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Monday, December 12, 2016

interim injunction, restraining the defendants from purporting to act or to give effect to or taking any step in furtherance of the purported deed of transfer dated 5th July, 2007 and the certificate of sale of movable and immovable property dated 5th July, 2007 or from enforcing the same in any manner whatsoever pending the suit.=The learned Single Judge passed an order, refusing the interim order as prayed for in O.A. No. 233 of 2011. The Division Bench, while dismissing the appeal made following observations in Para 62 at page 50: “62. The maintainability of suits, which are pending on the file of the City Civil Court as well as on the file of this Court in C.S. No. 164 of 2011, can be adjudicated in the course of trial and this Court finds some force in the submission made by the learned senior counsel appearing for the appellants that the said findings may definitely prejudice their case. Hence, this Court expunge the observations made by the learned Judge with regard to the maintainability of the suit in O. S. No. 12159 of 2010, pending on the file the III Addl. Judge, City Civil Court, Chennai and C.S. No. 164 of 2011 pending on the file of this Court.”-The Division Bench as well as learned Single Judge has already noted that hotel has already commenced its operation and contracts have been made with third parties for the operation of the hotel and bookings are also being taken from the customers. We have already noticed the directions issued by Division Bench, directing the defendant Nos. 1, 2 and 8 to the suit C.S. No. 257 of 2005 to deposit an amount of Rs. 15.21 Crores which order had done substantial justice between parties. Taking into consideration the overall circumstances, specially when issues raised in C.S. No. 164 of 2011 are yet to be adjudicated, the orders passed by both learned Single Judge and Division Bench, refusing to grant interim injunction in view of the facts as noted above cannot be faulted. 48. In result, the appeals of Robust Hotels & ors. are disposed of by modifying the order of the Division Bench as above. The appeals of EIH Ltd. and ors. are dismissed.

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                    CIVIL APPEAL Nos. 11886-11887 OF 2016
               (ARISING OUT OF SLP(C)NO. 23410-23411 of 2011 )

ROBUST HOTELS PVT. LTD
& ORS.                                       .... APPELLANTS
                                     VERSUS

EIH LIMITED & ORS.                     .... RESPONDENTS

                                    WITH
                    CIVIL APPEAL Nos. 11888-11889 OF 2016
               (ARISING OUT OF SLP(C)NO. 17742-17743 of 2012)
EIH LIMITED & ANR.                        ...APPELLANTS
                                      VERSUS

BALAJI HOTELS & ENTERPRISES
LTD. & ORS.                              ...RESPONDENTS


                               J U D G M E N T


ASHOK BHUSHAN, J.

      Leave granted.
2. These appeals along with connected appeals  although  emanates  from  two
different suits filed by the same plaintiff, but the  parties  being  common
and sequence of  facts  being  inter-related,  we  have  heard  the  appeals
together and they are being decided by this common judgment.

                       Civil Appeal Nos.......Of 2016
                (Arising Out of SLP(C)Nos. 23410-11 of 2011 )

