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TMI Blog2024 (12) TMI 1461X X X X Extracts X X X X X X X X Extracts X X X X ..... emise that the right to relief, nay, remedies, arise only at the hands of a banker as against the borrower and that the enquiry to be conducted is wholly one-sided, or in the alternative to declare that the borrower's right to be an actor/Petitioner for the enforcement of his remedies has to be read into the said Acts; b. To declare that Section 34 of the RDB Act, and Section 34 of the SARFAESI Act and Section 63 of the IBC which bar the jurisdiction of the Civil Court to entertain and adjudicate the Petitioner's/borrower's plea against the Respondent Bank nay, bank/financial institution, is unconstitutional and void inasmuch as the Petitioners, victims of the gross breach of contract, culpable negligence, malicious and tortious action, so too, violation of the express statutory provisions at the hands of the Respondent Bank, are entitled to institute an action/Petition as against the Respondent Bank for the enforcement of the Petitioners' right as against them; c. To declare that the Petitioner being an MSME within the meaning of Sections 7 and 8 of the MSMED Act of 2006, it is entitled to the benefits of the said Act and, in particular, the notification S.O. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , financial institution and its officers, which loss and injury far exceeds the very claim of the Bank as against the Petitioners and therefore, no amount is due to the Respondents by the Petitioner and further that the Respondents have no enforceable rights as against the Petitioner; g. To declare that the guidelines and notifications issued by the Reserve Bank of India from time to time empowering the bank and financial institutions to declare a borrower as a willful defaulter is without authority of law, for such a declaration amounts to a civil death and further that the Petitioners, nay, a borrower is not liable to be declared as a willful defaulter except by the authority of an Act of Parliament or statutory instrument having the force of law; h. To declare that the failure on the part of the Central Government/RBI to implement the MSMED notification dated 29.5.2015, in particular, to ensure that the Board of Directors of the Banks/financial institutions in this country, including the Respondent Bank, constitutes a committed for 'stressed micro, small and medium enterprise, and further to prevent the Banks and NBFCs from classifying the account of an MSME as NPA and r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a perpetual mandatory injunction directing Respondents to put the clock back in respect of the entire action initiated under the SARFAESI Act, in particular, cancel the sale notice dated 22.7.2024, putting the Petitioner's properties to sale and further to make attempts to revive the Petitioner's business as mandated by the notification dated 29.5.2015; n. To issue a Writ in the nature of Prohibition restraining and prohibiting the CIBIL and NeSL from acting upon the classification of the Petitioners account as NPA by the Respondent Bank and if they have already done so to put the clock back by undoing the acts or steps, if any already taken against the petitioner; o. Pass such further and other orders, as the nature circumstances of the case may require; p. Issue a writ, order, or direction, which this Hon'ble Court may deem fit and proper under the facts and circumstances of the case. q. Award the cost of the petition to the petitioner." 3. At the very outset, a preliminary objection has been raised by Sri Vivek Kumar Singh that, admittedly, with the same relief, a writ petition, being Writ - C No.31899 of 2024 was filed before this Court, wherein a prelimina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, all grounds of challenge being raised now were available to the petitioners at the earlier stage. Though the petitioner was granted time in view of the circumstance noted in the earlier order dated 12.08.2024, the petitioner has illegally continued to hold possession over the secured asset, till today. 5. The above objection has been met on the legal premised that challenge raised to the validity of the laws may not be thrown out at the first instance, on that technical objection. 6. Without ruling on the preliminary objection, at present, we consider it appropriate to issue notice to the learned Attorney General of India with respect to the challenge raised to the parliamentary laws. 7. All respondents may file counter affidavit within a period of six weeks. Petitioner shall have two weeks thereafter to file rejoinder affidavit. 8. List this case in the week commencing 13.01.2025, showing the name of Sri Sanjay Kumar Gupta also as counsel for the respondent. Re: Civil Misc. Stay Application No. 1 of 2024 9. In view of the facts noted above, no good ground is made out to grant stay in the context of proceedings having arisen and in view of the facts noted in the earl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aforesaid enactments, the MSMED Act will prevail over them and recovery can be made only in accordance with article 5 (4) (iii) of the aforesaid notification dated 29.5.2015; d. To declare that the MSMED Act insofar as it has not created a special forum/tribunal to enforce the inter-se rights and obligations/remedies, which it has created in addition to those rights/obligations/remedies recognized by the common law, the jurisdiction of the Civil Court is not ousted, for it is impossible to oust the jurisdiction of the Civil Court without providing for an alternative forum/tribunal to adjudicate the inter se disputes between parties who are governed by the Act, and further as a corollary thereof, the DRTs, NCLTs created under the RDB Act, 1993 and the Companies Act, 2013 are invested of no jurisdiction to adjudicate a dispute arising out of/involving the MSMED Act; e. To declare that the entire recovery steps initiated by Respondent Bank under the SARFAESI Act or any other law, is without jurisdiction, illegal and void inasmuch as the Respondent are not entitled to take recourse to any forum of recovery of the amounts they claim to be due to them from the Petitioner except