Final Order 1

Order Details: Notice of Motion
Pdf Text: 1 N/M No. 1257/2020 in Comm. Suit 209/2021
MHCC010036182020
NOTICE Of MOTION NO.1257 OF 2020
IN
COMMERCIAL SUIT NO. 209 OF 2021
CNR NO. : MHCC010036182020
Topworth Tollways Bela Pvt. Ltd. & Anr. … Plaintiffs
Versus
Central Bank of India … Defendant
Appearance:
Adv. Megha Gupta along with Adv. Priyanka Dubey along with Adv.
Dimple Ashar for Plaintiffs.
Adv. M.R. Patel along with Adv. Shruti K. for Defendant.
CORAM : SHRI. A.S.SALGAR
ADHOC JUDGE,(C.R.NO.31)
DATED : 22nd DECEMBER, 2022
ORDER
The plaintiffs have taken out the present Notice of Motion
against the defendant for grant of temporary injunction. The plaintiffs
prayed that pending the hearing and final disposal of the present suit,
the defendant, its agents, servants, officers and/or any person claiming
through the defendant be restrained from dissemination, publication,
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display of the names of plaintiff no. 1 and plaintiff no. 2 as a “Fraud”.
The plaintiff also prayed that pending the hearing and final disposal of
the suit, the defendant, its agents, servants, offices and/or any person
claiming through the defendant be restrained from acting upon and/or
taking any action in any manner of whatsoever nature on the basis of
defendant's impugned action of declaration of account of the plaintiff
no. 1 as “Fraud”. The plaintiff also prayed that pending the hearing and
final disposal of the suit, the defendant its agents, servants, offices
and/or any person claiming through the defendant be restrained from
declaring the account of the plaintiff no. 1 as “Fraud”. The plaintiff also
prayed that pending the hearing and final disposal of the present suit,
the defendant be directed to reverse their impugned action of declaring
the account of the plaintiff no. 1 as “Fraud”. The plaintiff has claimed
the interim relief in terms of prayer clause (a) to (d) in the present
Notice of Motion. Perused the Notice of Motion, Affidavitinsupport of
the Notice of Motion and Affidavitinreply filed by the defendant.
2. It is the case of the plaintiff that the plaintiff no. 1 is a
“Topworth Tollways Bela Private Limited”, company which is a duly
registered and incorporated under the provisions of the Companies Act,
1956. The plaintiff no. 2 is the Guarantor/ Promoter of the said
company. The Government of Madhya Pradesh had entrusted Madhya
Pradesh Road Development Corporation Limited (herein referred to as
“MPRDC”) with the responsibility of construction, development,
maintenance and management of SatnaBela Section of National
Highway No. 75. In this regard, the MPRDC had resolved to augment
the existing road from KM 155.00 to KM 203.4 of National Highway No.
75 in Madhya Pradesh by FourLaning on design, build, finance and
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operate and transfer basis. For the purposes of the above said project,
the MPRDC invited proposals vide its Notice dated 06.01.2010.
Thereafter, the Consortium comprising of M/s. Topworth Infra Private
Limited and M/s. MCC Overseas India Private Limited applied for the
tender. After evaluation of the bids, the MPRDC accepted the bid
submitted by the Consortium and issued letter of Award in favour of the
plaintiff company. The Concession Agreement dated 09.05.2012
entered into between the plaintiff no. 1 and MPRDC. In terms of Article
2 of the Concession Agreement, the plaintiff no. 1 was required to
construct the project highway on the site set forth in ScheduleA of the
Concession Agreement. The plaintiff no. 1 had estimated the cost of the
Project as Rs. 483,03,00,000/. The plaintiff no. 1 was keen to complete
the project highway as per the terms of the Concession Agreement but
due to nonavailability of RoW and due to the default on the part of the
MPRDC, the plaintiff no. 1 was unable to continue performing the
construction work. Meantime, there was devastating floods in Satna
district of Madhya Pradesh, which badly affected the Project Site. The
MPRDC issued the Show Cause Notice to the plaintiff no. 1. The
plaintiff no. 1 approached the Hon'ble High Court of Jabalpur seeking to
restrain the MPRDC from invoking the Performance Security Bank
Guarantee in violation of the terms of the Concession Agreement. The
Honb'le High Court of Jabalpur granted a stay in favour of the plaintiff
no. 1. Thereafter, vide letter dated 29.05.2017, the MPRDC terminated
the Concession Agreement dated 09.05.2012. The examination of
details of repayments made along with the brief facts leading to the
situation would disclose the factual and actual position of work done by
the plaintiff no. 1 . This establishes that the plaintiff no. 1 is not and
cannot be fraud. The act of the defendant in declaring the account as
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fraud is not only an after thought but is an act of arm twisting which is
not permissible in law. From the officials of the defendant bank, it has
come to the information and knowledge of the plaintiffs that defendant
bank has declared the account of the plaintiff no. 1 as “Fraud”.