3.    These appeals have been filed against the  judgment  and  order  dated
26th July, 2011 passed by High Court of Madras in C.M.A.  No.  798  of  2011
and MP No. 1 of 2011 arising out of C.S. No. 257 of 2005  renumbered  as  OS
No. 12159 of 2010. Brief facts of  the  case,  necessary  to  be  noted  for
deciding the appeal are:
      The EIH Ltd., Respondent No. 1 (hereinafter referred to,  as  EIH)  to
the appeal is a company which operates a chain of luxury hotels. The  Oberoi
Hotels Private Ltd., Respondent No. 2 owns a brand name 'Oberoi'.
4.    On 26.10.1988 EIH entered into  'Technical  Services  Agreement'  (for
short TSA) with one Balaji Construction (P.)  Ltd.  Predecessors-in-interest
of the 3rd Respondent Balaji Hotels & Enterprises Ltd.  (for  short,  BHEL).
The agreement provided that EIH would provide its  technical  knowledge  and
skill required for operation of hotel, which was being constructed by  BHEL.
Another agreement on January 12, 2000 was  entered  between  BHEL  and  EIH,
where it was recorded that on the request of BHEL, EIH paid Rs. 9 Crores  to
the BHEL by way of financial accommodation which was used  for  construction
of hotel. By supplemental agreement dated June 10,  2000,  it  was  recorded
that in total Rs. 15 Crores 12 Lacs have been received  by  BHEL,  repayment
of which is to be made within 24 months  from  the  date  of  the  principal
agreement dated 12th June, 2000. It appears that amount could not be  repaid
hence another agreement was entered between EIH and BHEL  on  4th  February,
2002. The agreement recorded that, it has now been mutually  agreed  by  the
BHEL and EIH that EIH will no longer participate  in  the  hotel  operations
hence the Technical Service  Agreement  will  be  terminated.  EIH,  further
stipulated that No-Objection to BHEL shall be given for selling, leasing  or
otherwise  transferring  the  hotel  unit  to  any  other  company   whether
subsidiary or not, or to any other company  or  entity  either  directly  or
indirectly or otherwise. It was further agreed that BHEL  shall  refund  the
amount of Rs. 15.12 Crores alongwith interest.

5.    Relevant Clauses F and G of the Agreement, are as follows:

F. It is also agreed by and between the parties that BHEL shall  refund  the
said amount of Rs. 15.12 Crores as mentioned in clause D  above  along  with
interest as applicable on the above amounts  on  the  terms  and  conditions
hereinafter contained.

G. It is also agreed by and between the parties that BICL  will  execute  an
irrevocable guarantee in favour of EIH guaranteeing the payment of the  said
sum  of  Rs/  15.12  Crores  along  with  interest  as  applicable  and   in
consideration of such guarantee, EIH has agreed to  give  BHEL  time  up  to
31st December, 2002 to repay the said sum of Rs. 15.12 Corers with  interest
as applicable.

6.    On  the  same  day,  a  Letter  of  Guarantee  was  issued  by  Balaji
Industrial  Corporation  Ltd.   the   4th   Respondent   in   this   appeal,
unconditionally, absolutely and irrevocably guaranteeing the payment of  Rs.
15.12 Crores, in the event, BHEL did not paid  the  subject  amount  of  Rs.
15.12 Crores within 31st December 2002.

7.    The BHEL  had  obtained  financial  assistance  from   IFCI,  the  7th
Respondent and and Tourism  Finance  Corporation  of  India  Ltd.,  the  8th
Respondent. EIH came to know that Tourism  Finance  Corporation  India  Ltd.
(for short TFCI)  had issued advertisement  inviting  offer  for  take  over
(joint venture) sale of hotel project of BHEL.  The EIH  wrote  to  TFCI  on
8th September, 2002 informing about the agreements entered between  EIH  and
BHEL and further stating that till  sum  of  Rs.  15.12  Crores  along  with
interest is not refunded EIH would have the exclusive right to  operate  the
hotel. BHEL on 8th June, 2004 acknowledged and confirmed the  principal  sum
of Rs. 15.12 Crores being outstanding as per  books  of  accounts  of  March
31st, 2004 with interest. A suit in the High Court of Madras being C.S.  No.
257 of 2005 was filed by EIH against BHEL and others praying  for  following
reliefs:

“The plaintiff prays for a Judgment and Decree for:
(a)   Declaration that the Technical Services Agreement dated 26th  October,
1988 and the Project Consultancy Agreement and Royalty Agreement both  dated
26th October, 1988 and the Agreements dated 12th January, 2000,  10th  June,
2000 and 4th February 2002 are valid, legal and subsisting and  are  binding
and enforceable on the Defendant No. 3 to 7 and /or its assigns.


