION OF CHANGE IN LAND USE WAIVED OFF:
Ld. Senior counsel further submits that it is the case of
the respondents/defendants No.1 & 2 that there was a specific
stipulation in Clause 3.1.3 of the said MOU that the land will be
sold only after obtaining all approvals including Change in land
Use (CLU) for commercial use of the suit property. However,
plaintiff has specifically pleaded in paragraph No. 8 of the suit
that plaintiff was ready to purchase the suit property even on 'as
is, where is' basis. The said fact has also been pleaded in
paragraph No.12 of the present revision petition. Ld. Senior
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 26 -
counsel submits that once the condition of CLU to commercial
use was waived off by the plaintiff and duly communicated to
the defendant-Company, it does not lie in the mouth of the
respondents/defendants to say that the MOU is void, being
contingent on such stipulation.
D. DEFENDANT NO.3 IS NOT A BONA-FIDE PURCHASER:
Ld. Senior counsel further submits that defendant No.3
i.e. M/s Apollo Hospitals North Ltd., is not a bona-fide
purchaser of the suit property, as pleaded by it in the written
statement, as the defendant No.3 was always aware of the
pendency of the suit i.e. CS-81-2022, as defendant No.3 itself
had mentioned the pendency of the suit in WP No.11745 of
2022. Further submits that even a cease-and-desist notice dated
06.08.2022, was sent by the plaintiff to defendant No.3 and the
said fact is not denied by the defendant No.3 in the written
statement filed by it. Therefore, by no stretch of imagination,
defendant No.3 can be considered a bona-fide purchaser, as it
was well aware of all the litigations pending qua the suit
property, as well as, the MOU signed between the plaintiff and
defendants No.1 & 2.
E. DATE OF EXECUTION IN ALLEGED SALE-DEED
MENTIONED AS 08.08.2022: Ld. Senior counsel
vehemently argues that the conduct of the defendants is mala
fide, which is evident from the fact that in the alleged sale-deed
dated 08.08.2022, it is claimed that the said sale-deed was
executed on 06.07.2022. However, on perusal of the stamp
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 27 -
duty attached with the sale-deed, it is clear that two stamps
were issued on two different dates i.e. 06.07.2022 and
15.07.2022. Further submits that in paragraph No.2(p) of the
sale-deed dated 08.08.2022, it is stated that '... there is no
prohibition/stay order operating as on the execution date on the
said property that is i.e. 08.08.2022.'. From this statement, it is
clear that the sale-deed was executed as well as registered on
one and the same date i.e. 08.08.2022, and the defendants have
concocted a false story about execution of the sale-deed on
06.07.2022.
Further submits that this mala fide conduct of the defendants
has even being deprecated by the Ld. Commercial Court vide
order dated 08.08.2022, on which date, defendants appeared in
the Court and asked for half an hour to submit reply to the
application filed by the plaintiff, however, later appeared in the
post lunch session at 1:45 PM and claimed that sale-deed
between defendants No.1 & 2, and M/s Apollo Hospitals North
Ltd., has already been executed. Such conduct of the
defendants has also been deprecated by the Hon'ble Division
Bench of this Court in FAO-COM-27-2022 and FAO-COM-30-
2022, vide order dated 03.05.2022.
Ld. Senior counsel further submits that even the Administrative
as well as Revenue Authorities acted in collusion with the
defendants, and got registered the sale-deed on 08.08.2022
itself, inspite of the objections already raised by the plaintiff
vide letter dated 13.07.2022, before the Tehsil Office,
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 28 -
expressing their right of priority over the suit property, as well
as, existence of a valid MOU between plaintiff and defendants
No.1 & 2.
Therefore, all the defendants have acted in a clandestine manner
to alienate the suit property in favour of M/s Apollo Hospitals
North Ltd., over which, plaintiff had a right of priority on the
basis of MOU dated 08.04.2022.
F. APPLICABILITY OF THE PROVISIONS OF SECTIONS 13,
17 AND 34 OF THE SARFAESI ACT, 2002: Ld. Senior
counsel submits that the remedy under the provisions of
SARFAESI Act, 2022, would have been available to the
plaintiff only, if on the date of filing of the suit i.e. 30.07.2022
(before the Ld. Commercial Court) or 28.10.2022 (before Ld.
Civil Court), any balance amount of the secured creditor i.e.
M/s Yes Bank Ltd., would have been due.
Further submits that as per order dated 20.07.2022, of Ld. DRT,
and 28.07.2022 of Ld. NCLAT, it is cleared that on the date of
filing of the suit, all the dues of M/s Yes Bank Ltd. stood
cleared.
Ld. Senior counsel further submits that once the secured
creditor i.e. M/s Yes Bank Ltd., had issued notice under Section
13(2) of the SARFAESI Act, 2002, to defendants No.1 & 2, and
in non-compliance of the notice, had taken over the possession
over the suit property on 10.09.2021 by adopting measures
under Section 13(4) of the SARFAESI Act, 2002, there was no
occasion with the plaintiff to seek any remedy under Section 17
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 29 -
of the SARFAESI Act, 2002, as plaintiff was in no way
aggrieved by the measures taken by M/s Yes Bank Ltd. against
defendants No.1 & 2. Further, it is a settled law that no suit for
specific performance can be instituted under SARFAESI Act,
2002, in Debts Recovery Tribunal (DRT), therefore, by any
stretch of imagination, bar of Section 34 of the SARFAESI Act,
2002, is not applicable to the plaintiff in the case at hand.
Ld. Senior counsel further submits that defendants at the time
of instituting an application for return of plaint under Order 7
Rule 10 of CPC, before the Ld. Commercial Court, never took
the plea that the suit of the plaintiff is barred by Section 34 of
the SARFAESI Act, 2002, instead themselves stated that
jurisdiction of Civil Court shall be made out in the present case
due to existence of bar of Sections 20-A and 20-B of the
Specific Relief Act, 1963.
In response to the said application, Ld. Commercial Court
clearly held that bar of Sections 20-A and 20-B of the Specific
Relief Act, 1963, shall not apply in the present case, as in the
MOU dated 08.04.2022, there is no mention that the suit
property relates to infrastructure or hospital project. Even, in
the appeals filed by defendant No.1 i.e. FAO-COM-27-2022
and defendant No.3 i.e. FAO-COM-30-2022, before this Court,
against the order of Ld. Commercial Court, no such plea of bar
of Section 34 of the SARFAESI Act, 2002, was taken. Hon'ble
Division Bench of this Court, vide order dated 03.05.2023,
upheld the order of the Ld. Commercial Court and held the non-
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 30 -
applicability of Sections 20-A and 20-B of the Specific Relief
Act, 1963. Therefore, plea of bar of Section 34 of SARFAESI
Act, 2002, at the stage of appeal of the order of allowing
application under Order 39 Rule 1 & 2 CPC, cannot be taken at
such a belated stage.
G. REASON FOR NOT EXECUTING MOU WITHIN 30 DAYS
OF VACATION OF STAY BY NCLT: Ld. Senior counsel
submits that in the MOU dated 08.04.2022, there was a specific
condition precedent under Clause 3.2 of the said MOU, that the
purchaser would be required to complete the said transaction
within 30 days from the date of vacation of stay by NCLT,
granted vide order dated 30.09.2021, initiated by one Dewan
Housing Finance Ltd. (DHFL) (now Piramal).
It is an admitted fact that NCLT vide its order dated
19.04.2022, dismissed the petition filed by DHFL, and on the
said date, stay stood vacated. However, it is important to note
that on 06.05.2022, DHFL instituted an appeal against the said
dismissal before Ld. NCLAT, and Ld. NCLAT vide order dated
12.05.2022, held that any action taken in the meanwhile shall
abide by the result of the appeal. It was only on 02.06.2022,
that Ld. NCLAT allowed the sale of the suit property, subject to
the condition that the sale proceeds shall be kept in a separate
account, which shall be subject to the order passed in appeal.
Therefore, for practical purpose, it was only on 02.06.2022, that
the stay on the suit property was vacated, and plaintiff had
purchased the requisite stamp papers even before said vacation
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 31 -
i.e. on 31.05.2022.
Ld. Senior counsel further submits that even if for the sake of
argument, it is believed that the stay on the suit property was
vacated on 19.04.2022 itself, still, the said argument is
untenable. The plaintiff came to know about the written
exchanges between defendants No.1 & 2 and M/s Apollo
Hospitals North Ltd. (defendant No.3) regarding the alienation
of the suit property. This created a doubt in the mind of the
plaintiff about the intention of the defendants, coupled with the
fact that proceedings were continuing in an appeal before Ld.
NCLAT, thus, plaintiff could not complete his part of the
contract before 19.05.2022, although, he was always ready,
willing and capable of performing his part of the contract.
H. IRREGULARITIES AND ILLEGALITIES IN THE
IMPUGNED ORDER: Ld. Senior counsel submits that the
Ld. Appellate Court in Civil Misc. Appeal against the order
dated 04.11.2022 of the trial Court, allowing the application
under Order 39 Rule 1 & 2 CPC, has failed to deal with any of
the findings rendered by the Ld. Trial Court, and has reversed
the well reasoned order of the Ld. Trial Court, only on the
ground of applicability of bar of Section 34 of the SARFAESI
Act, 2002.