However, the plaintiffs have neither received any communication or
intimation nor any order from the defendant bank declaring the account
of the plaintiff no. 1 as fraud and thus, the plaintiffs have serious
apprehension that the defendant bank with the malafide and dishonest
intention and without following any due procedure of law and totally
against the principles of natural justice would go ahead and publish the
name of the plaintiffs as fraud.
3. The plaintiff further submitted that vide Director's letter
dated 17.06.2020 addressed to the Deputy General Manager of the
Defendant Bank, it has been placed on record that it has come to the
knowledge that during a regular meeting the Defendant Bank has
declared the account of the plaintiff no. 1 as “Fraud”. It was requested
that the defendant bank to provide with the reasons and documents
perused for declaring the account of the plaintiff no. 1 as Fraud. The
defendant has not replied to the plaintiff's letter. The defendant has
failed to follow the due legal procedure while declaring the account of
the plaintiff no. 1 as Fraud. The defendant bank is bound in law to
provide the documents desired by plaintiffs. According to the plaintiffs,
the defendant has failed and neglected to consider the RBI Guidelines
and also failed and neglected to follow the same while declaring the
account of the plaintiff no. 1 as Fraud. According to the plaintiffs, no
notice or letter was given to the plaintiff no. 1 or its Directors or the
plaintiff that the defendant bank is declaring the account of the plaintiff
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no. 1 as Fraud. The impugned action of the defendant in declaring the
plaintiff no. 1's account as Fraud was without giving any personal
hearing to the plaintiffs and is done in total violation of principles of
natural justice and equity. The principle of grant of personal hearing
has always been the backbone of the rule of Audi Alterem Partem.
Absence of any such opportunity would render such declaration not
only null and void but also illegal. The action of the defendant in
declaring the account of the plaintiff no. 1 as fraud is clearly illegal and
unsustainable and contrary to the mandate of the Master Directions of
the RBI. There are many serious consequences of declaration of any
account as a fraud. Considering the serious nature of the consequences,
it was mandatory on the part of the defendant to follow the procedure
laid down in the Master Circular. Hence, the plaintiffs have sought the
relief of temporary injunction against the defendant bank. Hence, the
Plaintiffs have filed the present Notice of Motion and claimed the
interim relief in terms of prayer clause (a) to (d).
