2008 (2) TMI 975 - HC - Indian Laws

Summary

Issues Involved:

1. Whether the Civil Court had jurisdiction to entertain the suit for recovery of money filed by a Nationalized Bank.
2. Whether the plaint should be rejected or returned for presentation before the appropriate forum, specifically the Debt Recovery Tribunal.
3. The implications of rejecting a plaint under Order VII Rule 11 versus returning it under Order VII Rule 10 of the Code of Civil Procedure.
4. The applicability of Section 14 of the Limitation Act in the context of rejected or returned plaints.

Detailed Analysis:

1. Jurisdiction of the Civil Court:

The primary issue in this case was whether the Civil Court had jurisdiction to entertain a suit for recovery of money filed by a Nationalized Bank, given the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The High Court noted that the suit was barred by the Act, which mandates that such proceedings should be entertained only by the Debt Recovery Tribunal. The Court emphasized that the Civil Court lacked jurisdiction due to the statutory bar created by the Act.

2. Rejection vs. Return of the Plaint:

The appellant contended that the Trial Judge erred in rejecting the plaint and should have returned it for presentation before the Debt Recovery Tribunal. The High Court analyzed the provisions of Order VII Rule 10 and Rule 11 of the Code of Civil Procedure. Rule 10 allows for the return of a plaint when a Court lacks jurisdiction, while Rule 11 mandates rejection if the suit appears barred by any law. The Court concluded that the rejection of the plaint was appropriate because the suit was barred by law, and the provisions of Rule 11(d) are mandatory, leaving no discretion to the Court.

3. Implications of Rejection under Order VII Rule 11:

The Court clarified that the rejection of a plaint does not amount to dismissal of the suit. A rejected plaint allows for the filing of a fresh suit after rectifying the defect that led to rejection. In contrast, dismissal would invoke the principle of res judicata, barring a new suit on the same cause of action. The Court found that since the rejection was due to a lack of jurisdiction under the Act, the plaintiff could still initiate proceedings before the Debt Recovery Tribunal.

4. Applicability of Section 14 of the Limitation Act:

The appellant expressed concern that initiating new proceedings before the Debt Recovery Tribunal might be barred by limitation. The Court acknowledged this concern but noted that even if the plaint were returned under Order VII Rule 10, the benefit of Section 14 of the Limitation Act, which allows for exclusion of time spent in a Court without jurisdiction, would not automatically apply. The Court cited precedents to support this view, emphasizing that the suit is deemed validly presented only when represented before the appropriate forum.

Conclusion:

The High Court upheld the Trial Judge's decision to reject the plaint under Order VII Rule 11, as the suit was barred by the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The Court found no merit in the appellant's reliance on various case laws, as they were not applicable to the facts of the present case, which involved a statutory bar rather than a lack of territorial or pecuniary jurisdiction. Consequently, the appeal was dismissed, and the connected application for stay was declared infructuous.