Further submits that the Ld. Appellate Court has held that no
prima facie case is made out in favour of the plaintiff for
seeking injunction and the suit filed by the plaintiff is nothing
but an offshoot of the recovery proceedings initiated by M/s
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 32 -
Yes Bank Ltd. Ld. Appellate Court has failed to notice that
once on the date of filing of the suit, the claim of the secured
creditor is already settled, and the plaintiff is not aggrieved by
any of the measure taken by secured creditor, the jurisdiction of
Ld. DRT is not made out, whatsoever. Further, a suit for
specific performance cannot be instituted before DRT, and the
jurisdiction to grant such a remedy, is only within the domain
of ordinary Civil Courts.
Ld. Appellate Court has also held that the Change of Land Use
(CLU) from healthcare to commercial use, was not possible,
and thus, such MOU is void. However, it has already been
stated that the condition precedent of securing the CLU was
already waived off by the plaintiff, and it was the obligation of
the defendants to get the said CLU done. Another point, taken
by the Ld. Appellate Court is that no consideration was passed
at the time of execution of said MOU, which has already been
addressed in the point 'B' of the submissions.
Further, Ld. Appellate Court has gone beyond its jurisdiction by
holding that the jurisdiction of the Civil Court in the matter is
barred by the provision of Section 34 of the SARFAESI Act,
2002, as in a way Ld. Appellate Court, has rejected the plaint
which is beyond its jurisdiction while deciding an appeal
against order allowing application under Order 39 Rule 1 & 2
CPC. Ld. Appellate Court, could have gone only to the extent
of deciding whether a prima facie case is made out in favour of
plaintiffs for seeking temporary injunction or not?
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 33 -
Therefore, the impugned order dated 21.09.2023 (Annexure
P-1), passed by Ld. Appellate Court suffers from illegality,
irregularity and perversity, and is thus, liable to be set-aside.
11. To assail the findings given by the Ld. Appellate Court, learned
Senior counsel for the petitioner (plaintiff) primarily relies upon the
judgment of the Hon'ble Apex Court rendered in Nahar Industrial
Enterprises Limited v. Hong Kong and Shanghai Banking Corporation,
(2009) 8 Supreme Court Cases 646, and refers to paragraph Nos. 96 to 98;
105 to 131 of the said judgment.
While relying on this judgment, learned Senior counsel submits
that it has been held by the Hon'ble Apex court that for deciding the rights
of the parties to an agreement, only remedy available to the plaintiff is to
approach to the Civil Court. In paragraph No.108, Hon'ble the Apex Court
clarified that it is not always that the jurisdiction of the Civil Court is barred
by virtue of Sections 17 & 18 of the SARFAESI Act, 2002, rather the
jurisdiction of Civil Court would be ousted only in respect to the matters,
contained in Section 18, which has a direct co-relation with Section 17
thereof. Since, the jurisdiction of the Civil Court is plenary in nature, it will
have the jurisdiction to try all types of suits, unless the same is ousted,
expressly or by necessary implication of law.
Learned Senior counsel further relies upon another judgment of
Hon'ble the Apex Court rendered in J.P. Builders and another v. A.
Ramadas Rao and another, (2011) 1 Supreme Court Cases 429. While
referring to said judgment, learned Senior counsel argues that a substantial
amount of court fee i.e. around Rs.2,35,68,800/-, has already been appended
PRASHANT KAPOOR
2023.11.20 15:50
with the plaint, and in such circumstances, apart from substantial relief of
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 34 -
possession by way of specific performance of the Act/Contract, other reliefs
like compensation by way of damages or other discretionary reliefs may also
be granted by the Civil Court. Thus, the prayer made in the suit by the
plaintiff is maintainable only before the Civil Court, because, at an
appropriate stage of the suit, it will be within the domain of the Civil Court
only to mould the relief, so as to render substantial justice to the parties.
Relevant paragraph No.67 of the aforesaid judgment, says as under:-
"67. We have already demonstrated the relief prayed in the
plaint by paying substantial court fee of Rs. 41,66,326.50. In
such circumstance, when a party is able to secure substantial
relief, namely, decree for specific performance with
clearance of mortgage amount, it is the duty of the Court to
mould the relief so as to render substantial justice between the
parties. In this regard, we accept the course adopted by the
High Court in granting relief to the plaintiff."
While referring to another judgment of Hon'ble the Apex Court
rendered in Robust Hotels Private Limited and others v. EIH Limited and
others, (2017) 1 Supreme Court Cases 622, learned Senior counsel submits
that therein, while relying upon Nahar Industrial Enterprises Limited's case
(supra), again the Hon'ble Apex Court held that the bar of jurisdiction of
Civil Court under Section 34 of the SARFAESI Act, 2002 has to co-relate
with two conditions i.e.;
"(i) Any suit or proceeding in respect of any matter in which
the Debts Recovery Tribunal or Appellate Tribunal is
empowered by or under this Act to determine.
PRASHANT KAPOOR
2023.11.20 15:50
(ii) Further, no injunction shall be granted by any court or
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 35 -
other authority in respect of any action taken or to be taken in
pursuance of any power conferred by or under this Act or
under the Recovery of Debts Due to Banks and Financial
Institutions Act, 1993."
Thus, submits that in an appeal against order of interim
injunction, Ld. Appellate Court was not required to express any opinion, as
to whether the suit filed by the plaintiff was barred by Section 34 of the
SARFAESI Act, 2002, or not, since the issues are yet to be decided on
merits.
Thus, submits that in view of the law laid down by Hon'ble the
Apex Court, jurisdiction of the Civil Court cannot be ousted in view of the
bar provided under Section 34 of the SARFAESI Act, 2002, rather, Civil
Court has to conduct the proceedings up-till end, by deciding the rights of
the respective parties, and determine whether plaintiff would be entitled for
the basic relief or any other alternative relief by moulding the prayer.
12. SUBMISSIONS OF RESPONDENTS:
I. Inability of petitioner to fulfill terms of Memorandum of
Understanding (MOU):
On the other hand, Learned Counsel for respondents
(defendants) submits that as per the Clause 3.2 of the MOU,
onus was on the plaintiff to complete the said transaction within
30 days of the vacation of stay by Ld. NCLT, which was
vacated on 19.04.2022. Thus, plaintiff was to complete the
transaction at the most by 19.05.2022; however, plaintiff was
PRASHANT KAPOOR
not able to complete the same. Further submits that the alleged
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 36 -
stamp papers worth Rs.28,03,50,000/- (Rupees Twenty Eight
Crores, Three Lakhs and Fifty Thousand only) purchased by the
plaintiff is also after the expiry of said 30 days that is on
31.05.2022 and are thus of no consequence.
Further submits that the argument raised by the plaintiff
that the stay was not vacated uptill 02.06.2022, as an appeal was
filed by the DHFL against the order of dismissal passed by Ld.
NCLT before Ld. NCLAT on 06.05.2022 is also without force,
as Ld. NCLAT never provided any stay on the sale or alienation
of the third property, and the only direction that Ld. NCLAT
issued was that any action taken in the meanwhile, shall abide
by the result of the appeal.
Thus, in view of the failure of the plaintiff to fulfill the
condition precedent as provided in the Clause 3.2 of the MOU,
the said MOU is rendered infructuous and void as per Section
2(g) of the Indian Contract Act, 1872 and does not empower
plaintiff to seek any right in the suit property on the basis of
said MOU. Hence, the MOU was rendered infructuous on
19.05.2022 itself, when the 30 days expired from the vacation
of stay by Ld. NCLT and there is no locus with the plaintiff to
file the suit.
II. Non-Impleadment of the Bank as a party:
Learned Counsel for the respondents submits that
proceedings under the SARFAESI Act, 2002, were well within
the knowledge of the plaintiff and are even mentioned in the
alleged MOU, still, deliberately, the Bank has not been made
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 37 -
party (defendant) in the suit. Further submits that reason is best
known to the plaintiff itself, as to why it never approached the
DRT for the purpose of outright sale in his favour by making
the requisite payment to the Bank. Obviously, it was never the
intention of the plaintiff to buy the land, and hence, even no
consideration was given by the plaintiff to the defendant No. 1
and 2 during the execution of the alleged MOU.
III. MOU void as the condition precedent of Change in Land use
was itself Impossible:
Learned Counsel for the respondents submits that the
alleged MOU is also void as per Section 2(g) of the Indian
Contract Act, 1872 simply for the reason that one of the
condition precedent as provided in the alleged MOU is itself
impossible. Clause 3.1.3 of the MOU provides that before
completing the transaction, a change in land use (CLU) from
healthcare to commercial shall be obtained by the defendants
No. 1 and 2 for which the requisite fee and charges payable
shall be borne by the plaintiff. However, plaintiff has totally
failed to rely upon any policy to indicate that the land which is
meant for the dispensary/medical purpose could be converted
for commercial purpose, by seeking the Change of Land Use
(CLU), from the Government. Moreover, plaintiff has failed to
cite even any request made by it to the defendants No.1 and 2 to
seek the Change in land use (CLU).