4. The defendant bank appeared and filed its reply and
contested the Notice of Motion. The Notice of Motion is devoid of merits
and is not tenable in law, as no case has been made out by the plaintiffs
to seek any reliefs as prayed. The plaintiffs have filed the suit just to
cause obstruction and as a counterblast to the lawful action taken by
the defendant of declaring the account of the plaintiff no. 1 as a Red
Flag Account which is in conformity and compliance of the guidelines
laid down by Reserve Bank of India from time to time and on this
ground alone the Notice of Motion is liable to be dismissed. It is also
submitted that the suit filed by the plaintiff is not maintainable and this
Court does not have jurisdiction to entertain the suit. It is submitted
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that the liability of a guarantor is joint, several and coextensive to that
of borrower. The provisions of Section 41 of the Specific Relief Act is
applicable and on this ground also the Notice of Motion is liable to be
dismissed. The plaintiff has suppressed the true and correct facts and
approached the Court with unclean hands. The defendant initiated the
action against the plaintiff nos. 1 and 2 in accordance with due
applicable provisions under the Master Circular of Reserve Bank of
India dated 01.07.2015. There is no breach of RBI Notification. In the
entire plaint and affidavitinsupport of the Notice of Motion, there is no
iota of case made out by the plaintiffs indicating that the defendant has
failed to comply with the circulars and notification of RBI or the
defendant is in breach of the said circulars and notifications. On these
grounds also the plaintiff is disentitled to claim any reliefs. It is
submitted that the Civil Court does not have jurisdiction to decide
matters. The defendant no. 1 as per Master Circular of Reserve Bank of
India has formed a Committee consisting of two senior officers of the
rank of Deputy General Manager headed by an Executive Director of the
Bank for declaring the borrower as Willful Defaulters and based on the
Committee recommendation, declared the account of the plaintiff as
fraud on 07.12.2019 and declared the said Borrower Account as Fraud
on 07.12.2019 and the said declaration was reported to the RBI on
13.12.2019 which is well within the timelines as stipulated by the RBI
Guidelines. The Order of the Committee was reviewed by another
Committee consisting of Managing Director and Executive Director. The
defendant also appointed M/s B Ratan and Associate Tax Auditors who
submitted their Report on 3rd July. The defendant further submitted that
the defendant has complied with all the necessary formalities prior to
declaring the account of borrower as fraud and on this ground also the
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suit and/or Notice of Motion deserves to be rejected. According to the
defendant, under the guise of the present suit, the plaintiffs are seeking
alleged reliefs from the Hon'ble Court which is expressly barred by law
and is not maintainable. It is settled position in law that once the
Liquidator stands appointed, it is only the Liquidator who can file,
defend and prosecute the civil or criminal proceedings in the name and
on behalf of the company with the leave of the NCLT. It is submitted by
the defendant that under the guise of stay of the declaration of fraud,
the plaintiffs are attempting to stop the defendant from initiating
criminal action against the plaintiff regarding the investigation of fraud
and loss of public money. The plaintiffs have failed to make out any
case against the defendant. Lastly, the defendant prayed for rejection of
the Notice of Motion.
5. Heard Learned Advocate Megha Gupta along with Learned
Senior Counsel Priyanka Dubey for the plaintiffs and Learned Advocate
Smt. M.R. Patel for the defendant at length.
6. Learned Advocate for the plaintiffs has submitted the
material points.
a) The plaintiff company has issued letter to the defendant
and sought explanation in respect of declaration of
account as Fraud and demanded the documents, but no
reply was given by the defendant to the said letter.
b) The defendant bank has initiated action under Master
Circular dated 01.07.2015.
c) The Rule 3.2.6 of Master Circular states about the flash report.
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According to para no. 3.3 in respect of delay in reporting of
frauds and to fix the responsibility of staff. The delay as
mentioned in Rule. 3.3 in Master Circular is not explained by the
defendant bank.
d) The time limit as mentioned in Rule 3.2 from Master Circular is
not followed by the defendant bank.
e) In the Forensic Report, there is no whisper in respect of
siphoning of the funds or diversion of the funds by
Promoter/Director.
f) The defendant bank has declared the account of the
plaintiff as fraud without following the principles of
natural justice.
7. On behalf of the defendant, Learned Counsel Smt. M.R.
Patel submitted that the plaintiff has not filed any rejoinder to the reply
filed by the defendant. Hence, she submitted that the plaintiffs are
deemed to have admitted the reply filed by the defendant. She
submitted that the prayers made by the plaintiffs in the Notice of
Motion as well as in the suit are same. She submitted that as per
Section 2 of the Commercial Courts Act, the present suit as a
Commercial Suit is not maintainable. She submitted that the plaintiffs
are claiming the relief of declaration that the action of defendant in
declaring the account of the plaintiff no. 1 as “Fraud” is illegal one. As
per order 6 Rule 4 of the Code of Civil Procedure, the particulars of the
fraud must be pleaded in the plaint. But there is no pleading in the
plaint where the fraud was committed. It is obligatory on the part of the
plaintiffs to plead the particulars of the fraud. The plaintiffs have to
prove prima facie case, balance of convenience and irreparable loss. The
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plaintiffs must prove three ingredients for claiming the relief of
injunction. She submitted that the defendant has filed the document i.e.
