Suits with the basic relief of challenging the decree passed by the Debts Recovery Tribunal are not maintainable

The Supreme Court in the matter of Canara Bank vs P. Sekathal & Ors., decided on 28.02.2020 has observed that the suits with the basic relief of challenging the decree passed by the Debts Recovery Tribunal (DRT) are not maintainable.

Facts

In this case, the suits were filed challenging the decree passed by the DRT. The Bank filed applications to reject the plaints in exercise of powers under Order 7 Rule 11(d) of the Code of Civil Procedure on the ground that considering the provisions of Recovery of Debts due to Banks and Financial Institutions Act, 1993 more particularly Sections 18, 19 and 20 of the Act, the suits are not maintainable. The Trial Court and later the High Court dismissed the applications.

Issue

In the present appeal filed by the bank the issue that arose was whether the suits filed by the plaintiffs were liable to be rejected in exercise of powers under Order 7 Rule 11(d) of the CPC or not?

Ratio

The Bench inter-alia referring to the judgment of Punjab National Bank v. O.C. Krishnan and others, (2001) 6 SCC 569 wherein it was held that, without exhaustion of the remedies under the RDDBFI Act, the High Court ought not to have exercised its jurisdiction under Article 227 allowed the appeals in the present matter.

The Bench further, while considering the pleadings and the averments in the suits, more particularly the allegations of fraud found that the allegations of fraud are with respect to the partnership deed and there were no allegations at all with respect to the mortgage created by the Guarantor with the Appellant. Hence, it was never denied that the guarantors did not create the mortgage in favor of the Bank.
It was finally held that the plaints being vexatious, frivolous, meritless and nothing but an abuse of process of law, the present case was a fit case to exercise the powers under Order 7 Rule 11 thereby dismissing the plaints as the prayer of setting aside the decree of DRT is barred in law and not maintainable.