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TMI Blog2017 (10) TMI 1625X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 August 2009 is illegal, null, void and unenforceable; (d) For a permanent order of injunction of this Hon'ble Court restraining the Defendant, from acting under and/or in furtherance of the Term Loan Agreement dated 13th August 2009 in any manner whatsoever; (e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 every month, if the dollar rate was below the predetermined rate, the difference between the predetermined rate and the prevalent rate was payable by the defendant to the plaintiff, whereas if the prevailing dollar rate was more than the predetermined rate, then the plaintiff was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 agreement dated 13.8.2009 was executed between the parties. 2(v) It is further case of the plaintiff that in early 2010, the plaintiff realizing the illegality of the Master agreement and the transactions thereunder, stopped making further payments under the said contracts, and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 to be vacated, and the Presiding Officer of the DRT allowed the said interim applications vide the order dated 17.1.2012 directing that the further hearing of the original applications would proceed in accordance with law and that the recovery certificate, if issued, would not be enfo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 DRT-II, Mumbai and the issues raised in the plaint are directly and substantially the issues before the DRT in the recovery proceedings initiated by the defendant. Reliance is placed on the decision of the Supreme Court in case of I.T.C. Limited v. Debts Recovery Appellate Tribunal & Ors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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 jurisdiction under Section 115 of CPC may not interfere with the same in view of the decision of the Supreme Court in case of Hindustan Petroleum Corporation Limited v. Dilbahar Singh, reported in 2014 (9) SCC 78. 5. In response to the preliminary objection raised by the learned Sr. Advocate Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uses 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, considering the submission of Mr. Thakore, the present revision application is treated as having been filed against the order passed by the trial Court rejecting the application for rejection of the plaint under Rule 11 of Order VII of CPC. 7. It is needless to say that the law as regards t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 tenor and terms of his pleadings taken as a whole. At the same time it should be borne in mind that no pedantic approach should be adopted to defeat justice on hairsplitting technicalities." 8. In Mayar (H.K.) Ltd. and Ors. v. Owners and Parties, Vessel M.V. Fortune Express & Ors. (supra) dealt wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firmities 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 would be also relevant to mention that Order VII Rule 1 states as to what particulars should be contained in the plaint, and as per Clause (e) of the said Rule, the plaint must contain the facts constituting the cause of action, and when it arose. As per Clause (f) thereof, the plaint also must contain the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial 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 11, even without intervention of the defendant. In any event, rejection of the plaint under Rule 11 does not preclude the plaintiffs from presenting a fresh plaint in terms of Rule 13." 11. From the afore-stated provisions contained in Order VI Rule 2 and Order VII Rule 1 it clearly emerges that the pleadings i.e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch 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 averred inter alia with regard to the execution of the Master agreement in the year 2007 and execution of the Term loan agreement in the year 2009, however, has remained conveniently silent as to when such agreements became illegal or void, requiring the plaintiff to file the suit. The respondent plaintiff has also remained co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Tribunal directing that the further hearing of the original Applications would proceed in accordance with law and the recovery certificate, if issued, would not be enforced without the permission of the BIFR, as the plaintiff had filed the proceedings before the BIFR under SICA. The BIFR in the said case of the plaintiff had pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 example 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 appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 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 action and even otherwise barred under the provisions contained in Section 18 of the DRT Act, deserves to be rejected under Clause (a) and (d) of Rule 11 of Order VII. The Court is also of the opinion that the suit filed by the respondent is absolutely vexatious and dishonest litigation, filed with a view to misuse and abuse the process of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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