Sanction Letter and the conditions mentioned in the Sanction Letter are
binding upon the plaintiffs. There are other terms and conditions
imposed on the plaintiffs at the time of obtaining the loan. The plaintiffs
accepted the terms and conditions at the time of sanctioning of the
loan. The account of the plaintiffs has been declared as NPA on
30.12.2016. She submitted that on page no. 34 filed along with Written
Statement, the recall notice was sent to the plaintiffs. The Forensic
Auditor was appointed and on the basis of report of Forensic Auditor,
the defendant bank has declared the account of the plaintiffs as
“Fraud”. She further submitted that the forensic report shows that the
opportunity was given to the plaintiffs. The email placed on record
shows that the defendant informed to the plaintiffs about the
irregularities pointed out by the Auditor. She also submitted that the
Committee was formed and after submission of the report and as per
the guidelines of the Reserve Bank of India, the defendant has declared
the account of the plaintiffs as “Fraud”. The principle of natural justice
was followed before passing the order. She submitted that third party
has prepared the report, who has verified the account. Lastly, she
submitted that there is no substance in the Notice of Motion and hence
Notice of Motion may be rejected.
8. It is an admitted fact that plaintiff no. 1 is company and the
plaintiff no. 2 is the Promoter, Director and Personal Guarantor of the
Company, who has availed and enjoyed various credit facilities from the
defendant. According to plaintiff, the defendant bank has provided
credit facilities in nature of term loan and bank guarantee to plaintiff
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no. 1 to the tune of Rs.311.08 Crores and Rs.16.05 Crores which was
enhanced to current level vide letter dated 02.01.2016. The defendant
bank sanctioned credit facilities to the plaintiff upon terms and
conditions mentioned in agreement. The plaintiffs have executed loan
documents in favour of the defendant. The defendant has declared the
account of the plaintiffs as NPA on 30.12.2016 and Later on as Fraud.
9. According to plaintiffs, the defendant bank has not
followed guidelines and procedure as given in Master Circular.
Defendant bank has not given opportunity of hearing and not followed
principle of natural justice. On the contrary, it is the contention of
defendant that plaintiff has diverted and siphoned off loan amount and
not made repayment of amount. The defendant contended that before
declaring account of plaintiff as fraud, the bank has followed proper
procedure given in Master Circular. Hence, the plaintiffs can not ask
relief of injunction against defendant.
10. Admittedly Master Circular was issued by Reserve Bank of
India for declaring any account as fraud. Rule 2.2 of the Master Circular
deals with classification of fraud. It reads as under.
2.2 Classification of Frauds
2.2.1 In order to have uniformity in reporting, frauds have
been classified as under, based mainly on the provisions of
the Indian Penal code;
a. Misappropriation and criminal breach of trust.
b. Fraudulent encashment through forged instruments,
manipulation of books of account or through fictitious
accounts and conversion of property.
c. Unauthorised credit facilities extended for reward or for
illegal gratification.
d. Cash shortages
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e. Cheating and forgery.
f. Fraudulent transactions involving foreign exchange.
g. Any other type of fraud not coming under the specific
heads as above.
Thus, it is clear from rule 2.2 that there must be
misappropriation and criminal breach of trust, cheating or forgery,
fraudulent encashment through forged instruments for declaring of any
account as fraud. In present case defendant bank has not given any
details about types of irregularities which plaintiffs have committed as
mentioned in rule 2.2 of Master Circular.
11. Clause No. 8.4 of the Master Circular provides for Early detection
and reporting as under :
8.4.1 At present the detection of frauds takes an unusually
long time. Banks tend to report an account as fraud only
when they exhaust the chances of further recovery. Among
other things, delays in reporting of frauds also delays the
alerting of other banks about the modus operandi through
Caution Advice/CFR by RBI that may result in similar
frauds being perpetrated elsewhere. More importantly, it
delays action against the unscrupulous borrowers by the law
enforcement agencies which impact the recoverability
aspects to a great degree and also increases the loss arising
out of the fraud.