(b)   Permanent injunction restraining the Defendant Nos. 3 to 7 whether  by
itself, its servants, agents and /or assigns  or  otherwise  howsoever  from
selling, encumbering and/or  disposing  of  in  any  manner  howsoever,  the
schedule property of the Defendant No. 1 situated at  Mount  Road,  Chennai,
in favour of any persons without disclosing and/or  recognizing  the  rights
of the plaintiff to operate and manage the hotel as provided for  under  the
technical services agreement  dated  26th  October,  1988  and  the  Project
Consultancy Agreement and Royalty Agreement both dated  26th  October,  1988
and the agreements dated  12th  January,  2000,  10th  June,  2000  and  4th
February 2002.

(c)   Costs
(d)   Such further and other reliefs.”


8.    An application was also filed by the EIH and Oberoi  Hotels  (P)  Ltd.
who were Plaintiff Nos. 1 and 2, for  grant  of  temporary  injunction.  The
learned Single Judge had issued temporary injunction on 18.03.2005.

9.    After the grant of temporary injunction, it appears that in  the  year
2007 proceedings were initiated by IFCI by issuing notice under  Section  13
sub Section (2), Securitisation and Reconstruction of Financial  Assets  and
Enforcement of Security Interest (SARFAESI) Act, 2002 demanding  amount  due
from BHEL.

10.   Proceeding under Sarfaesi Act, 2002 proceeded and the hotel  asset  of
BHEL was transferred in favour of one Robust Hotels (P.) Ltd.(the  appellant
in C.A.Nos.....of 2016 (arising out of  SLP  ©  No.  23410-11  of  2011).  A
transfer deed dated 5th July, 2007 was issued by IFCI and TFCI in favour  of
Robust Hotels (P) Ltd. (hereinafter referred to as Robust Hotels).  All  the
land, together with erections,  plant  and  machinery  were  transferred  to
Robust Hotels. EIH filed an application in November,  2009  for  impleadment
of Robust Hotels in C.S. No.  257  of  2005  although  the  impleadment  was
opposed but was allowed by learned Single Judge  vide  judgment  dated  23rd
March, 2010.  The Appellant Nos.1 to 4 in SLP (C) No. 23410-11 of 2011  were
impleaded as Defendant Nos. 8 – 11 in C.S. No. 251 of 2005.  Letters  Patent
Appeal against the said judgment was also dismissed  by  Division  Bench  on
22nd October, 2010. The Robust Hotels unsuccessfully  challenged  the  order
of the Division Bench before this Court by filing an S.L.P., which was  also
dismissed on 7th January, 2011.

11.   C.S. No. 257 of 2005 was renumbered as O.S.No. 12159 of 2010.   An  IA
was filed by EIH being IA No. 22846 of 2010.  By the aforesaid IA No.  22846
of 2010 the plaintiff prayed for an order, restraining  Robust  Hotels  from
having the construction of the hotel unit or from doing,  acting  or  taking
steps contrary to or in derogation of the rights of the plaintiff under  the
Technical Services Agreement and  other  agreements.   The  application  was
rejected by learned Single Judge vide judgment and order  dated  9th  March,
2011, challenging the aforesaid order  9th  March,  2011,  an  appeal  being
C.M.A. No. 798 of 2011 was preferred.  The  Division  Bench  of  this  Court
decided the appeal being C.M.A. NO. 798 of 2011 and M.P. No. 1 of  2011  and
issued certain directions vide its  judgment  and  order  dated  26th  July,
2011.  C.A.Nos.......of 2016 (arising out of  SLP(C)  No.23410-11  of  2011)
have been filed against aforesaid Division Bench judgment  and  order  dated
26th July, 2011 by the Robust Hotels and other three defendants.


