TMI Blog2017 (10) TMI 1625X X X X Extracts X X X X X X X X Extracts X X X X ..... cts showing that the Court has jurisdiction. Order VI Rule 2 and Order VII Rule 1 it clearly emerges that the pleadings i.e. the plaint in the instant case, must state the material facts constituting the cause of action and as to when it arose, and omission of a single material fact leads to an incomplete cause of action, and the plaint becomes bad. Such infirmity may attract Clause (d) of Rule 11 of Order VII. The word shall used in Order VII Rule 11 also cast duty on the Court to reject the plaint when it is hit by any of the clauses mentioned in Rule 11. In the instant case, the applicant Bank having already initiated the proceedings under Section 17 of the DRT Act, for crystallizing their dues as permitted by the BIFR, the suit filed by the respondent - plaintiff seeking reliefs in respect of the same subject matter would be completely barred under Section 18 of the said Act. It cannot be gainsaid that under Section 17 the Tribunal has powers and jurisdiction to entertain and decide applications from the banks and financial institutions for recovery of debts, and under Section 18 no other Court or authority has jurisdiction or powers in relation to the matters specifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the plaint. With the consent of the learned Advocates for the parties, the Civil Revision Application was heard finally at the admission stage. 2. The factual matrix in nutshell giving rise to the present Civil Revision Application may be stated as under:- 2(i) The respondent (original plaintiff) has filed the suit being Special Civil Suit No. 72 of 2012 against the applicant - defendant seeking various reliefs of declaration and permanent injunction as stated in paragraph 46 of the plaint, which read as under:- (a) For a declaration that the Master Agreement dated 15th October 2007 and all the four Transactions thereunder bearing reference Nos. 69026HM to 69145HM, 73359HM to 73360HM, 73773HM to 73774HM and 74217HM to 74218HM are illegal, void ab initio and unenforceable; (b) For a permanent order of injunction of this Hon'ble Court restraining the Defendant, from acting under and/or in furtherance of the Master agreement dated 15th October 2007 and Transactions thereunder bearing reference Nos. 69026HM to 69145HM, 73359HM to 73360HM, 73773HM to 73774HM and 74217HM to 74218HM in any manner whatsoever; (c) For a declaration that the Term Loan Agreement dated 13th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of bauxite and bentonite, having its offices at various places in India, including at Mumbai and Khambhaliya. The defendant is a banking company incorporated under the Indian Laws, with whom the plaintiff had banking relationship since 2007. Since the plaintiff was an exporter of minerals, it was constantly exposed to the risk arising out of the fluctuation in the exchange rate of foreign currency. Hence, considering the recommendation of the defendant Bank and considering the fact that export of bauxite would increase in future, the plaintiff in order to protect itself against the risk of depreciation of the dollar, which would impact the business profit, agreed to enter into a Master Agreement to hedge the foreign currency risks arising out of the business of export of bauxite. The Master agreement called International Swaps and Derivatives Association Master Agreement was entered into between the parties on 15th October, 2007 and the same was intended to be a foreign exchange derivative transactions in the nature of foreign currency rupee option between the parties, wherein the plaintiff was to sell USD and buy INR from the defendant at a predetermined price. At the end of eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntiff company, which had no expertise or skill or adequate knowledge in the field of foreign exchange management. The said Master agreement and the said transactions, therefore, were voidable at the instance of the plaintiff under Sections 17 and 18 of the Indian Contract Act and void ab initio under Section 23 of the Indian Contract Act. 2(iv) It has been further averred that in or around June 2009 the defendant claimed and demanded a sum of Rs. 22 Cr., approximately, which the plaintiff was made liable to pay under the said transactions. As the plaintiff was not in a position to pay the said amount, the defendant further misled the plaintiff by suggesting that they would grant a Term loan to the plaintiff of an equivalent amount. The plaintiff having no other choice borrowed money from the market to make payment against the said alleged debt and made payment of Rs. 22 Cr., to the defendant, and in return the defendant released a sum of Rs. 25 Cr., under the guise of Term loan for the purpose of partial reimbursement of capital expenditure incurred for setting up Kaolin Project at Village Melakulam, Taluka Trivandrum, District Trivandrum, Kerala. In this regard, Term loan agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y rights in Kaolin land property of the plaintiff. Since the plaintiff had no intention of parting away with any of the suit properties, the Presiding Officer of the DRT had disposed of the said Misc. Applications upon the statement made by the plaintiff in that regard. 