Final Order 1

Order Details: Notice of Motion
Pdf Text: N/M No.4419 of 2019 in SU No.2739 of 2017
MHCC010121022019
IN THE BOMBAY CITY CIVIL COURT FOR GREATER BOMBAY
NOTICE OF MOTION NO.4419 OF 2019
IN
SHORT CAUSE SUIT NO.2739 OF 2014
1. Mandovi Metals Pvt. Ltd., ]
200-A, Kundaim Industrial Estate, ]
Kundaim, Goa - 403 115 ]
2. Surajit Chandra Baruah, ]
Age : 51 years, Occ.: Business, ]
R/a : Flat no.10/S-1, ]
Kamat Kinara, Miramar, ]
Caranzalem, Goa - 403 002 ] … Plaintiffs
Versus
1. Board of Directors of Reserve Bank of India, ]
Central Office Building, ]
Shahid Bhagat Singh Road, ]
Mumbai - 400 001. ]
Represented by its Governor. ]
2. The Chief General Manager, ]
Department of Banking Developments ]
& Operations, Reserve Bank of India, ]
Central Office Building, ]
Shahid Bhagat Singh Road, ]
Mumbai – 400 001. ]
3. Board of Directors of Corporation Bank, ]
Having its head office at ]
Mangaladevi Temple Road, ]
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Pandeshwar, Mangalore, ]
Karnataka – 575 001. ]
4. Shri S. R. Bansal, ]
Chairman & Managing Director, ]
Corporation Bank, having its head office at ]
Mangaladevi Temple Road, ]
Pandeshwar, Mangalore, ]
Karnataka - 575 001. ]
5. Shri D. Raghuveer Pai, ]
Senior Manager, Corporation Bank, ]
Ponda Branch, Alankar House, ]
Shanti Nagar, Main road, ]
Ponda, Goa – 403 401. ]
6. Shri Robert Menezes, ]
Dy. General Manager, ]
Corporation Bank, Goa Zonal Office, ]
2nd floor, Jeevan Prakash Building, ]
EDC Complex, Patto Plaza, ]
Panaji - 403 001. ]
7. General Manager and Circle Head, ]
Corporation Bank, 28, Mittal Chambers, ]
2nd floor, Nariman Point, ]
Mumbai - 400 021. ]
8. Shri K. Dilipan, ]
Authorized Officer and Chief Manager, ]
Corporation Bank, Goa Zonal Office, ]
2nd floor, Jeevan Prakash Building, ]
EDC Complex, Patto Plaza, ]
Panaji - 403 001. ]
9. The Governor, ]
Reserve Bank of India, ]
Central Office Building, ]
Shahid Bhagat Singh Road, ]
Mumbai - 400 001. ]
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10. The Union of India, ]
Represented by the Secretary, ]
To the Government, ]
Department of Banking, ]
Ministry of Finance, Jeevan Deep Building, ]
Parliament Street, ]
New Delhi - 110 001. ]
11. Attorney General of India, ]
10, Motilal Nehru Marg, ]
New Delhi - 110 001. ]
12. The District Magistrate, ]
North Goa, Panaji, ]
Goa - 403 001. ]
13. The Talathi, ]
Miramar, Caranzalem, ]
Panaji, Goa - 403 001. ]
14. The Mamlatdar, ]
Tiswadi Taluka, ]
Panaji, Goa - 403 001. ]
15. The Police Inspector, ]
Panaji Police Station, ]
Panaji, Goa – 403 001. ]
16. The Talathi, ]
Village Kundaim, ]
Ponda, Goa - 403 401. ]
17. The Mamlatdar, ]
Ponda Taluka, ]
Ponda, Goa - 403 401. ]
18. The Police Inspector, ]
Ponda Police Station, ]
Ponda, Goa - 403 401. ]
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19. The State of Goa, ]
Represented by its Chief Secretary, ]
State Secretaries, Parvorim, Goa ] … Defendants
Appearances :-
Neha Mishra Learned Advocate for plaintiff.
Rama Nageshwaran Learned Advocate for Defendants No.1, 2
and 9.