8.4.2 The most effective way of preventing frauds in loan
accounts is for banks to have a robust appraisal and an
effective credit monitoring mechanism during the entire life
cycle of the loan account.
Clause no. 3.2 speaks about reporting of frauds to Reserve
Bank of India. The bank needs to furnish fraud monitoring return in
individual fraud case to the RBI within three weeks from this date of
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detection. The clause no. 3.2.6 speaks about time limit for flash report
within a week of such fraud coming to the notice of the banks head
office. Clause No.3.3 is in respect of of delay in reporting fraud and to
fix the responsibility of staff. The delay as mentioned in clause no. 3.3
is not explain by the defendant and responsibility is not fixed upon the
staff. Clause no. 8.7 and 8.8 are regarding prompt reporting. The
defendant is silent regarding from the prompt reporting. The time limit
as mentioning in clause no. 3.2 and 8.9.5 and 8.9.6 of the circular is not
followed by the defendant bank. In the present case, the bank has not
properly followed the procedure and not reported the frauds.
12. According to defendant, the plaintiffs have diverted and
siphoned off the loan amount. The defendant has relied upon Forensic
Audit Report. I have gone through said Audit Report. On perusal of
same, it appears that on page no. 20 of the Report it is clearly
mentioned that there does not exist diversion of funds. Page No. 19 of
the Report also shows about utility shifting work. It appears that said
money has not been come in account of plaintiffs. There is no diversion
of fund. Therefore, it can be said that prima facie there is nothing on
record to show that the plaintiffs have diverted and siphoned off loan
amount.
13. It is argued by Learned Advocate for the defendant that the
plaintiffs are challenging recovery proceeding and plaintiffs are trying
to prevent the defendant from recovering due amount. However, in the
present case, the plaintiffs are not challenging recovery proceeding
initiated by the defendant before various forums. In my view, the
defendant bank can proceed against the plaintiffs to recover loan under
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recovery proceeding. The plaintiffs are asking relief of injunction
against the defendant restraining him from acting on declaration of
plaintiffs' account as fraud. In my view, plaintiffs are not challenging
recovery proceeding nor preventing defendant from recovering amount.
Hence, I find no substance in the contention of the defendant that the
plaintiffs are challenging recovery proceedings before this court.
14. It is contention of the defendant that on the basis of
Forensic Audit Report, plaintiffs' account is declared as fraud.
Defendant placed on record Forensic Audit Report during argument. It
is material to note that at the time of filing Written Statement, the
defendant has not produced Forensic Audit Report. But the defendant
produced the same at the time of argument on Notice of Motion. It
appears that the copy of Forensic Audit Report was not furnished to
plaintiffs before declaring his account as fraud. It is seen from
documents filed by the plaintiffs on page 278 that the plaintiffs have
issued letter to defendant on 17.06.2020 and requested the bank to
provide documents. No reply was given to said letter by the defendant
bank. The plaintiffs have right of inspection of documents as relied on
by the defendant before declaring account of plaintiff as fraud. The
defendant has not furnished necessary documents to plaintiffs before
passing order. It appears that adequate opportunity was not given by
the defendant to the plaintiffs before declaring account of the plaintiffs
as fraud.
15. It is contended by the defendant that the Civil Court has no
jurisdiction to entertain the suit and the suit is not maintainable before
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the Court. In the present case, the plaintiffs have sought the relief of
declaration that action of the defendant declaring the account of the
plaintiff no. 1 as 'Fraud' is illegal, improper, null and void. The plaintiffs
also claimed the relief of permanent injunction against the defendant.
