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TMI Blog2021 (11) TMI 941X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned even after the approved resolution plan against the corporate debtor still there shall be the liability of the plaintiff and/or the assignee can be said to be secured creditor and/or whether any amount is due and payable by the plaintiff, are all questions which are required to be dealt with and considered by the DRT in the proceedings initiated under the SARFAESI Act. It is required to be noted that as such in the present case the assignee has already initiated the proceedings under Section 13 which can be challenged by the plaintiff appellant herein by way of application under Section 17 of the SARFAESI Act before the DRT on whatever the legally available defences which may be available to it. The suit filed by the plaintiff appellant herein was absolutely not maintainable in view of the bar contained under Section 34 of the SARFAESI Act. Therefore, as such the courts below have not committed any error in rejecting the plaint/dismissing the suit in view of the bar under Section 34 of the SARFAESI Act - Appeal dismissed. - CIVIL APPEAL NO. 6669 OF 2021 - - - Dated:- 26-11-2021 - M. R. SHAH And SANJIV KHANNA , JJ. JUDGMENT M. R. Shah, J. 1. Feeli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corporate debtor came to be discharged. It appears that thereafter an assignment agreement was executed between defendant No.2 respondent No.2 herein and defendant No.1 respondent No.1 herein on 30.06.2018, assigning all the rights, titles and interest in all the financial assistance provided by defendant No.2 financial creditor respondent No.2 herein in terms of agreement dated 26.07.2011 in favour of assignee respondent No.1. As assignee respondent No.1 herein pursuant to the assignment agreement dated 30.06.2018 had issued letter to all the interested parties, namely, assignor financial creditor, guarantor and corporate debtor informing that assignor financial creditor respondent No.2 herein had absolutely assigned all the rights, title and interest in all the financial assistance granted by financial creditor respondent No.2 herein from time to time to corporate debtor in favour of assignee respondent No.1 herein vide assignment agreement dated 30.06.2018. The said letter was responded by the plaintiff appellant herein stating the following : (i) Respondent No.2 had duly filed its claim before the Resolution Professional in accordance with the provisions of IBC. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i). To declare that the 1st Defendant acquired no rights against the Applicant herein under the Assignment Deed dated 30.06.2018, arid consequently, declare that the 1st Defendant is not a secured creditor vis-a-vis, the Applicant herein; and (ii). Consequently, to declare Possession Notice dated 19.6.2019 issued by the 1st Defendant herein has null and vend and render justice. 2.4 The suit was filed with an application seeking leave to file the suit with the aforesaid prayers. As observed hereinabove, the suit was filed on 22.06.2019. Immediately thereafter appellant herein plaintiff also filed an application before the Debt Recovery Tribunal (DRT), Chennai under Section 17(1) of SARFAESI Act on 17.07.2019 against the possession notice dated 19.06.2019 praying that the assignee has acquired no rights under the assignment agreement dated 30.06.2018 and consequently, assignee respondent No.1 is not a secured creditor vis-a-vis the appellant plaintiff and also to declare possession notice dated 19.06.2019 as null and void. The registry of DRT returned the application filed under Section 17(1) of SARFAESI Act by observing as under: Counsel for the Appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of SARFAESI Act. 5.2 It is submitted that the High Court has not properly appreciated and considered the fact that in the suit plaintiff had pleaded the fraud and it was the case on behalf of the plaintiff appellant herein that the assignment agreement dated 30.06.2018 is fraudulent and relief was sought to declare the assignment agreement dated 30.06.2018 as null and void by the plaintiff appellant herein, the said relief cannot be granted by the DRT under the provisions of the SARFAESI Act and therefore the bar under Section 34 of the SARFAESI Act shall not be applicable. 5.3 It is submitted that when the suit is filed alleging fraud the bar under Section 34 of the SARFAESI Act shall not be applicable and the suit for the reliefs sought in the plaint shall be maintainable. 5.4 It is submitted that even otherwise considering the fact that subsequently and before the assignment agreement, the proceedings under the IBC against the corporate debtor with respect to the loan agreement dated 26.07.2011were initiated and the resolution plan was approved and entire amount due and payable under the approved resolution plan was paid to the successful resolution applicants a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s rightly held to be not maintainable. It is submitted that initiation of the proceedings by the appellant by filing of the suit for the reliefs sought in the plaint is nothing but abuse of process of law and court. 6.3 It is submitted that the allegations of fraud are nothing but a clever drafting only with a view to bring the suit maintainable before the civil court despite the bar under Section 34 of the SARFAESI Act. 6.4 It is vehemently submitted by the learned senior counsel appearing on behalf of the respondents herein original defendants that except using the word fraud / fraudulent , there are no other particulars pleaded in support of the allegations of fraud. It is submitted that pleading of fraud is made at two places in the plaint namely para 31 and para 46. At both these places, the assertion is that consequent to the alleged discharge of the debt of the corporate debtor through the proceedings under the IBC, no assignment of such debt in favour of assignee could have been made and, thus, for this reason, the initiation of proceedings under the SARFAESI Act, is fraudulent. It is submitted that on the aforesaid ground the assignment deed cannot be said to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erein that assignment agreement is fraudulent in as much as after the full payment as per the approved resolution plan under the IBC and the original corporate debtor is discharged, there shall not be any debt by the plaintiff appellant herein as a guarantor and therefore Assignment deed is fraudulent. Therefore, it is the case on behalf of the plaintiff appellant herein that the suit in which there are allegations of fraud with respect to the assignment deed shall be maintainable and the bar under Section 34 of SARFAESI Act shall not be applicable. 7.2 However, it is required to be noted that except the words used fraud / fraudulent there are no specific particulars pleaded with respect to the fraud . It appears that by a clever drafting and using the words fraud / fraudulent without any specific particulars with respect to the fraud , the plaintiff appellant herein intends to get out of the bar under Section 34 of the SARFAESI Act and wants the suit to be maintainable. As per the settled preposition of law mere mentioning and using the word fraud / fraudulent is not sufficient to satisfy the test of fraud . As per the settled preposition of law such a pleadi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int it is manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue, he should exercise his power under Order 7, Rule 11 CPC taking care to see that the ground mentioned therein is fulfilled. And, if clever drafting has created the illusion of a cause of action, nip it in the bud at the first hearing by examining the party searchingly under Order 10, CPC. An activist Judge is the answer to irresponsible law suits. 7.5 A similar view has been expressed by this court in the recent decision in the case of P. Selathal Ors. (Supra). 8. Having considered the pleadings and averments in the suit more particularly the use of word fraud even considering the case on behalf of the plaintiff, we find that the allegations of fraud are made without any particulars and only with a view to get out of the bar under Section 34 of the SARFAESI Act and by such a clever drafting the plaintiff intends to bring the suit maintainable despite the bar under Section 34 of the SARFAESI Act, which is not permissible at all and which cannot be approved. Even otherwise it is required to be noted that it is the case on behalf of the plaintiff appellant herein that in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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