Further relies upon the judgment of Hon'ble the Apex
Court rendered in DLF Qutab Enclave Complex Educational
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 38 -
Charitable Trust v. State of Haryana, 2003(5) SCC 622, and
submits that in fact, such a change in Land use (CLU) was
never possible and hence, plaintiffs even did not pay any
consideration whatsoever. Moreover, once the condition on
which alleged MOU is contingent is itself impossible, the
alleged MOU stands void as per Section 36 of the Indian
Contract Act, 1872.
IV. Non-Compliance OF Security Interest (Enforcement) Rules,
2002:
Mr. Chetan Mittal, learned Senior counsel for
respondents No.1 & 2, refers to the Security Interest
(Enforcement) Rules, 2002 (hereinafter referred to as 'Rules of
2002'), and submits that in view of said Rules of 2002, MOU in
question was required to be ratified from M/s Yes Bank Ltd.,
because as per the Rules of 2002, an immovable property,
whose possession has been taken over by a secured creditor
under Section 13(4) could not be sold except in accordance with
the provisions enumerated under Rules 8 & 9 of the Rules of
2002. There is a complete procedure for the sale of properties,
which are the subject matter of Section 13(2) to Section 13(13)
of the SARFAESI Act, 2002. Thus, no such MOU without
being signed by the Bank can be termed as executable or an
enforceable agreement, by way of specific performance of the
Act, as sought by the plaintiff by way of filing the suit.
In other words, except for the provisions mentioned in
Rules 8 & 9 of the Rules of 2002, which are to be exercised by
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 39 -
the designated authorized officer, for recovery of the debt of the
secured creditor, there is no other provision for disposal of such
immovable property. Secured creditor is required to be party to
any such outside agreement. Therefore, again submits that suit
on the strength of such MOU is not maintainable.
V. Not meeting out the Parameters/Principles for grant of
temporary Injunction:
Learned Counsel for the respondents submits that
Hon'ble the Apex Court has enumerated and laid down certain
principles that are essential to be followed while granting the
discretionary relief of Temporary Injunction as per Order 39
Rule 1 and 2 of CPC. Three principles to be considered while
granting relief of temporary injunction are:
(i) Balance of convenience;
(ii) Irreparable damage; and
(iii) Prima facie case
Thus, in the absence of required principles for seeking
injunction, such a relief cannot be granted.
Substantiating his arguments, Mr. Chetan Mittal, learned
Senior counsel relies upon the judgment of Hon'ble Apex Court
rendered in Ambalal Sarabhai Enterprise Limited v. KS
Infraspace LLP Limited and another, 2020(5) Supreme Court
Cases 410, and refers to paragraph Nos. 15 & 16, and argues
that grant of relief in a suit for specific performance, is itself a
discretionary remedy. Plea of temporary injunction requires aid
of a strong prima facie case, on the basis of undisputed facts
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 40 -
and discretion has to be exercised judiciously and not
arbitrarily. In the said cited judgment,
reliance was also placed upon Dalpat Kumar v. Prahlad Singh,
(1992) 1 Supreme Court Cases 719, which says that even a
prima facie case is not sufficient to grant injunction. Court is
also required to satisfy itself, that its non-interference would
result in an "irreparable injury" to the party seeking relief and
that there is no other remedy available to the party except of
injunction. While referring to the observation made by Hon'ble
the Apex Court recorded from Dalpat Kumar's case (supra),
learned Senior counsel submits that before considering the plea
of temporary injunction, Court has to reach to the conclusion
that if any injury is suffered by the plaintiff due to refusal of the
Court to grant interim relief, same cannot be adequately
compensated by way of damages.
While referring to the said judgment, learned Senior
counsel further submits that plaintiff being well aware, from the
very inception that the property in question is already
mortgaged and possessed by the M/s Yes Bank Ltd., must have
prepared itself in advance about the expected losses also.
Even otherwise, MOU was entered without any
investment or consideration, and thus, plaintiff was always in a
win-win situation. Thus, there is no point in saying that in the
absence of granting of temporary injunction, plaintiff would
suffer irreparable loss or even non-compensable injury.
Learned Senior counsel also relies upon M/s Best Sellers
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 41 -
Retail (India) Pvt. Ltd. v. M/s Aditya Birla Nuvo Ltd., 2012(6)
Supreme Court Cases 792, and refers to paragraph Nos. 14, 15
& 17. He submits that once, plaintiff himself has claimed an
alternative relief of grant of damages to the tune of Rs.468.00
Crores, there is no question of grant of any temporary
injunction to the plaintiff. Taking note of the plea of specific
performance and the other prayers reflects itself that even if the
case of the plaintiff is proved during the course of trial, it can be
compensated by way of grant of damages. Such damages, if
any, shall be calculated and assessed by the Ld. Trial Court
during the course of Trial.
Mr. Chetan Mittal, learned Senior counsel further relies
upon the judgment of this Court rendered in Taj Ram v. Pinku
and Ors., 2009(10) R.C.R. (Civil) 172, and refers to paragraph
No.8 of the said judgment. In the aforesaid judgment, plea of
temporary injunction under Order 39 Rule 1 & 2 of CPC, in a
case of agreement to sell, was dismissed.
Said dismissal of temporary injunction was upheld by the
Appellate court by holding that any construction over the
property in dispute would be hit by the principle of lis
pendence, and hence, the right of plaintiff shall be duly
protected even in the absence of grant of temporary injunction.
Learned Senior counsel further relies upon the judgment
of Hon'ble Delhi High Court in Saroj Aggarwal and Anr. v.
Shakuntala Aggarwal, 2014(9) R.C.R. (Civil) 3079, and refers
to paragraph No.35 of the same. As per the observation made
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 42 -
by the Hon'ble Delhi High Court, restraining the defendants
from completing the construction would certainly lead to more
complications, be it on financial front or be it because of
various contracts having been entered into by the defendants.
Thus, it was held that construction, if any, is raised by the
defendants, would not extinguish the rights of the plaintiff in
the said building.
VI. Bar of Section 34 of the SARFAESI Act, 2002:
Learned Senior counsel submits that the suit is further
barred under Section 34 of the SARFAESI Act, 2002. Further
submits that the expression "any person" used under Section 17
of the SARFAESI Act, 2002, is of wide import, and under the
fold of "any person", apart from the borrower, guarantor or any
other person can also approach the Bank. Substantiating his
arguments, Counsel relies upon the Jagdish Singh v. Heeralal
and others, (2014) 1 Supreme Court Cases 479, and refers to
paragraph Nos. 19 & 20, which are reproduced as under:-
"19. The expression "any person" used in Section 17
is of wide import and takes within its fold not only the
borrower but also the guarantor or any other person who
may be affected by action taken under Section 13(4) of
the Securitisation Act. Reference may be made to the
judgment of this Court in Satyawati Tondon case.
20. Therefore, the expression "any person" referred
to in Section 17 would take in the plaintiffs in the suit as
PRASHANT KAPOOR
2023.11.20 15:50
well. Therefore, irrespective of the question whether
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 43 -
the civil suit is maintainable or not, under the
Securitisation Act itself a remedy is provided to such
persons so that they can invoke the provisions of
Section 17 of the Securitisation Act, in case the Bank
(secured creditor) adopt any measure including the sale
of the secured assets, on which the plaintiffs claim
interest."
Thus, submits that plaintiff has voluntarily not availed the
remedy by approaching the appropriate forum, where the
dispute in regard to the property was/were admittedly pending,
and thus, at this stage, would not be entitled for any relief of
injunction.
Learned Senior counsel also refers to G. Vikram Kumar
v. State Bank of Hyderabad and others, 2023 SCC Online SC
549, and refers to paragraph Nos. 25 & 26, which says as
under:-
"25. Even otherwise it is required to be noted that as
such what exact relief is granted by the High Court is
not clear. The High Court has simply stated that the
writ petition is allowed. However, it is required to be
noted that what was challenged before the High Court
was the e-auction notice dated 28.07.2016 which was
already conducted on 31.08.2016. Therefore, the writ
petition was filed much after conducting the e-auction
on 31.08.2016. No consequential relief has been
PRASHANT KAPOOR
2023.11.20 15:50
granted by the High Court. Therefore, also the
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 44 -
impugned judgment and order passed by the High Court
is unsustainable.
26. Now so far as the submission on behalf of the
respondent no.1 that the respondent no.1 has
paid/deposited the amount of sale consideration and
now the respondent no.1 has died his heirs will have to
vacate the flat in question and on the other hand the
appellant shall be entitled to return the amount of
Rs.6,45,250/- deposited at the relevant time being 25%
of the auction sale consideration with interest is
concerned, at the outset it is required to be noted that as
such the transaction between the respondent no.1 and
the borrower pursuant to the agreement to sale dated
16.06.2016 was absolutely illegal and behind the back
of the Tribunal as well as the Bank and during the
pendency of the proceedings before the Tribunal in
order dated 24.08.2016 the Tribunal had in fact already
held the sale transaction as void. As observed
hereinabove even at the time when the respondent no.1
entered into the agreement to sale/MOU he was aware
about the proceedings pending before the DRT which is
apparent from Clause 4 of the MOU referred to
hereinabove. Therefore, respondent no.1 and/or his
heirs cannot be permitted to get the benefit of his own
wrong and cannot be permitted to get the benefit of a
void transaction."
