Supreme Court overturns Division Bench decision, reinstates Single Judge order. Axis Bank's plea rejected. Questions on SARFAESI Act & MOFA left open.

The Supreme Court allowed the appeals, setting aside the Division Bench's judgment and restoring the Single Judge's order. The notice of motion filed by Axis Bank to reject the plaint only against them was dismissed, emphasizing that such relief cannot be entertained under Order 7 Rule 11(d) of CPC. The Court left open questions regarding the applicability of Section 34 of the SARFAESI Act and the rights of the plaintiffs under the Maharashtra Ownership Flats Act for future determination.

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Issues Involved:
1. Rejection of plaint under Order 7 Rule 11(d) of CPC.
2. Applicability of Section 34 of the SARFAESI Act, 2002.
3. Rights of plaintiffs under the Maharashtra Ownership Flats Act, 1963.
4. Jurisdictional error in partial rejection of plaint.

Issue-wise Detailed Analysis:

1. Rejection of plaint under Order 7 Rule 11(d) of CPC:
The primary issue revolves around the rejection of the plaint against Axis Bank Ltd. (respondent No.1) under Order 7 Rule 11(d) of the Civil Procedure Code (CPC). The High Court had allowed the notice of motion filed by Axis Bank, resulting in the dismissal of the suits filed by the appellants against the bank. The Supreme Court, however, emphasized that the plaint can only be rejected as a whole and not in part. The Court referred to the decision in Sejal Glass Limited vs. Navilan Merchants Private Limited, which established that a plaint must be rejected entirely or not at all. The Supreme Court concluded that the relief sought by Axis Bank to reject the plaint only against them constituted a jurisdictional error and could not be entertained under Order 7 Rule 11(d) of CPC.

2. Applicability of Section 34 of the SARFAESI Act, 2002:
Axis Bank argued that the suits filed by the appellants were barred under Section 34 of the SARFAESI Act, 2002, which restricts civil courts from entertaining matters that fall within the jurisdiction of the Debt Recovery Tribunal (DRT). The Division Bench of the High Court had reversed the Single Judge's decision, holding that the suits were indeed barred by Section 34. However, the Supreme Court did not delve into the applicability of Section 34 in detail, as it resolved the matter on the jurisdictional error related to the partial rejection of the plaint.

3. Rights of plaintiffs under the Maharashtra Ownership Flats Act, 1963:
The appellants contended that they had statutory protection under the Maharashtra Ownership Flats Act, 1963, based on their agreements with the builder, Orbit Corporation Ltd. They argued that their rights to the flats were jeopardized by the mortgage transaction between the builder and Axis Bank. The Supreme Court acknowledged the appellants' reliance on the statutory protection but did not make a definitive ruling on this issue, leaving it open for determination at a later stage.

4. Jurisdictional error in partial rejection of plaint:
The Supreme Court identified a jurisdictional error in the High Court's decision to reject the plaint only against Axis Bank. The Court reiterated that the plaint must be rejected as a whole or not at all, citing the decision in Sejal Glass Limited. The Supreme Court restored the Single Judge's order dismissing the notice of motion filed by Axis Bank, thereby allowing the suits to proceed against all defendants, including the bank.

Conclusion:
The Supreme Court allowed the appeals, setting aside the Division Bench's judgment and restoring the Single Judge's order. The notice of motion filed by Axis Bank to reject the plaint only against them was dismissed, with the Court emphasizing that such a relief cannot be entertained under Order 7 Rule 11(d) of CPC. The Court left open the questions regarding the applicability of Section 34 of the SARFAESI Act and the rights of the plaintiffs under the Maharashtra Ownership Flats Act for future determination.

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