Order 3

Order Details: Notice of Motion
Pdf Text: NM No. 3518 /2024
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MHCC010155662024
City Civil and Sessions Court, Mazgaon Greater Mumbai
Court Room No. 31 – Commercial Court
Notice of Motion No. 3518 / 2024
in
Commercial Suit No. 63 / 2020
CFM Asset Reconstruction Pvt. Ltd. … Applicant
(Original Defendant No. 1)
IN THE MATTER BETWEEN
Anand Chhaganlal Thakkar … Plaintiff
Vs.
1. CFM Asset Reconstruction Pvt. Ltd. … Defendant No.1
2. Bharti Axa Life Insurance Co. Ltd. … Defendant No. 2
Appearances :
Plaintiff : Adv. Sanjay T. Manek
Defendant No. 1 : Adv. Shreya Gupte
Adv. Megha Gupta
CORAM : PRASAD P. KULKARNI
COURT ROOM NO.31.
DATE : 10.07.2025
*************************************************************
ORDER
1. Defendant No. 1 has moved this Notice of Motion under Order
7 Rule 11 of the Code of Civil Procedure, 1908 (the Code, for short)
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with a prayer to reject the plaint because there is no cause of action and
there is a legal impediment. Notice of Motion is supported by an
affidavit and documents annexed there with. Plaintiff filed affidavit in
reply vide Exh.30.
2. I have heard Learned Advocate Ms. Megha Gupta for
defendant No. 1 and Learned Advocate Mr. Sanjay T. Manek for
plaintiff. Their arguments will be discussed in later part of this order.
Prior thereto, it would be relevant to know about dispute between the
parties.
3. Plaintiff and his late mother Mrs. Manjula Chhaganlal Thakkar
has raised loan of Rs. 94,50,000/- from defendant No. 1 as against flat
No. 10, 3rd floor of Ambe Maiya Apartment at Dr. R. P. Road, Mulund
(W), Mumbai. As against this loan, insurance was obtained from
defendant no. 2 as Life Loan Secure Policy. Said policy was obtained in
name of mother of plaintiff. Purpose of this policy was to secure loan
amount in case of accidental death. In that event, it is defendant no. 2,
who is supposed to pay sum assured to defendant no. 1. Accordingly, all
formalities relating to said Life Loan Secure Policy was done and
Certificate of Insurance was issued on 13.09.2017.
4. On this backdrop, prior to making complete repayment of
loan, plaintiff’s mother died on 28.06.2018 due to blood cancer.
Plaintiff contended that after demise of his mother, defendant no. 2 is
duty bound to pay defendant no. 1 sum assured and it should be
adjusted in the outstanding amount. Plaintiff contended that without
obtaining consent of plaintiff, second policy was issued in the name of
plaintiff and it is not legal. So, with this, plaintiff raised this suit with
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multiple prayers viz. defendant no. 2 may be directed to make payment
of Rs. 79,01,572/- either to defendant no. 1 or to plaintiff, which is due
under the insurance policy. Plaintiff further prayed that above referred
amount may be adjusted by defendant no. 1 as against amount due.
Plaintiff also prayed that defendant no. 1 may be restrained from
recovering balance installment from plaintiff.
5. In response to writ of summons, defendants appeared in the
proceeding and defendant no. 1 submitted Written Statement Exh.8 on
08.09.2021. At that point of time, defendant no. 1 has not raised any
objection or filed any application under Order 7 Rule 11 of the Code.
After framing of issues, trial proceeded further and plaintiff closed his
evidence on 21.06.2024. Thereafter, on 09.08.2024, present Notice of
Motion is tendered.
6. Crux of Notice of Motion is that in view of Section 34 of
SARFAESI Act, present suit is barred, as jurisdiction of Civil Court is
excluded. New insurance policy was issued in the name of plaintiff on
05.10.2017 by cancelling policy, which was issued in the name of
plaintiff’s mother. As per policy issued it was agreed that, it will be
applicable only in the event of accidental death and plaintiff’s mother
died due to blood Cancer, so policy is of no avail. Defendant no. 1
contended that as flat was mortgaged with defendant no. 1, so that flat
is already attached and sold.
7. Per contra, in affidavit of reply, plaintiff contended that
application under Order 7 Rule 11 of the Code needs to be disposed of
only on the basis of pleading in the plaint. Evidence of plaintiff has
already completed and defendant no. 2 who is insurer of loan is under
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legal liability to pay sum assured to defendant no. 1 and that amount
cannot be recovered from plaintiff. So plaintiff prayed that Notice of
Motion may be dismissed.
8. Advocate for defendant no. 1 submits that mother of plaintiff
died due to blood Cancer and at time of obtaining first policy, plaintiff
was well aware about health of his mother and life expectancy of
plaintiff’s mother was very minimal at that time. After demise of
plaintiff’s mother first policy was cancelled and second policy was
issued in the name of plaintiff.
9. Advocate for defendant no. 1 further submits that no relief can
be granted against defendant no. 1, preventing it to take action in
respect of secured debt. While making submissions, Advocate for
defendant no. 1 not only pointed out contents of plaint but also argued
about probable defense of defendant no. 1 and heavily placed reliance
on order below Exh.1 Dt. 13.12.2023 passed by Additional Chief
Metropolitan Magistrate, 19th Court, Esplanade, Mumbai in Case No.
788/SA/2023 and order Dt. 08.11.2021 passed by the then Presiding
Officer in Notice of Motion No. 1784 / 2021. Thus, Advocate for
defendant no. 1 submits that plaint may be rejected.
10. Per contra, Advocate for plaintiff reiterated contents of his
affidavit in reply as his arguments.
