I.D.F.C. First Bank Ltd. (Earlier ... vs Dr. Aruna Bamniya (Kundara) W/O ...
2021 Latest Caselaw 3479 Raj/2

      HIGH COURT OF JUDICATURE FOR RAJASTHAN
                  BENCH AT JAIPUR

              S.B. Civil Revision Petition No. 85/2021

I.D.F.C. First Bank Ltd. (Earlier Known As IDFC Bank Ltd.)
Through Manager, Second Floor, Man Upasana Plaza, Sardar
Patel Marg, C-Scheme, Jaipur-302001
                                                                   ----Petitioner
                                     Versus
1.     Dr. Aruna Bamniya (Kundara) W/o Dr. Manoj Bamniya,
       R/o B-1, New Heera Bag, S.m.s. Hospital Campus, Jaipur,
       Rajasthan.
2.     M/s Bajaj Finance Ltd, Through Authorized Signatory, 5Th
       Floor, Manglam Ambition Tower, D-46-B, Malan Chauraha,
       Agrasen Circle, C-Scheme, Jaipur-302001
3.     ICICI Bank Ltd, Through Branch Manager, Third Floor, Jsel
       Building J.L.N. Marg, Jaipur.
4.     IIFL Through Manager, Office No. 509 To 511, 5Th Floor,
       Sunny House, Airtel Office Agrasen Circle, C-Scheme,
       Jaipur.
5.     Tata Capital Finance Service Through Manager, The
       Guman 1St Plot 1 To 7 Block F, Amrapali Circle, Vaishali
       Nagar, Jaipur.
6.     HDFC Bank Ltd, Through Manager, Forth Floor, Time
       Square Vidhyadhar Nagar, Jaipur.
7.     Aditya Birla Finance Ltd, Through Manager, Office No.
       701, 702 And 703, B-46, Ambition Tower, Subhash Marg,
       Agrasen Circle, C-Scheme, Jaipur.
                                                                ----Respondents

For Petitioner(s)        :     Mr. Jai Prakash Gupta
                               Mr. Avinash Kumbhaj
                               Mr. Peush Nag
For Respondent(s)        :     Mr. Harish Agarwal for R/1
                               Mr. Anurag Mathur for R/2
                               Mr.   Pankaj Gupta for R/3
                               Mr.   Udit Purohit for R/4
                               Mr.   Hemant Sharma &
                               Mr.   Anoop Agarwal for R/5
                               Mr.   Prakhar Gupta for R/6 through VC
                               Mr.   Anurag Mathur for R/7




                                               (2 of 9)                     [CR-85/2021]


           HON'BLE MR. JUSTICE RAMESHWAR VYAS

                                     Order

06/08/2021

The instant revision petition under Section 151 CPC has been

filed against the impugned order dated 16.03.2021 passed by

Commercial Court No.2, Jaipur Metropolitan-II, Jaipur (afterwards

referred to as 'Commercial Court') in Suit No. 53/2020

(430/2019), whereby, the application under Order VII, Rule 11

read with Section 151 CPC and Sections 8 & 5 of the Arbitration

and Conciliation Act, 1996 (afterwards referred to as the 'A&C

Act') filed by defendant No.5 - petitioner herein has been

dismissed.

Brief facts of the case are that the plaintiff-respondent No.1

herein applied for loan to so many Banks including petitioner

Bank; the consolidated amount taken on loan from different seven

Banks is Rs. 98,34,413/-; plaintiff filed a suit against all the banks

including the present petitioner - defendant No. 5 to the effect

that a fraud has been committed by some doctors viz. Dr.

Manohar Lal, Dr. Vikash Sharma and other persons; defendants

managed to get sign of the plaintiff on blank papers and forms; a

total sum of Rs. 98,32,101/- was credited by defendant Banks in

the account of plaintiff; afterwards plaintiff came to know that the

said credited money has been transferred in the account of Kishan

Hospital and Research Centre; thereafter plaintiff lodged an FIR

No.274/2019 under Sections 420 and 406 IPC on 02.07.2019

against all the defendants; thereafter plaintiff came to know from

the newspaper that an FIR No. 17/2019 under Sections 420, 406,

467, 468, 471 and 120B IPC has been registered against Dr. Ram

Lakhan Desaniya, Dr. Nand Lal Desaniya, Dr. Suresh Rolaniya, Dr.

(3 of 9) [CR-85/2021]

Manohar Kanwariya, Dr. Pavan Sharma, Dr. Ravi Prakash Khatri,

Dr. Neha Jain, Vikas Sharma, Radha Mohan, Karan and Laxmi

Narayan, in which, after filing charge-sheet cognizance has been

taken by the Court; from the FIR No.17/2019 plaintiff came to

know that fraud has been committed with her by the defendants

then plaintiff intimated the Banks that no proceedings should be

initiated against the plaintiff on the forged document; all the

banks sent notices to the plaintiff and initiated arbitration

proceedings; since all the loan accounts were opened in a

fraudulent manner, hence the arbitration proceedings cannot be

initiated; the plaintiff prayed that all the loan agreements may be

declared void and defendants may be restrained from initiating

any arbitration and recovery proceedings against the plaintiff on

the basis of above forged loan agreements.

