TaxTMI 
TaxTMI 
2023 (2) TMI 1347
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....count of the respondent No. 1, being declared a Non-Performing Asset (NPA) by the original lender banks in December, 2013. In connection with restructuring of the loans availed by the respondent No. 1, multiple agreements had been entered into for the same, but however, on account of repeated defaults by the respondent No. 1 on its payment obligations, the petitioner issued a revocation notice dated 15.12.2021, calling upon it to pay the entire outstanding amount of Rs. 695,28,65,735/- as on 15.12.2021. Thereafter, on 03.01.2022, the petitioner published an Expression of Interest (EOI), for acquisition of strategic equity stake and/or assignment of debt exposure of the petitioner in the respondent No. 1 company. 3. The respondent No. 1 and 2, then filed the Title Suit No. 1 of 2022, along with Misc. Case No. 1 of 2022, against the petitioner under Order 39 Rule 1 of the CPC, seeking a permanent injunction of the revocation notice dated 15.12.2021 and the Expression of Interest (EOI) published on 03.01.2022. The learned Court below, then vide order dated 28.01.2022, passed an ex parte interim order, directing the parties to maintain status quo, to which the petitioner had preferr....
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....dent No. 1, revoking the restructuring proposal and reinstating all the liabilities of respondent No. 1, which aggregated to Rs. 695.28/- crores, as on 15.12.2021 (Revocation Notice). 6. The learned Senior counsel submits that, it was at this juncture that, an invitation for Expression of Interest (EOI) dated 03.01.2022, was published, inviting bids for sale of its equity stake and assignment of its debts in respondent No. 1, under Section 5 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI), to which the respondent No. 1 and 2 filed the Title Suit before the Court of Assistant Deputy Commissioner, East Jaintia Hills, to restrain the petitioner from taking any steps consequent to the Revocation Notice and Expression of Interest (EOI). 7. The learned Senior counsel submits that, the petitioner has come by way of Article 227, as the orders passed by the Lower Court, are erroneous and beyond its jurisdiction. It is submitted that, by an express agreement entered into by the parties, for restructuring as per clause 10 thereof, all disputes had been made subject to the jurisdiction of Courts and Tribunals of Mumba....
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.... & Ors. (2015) 3 SCC 251, has been cited. 10. It has also been urged that, the jurisdiction of the Civil Courts is ousted by the operation of Section 34 of the SARFAESI Act, which he submits, provides that, Civil Courts do not have jurisdiction in respect of any action taken, or to be taken by a secured creditor under this Act, and the impugned orders have in effect even prohibited the petitioner from taking steps under Section 13 of this Act, which therefore, is a clear violation of Section 34. With regard to, the point of Section 34 of the SARFAESI Act, being applicable to future situations, the learned Senior counsel has placed reliance on the case of Mardia Chemicals Ltd. & Ors. vs. Union of India & Ors. (2004) 4 SCC 311. The learned Senior counsel concludes his submissions, by praying that the impugned orders be set aside to enable the petitioner to exercise its legal and statutory rights to initiate proceedings before the competent jurisdictional courts and tribunals as per the Restructuring Agreement and applicable law for recovery, resolution in respect of the admitted outstanding debt of nearly Rs. 700 crores, owed by respondent No. 1. 11. Mr. K. Paul, learned Senior....
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....ion over the arbitration proceedings. The learned Senior counsel then submits that on 03.10.2019, the Restructuring Agreement was executed followed by the Share Pledge Agreement on 29.11.2019, which however on the letter dated 15.12.2021, issued by the petitioner, the said restructuring stood cancelled and revoked with immediate effect. It is contended that, by the cancellation, the situation reverted back to the first agreement dated 14.11.2018, and its terms was thus binding on the parties, and the subsequent terms contained in the Restructuring Agreement dated 03.10.2019, became null and void. He therefore asserts, as this agreement, that is the Investment Agreement, provides at clause 24.2, that nothing shall preclude a party from seeking interim equitable or injunctive relief, the filing of the suit by the respondent shall not be a waiver of the right of the parties to pursue any other remedy or relief through arbitration. He therefore submits, the Revision Application not being maintainable, the same is liable to be dismissed. 14. Mr. G.N. Sahewalla, learned Senior counsel for the petitioner in reply to this argument, has submitted that, the Investment Agreement is not the....