The impugned decision taken by the defendant adversely affects the
petitioner's civil right. The plaintiffs have right to challenge the same
before the Civil Court. The reliefs sought by the plaintiffs in the plaint
can be granted by the Civil Court. The cognizance of the suit is not
barred. Learned Advocate for the plaintiffs rightly submitted the ruling
of the Bank of India Vs. Gupta Coal (Civil Revision 97 of 2017
decided on 04.09.2018) wherein it is observed as under :
“It is the case of the plaintiff company that in view of
various guidelines of the Reserve Bank of India and
Master Circular, its accounts has been declared as fraud
account without following the due procedure and in
breach of principles of natural justice. In the light of the
challenge as raised, it would be the Civil Court that
would retain jurisdiction to entertain the suit. Same can
not be a reason to reject the plaint. In view of the fact
that the reliefs sought in the plaint are not those reliefs
which are impermissible in view of provisions of the
Sections 17 and 18 of the Act of 1993 as well as Section
34 of the Act of 2002, the cognizance of the suit is not
barred before the civil court.”
16. The plaintiffs have challenged the declaration of fraud on
the ground that the principles of natural justice are not followed by the
defendant. Learned Advocate for the plaintiffs have placed reliance on
the ruling of Hon'ble Telangana High Court in the case of Rajesh
Agarwal Vs. Reserve Bank of India (2020 SCC Online TS 2021) as
well as the Judgment of the Hon'ble Telangana High Court in the case
of Yashdeep Sharma Vs. Reserve Bank of India (2021 SCC OnLine
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TS 1852). The Judgment of Rajesh Agarwal (Supra) is challenged
before the Hon'ble Apex Court bearing Special Leave to Appeal No.
3931 of 2021 and the Hon'ble Supreme Court vide order dated
15.04.2021 has stayed the observation of the Hon'ble Telangana High
Court. The Hon'ble Supreme Court has also stayed the observation in
respect of personal hearing in the case of Sharma Vs. RBI.
17. After perusal of the above rulings, it is clear that the issue
as to whether the principles of natural justice can be read into, the
relevant clauses of Master Circular is subjudice before the Hon'ble
Supreme Court. At this stage, it will be just and proper to grant interim
relief to the plaintiffs against the defendant thereby restraining the
defendant from acting upon the declaration of the account of GFL as
Fraud.
18. Learned Advocate for the plaintiffs submitted that the
opportunity of hearing ought to be effective hearing. Hence, the
plaintiffs are entitled to claim interim relief against the defendant. In
support of his submission, he placed reliance on the ruling of the
Hon'ble Rajasthan High Court, Jaipur Bench in the case of Moserbaer
Vs. State Bank of Bikaner and Jaipur in Civil Writ Petition No. 7488
of 2016 dated 07.09.2016 I have gone through the said ruling. The
said ruling is in respect of declaration of account as willful defaulter
and the present case is not in respect of the willful defaulter. Hence, the
facts of the reported case and the facts of the present case is not similar.
Hence, the said ruling is not helpful to the plaintiffs. The plaintiffs also
relied upon the ruling of the Hon'ble Delhi High Court in the case of
Apple Sponge and Power Limited Vs. RBI in Writ Petition No. 306 of
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2019 wherein it is observed by the Hon'ble Delhi High Court that,
“declaring an account as 'fraud' would arise in a case of egregious
default on the part of an account holder, something more than the
account holder being a 'willful defaulter'. For an account to be declared
as 'fraud' must entail an element of criminality on the part of the
account holder, which ought to be inferred only on the basis of some
substantial material which must be put to the errant account holder;
and after considering any explanation such account holder has to offer;
and not unilaterally by a stroke of pen.” I have gone through the said
ruling. There cannot be dispute about the propositions laid down in the
said ruling. However, facts of said ruling and facts of present case are
not similar. Hence, with due respect to ratio laid down in the aforesaid
ruling, I am of the view that said ruling is not helpful for the plaintiff.