An application under Order VII, Rule 11 CPC read with

Sections 8 and 5 of the A&C Act was filed by defendant No.5 -

petitioner herein, to the effect that plaintiff borrowed a sum of

Rs. 10,42,000/- as personal loan from it, for which, a loan

agreement was entered between them on 16.02.2019, which

contained the arbitration clause No.23; since the dispute between

the parties could have been decided under the provisions of the

A&C Act, the Commercial Court has no jurisdiction to decide the

same; it is further averred that the suit is barred by law; if

plaintiff has any grievance then she has right to seek reference of

the dispute to the Arbitrator; it is also averred in the application

that the plaintiff did not file sufficient court fees also; as per the

averments of defendant No.5-petitioner herein no cause of action

arises in favour of the plaintiff and the suit is barred by law, hence

the same was liable to be dismissed.

(4 of 9) [CR-85/2021]

The above application was dismissed by the impugned order.

Hence, this revision petition has been filed by defendant No.5-

petitioner herein.

Learned counsel for the petitioner submitted that the plaintiff

filed a suit against seven Banks containing therein that the loan

amount credited in plaintiff's account was transferred to Kishan

Hospital and Research Centre. It is submitted that the petitioner

in its application has only sought relief for rejection of plaint being

barred by law. The petitioner has not made any prayer in terms of

Section 8 of the A&C Act to refer the dispute to the Arbitrator for

the reason that as per arbitration clause the Bank has right to

appoint the Arbitrator, which they already did and the Arbitrator

has passed the award dated 28.02.2020 determining the liability

of the plaintiff-respondent No.1 herein. It is submitted that if the

application filed by the petitioner would have been allowed then

the proceedings of the Civil Court would have been terminated on

the ground that the suit is barred by law as there is arbitration

clause between the parties.

It is submitted that as the impugned order is not an

interlocutory order, thus the revisional jurisdiction of the High

Court can be invoked. The provisions of A&C Act are special

provisions, which prevails over the general statute. As per the

provisions of Section 5 of the A&C Act notwithstanding anything

contained in any other law for the time being in force, in matters

governed by this Part, no judicial authority shall intervene except

where so provided in this Part.

It is further submitted that the above provisions show that if

there is an arbitration clause in loan agreement then judicial

authority shall not intervene and the jurisdiction of the Civil Court

(5 of 9) [CR-85/2021]

is curtailed by operation of Section 5 of the A&C Act. As per the

provisions of Section 8 of the A&C Act a judicial authority is under

an obligation to refer the parties to arbitration.

It is further submitted by learned counsel for the petitioner

that the impugned order passed under Order VII, Rule 11 CPC is

not an interlocutory order and, therefore, the provisions contained

in Section 8 of the A&C Act are not attracted.

Learned counsel for the petitioner relied upon the following

judgments in support of his contentions:-

(1) M/s. Caravel Shipping Services Pvt. Ltd. v. M/s. Premier Sea

Foods Exim Pvt. Ltd. : 2019 (1) WLC (SC) Civil 183.

(2) Johra Bi & Ors. v. Jageshwar & Ors. : (2010) 1 MP LJ 98.

(3) Rashid Raza v. Sadaf Akhtar : (2019) 8 SCC 710.

(4) Sundaram Finance Limited v. T. Thankam : (2015) 14 SCC

444.

(5) Swiss Timing Limited v. Commonwealth Games 2010

Organising Committee : (2014) 6 SCC 677.

(6) Shri Ram Tansport Finance Co. Ltd. & Ors. v. Jasveer Singh :

2000 (1) Arb. L.R. 192 (P&H).

On the other hand, learned counsel for respondent No.1-

plaintiff contended that as per provisions of Section 13 of the

Commercial Courts, Commercial Division and Commercial

Appellate Division of High Courts Act, 2015 (afterwards referred to

as the 'Commercial Courts Act') any person aggrieved by decision

of Commercial Court may appeal to the Commercial Appellate

Division of that High Court.

Learned counsel while drawing attention of the Court towards

provisions of Section 37 of the A&C Act submitted that against the

impugned order an appeal will lie to the Court authorized by law

(6 of 9) [CR-85/2021]

to hear the appeals from original decrees of the Court passing the

order.

Since the impugned order was appealable under Section

37(1)(a) of the A&C ACt, no revision petition is maintainable

against the said order.