CORAM : HER HONOUR JUDGE
SMT. ASHWINI V. KASTURE
COURT ROOM NO.17
DATE : 20.09.2025
O R D E R
1. This is the Notice of Motion taken out by the Defendants
No.1, 2 and 9 for rejection of plaint under Order VII Rule 11 or return
of plaint under Order VII Rule 10 of The Code of Civil Procedure
(hereinafter, referred to as CPC).
2. According to the defendants, the plaintiffs were granted, at
its request, various credit facilities from time to time by the Corporation
Bank. However, as the plaintiffs willfully neglected and defaulted in
repayment of the loan amount, the notices under Section 13(2) and
13(4) of the SARFAESI Act, 2002 were sent to the plaintiffs. The
Plaintiff has challenged the constitutionality, validity and correctness of
the Master Circular - Prudential norms on Income Recognition, Asset
Classification and Provisioning pertaining to Advances date July 01,
2011, DBOD.No.BP.BC.12/21.04.048/2011-12 (revised dated July 01,
2015), Master Circular - Income Recognition, Asset Classification,
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Provisioning and Other Related Matters - UCBs dated July 01, 2011,
UBD.BPD.(PCB) MC No.3/09.14.000/2011-12 (revised date July 01,
2015) and Master Circular on Wilful Defaulters,
DBOD.No.CID.BC.1/20.16.003/2011-12 dated July 01, 2011 (revised
dated July 01, 2015), issued by the Reserve Bank of India. This Court
does not have the jurisdiction to declare or decide the constitutionality,
validity or correctness of the RBI master circulars. The circulars on
Income Recognition and asset classification are in the nature of a
subordinate legislation issued under the powers vested in the Reserve
Bank of India by the Banking Regulation Act, 1949. In terms of Section
2(o) of the SARFAESI Act, 2002 banks or financial institutions can
classify the assets or account as a non-performing asset only in
accordance with the directions or guidelines relating to asset
classification issued by the Reserve Bank. The provisions of the
SARFAESI Act, 2002 refer to and give recognition to the
directions/guidelines relating to assets classifications issued by the RBI.
Therefore, the present suit is not maintainable and is liable to be
dismissed with costs. Even otherwise, the plaintiff has challenged
Circulars of the Reserve Bank of India (Master Circular - Income
Recognition, Asset Classification, Provisioning and Other Related
Matters - UCBs dated July 01, 2011) applicable to Urban Co-operative
Banks only and not the circulars that would be applicable to Scheduled
Commercial Banks in view of the fact that Corporation Bank is a
Scheduled Commercial Bank as stated aforesaid.
3. This Court has no jurisdiction to declare or decide the
constitutionality, validity and correctness of RBI Master circulars. The
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circulars on income recognition and asset clarification are in the nature
of a sub-ordinate legislation issued under the powers vested in the
Reserve Bank of India by the Banking Regulation Act, 1949. In terms of
Section 2(o) of the SARFAESI Act, 2002, banks or financial institutions
can classify the assets or account as a non performing asset only in
accordance with the directions or guidelines relating to the asset
clarification issued by the Reserve bank. The provisions of the SARFAESI
Act, 2002 refer to and give recognition to the directions/guidelines
relating to assets clarification issued by the RBI. Therefore, the present
suit is not maintainable and is liable to be dismissed with costs. Even
otherwise, the plaintiff has challenged the circulars of the Reserve Bank
of India, applicable to Urban Co-operative Banks only and not the
circulars that would be applicable to Scheduled Commercial Banks in
view of the fact that Corporation Bank is a Scheduled Commercial bank
as stated aforesaid. From perusal of the prayer clause of the plaint, it is
clear that the present suit is filed by the plaintiffs seeking remedy
against the demand notice and possession notice issued against it under
section 13(2) and 13(4) of the SARFAESI Act, 2002. Any person
aggrieved by any of the measures referred to in 13(4) has already a
remedy available under Section 17 of the SARFAESI Act, 2002. Section
34 of the SARFAESI Act, 2002 states that no Civil Court shall have
jurisdiction to entertain any suit or proceeding in respect of any matter
which the Debt Recovery Tribunal is empowered by or under this Act to
determine. Therefore, the plaint is liable to be rejected under Order VII
Rule 11 (d) of the Code of Civil Procedure.
4. It is further stated by the defendants that the plaintiffs
have deliberately undervalued the suit and not paid the proper Court
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fees. The plaintiffs have sought the compensation of Rs.20 crores for
breach of contract and damages. In view of that, the present suit ought
to be valued as Rs.20 crores, being the amount claimed in the suit.