19. It is argued by the Learned Advocate M.R. Patel for the
defendant that it is obligatory on the part of the plaintiffs to plead the
particulars of fraud. She argued that the plaintiffs have not pleaded the
particulars of the fraud in the plaint. Therefore, the plaintiffs are not
entitled to claim the relief of temporary injunction against the
defendant. In support of her submission, she placed reliance on the
ruling of the Hon'ble Supreme Court in the case of Ladli Parshad
Jaiswal Vs. The Karnal Distillery Co. Ltd. Judgment reported in AIR
1963 SC 1279. She has relied upon para no. 19 of the said ruling
wherein it is observed that, “Order 6 Rule 4 of the Code of Civil
Procedure provides that in all cases in which the party pleading relies
on any misrepresentation, fraud, breach of trust, willful default or
undue influence, and in all other cases in which particulars may be
necessary beyond such as are exemplified in the forms in the Appendix,
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particulars shall be stated in the pleading”. I have gone through the
aforesaid ruling. There cannot be dispute about the propositions laid
down in the said ruling. In that case, the evidence was tendered before
the Trial Court and appeal was also preferred against the decree before
the District Court and thereafter before the Hon'ble High Court. In the
present case, the issues are not yet framed and evidence of the parties
are yet to commence. In my view, the facts of the reported case and the
facts of the present case are not similar. Therefore, the ruling submitted
by the Learned Advocate for the defendant is not helpful for the
defendant. In the present case, the plaintiffs in para nos. 40, 41 and 42
have pleaded the particulars of fraud. These are the paras regarding the
fraud on which the plaintiffs are seeking relief of injunction. Hence, the
contention of the defendant that the plaintiffs have not pleaded
particulars of fraud in the plaint is not acceptable.
20. The plaintiffs have claimed interim relief in terms of prayer
clause (a) to (d). The reliefs claimed by the plaintiffs in clause no. (a),
(c) and (d) of the Notice of Motion are final reliefs of the suit. The
reliefs claimed in prayer clause (a), (c) and (d) and the reliefs claimed
in the plaint are similar. Therefore, I am of the view that the plaintiffs
are not entitled to claim the reliefs in terms of prayer clause (a), (c) and
(d) of the Notice of Motion because these reliefs are all final reliefs in
the suit. If these reliefs are granted in terms of prayer clause (a), (c)
and (d), then it will amount to decreeing the suit itself. However, the
plaintiffs have made out a case to the extent that the defendant, their
agents or servants or officers restraining by an order of injunction from
acting upon the declaration of the account of the plaintiffs as 'Fraud” till
further order. In my view, the prayer clause (b) of the Notice of Motion
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needs to be granted. In short, the plaintiffs are entitled to claim the
reliefs of temporary injunction against the defendant thereby restraining
the defendant, its agents, servants, offices and/or any person claiming
through the defendant from acting upon and/or taking any action in
any manner of whatsoever nature on the basis of defendant's impugned
action of declaration of account of the plaintiff no. 1 as “Fraud”. The
plaintiffs have made out a prima facie case to the extent of clause (b) of
the Notice of Motion. The balance of convenience lies in favour of the
plaintiffs to that extent. If the plaintiffs are not granted the reliefs as per
prayer clause (b), then the plaintiffs will suffer irreparable loss and the
very purpose of filing of the suit will get frustrated. Therefore, the
Notice of Motion needs to be partly allowed. Hence, I pass the following
order :
ORDER
1. Notice of Motion no.1257 of 2020 is partly allowed in
terms of prayer clause (b).
2. The defendant, its agents, servants, offices and/or any
person claiming through the defendant is hereby
temporarily restrained from acting upon and/or taking
any action in any manner of whatsoever nature on the
basis of defendants impugned action of declaration of
account of the plaintiff no.1 as Fraud till further order.
3. The defendant bank may continue with the recovery
proceeding and attachment of the property against the
plaintiff for recovering defaulted loan.
4. The suit is expedited and defendant is directed to file
written statement.
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5. Notice of Motion no.1257 of 2020 is disposed off
accordingly.
Dated : 22.12.2022 (A.S. Salgar)
Adhoc Judge,
City Civil Court
Gr. Mumbai.
Dictated on : 22.12.2022
Typed on : 27.12.2022
Corrected on : 07.02.2023.
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20 N/M No. 1257/2020 in Comm. Suit 209/2021
CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”
UPLOAD DATE TIME NAME OF STENOGRAPHER
08.02.2023 11.45 a.m. Prachi Y. Potdar
Stenographer – Grade I
Name of the Judge HHJ Shri. A.S. Salgar
(C.R.NO. 31)
Date of Pronouncement of
Judgment/Order.
22.12.2022
Corrected & signed by HHJ on 07.02.2023
Judgment/order uploaded on 08.02.2023
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