11. It is a matter of fact that, present suit is filed in the year 2020
and defendant no. 1 filed Written Statement on 08.09.2021. Till
09.08.2024 i.e. date of filing of Notice of Motion, defendant no. 1 has
never raised objection under Order 7 Rule 11 of the Code nor filed any
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petition to that effect earlier in point of time. Plaintiff closed his
evidence vide pursis on 21.06.2024 and thereafter present application is
moved.
12. On this point, Advocate for defendant no. 1 relied on
Judgment of the Hon’ble Apex Court in case of Dahiben Vs. Arvindbhai
Kalyanji Bhanusali reported in (2020) 7 Supreme Court Cases 366 and
in case of Saleem bhai and Ors. Vs. State of Maharashtra and Ors.
reported in (2003) 1 Supreme Court Cases 557. These authorities are
relied upon to impress that application under Order 7 Rule 11 of the
Code can be filed at any point of time before the conclusion of trial and
the Court can exercise power under Order 7 Rule 11 of the Code at any
stage.
13. No doubt, these authorities in clear terms speaks about legal
position that application under Order 7 Rule 11 of the Code can be filed
at any time but at the same time one has to keep in mind the
parameters which are require to be considered while deciding such
application. For deciding application under Order 7 Rule 11 of the
Code, contents of plaint only has to be gone through.
14. On the same point, plaintiff relied on Judgment of the Hon’ble
Apex Court in case of Srihari Hanumandas Totala Vs. Hemant Vithal
Kamat & Ors. arising out of Civil Appeal No. 4665 / 2021 arising out of
SLP (C) No. 3899 / 2021 Dt. 09.08.2021. I have gone through said
Judgment wherein it is observed that under Order 7 Rule 11 of the
Code, it must be shown that suit is barred under any law and said
conclusion must be drawn from averments in the plaint. Thus, it is
settled principle of law that while deciding application under Order 7
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Rule 11 of the Code, probable defense of defendant cannot be gone
through. At the same time, it is also not permissible to go through other
documents, which are relied upon by either plaintiff or defendant to
substantiate their respective stand.
15. Applying this principle to the facts in hand, order passed by
Additional Chief Metropolitan Magistrate Court Dt. 13.12.2023 in Case
No. 788/SA/2023 and order passed by the then Presiding Officer in
Notice of Motion No. 1784 / 2021 Dt. 08.11.2021 is of no avail to the
stand taken by defendant no. 1. It appears Advocate for defendant no. 1
has lost sight of fact that application for rejection of plaint needs to be
decided only on the basis of averments in the plaint.
16. One of the ground for rejection of plaint mentioned in Notice
of Motion is that in cross examination of plaintiff, he admitted that flat
is attached and sold. Admission given by plaintiff and its effect can only
be decided at conclusion of trial. At the stage of deciding application
under Order 7 Rule 11 of the Code, Court cannot go through oral
evidence of either party and Court is not supposed to pass comment
about merit of dispute.
17. I have gone through plaint wherein plaintiff contended that
loan was borrowed against a flat which was secured by way of
insurance. It is contention of plaintiff that due to demise of his mother,
defendant no. 2 is under legal liability to pay sum assured to defendant
no. 1 and that should be adjusted in the outstanding amount. It appears
that plaintiff is disputing a fact that he ever executed any policy after
demise of his mother.
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18. Advocate for defendant no. 1 though argued much about
second policy Dt. 05.10.2017, but that policy is not filed on record. Had
it been the case that, that policy was filed on record, still it could not be
gone through because it is not a plaint. Contents of plaint nowhere
reflect that when suit was filed, defendant no. 1 has raised any action
under the SARFAESI Act. It appears that it might be subsequent
development after filing of suit.
19. No doubt, as per section 34 of the SARFAESI Act, jurisdiction
of Civil Court is excluded only when dispute is sub judice before
appropriate forum. However, contents of plaint itself nowhere speaks
about said dispute when suit was filed. So, on the basis of subsequent
events, defendant no. 1 cannot maintain present Notice of Motion.
20. Whether second policy was issued or not? What is the effect of
second policy issued in favour of plaintiff that can only be decided after
conducting trial on merit. Suit property is attached and sold in auction
is one of the defense which defendant no. 1 has raised. So, that defense
cannot be gone through while deciding present Notice of Motion.
21. After conducting trial on merit, if at all defendant no. 1 is
successful in proving its defense, then plaintiff may not be entitled for
Judgment and decree. But on going through averments in the plaint, it
cannot be said that either there is no cause of action or there is some
legal impediment in filing of suit. Hence, I find no substance in the
submissions made by Advocate for defendant no. 1. Notice of Motion is
devoid of merit. Therefore, it deserves to be dismissed. Hence, the
order:-
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ORDER
1. Notice of Motion No. 3518 of 2024 is dismissed.
2. No order as to costs.
3. Order is dictated and pronounced in Open Court.
4. Record of Notice of Motion No. 3518 / 2024 shall be part of
main Commercial Suit No. 63 / 2020.
Mumbai
Dated : 10.07.2025
(Prasad P. Kulkarni)
Judge, City Civil & Sessions Court,
Court Room No.31 - Commercial Court,
Mazgaon, Greater Mumbai
Dictated on : 09.07.2025
Transcribed on : 09.07.2025
Signed by HHJ on : 10.07.2025
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CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
UPLOAD DATE TIME NAME OF STENOGRAPHER
10.07.2025 5.55 p.m. Prachi Y. Potdar
Stenographer - Grade I
Name of the Judge HHJ Shri. Prasad. P. Kulkarni
(C.R.NO. 31)
Date of Pronouncement of
Judgment/Order.
10.07.2025
Judgment/order signed by P.O on 10.07.2025
Judgment/order uploaded on 10.07.2025
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