2(ix) It is further stated that since the plaintiff had suffered enormous losses, it had to make a reference to the Board of Industrial and Financial Reconstruction (hereinafter referred to as the BIFR ) vide the application dated 31.5.2011, which was registered as Case No. 34 of 2011 by the BIFR. In the said case of the plaintiff, the BIFR on 2.11.2011 passed the order inter alia stating that the HDFC Bank was allowed to approach the competent Court for crystallization of their dues and that they shall approach the Board whenever their dues are crystallized. Till then, they will not enforce the recovery of their dues from the company, as agreed by them in the hearing. According to the plaintiff, despite the said order passed by the BIFR, the defendant filed interim applications in the original applications in the DRT on or around 1.12.2011 seeking the stay on the further hearing of the original applications t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be returned for being presented to the competent Court having jurisdiction. Referring to the documents annexed to the plaint, he implored that Master agreement and the Term loan agreement having been executed and signed at Mumbai and all other legal proceedings having also been initiated and pending on the same subject matter, before the Courts/Tribunals at Mumbai, the trial Court at Khambhaliya did not have the jurisdiction to entertain the suit. In the alternative, he submitted that the plaint was liable to be rejected mainly under Clause (a) of Rule 11, Order VII as it did not disclose any cause of action, and was filed with mala fide intention, misusing the process of law to avoid and/or delay the payment of the amounts that had fallen due to the defendant Bank. Mr. Thakore pressing into service the provisions contained in Sections 17 and 18 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the RDDBFI Act ) submitted that the Debts Recovery Tribunal would have the exclusive jurisdiction in the matter of recovery of debts and in the instant case the defendant - Bank has already initiated the recovery proceedings before the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the trial Court was also not maintainable. As regards the rejection of the plaint under Order VII Rule 11, Mr. Joshi has relied upon the latest decision of the Supreme Court in case of Kuldeep Singh Pathania v. Bikram Singh Jaryal, reported in (2017) 5 SCC 345, to submit that the plaint cannot be rejected if the plaint discloses the cause of action and that the cause of action has to be gathered on the basis of the averments made in the plaint. Merely because the Court is of the opinion that the plaintiff may not succeed in the suit cannot be a ground for rejection of the plaint. Mr. Joshi has also relied upon the decision of the Supreme Court in case of Sopan Sukhdeo Sable and Ors. v. Assistant Charity Commissioner and Ors., reported in (2004) 3 SCC 137 and in case of Mayar (H.K.) Ltd. and Ors. v. Owners and Parties, Vessel M.V. Fortune Express Ors., reported AIR 2006 SC 1828 and submitted that the averments made in the plaint as a whole have to be seen to find out whether clause (d) of Rule 11 of Order VII was applicable. According to him, the trial Court having rightly passed the order rejecting the application of the defendant Bank, and this Court having limited jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement made in the plaint to be barred under any law, then also the plaint is liable to be rejected Clause (d) of under Rule 11 and could not be returned under Rule 10. Thus, a duty is cast on the Court to reject the plaint when the same is hit by any of the infirmities provided in the clauses of Rule 11 even without the intervention of the defendant. Whereas the plaint could be returned under Rule 10 only when the Court comes to the conclusion at any stage of the suit that the plaint was not presented to the Court having jurisdiction to try the suit, and under the circumstances, it has to be returned to be presented to the Court in which the suit should have been instituted. Thus, on the plain reading of the said provisions as contained in Rule 10 and 11 of Order VII, it clearly emerges that they are mutually exclusive to each other, and the reliefs could not be prayed for alternatively, either under Rule 10 or under Rule 11 as sought to be prayed for in the instant case by the applicant - defendant before the trial Court. The Court, therefore, is the opinion that such a composite application under Rule 10 and Rule 11 of Order VII as such would not be maintainable. In any case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be considered, and the whole plaint has to be read. As was observed by this Court in Roop Lal Sathi v. Nachhattar Singh Gill (1982 (3) SCC 487), only a part of the plaint cannot be rejected and if no cause of action is disclosed, the plaint as a whole must be rejected. 14. In Raptakos Brett Co. Ltd. v. Ganesh Property (1998 (7) SCC 184) it was observed that the averments in the plaint as a whole have to be seen to find out whether clause (d) of Rule 11 of Order VII was applicable. 15. There cannot be any compartmentalization, dissection, segregation and inversions of the language of various paragraphs in the plaint. If such a course is adopted it would run counter to the cardinal canon of interpretation according to which a pleading has to be read as a whole to ascertain its true import. It is not permissible to cull out a sentence or a passage and to read it out of the context in isolation. Although it is the substance and not merely the form that has to be looked into, the pleading has to be construed as it stands without addition or subtraction or words or change of its apparent grammatical sense. The intention of the party concerned is to be gathered primarily from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any stage when the objection can be raised, and also does not say in express terms about the filing of the written statement. Instead, the word shall is used clearly implying thereby that it casts a duty on the Court to perform its obligation in rejecting the plaint when the same is hit by any of the infirmities provided in the four Clauses of Rule 11, even without intervention of the defendant.... 