Case: Om Aggarwal Vs. Haryana Financial Corporation &amp; Ors

difficult to appreciate the contention of the learned counsel for the respondent Financial Corporation that any such determination can take place without notice to the defaulter. The jurisdiction of the civil courts to go into the question as to what is the amount due is expressly ousted by sub-section (4) of Section 3. In its place, the power has been given to the Managing Director under Section 3(1)(b) to determine as to what is the amount due from the defaulter. There can be no doubt that any such determination by the Managing Director will result in civil consequences ensuing. The determination being final and conclusive, would have the result of the passing of a final decree, inasmuch as the defaulters from whom any amount is found to be due, would become liable to pay the amount so determined and the Collector will have the right to recover the same as arrears of land revenue. (Emphasis supplied) 25. Applying the aforesaid principle of law to the facts of the case in hand, it is clear by mere reading of the plaint that firstly, the plaintiff was a defaulter as defined under Section 2(c) of the Act; secondly, the investment made by defendant No.1- Corporation pursuant to an agreement dated 16.07.1996 was in the nature of the financial assistance as defined under Section 2 (d) of the Act; thirdly, the demand raised by the respondent was in relation to the amount given by way of financial assistance under Section 3 of the Act and lastly, the subject matter of the suit viz., challenge to the legality of the agreement and the demand fell under Section 3(4)(a) and (b) of the Act. 26. In the light of the four aforementioned facts, which are clearly discernable from the averments made in the plaint, we are of the considered opinion that the provisions of the Act get attracted to the case in hand which, in turn, attract the bar contained in sub-section (4) of Section 3 in filing the civil suit by the defaulter. The suit is, therefore, apparently barred by virtue of bar contained in Section 3(4) of the Act. It was thus rightly dismissed by the courts below by taking recourse to Order VII Rule 11 (d) of the Code. 27. We do not find any force in the submission urged by the learned counsel for the plaintiff that on the basis of law laid down in Unique Butyle case (supra), the suit should be held as maintainable for adjudication of the reliefs claimed therein on merits. 28. On perusal of the decision rendered in Unique Butyle case (supra), it is clear that the said decision was rendered in a writ petition filed by the defaulter against the Corporation wherein the question involved was whether the proceedings for recovery initiated by the U.P. Financial Corporation under the U. P. Public Moneys (Recovery of Dues) Act, 1972 are maintainable in view of Section 34(2) of the Recovery of Debts Due to Banks and Financial Institutions Act 1993. 29. This Court examined the aforesaid question in the light of the provisions of the aforementioned two Acts and held that the proceedings initiated under the U. P. Public Moneys (Recovery of Dues) Act, 1972, are not maintainable in view of overriding effect given to the Central Act by virtue of Section 34(2) of the Central Act over the State Act. 30. It is pertinent to mention that while deciding the question, their Lordships took note of the law laid down in S.K. Bhargava case (supra) and held that the provisions of U.P. Act and that of the Haryana Act are not similar. This is what was held in para 15: We may notice here that to strengthen his arguments, learned counsel for the appellant referred to the decision of this Court in S.K. Bhargava vs. Collector, Chandigarh. The said case related to the Haryana Public Moneys (Recovery of Dues) Act, 1979 (in short the Haryana Act). With reference to certain observations in para 8 of the said judgment, it was submitted that a process of adjudication is inbuilt, even when the Managing Director of the Corporation takes action. We notice that Section 3 of the Haryana Act is couched differently from Section 3 of the U.P. Act. Reference was made in the said case to Director of Industries Case, (1980) 2 SCC 332 and held that while upholding the validity of Section 3 of the U.P. Act, the Court was not called upon to deal with the question as to whether the principles of natural justice were implicit in the said Section. We also do not think it necessary to go into that question. 31. In the light of several distinguishing features noticed in the case in hand and the facts of Unique Butyle case (supra) such as the question as to whether the suit filed in the Civil Court was barred or not, which is the subject matter of this case, was not decided in Unique Butyle case. Secondly, the case in hand arose out of Haryana Act whereas the Unique Butyle case (supra) arose out of U.P Act and thirdly, both Haryana Act and U.P. Act were held not identical in their wordings. 32. In the light of these distinguished features, no reliance can be placed on the law laid down in Unique Butyle case (supra) for deciding the issue involved in the present case. It has, in our considered opinion, no application to the case in hand. 33. Before parting with the case, we consider it apposite to clarify that we have not examined the legality and correctness of the demand on its merits once it is held that Civil Court has no jurisdiction to entertain the civil suit. In other words, once it is held that the Civil Court has no jurisdiction to try the suit on merits, the question as to whether the demand impugned in the suit is legal or not cannot be gone into nor it was gone into.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]20. Having heard the learned counsel for the parties and on perusal of the record of the case, we find no merit in this appeal22. An application for rejection of the plaint can be filed, if the allegations made in the plaint taken to be correct as a whole on its face value show the suit to be barred by any law. The question as to whether a suit is barred by any law or not would always depend upon the facts and circumstances of each case. However, for deciding this question, only the averments made in the plaint are relevant. Since the question of jurisdiction of the Civil Court to entertain and try the civil suit goes to the very root of the case and hence it can be raised at any time by the defendant by taking recourse to the provisions of Order VII Rule 11 of the Code. Indeed, this principle of law is well settled23. So far as the provisions of the Act are concerned, Section 3 of the Act empowers the Corporation to make recovery of its outstanding dues from the defaulter as arrears of land revenue by getting the certificate of recovery of the amount issued from the competent authority whereas sub-section (4) of Section 3 in clear terms takes away the jurisdiction of the Civil Court to entertain or/and adjudicate any case relating to the recovery of any sum due from the defaulter. It also takes away the jurisdiction of Civil Court to proceed with any pending case involving such issue. If any such case is pending on the date of commencement of the Act, such case shall stand abate26. In the light of the four aforementioned facts, which are clearly discernable from the averments made in the plaint, we are of the considered opinion that the provisions of the Act get attracted to the case in hand which, in turn, attract the bar contained in sub-section (4) of Section 3 in filing the civil suit by the defaulter. The suit is, therefore, apparently barred by virtue of bar contained in Section 3(4) of the Act. It was thus rightly dismissed by the courts below by taking recourse to Order VII Rule 11 (d) of the Code27. We do not find any force in the submission urged by the learned counsel for the plaintiff that on the basis of law laid down in Unique Butyle case (supra), the suit should be held as maintainable for adjudication of the reliefs claimed therein on merits33. Before parting with the case, we consider it apposite to clarify that we have not examined the legality and correctness of the demand on its merits once it is held that Civil Court has no jurisdiction to entertain the civil suit. In other words, once it is held that the Civil Court has no jurisdiction to try the suit on merits, the question as to whether the demand impugned in the suit is legal or not cannot be gone into nor it was gone into.