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....be subject to the jurisdiction of the Courts and Tribunals at Mumbai and Guwahati. The said clauses for the sake of convenience, are reproduced hereinbelow; "10.1 Governing Law and Jurisdiction 10.1.1. This Agreement shall be governed, construed and interpreted in accordance with the laws of India and the Borrower agrees that courts and tribunals of Mumbai, Maharashtra and Guwahati, Assam shall have the jurisdiction to settle any disputes which may arise out of or in connection with this Agreement and that accordingly any suit, action or proceedings (together referred to as "Proceedings") arising out of or in connection with this Agreement may be brought in such courts or the tribunals and the Borrower irrevocably submits to and accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of those courts or tribunals. 10.1.2. The Borrower irrevocably waives any objection now or in future, to decide of the venue of any Proceedings in the courts and tribunals at Mumbai, Maharashtra and/or Guwahati, Assam and any claim that any such Proceedings have been brought in an inconvenient forum and further irrevocably agrees tha....
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.... the courts at Kolkata alone shall have jurisdiction. It is so because for construction of jurisdiction clause, like clause 18 in the agreement, the maxim expressio unius est exclusio alterius comes into play as there is nothing to indicate to the contrary. This legal maxim means that expression of one is the exclusion of another. By making a provision that the agreement is subject to the jurisdiction of the courts at Kolkata, the parties have impliedly excluded the jurisdiction of other courts. Where the contract specifies the jurisdiction of the courts at a particular place and such courts have jurisdiction to deal with the matter, we think that an inference may be drawn that parties intended to exclude all other courts. A clause like this is not hit by Section 23 of the Contract Act at all. Such clause is neither forbidden by law nor it is against the public policy. It does not offend Section 28 of the Contract Act in any manner. 33. The above view finds support from the decisions of this Court in Hakam Singh, A.B.C. Laminart, R.S.D.V. Finance, Angile Insulations, Shriram City, Hanil Era Textiles and Balaji Coke. 37. In my opinion, the very existence of the exc....
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.... jurisdiction.- No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993)". 21. Section 34 as noted above, has cast a bar on Civil Courts in entertaining any suit of proceeding in respect of any matter, which a Debts Recovery Tribunal is empowered to take up, and more importantly, in respect of any action taken or to be taken in pursuance of powers conferred by SARFAESI Act or Recovery of Debts Act, 1993. 22. Section 13 of the SARFAESI Act, speaks of enforcement of security interest, where a borrower who is under a liability to a secured creditor under security arrangement makes a default in repayment as provided in Section 13(2), or fails to discharge his liability in full within the period specified, which is provided in Section 13(4). The decision of Mardia Chemicals Lt....
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.... in this regard, having in effect restrained the petitioner from seeking relief under a special act, are hit by Section 34. 24. On the point of the orders being violative of Section 41(b) of the Specific Relief Act, 1963, this Court finds force in the submissions of the learned Senior counsel for the petitioner that, a Court cannot grant an injunction restraining any person from instituting a proceeding in a Court of co-ordinate or superior jurisdiction. This submission is accepted, inasmuch as, by the impugned orders, the petitioner has been effectively restrained from instituting other proceedings before a special forum, which is not subordinate to the Lower Court, that is, the Debts Recovery Tribunal or before the Company Law Tribunal. Section 41(b) reads as follows; "41. Injunction when refused.- An injunction cannot be granted- (a) .............. (b) to restrain any person from instituting or prosecuting any proceeding in a court not subordinate to that from which the injunction is sought." 25. The judgment of the Hon'ble Supreme Court in the case of Cotton Corporation of India Limited vs. United Industrial Bank Limited & Ors. reported in (1983....
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.... approach the court for relief. In other words, he would have to go through the gamut over again: When defending against a claim of injunction the person vindicates the claim and right to enforce the same. If successful he does not get relief but a door to court which was bolted in his face is opened. Why should he be exposed to multiplicity of proceedings? In order to avoid such a situation the Legislature enacted Section 41(b) and statutorily provided that an injunction cannot be granted to restrain any person from instituting or prosecuting any proceeding in a court not subordinate to that from which the injunction is sought. Ordinarily a preventive relief by way of prohibitory injunction cannot be granted by a court with a view to restraining any person from instituting or prosecuting any proceeding and this is subject to one exception enacted in larger public interest, namely, a superior court can injunct a person from instituting or prosecuting an action in a subordinate court with a view to regulating the proceeding before the subordinate courts. At any rate the court is precluded by a statutory provision from granting an injunction restraining a person from instituting or p....