10. In the light of the afore-stated legal position, let us examine the averments made in the plaint so as to find out whether the plaint discloses the cause of action, and whether the suit is barred under any law as contemplated in Clause (a) and Clause (d) respectively of Rule 11 of Order VII. At this juncture, it would be also apposite to mention that Order VI Rule 2 requires that every pleadings shall contain, and contain only a statement in concise form and of material facts on which the party pleading relies for his claim or defence as the case may be, but not the evidence by which they are to be proved. Thus, though the pleadings must contain a statement in concise form of material facts, it need not contain the evidence by which they are to be proved. At this juncture, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in Samant N. Balkrishna v. George Fernandez (1969 (3) SCC 238), and the distinction between material facts and particulars was brought out in the following terms: The word 'material' shows that the facts necessary to formulate a complete cause of action must be stated. Omission of a single material fact leads to an incomplete cause of action and the statement of claim becomes bad. The function of particulars is to present as full a picture of the cause of action with such further information in detail as to make the opposite party understand the case he will have to meet. Rule 11 of Order VII lays down an independent remedy made available to the defendant to challenge the maintainability of the suit itself, irrespective of his right to contest the same on merits. The law ostensibly does not contemplate at any stage when the objections can be raised, and also does not say in express terms about the filing of a written statement. Instead, the word 'shall' is used clearly implying thereby that it casts a duty on the Court to perform its obligations in rejecting the plaint when the same is hit by any of the infirmities provided in the four clauses of Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n must be stated in the plaint and omission of a single material fact would lead to an incomplete cause of action. When Rule 1 of Order VII requires the particulars as mentioned therein to be stated in the plaint, more particularly the facts constituting cause of action and as to when it arose, the omission to mention such particulars in the plaint would make the plaint defective leading to the conclusion that it did not disclose the cause of action. 14. When the specific query was raised by the Court to point out from the averments made in the plaint as to how and when the cause of action was stated to have arisen, the learned Sr. Advocate Mr. Joshi was not in a position to point out the same. From the bare reading of the plaint also it appears that though the paragraphs in the plaint have been separately numbered with titles like the parties, preliminary back ground, the facts, grounds for ad-interim reliefs, limitation, jurisdiction, valuation, no other suit, prayers, etc., there is no paragraph specifically stating as to which facts constituted cause of action and as to when such cause of action, in fact, had arisen for filing the suit. The respondent - plaintiff has averr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is also absolutely absent in the instant case. Mere allegation of fraud made in the plaint without stating the particulars of fraud and misrepresentation would not constitute cause of action. As per the settled legal position stated herein above, a cause of action is a bundle of facts which are required to be proved for obtaining the reliefs and for the said purpose, the material facts with regard to misrepresentation, fraud, undue influence are required to be stated in the plaint itself. 16. On the contrary, it appears that the suit was filed by the respondent in the Court of Khambhaliya seeking various reliefs only with a view to frustrate the proceedings initiated by the defendant Bank in the DRT-II, Mumbai and that too, after having failed to obtain the desired reliefs from the Bombay High Court against the orders passed by the DRT-II, Mumbai. As transpiring from the paragraph Nos. 29 to 34 of the plaint, it clearly emerges that the defendant Bank had filed the original Application Nos. 29, 30 and 31 of 2011 before the DRT-II, Mumbai for the recovery of its dues and had also filed interim applications in the said original applications, which were allowed by the said Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 and the financial institutions for the purpose of 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 Debt 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 counter-claims 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akore such a relief of injunction for restraining any person from instituting or prosecuting any proceedings in a Court not subordinate to that from which the injunction is sought, would also be barred under Clause (b) of Section 41 of the Specific Relief Act. The respondent - plaintiff instead of filing counterclaim or making claim of set off in the proceedings initiated by the applicant Bank before the DRT, Mumbai, has filed the suit for recovery of the amount in respect of the same subject matter, on which applicant Bank has filed the proceedings before the DRT, Mumbai, which would also be not tenable in view of Clause (h) of Section 41 of the Specific Relief Act. Such a vexatious and dishonest litigation deserves to be dismissed right at the threshold. 19. As held by Supreme Court in case of T. Arvindam v. T.V. Satyapal, reported in (1977) 4 SCC 467, followed in N.V. Srinivasa Murthy v. Mariyamma, reported in (2005) 5 SCC 548, and various other cases, if clever drafting has created an illusion of a cause of action, the Court must nip it in the bud at the first hearing. 20. In view of the above, the Court is of the opinion that the plaint, not disclosing the cause of actio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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