                         C.A.Nos.11888-11889 of 2016
                (arising out of SLP (C) No. 17742-43 of 2012

12.   These appeals have been filed by EIH Ltd. and  Oberoi  Hotels  against
judgment and final order dated 13th March, 2012 passed by the High Court  of
Madras in O.S.A. No. 419 of 2011 and M.P. No. 1 of 2011. While noticing  the
facts in  the  appeals  filed  by  Robust  Hotels,  we  in  the  proceedings
paragraphs have noted the facts which are also  relevant  for  understanding
the issues raised in present appeals. The appellants EIH and  Oberoi  Hotels
filed a suit, being C.S. No. 164 of 2011 before the  High  Court  of  Madras
praying for a declaration  that  Deed  of  Transfer  dated  5th  July,  2007
entered into between IFCI Ltd.  and TFCI on one part and the  Robust  Hotels
(P.) Ltd. on  another  part,  and  the  certificate  of  sale  of  immovable
property dated 6th July, 2007 are illegal and null & void and of  no  effect
and not binding. A perpetual injunction was  also  prayed  for,  restraining
the defendants whether by themselves, their servants,  agents  or  otherwise
howsoever from purporting to act, to give effect to  or taking any steps  in
furtherance of the purported deed of transfer dated  July 5,  2007  and  the
certificate of sale of movable and immovable property  also  dated  July  5,
2007 or from enforcing the same in any manner whatsoever.
13.   It was pleaded that the cause of action for instituting the  suit  was
the sale of hotel unit at Mount Road, Chennai by the financial  institutions
contrary to the order passed by this High  Court  dated  18th  March,  2005.
The counter affidavit was also filed in O.A. No. 233 of  2011  in  C.S.  No.
164 of 2011 by Robust Hotels.   A  Contempt  Petition  was  also  filed  for
violation of Order dated 18th March, 2005, passed in O.A. No.  300  of  2005
in C.S. No. 257 of 2005.
14.   O.A. No. 233 of 2011 in C.S. No. 164 of 2011 filed by EIH  and  Oberoi
Hotels praying for injunction was dismissed by  learned  Single  Judge  vide
Order dated 8th August 2011.  By the same order, learned Single  Judge  also
dismissed the Contempt Petition (C)No. 647 of 2011 filed by EIH  and  Oberoi
Hotels. Challenging the order passed by the learned Single Judge  dated  8th
August, 2011 Letters Patent Appeal was filed by EIH and Oberoi Hotels  being
O.S.A. No. 419 of 2011.  The Division Bench by the Order dated  13th  March,
2011 dismissed the appeal, challenging  which  order   the  C.A.  Nos.....of
2016 (arising out of Special Leave Petition (C) Nos. 17742-43 of  2012)  has
been filed by EIH and Oberoi Hotels.
15.   We have heard Shri K. K. Venugopal learned senior counsel  and  K.  V.
Vishawanathan learned senior counsel for Robust Hotels, Shri  Jaideep  Gupta
learned senior counsel and Shri Siddharth Mitra learned senior counsel  have
appeared on behalf of the EIH and Oberoi Hotels.
16.   Shri K. K. Venugopal, in support of  his  appeal,  contends  that  the
Division Bench of Madras High Court erred in passing  an  interim  order  on
26th July, 2011 whereas there was no case made out by the  EIH  and  Another
for grant of any interim order.  The Robust Hotels has purchased  the  hotel
unit under Sarfaesi Act, 2002 and the property  has  been  conveyed  to  the
Robust Hotels free from any encumbrance. The    proceedings  under  Sarfaesi
Act, 2002 cannot be made subject matter of challenge before a  Civil  Court.
Section 34 of Sarfaesi Act, 2002 completely oust the jurisdiction  of  Civil
Court.  He contends that entitlement to recover  the  amount  of  Rs.  15.21
Crores by EIH if at all was against the Balaji  Hotels  &  Enterprises  Ltd.
and Balaji Industrial Corporation Ltd., for which it was  open  for  EIH  to
take appropriate proceedings.  The Robust Hotels having acquired the  assets
under Sarfaesi proceeding has no liability to make any payment  to  EIH  and
the  order  passed  by  the  Division  Bench  issuing  such   direction   is
unsustainable. It is submitted that Robust Hotels cannot be held liable  for
any breach of Order dated 18.03.2005 and in  view  of  the  subject  matter,