i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd further to direct the Central Government and the RBI to ensure that recovery action initiated against the Petitioner in violation of the mandate of the notification is recalled, the clock is put back, the injustice which the Petitioner is made to suffer is redressed and that the Petitioner is compensated is full measure; j. To declare that the entire recovery proceedings, under the SARFAESI Act leading to the forceful taking of possession of the Petitioners properties and sale thereof is illegal and void ab initio, being an violation of express statutory provisions and vitiated by fraud and further to quash and set aside the same; k. To issue a Writ in the nature of Prohibition or any other appropriate Writ or order or direction restraining and prohibiting Respondent Bank/Financial institution, their agents, servants, officers, representatives from taking any action for recovery under the SARFAESI Act, IBC, Arbitration and Conciliation Act, Recovery of Debts and Bankruptcy Act, Negotiable Instruments Acts or any other law in respect of the amounts they falsely claim to be due from the Petitioner, in particular restraining Respondent no.3, from dispossessing the Petitioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven effect to, renders such proceedings void ab initio, still born, which alone is the inevitable consequence because the notification does not provide for any penal provision for violation thereof, and that such an inevitable legal consequence as against Banks/financial institutions is not lost or extinguished simply because an MSME, which the law recognizes as predominantly financially illiterate, has failed to raise such a plea before the court/bank; b. To declare that the failure on the part of the Central Government/RBI to implement the MSMED notification dated 29.5.2015, in particular, to ensure that the Board of Directors of the Banks/financial institutions in this country, including the Respondent Bank, constitutes a committed for 'stressed micro, small and medium enterprise, and further to prevent the Banks and NBFCs from classifying the account of an MSME as NPA and resorting to recovery under the SARFAESI, RDB Act, IBC, NI Act, etc. in violation of the prohibition to do so as contained in Paragraph 1 and 5 (4) (iii) of the said notification, amounts to gross failure on their part to comply with the statutory duty cast upon them under Sections 35, 35A, 35AA, 36, 36A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd further that no proceedings for recovery of the amounts due by the MSMEs to banks/financial institutions, nay, even operational creditors, shall lie against the Petitioner under the SARFAESI Act, RDB Act, IBC, Negotiable Instruments Act or any other law, for recovery of the amounts allegedly due, inasmuch as the MSMED Act being a special law/later law in relation to the aforesaid enactments, the MSMED Act will prevail over them and recovery can be made only in accordance with article 5 (4) (iii) of the aforesaid notification dated 29.5.2015; g. declare that the MSMED Act insofar as it has not created a special forum/tribunal to enforce the inter-se rights and obligations/remedies, which it has created in addition to those rights/obligations/remedies recognized by the common law, the jurisdiction of the Civil Court is not ousted, for it is impossible to oust the jurisdiction of the Civil Court without providing for an alternative forum/tribunal to adjudicate the inter se disputes between parties who are governed by the Act, and further as a corollary thereof, the DRTs, NCLTs created under the RDB Act, 1993 and the Companies Act, 2013 are invested of no jurisdiction to adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ful defaulter except by the authority of an Act of Parliament or statutory instrument having the force of law; l. To declare that the various writ petitions and other proceedings which the Petitioner has instituted as detailed in the Exhibit 'X' does not constitute cause of action estoppel, nay, estoppel per rem judicatam/res judicata, or even Issue Estoppel inasmuch as the rights and remedies which the Petitioner seeks to enforce in the instant is based on the notification dated 29.5.2015, and for the added reason that in the previous proceedings before the High Courts of Allahabad and Bombay and other forums there was never an adjudication on merits; m. declare that the entire recovery proceedings, under the SARFAESI Act leading to the forceful taking of possession of the Petitioners properties and sale thereof is illegal and void ab initio, being an violation of express statutory provisions and vitiated by fraud and further to quash and set aside the same; n. grant a perpetual mandatory and prohibitory injunction restraining and prohibiting Respondent Bank/Financial institution, their agents, servants, officers, representatives from taking any action for reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law and, the same is liable to be dismissed with heavy cost. 8. Learned counsel for the petitioners, replying the preliminary objection, submits that the principle of estoppel would not apply in the present case. 9. We find that the submission made by counsel for the petitioners is patently misconceived. All the petitions have been filed by the same counsel and, therefore, the petitioners have full knowledge that such repeated petitions have been filed before different High Courts, with identical prayers. We further find that although in paragraph nos.77 and 78 of the present petition, such facts have been disclosed, still it can be said that the petitioners are trying to somehow get an order in their favour by filing different petitions, with same prayers before the different High Courts. 10. In such view of the matter, present petition is dismissed, with a cost of Rs.1 lac (Rupees One Lac) upon the petitioners, which the petitioners shall deposit with the Registrar General of this Court within a period of one month from today. On deposit of such cost, it shall be transmitted to the account of the High Court Legal Services Committee, Allahabad. If the petitioners fail to deposi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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