Learned counsel for respondent No. 3 submitted that the

impugned order is not an interlocutory order hence the provisions

of Section 8 of the Commercial Courts Act are not attracted. It is

further submitted that the award has already been passed by the

sole arbitrator deciding the controversy between the parties.

Learned counsel for respondent No. 6 submitted that the

revision petition is not maintainable. On the other hand, as per his

contention a writ petition under Article 226 of the Constitution of

India is maintainable, for which, he relied upon the following

judgments:-

(1) Shri Balaji Industrial Product Ltd. v. AIA Engineering Ltd. &

Ors. : D.B. Civil Writ Petition No. 16794/2017.

(2) Raj. State Mines & Minerals Ltd. v. Ankur Mining Product Pvt.

Ltd. : S.B. Civil Writ No. 920/2019.

(3) Balaji Industrial Product Ltd. v. AIA Engineering Ltd. &

Ors. : 2018 SCC Online Raj 2315.

(4) N.N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. &

Ors. : (2021) 4 SCC 379.

The question which arises for consideration before this Court

is whether the impugned order may be categorized an order

passed under Section 37(1)(a) of the A&C Act or it is an order

passed under Order VII, Rule 11 CPC. It has also to be looked

into whether allowing the application under Order VII, Rule 11 CPC

will terminate the proceedings of suit.

(7 of 9) [CR-85/2021]

The revisional jurisdiction of the High Court can only be

invoked when the effect of allowing the application will be that it

will finally terminate the proceeding.

After carefully gone through the record it clearly reveals that

the petitioner has not made any prayer to refer the dispute before

the Arbitrator. On the other hand, it was contended that the

Commercial Court has no jurisdiction to decide the controversy

since there is an arbitration clause in the loan agreement entered

in between the parties. It is not in dispute that an arbitration

Clause No. 23 is there in the loan agreement entered in between

the parties. It is pertinent to note that the petitioner has already

appointed sole arbitrator in this matter and award has already

been passed by the Arbitrator on 28.09.2020.

In these circumstances the application filed by the petitioner

under Order VII, Rule 11 CPC and Sections 8 & 5 of the A&C Act

cannot be categorized as an application to refer the matter to

arbitration under Section 8 of the A&C Act. Hence, the impugned

order is not an appealable order under the provisions of Section

37(1)(a) of the A&C Act.

In the considered opinion of this Court the application filed

by the petitioner is certainly an application filed under Order VII,

Rule 11(d) CPC on the ground that the suit is barred by law.

It is true that generally decision on the application under

Order VII, Rule 11(d) CPC may terminate the proceedings, but

looking to the peculiar facts of the present case, allowing the

application of one of the defendants filed under Order VII, Rule 11

CPC will not terminate the suit filed by the plaintiff against all the

seven defendant - Banks.

(8 of 9) [CR-85/2021]

As stated earlier, in the present case, the loan agreements

have been entered in between the plaintiff and defendant-Banks

separately and there is dispute regarding recovery of the loan

account. As per contention of the plaintiff, she has been cheated

by Banks with the help of some other persons, whereas, as per

contention of the Banks including the petitioner the plaintiff has

taken personal loan from the different Banks to the tune of

Rs. 98,34,413/- and she has not repaid the same. There is

arbitration clause in the agreement entered in between the

parties.

As per the proviso to Section 115 CPC added by the

Amendment Act, 1999 w.e.f. 2002 the High Court shall not, under

this section, vary or reverse any order made, or any order

deciding an issue, in the course of a suit or other proceeding,

except where the order, if it had been made in favour of the party

applying for revision, would have finally disposed of the suit or

other proceedings.

As stated earlier, in the facts and circumstances of the case,

if application filed by the petitioner had been decided in the

petitioner's favour would not finally dispose of the suit since there

are other defendants also against whom plaintiff has sought the

protection from initiating arbitration and recovery proceedings.

It is also relevant to mention here about the legal position

that in cases where there is an arbitration clause in the agreement

then Civil Court instead of rejecting the plaint is under an

obligation to refer the matter to the Arbitrator, whereas, in the

present case petitioner itself embarked upon the proceeding under

A&C Act and got award in its favour by Arbitrator.

(9 of 9) [CR-85/2021]

In the considered opinion of this Court, the impugned order

is certainly an interlocutory order passed by the Commercial

Court, against which, as per the provisions of Section 8 of the

Commercial Courts Act there is bar on the Court to entertain any

civil revision. Hence, the present revision petition is not

maintainable.

Regarding the contention of learned counsel for respondent

No. 6 that writ petition lies against the impugned order, suffice it

to say that there is need to observe anything regarding the right

of the petitioner to file writ petition against the impugned order.

Consequently, the present revision petition is dismissed as

not maintainable.

(RAMESHWAR VYAS), J

ASHWINI KUMAR CHOUHAN /-

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