Therefore, the Court should fix a time period for the plaintiffs to rectify
the valuation and failure by the plaintiff to do so, within the fixed
period, the plaint ought to be rejected as per the provision of Order VII
Rule 11 (b) of CPC. Furthermore, the pecuniary jurisdiction of this
Court is limited to Rs.1 crore. Therefore, the suit is beyond the
pecuniary limit of this Court and hence, liable to be returned under
Order VII Rule 10 of CPC.
5. It is also stated that no part of cause of action has arisen in
Mumbai and therefore, this Court does not have territorial jurisdiction
to entertain the present suit and thus, not maintainable and liable to be
returned under Order VII Rule 10 of the CPC. Accordingly, the
defendants have prayed for making the Notice of motion absolute.
6. The plaintiffs in-spite of giving sufficient opportunity,
failed to file the reply on the Notice of Notion.
7. Heard learned advocate Rama Nageshwaran for the
defendants. The Plaintiffs remained absent and hence, matter was
posted for order without hearing the plaintiffs.
8. Perusal of the plaint shows that the plaintiffs have prayed
for declaration of guidelines ultra vires, unconstitutional and null and
void as referred in the plaint, to declare notices dated 01.01.2014,
07.01.2014 and 27.03.2014 null and void, declaration and classification
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of the plaintiff’s account in NPA as illegal and void and other
declarations, injunction as prayed in the plaint.
9. At the outset, it is seen that the plaintiff has prayed for the
compensation to the tune of Rs.20 crores. The defendants have objected
the suit on the ground of pecuniary jurisdiction of this Court. According
to the defendants the pecuniary jurisdiction of this Court is limited to
Rs.1 crore. Therefore, the suit is beyond the pecuniary limit of this
Court and hence, liable to be returned under Order VII Rule 10 of CPC.
On this point I would like to clarify that initially the jurisdiction of this
Court was limited to Rs.1 crore, but recently the pecuniary jurisdiction
has been enhanced to Rs.10 crores by the amendment in Section 3 of
the Bombay City Civil Court Act in the year 2004. However, still this
enhancement does not come in purview of pecuniary jurisdiction of this
Court to decide the present suit as the claim of the plaintiff is of the
compensation of Rs.20 crores along with the other prayers. Under such
circumstances, this Court has no jurisdiction to try and decide the
present suit. Therefore, the plaint is to be returned to the plaintiffs
under Order VII Rule 10 CPC so that it may be filed in the Court of
proper pecuniary jurisdiction.
ORDER
1. The Notice of Motion No.4419 of 2019 in Suit No.2739 of
2014 is hereby allowed in the following term:-
a) The plaint be returned to the plaintiff under Order
VII Rule10 of C.P. C. alongwith Notice of Motion No.1655 of
2017.
b) The other prayers (subject matter jurisdiction,
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constitutionality of RBI master circulars, etc.) are left open,
to be addressed by the appropriate Court having
jurisdiction.
c) The respondents’ objections under Order VII Rule 11 CPC
for rejection of plaint are not adjudicated on merits in this
Order.
2. The Notice of Motion No.4419 of 2019 in Suit No.2739 of 2014 is
disposed of accordingly.
(Ashwini V. Kasture)
Judge,
City Civil Court, Greater Bombay
Dated : 20.09.2025 C.R. No.17
Directly typed on : 20.09.2025
Checked on : 22.09.2025
Correction carried on : 24.09.2025
Signed on : 29.09.2025
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“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER.”
UPLOAD DATE AND TIME Typed by Varsha Choudhari
01.10.2025 at about 05.05 p.m. (Stenographer Grade I)
Some correction carried by Siddhesh Shirke
(Stenographer Grade I)
remaining correction carried by Vasanti D. Bhosale
(Stenographer Grade I)
Name of the Judge ( With Court
Room No.)
H.H.J. Smt. Ashwini V. Kasture
(Court Room No.17)
Date of Pronouncement of
JUDGMENT/ORDER 20.09.2025
JUDGMENT/ORDER signed by
P. O. on 29.09.2025
JUDGMENT/ORDER uploaded on 01.10.2025
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