2023 (11) TMI 606 - SC - Indian Laws

Seeking compliance with the Memorandum of Understanding - exercise of power under Rule 1 of Order XL of the Code of Civil Procedure, 1908 - HELD THAT - The order passed by the Civil Court in Bihar was appealable under Order XLIII of the CPC. Instead of availing the remedy of the appeal, the first respondent took the extraordinary step of invoking the jurisdiction of the Bombay High Court under Article 226 of the Constitution of India by specifically challenging the order of appointment of the Receiver passed by the Civil Court in Bihar - the first respondent ought not to have filed such a petition when a statutory remedy was available. Moreover, the High Court ought not to have entertained the Writ Petition. The jurisdiction of the High Court under Article 226 is no doubt very wide. But the propriety and judicial discipline required the High Court not to entertain such a petition. The High Court ought to have relegated the first respondent to the statutory remedy while possibly granting a limited protection. A statutory remedy was available to the first respondent before the concerned Court in Bihar. If the High Courts start entertaining Article 226 petitions for challenging the orders passed by the Civil Courts in other states, it will lead to a chaotic situation. Therefore, there are no manner of doubt that the impugned order will have to be set aside. Also, the appellant has indulged in the suppression of material facts while persuading the Trial Court to pass a drastic order for appointing a Court Receiver. There is another feature of the case. In the written statement filed by the defendants in the suit filed by the appellant, an issue of maintainability was raised. The order of the Trial Court noted that the first respondent had mortgaged the properties. The Trial Court did not pay attention to the issue of maintainability as well as the issue of territorial jurisdiction. An order appointing a Court Receiver has very drastic consequences. As noted earlier, such a drastic order was casually passed by the Civil Court. The impugned order dated 27th September 2023 passed by the Bombay High Court set aside - Writ Petition No.7064 of 2023 dismissed on the ground that a statutory remedy was available to the first respondent and therefore, the Bombay High Court ought not to have entertained the Writ Petition under Article 226 of the Constitution of India for challenging the order passed by a Civil Court in another State - appeal allowed in part.

Summary

Issues Involved:
1. Stay granted by Bombay High Court on Civil Court order under Article 226 of the Constitution of India.
2. Appellant's suit in Bihar Civil Court against borrowers with orders under SARFAESI Act.
3. Appointment of Court Receiver by Siwan Civil Court without considering first respondent's actions.
4. First respondent's appeal under Order XLIII CPC and filing of Article 226 petition in Bombay High Court.

Summary:
Issue 1: The Supreme Court granted leave and set aside the Bombay High Court's order staying a Civil Court order from Bihar under Article 226 of the Constitution of India. It was held that the High Court should not have entertained the Writ Petition challenging the Civil Court's decision when a statutory remedy was available.

Issue 2: The appellant filed a suit in the Bihar Civil Court against borrowers with orders under the SARFAESI Act. The Court noted that the appellant failed to disclose relevant details and suppressed material facts while seeking the appointment of a Court Receiver, leading to drastic consequences.

Issue 3: The Siwan Civil Court appointed a Court Receiver without considering the first respondent's actions under the SARFAESI Act. The Court found that the Trial Court should have impleaded the mortgagee as a party defendant and considered issues of maintainability and territorial jurisdiction before passing such a drastic order.

Issue 4: The first respondent appealed under Order XLIII of the CPC but also filed a petition under Article 226 in the Bombay High Court challenging the Civil Court's order. The Supreme Court directed that the Civil Court's order should not be acted upon, allowing the first respondent to pursue appropriate remedies and maintaining status quo on the properties involved. The appellant was directed to amend the suit to include the first respondent as a party defendant and appear before the Trial Court for further proceedings.