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 45 -
Thus, submits that with the observation given by the
Hon'ble Apex Court, intention of the plaintiff becomes clear
that it has purposely filed a civil suit to get the benefit without
paying any advance consideration or making any investment,
instead of approaching to the appropriate forum available to the
plaintiff. Therefore, plaintiff is not entitled for any injunction,
especially against defendant No.3, who has purchased the land
in dispute for a noble cause i.e. providing medical services.
Mr. Akshay Bhan, learned Senior counsel, representing
respondents No.1 & 2, also argues that intent of legislature, by
using the word "any person" in Section 17 of the SARFAESI
Act, 2002 is very much clear, and he also relies upon Jagdish
Singh's case (supra). Learned Senior counsel submits that
without there being any notice to any party, nothing was
stopping plaintiff to consider itself under the definition of "any
person" and to knock the doors of the forum, where the
proceedings in regard to the recovery of debts were in progress.
In other words, judgment of Hon'ble Apex Court in Jagdish
Singh's case (supra), covers the rights of the plaintiff, subject to
its real intention to buy the property.
Learned Senior counsel also relies upon the judgment of
the Hon'ble Bombay High Court rendered in Asset
Reconstruction Company v. Florita Buildcon Private Limited,
2017 AIR (Bombay) 25, to elaborate the meaning of the term
"aggrieved person", and refers to paragraph No.33 of the said
PRASHANT KAPOOR
2023.11.20 15:50
judgment, which says as under:-
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 46 -
"33. The learned Senior Counsel for Respondent No.1
has placed reliance on the definition of the 'aggrieved
person', as given in "Black's Law Dictionary-Tenth
Edition", which defines "aggrieved party" to mean, "a
party entitled to a remedy; especially, a party whose
personal, pecuniary, or property rights have been
adversely affected by another person's actions or by a
court's decree or judgment"."
He further relies upon the judgment of the Hon'ble Apex
Court rendered in South Indian Bank Ltd. And others v. Naven
Mathew Philip and another, 2023 SCC Online SC 435, and
refers to paragraph No.15 for the purpose of arguing the wider
meaning of "any person" of Section 17 of the SARFAESI Act,
2002. Further submits that even in the MOU itself, there was
already a liberty with the plaintiff to go for the "outright sale"
by paying the money directly to the Bank. Thus, in the absence
of impleadment of Bank as a party, no decree of possession
could have been granted on the day when the suit was instituted
as the property was mortgaged with the Bank and thus, Bank
had a right of priority.
VII. Defendant No. 3 - Apollo North Private Limited is a bona fide
purchaser:
Learned Counsel also submits that defendant No. 3 is a
bona fide purchaser and has paid the entire sale consideration
on 06.07.2022 itself. Further submits that even the possession of
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 47 -
the property in question has been handed over to the defendant
No. 3 on the same day vide possession letter dated 06.07.2022,
issued by M/s Yes Bank Ltd.
Mr. K. Ramakanth Reddy, learned Senior counsel for
defendant/respondent No.3 also supports the argument by
submitting that the entire sale consideration has been paid by
the defendant No. 3 and the said transaction has been done only
after obtaining requisite approvals and No - Objections (NOCs)
from all the concerned parties or forum that is M/s Yes Bank
Ltd., DHFL (Now Piramal Ltd.), Debt Recovery Tribunal
(DRT), thus, ensured that interest of none of the concerned
party may suffer.
Even, the aspect of proper apportionment of the said
consideration has also been noticed by Ld. NCLAT while
dismissing the appeal instituted by DHFL as infructuous. Thus,
no injunction can be granted against Defendant No. 3 - Apollo
Hospitals North Ltd. who is a bona fide purchaser of the
property in dispute and has purchased the same for a noble
purpose of dispensing healthcare services which is also in
consonance with the land use permitted by the government.
VIII. Contradictions in MOU & plaint:
In the MOU dated 08.04.2022, it has been explicitly mentioned
that the possession of the property in question is vested with
M/s Yes Bank Ltd. on the date of execution of MOU . In point
'A.' of the MOU, it is clearly stated that the physical possession
of the property in question has been taken over by the secured
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 48 -
creditor i.e. M/s Yes Bank Ltd. on 10.09.2021 under provisions
of Section 13(4) of the SARFAESI Act, 2002. Moreover, in the
said MOU, plaintiff also admits the pendency of the
proceedings before the Ld. NCLT.
However, in the plaint as well as in the revision petition filed
before this Court, plaintiff has alleged that the defendants
projected themselves to be owner-in-possession of the suit
property. This is in direct contradiction with the admitted fact in
the MOU that the physical possession of the said property vests
with M/s Yes Bank Ltd. and hence, reflects the mala fide
conduct of the plaintiff.
IX. Bar of Section 20-A, 20-B and Section 41 (ha) of the Specific
Relief Act, 1963:
Mr. Vineet Malhotra, learned counsel for respondent
No.1 also relies upon Sections 20(A), 20(B) and 41(ha) of the
Specific Relief Act, 1963, and submits that where there is an
infrastructure project especially a healthcare project, no
injunction can be granted by the Court. In support of his
submissions, he relies upon the judgment of the Hon'ble Apex
Court rendered in Raman (Dead) by Legal Representatives v. R.
Natarajan, (2022) 10 Supreme Court Cases 143 , and refers to
paragraph Nos. 15, 16 & 17 of the same, which says as under:-
"15. In any case, the High Court ought to have seen
that a Court cannot grant the relief of specific
performance against a person compelling him to enter
PRASHANT KAPOOR
2023.11.20 15:50
into an agreement with a third party and seek specific
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 49 -
relief against such a third party. In other words, the
specific performance of the agreement by the appellants
herein, depended upon: (i) the appellants entering into
an agreement with a third party; and (ii) appellants
being in a position to compel such third party to
perform her obligations under such agreement.
16. The High Court ought to have seen that the
specific performance of the agreement in question
comprised of two parts namely, (i) the defendant
entering into an agreement with his brother's wife for
the purchase of a land for providing access to the land
agreed to be sold under the suit agreement of sale; and
(ii) the defendant thereafter executing a sale deed
conveying the property covered by the suit agreement
of sale.
17. Since the defendant's brother's wife was not a
party to the suit agreement of sale, the Court cannot
compel her to enter into an agreement with the
defendant. In other words, the performance of the first
part of the obligation, which we have indicated in the
preceding paragraph, cannot be compelled by the Court,
as it depended upon the will of a third party. As a
consequence, the performance of the second part of the
obligation, may be hit by Section 12(1) of the Specific
Relief Act, 1963 which reads as follows:
"12. Specific Performance of part of
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 50 -
contract.−(1) Except as otherwise hereinafter
provided in this section, the court shall not direct
the specific performance of a part of contract."."
13. REBUTTAL:
In rebuttal to the submissions made by learned counsel for the
defendants/respondents, Mr. Ashish Chopra, learned Senior counsel for the
plaintiff/petitioner submits that suit was instituted on 30.07.2022, and M/s
Apollo Hospitals North Ltd., was impleaded as defendant No.3 in the said
suit on 08.08.2022. Moreover, rights of the parties are to be ascertained only
under the terms of the document of agreement i.e. MOU dated 08.04.2022.
Mr. Chopra, learned Senior counsel further submits that non-
impleadment of the Bank as party in the suit is of no consequence, because,
he is not claiming anything against the interest of the Bank. Plaintiff's rights
are arising from the understanding, which was recorded in writing in the
form of MOU only between the plaintiff and defendants No.1 & 2, and thus,
any right accruing from the said MOU having been executed under the bona
fide belief of future promise can be adjudicated only by the Civil Court, and
therefore, plaintiff cannot be ousted from the right of filing of the suit in
Civil Court by citing the provision of law i.e. Section 34 of the SARFAESI
Act, 2002.
Moreover, said issue is a mixed question of law and facts,
which requires its independent decision after its adjudication with the aid of
evidence available on record. Thus, he prays for dismissal of the impugned
order dated 21.09.2023, by restoring the order dated 04.11.2022 passed by
the learned Trial Court.
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 51 -
14. Before proceeding further for doing deep examination of the
facts of the case, pleadings and the submissions/arguments addressed by the
parties, and reaching to the decision thereon, I would be failing in
performing my pious duty without sharing the personal feel that Law
Researcher Mr. Akinchan Aggarwal, who is attached with my Court for the
last more than one year, has provided his selfless service in the shape of
assistance, in accumulating the relevant facts, documents and for arranging
them in order along with the cited judgments. All appreciation to his credit.
15. CONCLUSION:
I. This Court has already heard at length the learned Senior
Advocates and all other counsel for the parties, and has also
gone through the appended documents and compendium of
judgments, supplied by all the concerned parties along with the
judgments relied upon by them.
