When the plaints are vexatious, frivolous, meritless or an abuse of process of law, the Court shall

Canara Bank V.P. Selathal and others, CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS.1863­1864 OF 2020(Arising out of SLP(C) Nos.24819­24820/2019) – FEBRUARY 28, 2020

Bench: Hon’ble Justice M.R. Shah J

Facts of the case

The suit is filed to challenge the decree passed by DRT. The challenge is done using the order 7 rule 11 of CPC and considering the provisions of Recovery of debts due to banks and financial institution Act. Both trial and high court have rejected the petitions

Plaintiff contention

It is submitted by the learned Advocate appearing on behalf of the appellant­-bank that in the present case also the allegation of fraud is not with respect to the Guarantee Deed executed by the Guarantor – Shri M.C. Kallikutty, but with respect to Partnership Deed. It is submitted that therefore the suits filed by the original plaintiffs are frivolous and abuse of a process of law and therefore the plaints are liable to be rejected on that ground also and in exercise of powers under Order 7 Rule 11(d) of the CPC.

Defendant contention

It is vehemently submitted that in the facts and circumstances of the case, more particularly when there are specific allegations of fraud in the respective suits which can be decided only by the civil court, both, the learned trial Court as well as the High Court have rightly refused to reject the plaints in exercise of powers under Order 7 Rule 11(d) of the CPC.

Whether the suit filed by the appellant is competent enough to exercise its powers under Order 7 rule 11 of CPC.

The Bench had permitted the appeal of the bank – Punjab National Bank, this Court has observed that without exhaustion of the remedies under the RDDBFI Act, the High Court ought not to have exercised its jurisdiction under Article 227. While holding so, in paragraph 6, this Court has observed and held as under:

“The Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial institutions. There is a hierarchy of appeal provided in the Act, namely, filing of an appeal under Section 20 and this fast­track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision under an Act cannot expressly oust the jurisdiction of the court under Articles 226 and 227 of the Constitution, nevertheless, when there is an alternative remedy available, judicial prudence demands that the Court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have directed the respondent to take recourse to the appeal mechanism provided by the Act.”

The Bench also observed that the plaints are vexatious and nothing but an abuse of law and also mentioned that it is a fit case for Order 7 rule 11 of CPC using the words:

“Be that as it may, considering the pleadings/averments in the suits and the allegations of fraud, we are of the opinion that the allegations of fraud are illusory and only with a view to get out of the judgment and decree passed by the DRT. We are of the opinion that therefore the suits are vexatious and are filed with a mala fide intention to get out of the judgment and decree passed by the DRT.”

The court had listened to the arguments posted by the learned advocates. The court had pointed of the following

1. The allegation of fraud is with respect to partnership deed and not with respect to the mortgage done by the guarantor. The allegation of fraud are illusionary and was used only with a view to get out of the judgment and decree passed by the DRT. Hence the suit is vexatious.

2. The judgement passed by the learned judge of trial court has not considered or referred to the deed of guarantee in the judgement

3. The suit property was purchased by the appellant-bank from the vendor and not the original vendor which is factually incorrect as mentioned in the sale deed Sri Kallukutty has the power of attorney and has executed the deal.

4. Therefore, considering the law laid down by this Court in the aforesaid decisions, more particularly in the case of T. Arivandandam (supra), the suits being vexatious and frivolous, the plaints are required to be rejected in exercise of powers under Order 7 Rule 11 of the CPC.

5. The petition at the court has been filed after a period of 15 years of mortgage and 7 years from the date of passing the decree.

6. The plaints are liable to be rejected based on the law of limitations

Therefore, after pointing out the above the hon’ble court held that both appeals succeeded. The impugned common judgment and order passed by the High Court in dismissing the revision applications and the orders passed by the learned trial Court rejecting the applications preferred by the appellant­bank to reject the respective plaints in exercise of powers under Order 7 Rule 11(d) of the CPC are hereby quashed and set aside. Consequently, the plaints filed by the original plaintiffs being O.S. No. 1269/2010 and O.S. No. 233/2011 pending in the Court of Additional Subordinate Court, Coimbatore are rejected. The instant appeals are allowed accordingly.

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– Karthik K.P

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