Case Note & Summary
The appeal was filed by the Bank of India and its Authorized Officer (Defendants) under Section 13(1A) of the Commercial Courts Act, 2015, challenging an order dated 2nd December 2020 passed by the District Judge-2, Thane. The trial court had rejected the Defendants' application under Order VII Rule 10 and Rule 11(d) of the Code of Civil Procedure, 1908 (CPC) read with Section 19(6) to (10) of the Recovery of Debts and Bankruptcy Act, 1993 (Recovery Act). The Defendants sought rejection of the plaint or return of the plaint on the ground that the suit was barred by the provisions of the Recovery Act. The Plaintiff, M/s. Maruti Civil Works, a partnership firm, had filed Commercial Suit No.6 of 2019 against the Bank for recovery of money. The Defendants argued that the suit was not maintainable as the Debt Recovery Tribunal (DRT) had exclusive jurisdiction over matters involving recovery of debts by banks. The Plaintiff contended that the suit was for recovery of money by a non-banking entity against a bank, which is not covered under the Recovery Act. The High Court analyzed the provisions of Section 19 of the Recovery Act and held that the bar on civil court jurisdiction applies only to suits by banks or financial institutions for recovery of debts. Since the Plaintiff was a partnership firm and not a bank or financial institution, the suit was not barred. The court dismissed the appeal, upholding the trial court's order. The court also noted that the application under Order VII Rule 10 and Rule 11(d) CPC was rightly rejected as the plaint disclosed a cause of action and the civil court had jurisdiction.
Headnote
A) Civil Procedure - Rejection of Plaint - Order VII Rule 11(d) CPC - Bar of Suit - The court considered whether the suit for recovery of money by a non-banking entity against a bank is barred under Section 19(6) to (10) of the Recovery of Debts and Bankruptcy Act, 1993. Held that the bar under Section 19 of the Recovery Act applies only to suits by banks or financial institutions for recovery of debts, not to suits by other entities against banks. The civil court has jurisdiction to entertain such suits. (Paras 1-10) B) Commercial Courts Act, 2015 - Appeal from Order - Section 13(1A) - Maintainability - The appeal was filed under Section 13(1A) of the Commercial Courts Act, 2015 challenging an order rejecting an application under Order VII Rule 10 and Rule 11(d) CPC. The court examined the scope of such appeal and upheld the trial court's order. (Paras 1-3) C) Recovery of Debts and Bankruptcy Act, 1993 - Jurisdiction - Section 19(6) to (10) - Bar of Civil Court Jurisdiction - The court interpreted the provisions of Section 19 of the Recovery Act and held that the bar on civil court jurisdiction is limited to suits by banks or financial institutions for recovery of debts. The suit by the plaintiff, being a partnership firm, against the bank for recovery of money is not barred. (Paras 4-10)
Issue of Consideration
Whether the suit filed by the respondent (Plaintiff) for recovery of money against the appellants (Defendants/Bank) is barred under Section 19(6) to (10) of the Recovery of Debts and Bankruptcy Act, 1993, and whether the plaint is liable to be rejected under Order VII Rule 11(d) CPC or returned under Order VII Rule 10 CPC.
Final Decision
The appeal is dismissed. The order dated 2nd December 2020 passed by the District Judge-2, Thane rejecting the application under Order VII Rule 10 and Rule 11(d) CPC is upheld.
Law Points
- Jurisdiction of civil court
- Bar of suit under Recovery of Debts and Bankruptcy Act
- 1993
- Order VII Rule 10 and Rule 11(d) CPC
- Commercial Courts Act
- 2015 Section 13(1A)
- Maintainability of suit for recovery of money by non-banking entity