Since, a heavy bulk of documents have been presented by
both the sides, especially the plaintiff (petitioner herein), this
Court had to go through all the material documents appended
with the petition.
II. At the first instance, learned trial Court dealt with the
plea of the temporary injunction filed by the plaintiff and vide
its order dated 04.11.2022, held that prima facie case exists in
favour of plaintiff, and balance of convenience also tilts in
favour of the plaintiff. While holding so, also observed that if
temporary injunction is not granted at this stage, plaintiff may
suffer an irreparable loss and injury, which cannot be
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 52 -
compensated later on.
Thus, to preserve the nature of the suit property in all
respects, and to prevent the creation of third party rights and to
avoid multiplicity of litigations, application under Order 39
Rule 1 & 2 read with Section 151 CPC was allowed, and
defendants were restrained from selling/alienating/creating any
third party interest in the suit property. Further, defendants
were restrained from changing/altering the suit property till
final decision of the suit.
Needless to say that while giving findings on the settled
principles required to be met with, learned Trial Court also
noticed the conduct of defendants No.1 & 2 from the order
dated 08.08.2022 passed by Learned Commercial Court, and to
some extent found itself impressed with the same, and thus,
proceeded to consider the plea of granting of the temporary
injunction.
However, in the appeal filed by the Defendant No. 3
against the order of the Ld. Trial Court dated 04.11.2022
allowing the plea of granting of temporary injunction, Ld.
Court of learned Addl. District Judge, Gurugram, examined the
provisions of the SARFAESI Act, 2002 and primarily held that
in suit for specific performance filed by the plaintiff,
jurisdiction of the Civil Court is completely barred under
Section 34 of the SARFAESI Act, 2002 because against the
measures taken by the secured creditor under Section 13(4) of
the SARFAESI Act, 2002, any aggrieved person has a right to
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 53 -
approach Debts Recovery Tribunal (DRT).
Ld. Appellate Court also held that since, there was no
Change of Land Use (CLU) obtained over the land in question,
as per clause 3.1.3 of the MOU, same might be another reason
to enter into the transaction by Defendants No.1 & 2 with M/s
Apollo Hospitals North Ltd. (Defendant No.3). Moreover,
Change of Land use (CLU) was not within the control of either
of the parties. Even other factual aspects, such as; non-payment
of any amount as earnest money by the plaintiff as per MOU
also is a reason to deny the plea of temporary injunction.
Ultimately, court found that there is no prima face case in
favour of the plaintiff and thus, the plea of temporary injunction
was rejected.
Hence, plaintiff (petitioner) is again before this Court by
way of present revision petition.
MAINTAINABILITY OF THE SUIT BEFORE CIVIL COURT:
III. The very basis of claiming of the rights by the plaintiff is the
MOU dated 08.04.2022. Execution of the said MOU with the
relevant clauses/terms mentioned in it, is not at all disputed by
any of the parties to the suit. It is also established position that
at the time of preparation of MOU on 08.04.2022, property in
question was mortgaged with M/s Yes Bank Ltd. and physical
possession of the same had also been taken by the Bank.
Therefore, pleadings raised in the plaint along with prayer
clause, is based upon the actual or anticipated rights/relief by
the plaintiff in its favour vis-à-vis the rights of defendants No.1
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 54 -
& 2. Broadly speaking, MOU has been executed between the
parties [except M/s Apollo Hospitals North Ltd. (Defendant
No.3)] after acknowledging the complete factual situation with
all the ground realities. The manner of making payment to the
Bank and the process of obtaining the Change of Land Use
(CLU) was also expected by the concerned parties at the time of
preparation of MOU. Therefore, it would not be wrong to say
that MOU was executed on 'as is, where is' basis. Probably,
even plaintiff and defendants No.1 & 2, would not be able to
say that any misrepresentation or false fact has been introduced
in the MOU dated 08.04.2022.
IV. Now, question arises before the Court that the property,
which is in the hands of secured creditor (not being a
signatory/party to the MOU), and first charge is also of such
secured creditor, in such a situation whether any contingent-
agreement or the Memorandum of Understanding (MOU) could
be executed or not ?
V. The case of the plaintiff throughout has been that he has
no grouse or claim whatsoever against the Bank/secured
creditor, and therefore, rights emerging from the MOU that
plaintiff wants to seek; are only qua Defendants No. 1 and 2 and
can be claimed by filing only a civil suit in a Court of
competent jurisdiction, and cannot be adjudicated before the
Debt Recovery Tribunal or any other Tribunal. Thus, there is
nothing wrong in saying that either Debts Recovery Tribunal
(DRT) or the National Company Law Tribunal (NCLT) could
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 55 -
not decide rights of the parties, if any accruing from the MOU
dated 08.04.2022.
For the sake of convenience, prayer of the plaintiff in the
suit is reproduced hereunder:-
"It is therefore the plaintiff most humbly prayed that:
(a) A decree for possession by way of specific performance
of the AGREEMENT TO SELL Dated 08 th April 2022
in respect of the property being Plot No.1202, 1203 and
1204 situated in DLF City, Phase-I, Sector-28, District
Gurugram, Haryana, together with buildings and
structures be passed and the defendants be directed to
execute the sale deed in favour of the company, upon
payment of the balance sale consideration by the
plaintiff in terms of the orders of the NCLAT or any
other order for the time being in force;
(b) A Decree of declaration may also be passed in favour of
the plaintiff and against the defendants declaring that
the agreement dated 08.04.2022 in respect of the suit
property is valid, subsisting and binding upon the
defendants with full force and effect and further that the
plaintiff is entitled to purchase the suit property on pay-
ment of the balance sale consideration.
(c) A Decree of Declaration thereby declaring that the sale
deed bearing vasika no. 9036 dated 08.08.2022 is
illegal, null and void ab-initio and not binding upon the
rights of the plaintiff in any manner whatsoever and is
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 56 -
not a hurdle for the plaintiff to seek a decree of specific
performance and is not binding upon the rights of the
plaintiff in the present suit.
(d) The defendants, their agents or representative or any
other person claiming under them may kindly be
restrained by a decree of permanent injunction from
alienating the suit land or parting with possession or ex-
ecution of an agreement in favour of any third party or
make any changes to the structure, or use the said prop-
erty for any business or operations of any nature and to
seek any permission from any authority or in any other
manner jeopardizing the rights of the plaintiff in the suit
property except the plaintiff till the execution of the
sale deed in favour of the plaintiff. The defendants be
also restrained from undertaking any change in the
premises in question.
(e) A Decree of permanent and mandatory injunction be
also passed in favour of the plaintiffs and against the
defendants thereby directing the defendants to confer a
clear and marketable title in favour of the plaintiff as
contemplated under the agreement.
(f) The plaintiff be also awarded adequate compensation
for the harassment and mental agony suffered by the
plaintiff on account of the illegal acts of the defendants
of having not registered the suit property in favour of
the plaintiff.
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 57 -
(g) In the alternative in case the plaintiff fails in the decree
sought above, a decree of damages and compensation in
favour of the plaintiff and against the defendants jointly
and severally to the tune of Rs. 468 Crores for the loss
of profit suffered by the plaintiff.
(h) Costs of the suit including the court fee and the
counsels fee be also awarded.
(i) Any other relief to which the plaintiff may be found
entitled be also granted in their favour and against the
defendant."
VI. On a careful perusal of the prayer made by the plaintiff in
the suit, it is evident that none of the relief prayed by the
plaintiff could have been adjudicated or granted by the Debts
Recovery Tribunal (DRT) or any other Tribunal. Thus, same
can be adjudicated only by the Civil Court.
Undoubtedly, adjudication over the validity of the MOU
dated 08.04.2022, and whether any declaration qua the rights
arising to the parties from the said MOU can be granted, is
within the domain of the Civil Court, and not the DRT or any
other Tribunal. Moreover, plaintiff has also challenged the
sale-deed bearing Vasika No.9036, dated 08.08.2022, executed
by defendants No.1 & 2 in favour of defendant No.3, and has
sought a declaratory decree of the same being illegal, null &
void ab-initio and not binding upon the rights of the plaintiff in
any manner.
PRASHANT KAPOOR
2023.11.20 15:50
Further, there is an alternative prayer i.e. to grant a decree
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 58 -
of damages or compensation to the tune of Rs.468.00 Crores.
In furtherance of the prayer for seeking damages, plaintiff has
also appended the ad valorem court fee of Rs.2,35,68,800/- with
the plaint. In support of the prayer, it is pleaded in the plaint
that "the plaintiff had contemplated the development of the
project from where the plaintiff would have easily earned
revenue of a sum of Rs.3000 to 4000 Crores as the project is
covered under the TOD policy having an FAR of 350% and
thus would have easily earned profits upwards of a sum of
Rs.1000 Crores upon sale of the asset after undertaking full
construction of the project. That although the plaintiff would
have earned profits upwards of Rs.1000 Crores the plaintiff is in
a conservative manner seeking damages of a sum of Rs.468
Crores only."
VII. None of the Counsel appearing before this Court from the
side of the respondents is in a position to substantiate their
submissions that the relief claimed in the suit, can be prayed or
claimed before any other forum, except of the Civil Court.
Even, relief claimed by plaintiff is of discretionary nature and
there is no denial that Civil Court can mould its relief as per the
facts, circumstances and the evidence led by the parties, in
respect to the issues framed during the adjudication of the suit.
VIII. Hon'ble the Apex Court in Nahar Industrial Enterprises
Limited's case (supra), presented a comparable factual scenario
concerning the authority of the Debts Recovery Tribunal (DRT)
vis-à-vis the Civil Court under Civil Procedure Code. Hon'ble
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 59 -
the Apex Court clairified that the intended role of Debts
Recovery Tribunal (DRT) is to adjudicate particular type of
cases, especially those involving the recovery of debts due to
Banks and financial institutions. Thus, DRT possesses a unique
jurisdiction to handle this specific subject matter in consonance
with the legislative intent behind its establishment and its power
can in no way be compared to a Civil Court. A civil Court has a
plenary jurisdiction and is equipped with much wider power,
which cannot be taken away except by express statutory bar or
necessary implication. For the sake of convenience, relevant
paragraphs of the aforesaid judgment are reproduced
here-below:
"110. It must be remembered that the jurisdiction of a
Civil Court is plenary in nature. Unless the same is
ousted, expressly or by necessary implication, it will
have jurisdiction to try all types of suits."
Further, in paragraphs No. 117 & 118 of Nahar Industrial
Enterprises Limited's case (supra), Hon'ble the Apex Court
discussed in detail the very purpose of the creation of Tribunal
and the jurisdiction of the Civil Court which says as under:
"117. The Act, although, was enacted for a specific
purpose but having regard to the exclusion of
jurisdiction expressly provided for in Sections 17 and
18 of the Act, it is difficult to hold that a civil court's
jurisdiction is completely ousted. Indisputably the banks
PRASHANT KAPOOR
2023.11.20 15:50
and the financial institutions for the purpose of
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 60 -
enforcement of their claim for a sum below Rs. 10 lakhs
would have to file civil suits before the civil courts. It is
only for the claims of the banks and the financial
institutions above the aforementioned sum that they
have to approach the Debts Recovery Tribunal. It is
also without any cavil that the banks and the financial
institutions, keeping in view the provisions of Sections
17 and 18 of the Act, are necessarily required to file
their claim petitions before the Tribunal. The converse
is not true. Debtors can file their claims of set-off or
counterclaims only when a claim application is filed and
not otherwise. Even in a given situation the banks
and/or the financial institutions can ask the Tribunal to
pass an appropriate order for getting the claims of set-
off or the counter claims, determined by a civil court.
The Tribunal is not a high-powered tribunal. It is a one-
man Tribunal. Unlike some Special Acts, as for
example the Andhra Pradesh Land Grabbing
(Prohibition) Act, 1982 it does not contain a deeming
provision that the Tribunal would be deemed to be a
civil court.
118. The liabilities and rights of the parties have not
been created under the Act. Only a new forum has been
created. The banks and the financial institutions cannot
approach the Tribunal unless the debt has become due.
In such a contingency, indisputably a civil suit would
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 61 -
lie. There is a possibility that the debtor may file pre-
emptive suits and obtain orders of injunction, but the
same alone, in our opinion, by itself cannot be held to
be a ground to completely oust the jurisdiction of the
civil court in the teeth of Section 9 of the Code.
Recourse to the other provisions of the Code will have
to be resorted to for redressal of his individual
grievances."
IX. Hon'ble the Apex Court also visualized that in case the
jurisdiction of the Civil Court is ousted, then scope of remedy
that a plaintiff can seek shall be narrowed down, as it will lose
its vested right of appeal to the first appellate Court followed by
High Court. It was further observed that the Code of Civil
procedure not only grants procedural rights, but also grants
certain substantive rights such as vested right of appeal that
cannot be ousted unless by express provision or necessary
implications, as it will have huge ramifications on the rights of
the plaintiff and remedy that it can seek. In this regard,
observations made in paragraphs No.125 to 130 are as under:-
"125. Another aspect of the matter also cannot be lost
sight of. A plaintiff of a suit will have a vested right of
appeal. The said right would be determined keeping in
view the date of filing of the suit. Such a right of appeal
must expressly be taken away. An appeal is the "right
of entering a superior court, and invoking its aid and
PRASHANT KAPOOR
2023.11.20 15:50
interposition to redress the error of the court below" and
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 62 -
"though procedure does surround an appeal the central
idea is a right".
126. The right of appeal has been recognized by
judicial decisions as a right which vests in a suitor at
the time of institution of original proceedings. The
Privy Council in Colonial Sugar Refining Company v.
Irving : 1905 AC 369 : (1904-07) ALL ER Rep Ext
1620 (PC), noted that:
"... To deprive a suitor in a pending action of an
appeal to a superior tribunal which belonged to
him as of right, is a very different thing from
regulating procedure"
127. When a person files a civil suit his right to
prosecute the same in terms of the provisions of the
Code as also his right of appeal by way of first appeal,
second appeal, etc. are preserved. Such rights cannot be
curtailed, far less taken away except by reason of an
express provision contained in the statute. Such a
provision in the statute must be express or must be
found out by necessary implication. In Garikapati
Veeraya v. N. Subbiah Choudhry AIR 1957 Supreme
Court 540, this Court opined :-
"23. From the decisions cited above the following
principles clearly emerge:
(i) That the legal pursuit of a remedy, suit,
appeal and second appeal are really but steps in a
series of proceedings all connected by an intrinsic
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 63 -
unity and are to be regarded as one legal
proceeding.
(ii) The right of appeal is not a mere matter of
procedure but is a substantive right.
(iii) The institution of the suit carries with it the
implication that all rights of appeal then in force
are preserved to the parties thereto till the rest of
the career of the suit.
(iv) The right of appeal is a vested right and
such a right to enter the superior court accrues to
the litigant and exists as on and from the date the
lis commences and although it may be actually
exercised when the adverse judgment is
pronounced such right is to be governed by the
law prevailing at the date of the institution of the
suit or proceeding and not by the law that prevails
at the date of its decision or at the date of the
filing of the appeal.
(v) This vested right of appeal can be taken
away only by a subsequent enactment, if it so
provides expressly or by necessary intendment
and not otherwise."
128. The Code not only contains procedural provisions
but also substantive rights; right of appeal is one of
them. A forum of appeal is determined in terms of the
provisions of the Code having regard to the pecuniary
jurisdiction of the Court as may be notified by the
appropriate Government from time to time.
129. A suitor has the right to maintain a first appeal. A
second appeal also is maintainable before a High Court,
subject of course to the effect that questions of law
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 64 -
must be there for the court's consideration. For the said
purpose no pre-deposit is required to be made, as is
necessary in terms of the Act, that 75% of the awarded
amount is required to be deposited, subject of course, to
an order to the contrary, which may be passed by the
Debts Recovery Appellate Tribunal.
130. Such a right of conditional appeal, in our opinion,
curtails party's right to maintain an appeal as a matter of
right. While we say so, we are not oblivious of the fact
that in terms of Order 41, Rule 1 of the Code, in the
event of passing of a money decree the amount is
required to be deposited. The said provision, however,
has been held to be directory. Order 41 Rule 1 is
required to be read with Order 41 Rule 5 thereof. [See
Sihor Nagar Palika Bureau v. Bhabhlubhai Virabhai &
Co., (2005) 4 SCC 1, Malwa Strips (P) Ltd. v. Jyoti
Ltd. (2009) 2 SCC 426] More recently in Transmission
Corpn. of A.P. v. Ch. Prabhakar (2004) 5 SCC 551, this
Court similarly opined:
"18. ... the right of appeal is a substantive right
which is really a step in a series of proceedings
all connected by an intrinsic unity and is to be
regarded as one legal proceeding and further
being a vested right such a right to enter the
superior court accrues to the litigant and exists as
on and from the date the lis commences...."
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 65 -
X. Thus, to the view point of this Court, any right(s)
anticipated to be accruing from the terms mentioned in the
undisputed MOU dated 08.04.2022 between the plaintiff on the
one side, and the defendants No. 1 and 2 on the other side, can
be prayed only by way of a civil suit before a Civil Court of
competent jurisdiction. Hence, no other Court/forum could have
entertained the prayer made in the suit.
While observing so, this Court is well conscious of the
fact that plaintiff might have cleverly and in his own designed
manner, got prepared the terms of the understanding having
something else in the back of the mind, or may be because of
some ulterior motive, plaintiff never made Bank a party to the
said MOU, but this Court is of considered view that all such
areas are adjudicable only by the Civil Court during the trial.
While, stretching it out further, this Court finds that under
Section 17 of the SARFAESI Act, 2002, the term " any person"
is of wide import as is evident from the observations of Hon'ble
the Apex Court cited in the initial part of the judgment. Thus,
even the plaintiff is covered under the definition of the
"aggrieved person" and could have approached to the Debts
Recovery Tribunal to join the proceedings under Section 13 of
the SARFAESI Act, 2002, to show its intent to pay back the
agreed amount within 30 days, and that could have sorted out
the dispute between the parties by paying back dues of the loan
amount to the lender/secured creditor i.e. M/s Yes Bank Ltd..
PRASHANT KAPOOR
2023.11.20 15:50
Apparently, such a step was never resorted by the plaintiff,
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 66 -
because no Change of Land use (CLU) was ever obtained for
converting the use of land in question from healthcare to
commercial, or there might be some other reason with the
plaintiff. Still, this Court is of the view that adjudication of all
such areas are within the domain of the Civil Court only. Thus,
filing of the suit by the plaintiff before the Civil Court cannot be
said to be an act of approaching to the wrong forum/Court for
availing its rights accruing from the MOU in question.
XI. In continuation of the aforementioned observations and
reasons recorded, this Court has also delved into the issue of bar
of jurisdiction of Civil Court as per Section 34 of the
SARFAESI Act, 2002. For the said purpose, this Court is again
guided with the observations made by their Lordships in the
case of Robust Hotels Pvt. Ltd.'s case (supra), wherein, it is
observed that the bar of jurisdiction of Civil Court has to co-
relate to the two conditions i.e.;
"(i) Any suit or proceedings in respect of any matter, in
which the Debts Recovery Tribunal or Appellate
Tribunal is empowered by or under this Act to
determine."
(ii) Further, no injunction shall be granted by any Court or
other authority in respect of any action taken or to be
taken in pursuance of any power conferred by or under
this Act or under the Recovery of Debts Due to Banks
and Financial Institutions Act, 1993".
PRASHANT KAPOOR
2023.11.20 15:50
Rather, while relying upon the Nahar Industrial
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 67 -
Enterprises Ltd.'s case (supra), Hon'ble the Apex Court
observed that there is no need to give opinion on the bar of
jurisdiction under Section 34 of the SARFAESI Act, 2002 at the
time of appeal from an interim order, rather same shall be on
merits on the basis of the issues at the appropriate stage.
Relevant findings recorded in the said judgment from
paragraphs No.28 to 33, are as under:-
"28. The essence of interim injunction issued by the
Court was that Respondent Nos. 3 to 7 of that suit were
restrained by an order of injunction from dealing with,
disposing of, selling and/or encumbering in any manner
howsoever the hotel unit of Balaji Hotels & Enterprises
Ltd. (BHEL), in favour of any person without disclosing
the rights of the applicants to operate and manage the
hotel in terms of the Technical Services, Project
Consultancy & Royalty Agreement dated 26-10-1988
and the agreements dated 12-1-2999, 10-6-2000 and
4-2-2000.
29. Thus, the injunction ordained that while dealing
with the hotel unit the rights of the applicant be
disclosed. The subsequent facts, as noted above indicate
that even after the aforesaid injunction the IFCI Ltd. and
Tourism Finance Corporation of India Ltd. by deed of
transfer dated 5-7-2007 transferred the hotel unit to
Robust Hotels without disclosing the rights of the
applicant as provided by the agreement mentioned
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 68 -
therein. The agreement dated 4-7-2002 clearly provided
that the BHEL was required to repay the amount
of Rs.15.12 Crores to the EIH by 31-12-2002
whereafter, EIH had nothing to do with the operation of
the hotel.
30. The learned Senior Counsel for the appellants
have placed much reliance on the section 34 of the
SARFAESI Act, 2002. Section 34 of the SARFAESI
Act, 2002 provided as follows:
"34. Civil court not to have jurisdiction.- No
civil court shall have jurisdiction to entertain any
suit or proceeding in respect of any matter which
a Debts Recovery Tribunal or the Appellate
Tribunal is empowered by or under this Act to
determine and no injunction shall be granted by
any court or other authority in respect of any
action taken or to be taken in pursuance of any
power conferred by or under this Act or under the
Recovery of Debts Due to Banks and Financial
Institutions Act, 1993 (51 of 1993)."
31. The scope and ambit of Section 34 of SARFAESI
Act, 2002 have been considered by this Court in several
cases. It is sufficient to refer the judgment of this Court
in Nahar Industrial Enterprises Limited v. Hong Kong
& Shanghai Banking Corporation, (2009) 8 SCC 646.
This Court held that the jurisdiction of the Civil Court is
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 69 -
plenary in nature, unless the same is ousted, expressly
or by necessary implication, it will have jurisdiction to
try all types of suits.
32. Following was laid down in paras 110 - 111:
(Nahar Industrial Enterprises Ltd's case (supra)
"110. It must be remembered that the jurisdiction
of a civil court is plenary in nature. Unless the
same is ousted, expressly or by necessary
implication, it will have jurisdiction to try all
types of suits.
111. In Dhulabhai v. State of M.P. AIR 1969 SC
78, this Court opined:
"32. ... The result of this inquiry into the diverse
views expressed in this Court may be stated as
follows:
* * *
(2) Where there is an express bar of the
jurisdiction of the court, an examination of the
scheme of the particular Act to find the adequacy
or the sufficiency of the remedies provided may
be relevant but is not decisive to sustain the
jurisdiction of the civil court.
Where there is no express exclusion the
examination of the remedies and the scheme of
the particular Act to find out the intendment
becomes necessary and the result of the inquiry
may be decisive. In the latter case it is necessary
to see if the statute creates a special right or
liability and provides for the determination of the
right or liability and further lays down that all
questions about the said right and liability shall
be determined by the Tribunals so constituted,
PRASHANT KAPOOR
and whether remedies normally associated with
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 70 -
actions in civil courts are prescribed by the said
statute or not."
33. A perusal of Section 34 indicates that there is
express bar of jurisdiction of the Civil Court to the
following effect:
"(i) Any suit or proceeding in respect of any
matter in which Debts Recovery Tribunal or Appellate
Tribunal is empowered by or under this Act to
determine.
(ii) Further, no injunction shall be granted by
any Court or other authority in respect of any action
taken or to be taken in pursuance of any power
conferred by or under this Act or under the Recovery of
Debts Due to Banks and Financial Institutions Act,
1993."
Thus the bar of jurisdiction of Civil Court has to
correlate to the above mentioned conditions. For the
purposes of this case, we are of the view that this Court
need not express any opinion as to whether suits filed
by EIH were barred by Section 34 or not, since the issue
are yet to be decided on merits and the appeal by
Robust Hotels has been filed only against an interim
order."
XII. At the risk of repetition, it is again observed that plaintiff
has also prayed for awarding of damages by affixing the ad
valorem court fee with the suit, along with the declaration
regarding the sale deed in favour of defendant No.3, being
illegal, null & void. Therefore, prayer in that regard is
PRASHANT KAPOOR
2023.11.20 15:50
maintainable only in the civil suit before the Civil Court, and
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 71 -
bar of Section 34 of the SARFAESI Act, 2002 on the
jurisdiction of the Civil Court does not apply even in regard to
the property, which is already mortgaged with the financial
institution/bank and falls within the purview of the SARFAESI
Act, 2002.
XIII. Based upon the aforementioned reasoning, this Court is
unable to appreciate the findings given by the learned Appellate
Court that the jurisdiction of Civil Court is completely barred
under the SARFAESI Act, 2002, and also that the civil suit is
offshoot of the recovery proceedings initiated by M/s Yes Bank ,
primarily for the reason that such a finding was unwarranted at
this stage of proceedings and could have been left open for its
decision at an appropriate stage, in accordance with law. Thus,
to that extent impugned order dated 21.09.2023 is modified by
observing that plaintiff (petitioner herein) cannot be ousted at
this stage, to avail the remedy before the Civil Court. However,
it is left open for the Trial Court to decide the issue of
jurisdiction, if at all raised, before it, by any of the party, by
moving an appropriate application in this regard as per law, at
an appropriate stage.
Undoubtedly, issue regarding the bar of jurisdiction of
Civil Court according to Section 34 of the SARFAESI Act,
2002, can be adjudicated at first instance by the Trial Court
only, by treating the same to be a preliminary issue, or in an
application moved by the defendants, challenging the
maintainability of the suit on the point of jurisdiction, or if
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 72 -
Court finds that the issue of jurisdiction vis-à-vis provisions of
SARFAESI Act, 2002, is a mixed question of fact and law,
same can be decided at the final stage also.
Ordered accordingly.
PLEA OF INJUNCTION UNDER ORDER 39 RULE 1 & 2 CPC:
XIV. Now, this Court proceeds to examine whether the plea of
temporary injunction under Order 39 Rule 1 & 2 CPC, raised by
the plaintiff, should be accepted or declined.
For the purpose of deciding this plea, this Court is guided
by the three basic principles for grant of injunction, laid down
by Hon'ble the Apex Court in catena of judgments, which are as
follows:-
(i) Prima facie case;
(ii) Balance of convenience; and
(iii) Irreparable loss or injury.
XV. Undisputedly, MOU was prepared on 08.04.2022.
Admittedly, at the time of preparation of MOU or even
thereafter, not a single penny was ever paid or invested by the
plaintiff towards the property in question either to the
defendants No. 1 and 2 or to secured creditor i.e. M/s Yes Bank
Ltd. Moreover, the MOU was not even registered.
Further, from the very beginning, land in question was
meant for healthcare services, and for changing its use to
commercial one, CLU was to be obtained/arranged, but never
any such step was taken at the instance of the plaintiff or the
defendants No. 1 and 2. Even, there is no material available
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 73 -
before the Court to indicate that the land in question was worth
to be considered for the purpose of CLU from healthcare to the
commercial one. Admittedly, as per MOU, land was to be
purchased by the plaintiff for its commercial use after, once,
CLU was obtained by defendants No.1 & 2. Even, there is no
material/document to say that for obtaining such CLU, ever any
request was made by the plaintiff to the defendants No. 1 and 2
or defendants No. 1 and 2 themselves took any step for the
same. Thus, plaintiff never appeared in hurry to take any
required steps to exhibit its intent to purchase the land in terms
of the agreement/MOU.
XVI. As per clause 3.2 of the MOU, it was obligatory over the
purchaser i.e. plaintiff that upon vacation of the stay by Ld.
NCLT on the sale of the property, it would complete the entire
transaction within a maximum time limit of 30 days. Moreover,
said stipulated period was neither mutually extended by the
parties to the MOU, nor there is any such request made by the
purchaser to the other side. Admittedly, stay got vacated before
the Ld. NCLT on 19.04.2022, and the stipulated 30 days period
expired on 19.05.2022. Admittedly, till that time, neither any
amount (fully or partially) was deposited/paid by the purchaser
(plaintiff) to the Bank or to the other party to the MOU (i.e.
defendants No.1 & 2), nor any such intention to pay the amount
was ever expressed in writing till 19.05.2022.
Even stamp papers on which petitioner relies to show its
willingness to fulfill its part of the agreement were purchased
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 74 -
on 31.05.2022, i.e. after the expiry of stipulated period of 30
days, from vacation of stay.
XVII. Moreover, plea of the purchaser/plaintiff that actually,
stay got vacated on 02.06.2022 as an appeal was filed by DHFL
(Now, now Piramal Ltd.) before Ld. NCLAT, is not tenable,
because from the wordings of the MOU and the terms
mentioned therein, it is amply clear that it talks about nothing
less than a direct stay order, and no other order of any other
nature.
Further, from the perusal of the orders of Ld. NCLAT
dated 12.05.2022 and 02.06.2022, it is clear that no clear stay
was ever ordered qua the sale of the property.
Thus, said stay, which was mutually understood, got
vacated on 19.04.2022 itself and as per term/clause 3.2 of the
MOU, after expiry of 30 days of the period starting from
19.04.2022 that is vacation of stay by Ld. NCLT, said MOU
had become non-existent/non-enforceable document, being
rendered infructuous.
XVIII. In fact, it also appears that intentionally or
unintentionally, either purchaser/plaintiff was not that much
alert/vigilant over the expected steps to be taken on its part, or
was ready to face the consequences. Thus, submission of
defendants No.1 & 2 appears to be correct that plaintiff was
always in a 'win-win situation', as there was nothing to lose for
him, so no step was ever taken by it to acquire the property,
prior to 19.05.2022.
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 75 -
On the other hand, while considering the effect of
granting of temporary injunction in favour of plaintiff, it is
material to notice that the property in question has already been
handed over by M/s Yes Bank Ltd. to M/s Apollo Hospitals
North Ltd. (defendant No.3) on 06.07.2022. At this stage, it is
also not under dispute, that for purchasing the land, a heavy
amount of Rs. 438.00 Crores, has already been invested by
defendant No.3, who is presently having possessory rights
alongwith the ownership rights over the property.
On being pointed by defendants, it is also noticed that as
per MOU dated 08.04.2022, plaintiff already acknowledged the
fact that possession is with the 'Yes Bank', but in the plaint as
well as in the revision petition filed before this Court, plaintiff
has alleged that defendants projected themselves to be owner in
possession of the suit property. Thus, pleading and conduct of
the plaintiff is in contradiction to the clause of MOU.
XIX. Thus, the pivotal question before this Court is whether an
order of injunction against the interest of the title holder as well
as possession holder of the property would be justified. This
Court is of the view that granting such an injunction in favour
of the plaintiff, who has neither invested a single penny nor is
having possession over the same, would cause irreparable loss
to defendant No.3, who has invested a huge amount i.e.
Rs.438.00 Crores, in consonance with the land use permitted by
the Government.
Otherwise also, as per the settled law, usually, granting of
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 76 -
injunction is avoided in regard to the property, which is meant
for infrastructure projects, especially such as healthcare.
Rather, granting injunction in such a case, may lead to wider
ramifications against the interest of the people in general, who
are expected to draw benefit of the health services from such
infrastructure projects.
XX. This Court also feels satisfied with the submissions
addressed by learned counsel for the respondents/defendants
that suit for specific performance is itself a discretionary
remedy, and for grant of temporary injunction, a strong prima
facie case, on the basis of undisputed facts, needs to exist before
the Court. Reliance is placed at Ambalal Sarabhai Enterprise
Limited's case (supra) and Dalpat Kumar's case (supra). As per
Dalpat Kumar's case (supra), Court needs to examine the
situation, if any loss is suffered by the plaintiff due to refusal to
grant injunction, if the same can be compensated through
damages. If so, granting of injunction is required to be avoided.
On applying the said principle to the prayer made in the
suit by the plaintiff, it is found that plaintiff himself has prayed
for alternative relief of grant of damages to the tune of
Rs.468.00 Crores, thus, plaintiff itself is of the view that it can
be compensated by way of damages also. Thus, granting of
injunction in such a case must be avoided.
As per M/s Best Sellers Retail (India) Pvt. Ltd.'s case
(supra) also, plaintiff is not entitled for any injunction.
Moreover, plea of lis pendence is always there for safeguarding
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 77 -
the interest of the plaintiff, if at all, it succeeds finally in the
suit.
Further, all the parallel proceedings/litigations pending
before different forums/Tribunals, were admittedly in the
knowledge of plaintiff (chart available in Para No.7 of this
judgment), and thus, plaintiff knew the required steps, which it
could take for acquiring the desired property.
XXI. This Court looks into another aspect also that plaintiff
itself has never approached to avail remedy available to it under
Section 17 of the SARFAESI Act, 2002, and Rules 8 & 9 of the
Rules, 2002, to get a genuine sale in its favour. While looking
at this kind of attitude of the plaintiff, Court is also noticing the
fact that for joining the proceedings under Section 17 of the
SARFAESI Act, 2002, on its own, by projecting its intent,
plaintiff had to bear a huge financial cost. Thus, consciously,
escaping at relevant stage, despite execution of the MOU, and
not approaching and joining the proceedings pending under
SARFAESI Act, 2002, is enough to assume for this Court that
plaintiff (petitioner herein) is not entitled to seek any relief of
temporary injunction. Therefore, plaintiff is neither having
prima facie case in its favour, nor balance of convenience lies in
its favour, nor is going to suffer any irreparable loss, if plea of
injunction is rejected.
Rather, granting injunction at this stage, against the
person/company holding title as well as possession, for a
cause/purpose for which the required permissions or no
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 78 -
objection(s) have also been obtained from the concerned
quarter(s), may cause irreparable loss and injury to any such
person i.e. defendant No.3 in the present case.
Thus, apart from not meeting out any of the three
principles, even equity does not lie, in favour of the
plaintiff/purchaser, at this belated stage.
Moreover, it is not required by this Court to enlighten
defendant No.3 that creation of any third party rights would be
having a tag over it of lis pendence. Thus, alienation, if any, in
any manner, during the pendency of suit, would be at the risk of
defendant No.3 - M/s Apollo Hospitals North Ltd itself.
Therefore, plea of injunction under Order 39 Rule 1 & 2
CPC of the plaintiff is hereby declined.
Ordered accordingly.
DECISION:
XXII. By recording the aforementioned reasons and
observations with the help of the guidance given by the Hon'ble
Apex Court through its judgments, I conclude that the
impugned order dated 21.09.2023, is modified qua the issue of
maintainability of the suit before the Civil Court. Thus, by
virtue of the impugned order dated 21.09.2023 passed by the
Court of Ld. Addl. District Judge, Gurugram, 'jurisdiction of
the civil court shall not be considered to be barred, at this
stage'.
However, plea of grant of temporary injunction under
Order 39 Rule 1 & 2 read with Section 151 CPC, is rejected.
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
CR-5837-2023 (O&M) - 79 -
Hence, application in this regard stands dismissed.
Pending misc. application(s), if any, also stands disposed of.
Any finding given or observation made or reasoning recorded
by the Court in the present revision petition will not be considered as a
conclusive and final result on the merits of the case, rather, same is prima
facie view only, to decide the plea of temporary injunction. Thus, Court
below would take its final decision on any of the issue arising before it
during the pendency of the suit or at final stage, without getting impressed in
any manner with the present order.
(SANJAY VASHISTH)
JUDGE
November 20, 2023
J.Ram
Whether speaking/reasoned: Yes/No
Whether Reportable: Yes/No
PRASHANT KAPOOR
2023.11.20 15:50
I attest to the accuracy and
authenticity of this
order/judgment