order dated 18.03.2005 was also hit by Section 34  of  Sarfaesi  Act,  2002.
Shri Venugopal further submitted that C.A.Nos....of  2016  (arising  out  of
Special Leave Petition (C) Nos. 17742-43 of 2012) filed by EIH  deserved  to
be dismissed since  both  learned  Single  Judge  and  Division  Bench  have
rightly held that the transfer on 5th July 2007 made  in  favour  of  Robust
Hotels could not have been challenged in C.S. No. 164 of  2011  in  view  of
Section 34 of Sarfaesi Act, 2002.
17.   Shri  Jaideep  Gupta  and  Siddharth  Mitra  learned  senior  counsel,
appearing for EIH have vehemently opposed the submissions raised by Shri  K.
K. Venugopal.  It is contended by learned senior counsel appearing  for  EIH
and Another that the order passed by the Division Bench on 26th  July,  2011
is perfectly in accordance with law, which  need  no  interference  by  this
Court in exercise of jurisdiction under Article  136  of  the  Constitution.
It is submitted that interim order has been issued  by  Division  Bench   of
Madras High Court being fully satisfied on  prima  facie  case  of  the  EIH
Ltd., the balance of convenience and irreparable loss  being  in  favour  of
the plaintiffs.  It is contended that injunction order  dated  18th   March,
2005  issued in C.S. No. 257 of 2005,  has been violated  by  the  financial
institutions.  Any action taken, in breach of interim injunction  order,  is
to be set aside and no party can be allowed to take  benefit  of  its  wrong
committed in breach  of  an  order  of  the  Court.  It  is  contended  that
financial institutions and erstwhile owners of  the  hotel  unit  were  made
aware of the interim injunction order dated 18th  March,  2005  and  despite
the said injunction  order, they transferred the unit  without  taking  into
consideration the right of  the  EIH  flowing  from  the  contracts  entered
between EIH and erstwhile owner as noted above.
18.   One of the conditions of last agreement dated 4th February,  2002  was
to make payment of an amount of Rs. 15.21 Crores by erstwhile  owner  before
transferring the right in the hotel unit including right to  run  the  hotel
in favour of any entity.
19.   The Order  passed  by  Division  Bench  dated  26th  July,  2011  does
complete justice between parties,  and  Division  Bench  has  exercised  its
discretionary  jurisdiction  in  granting   the   relief   which   need   no
interference by this Court in exercise of jurisdiction under Article 136  of
the Constitution.
20.   Coming to appeal, filed by EIH against the  Order  dated  13th  March,
2012, it is contended that all actions in breach of  an  interim  injunction
have to be set aside and the Court is fully competent to restore status  quo
ante.  It is contended that in event where an action is taken  in  disregard
of any interim injunction passed by a court, the  question  of  prima  facie
case, balances of convenience and irreparable loss have  not  to  be  looked
into and the Court has to undo the wrong done in breach of court's order.
21.   It is submitted that Section 34 of the Sarfaesi  Act,  2002  does  not
protect the Robust Hotels in facts of the present  case.   It  is  submitted
that the appeal filed by the EIH, deserved to be allowed setting  aside  all
actions taken in breach of the injunction order 18th March, 2005.
22.   Learned senior counsel for  both  the  parties  have  also  relied  on
various judgments of this Court in support of their respective  submissions,
which shall be referred to while considering their submissions in detail.
23.   First, we take up the appeal of Robust Hotels,  the  appeal  has  been
filed against an interim order passed by the High Court,  disposing  of  the
CMA No. 798 of 2011.
24.   The interim directions issued  by  Division  Bench  are  in  following
three parts:
“(i). This Court without prejudice, directs the 1st and  2nd  respondents  /
erstwhile owners / BH and EL  and  another  or  the  8th  respondent  /  the
present owner / Robust Hotels Private Limited to deposit a sum of Rs.  15.12
Crores into the credit of O.S. No. 12159 of 2010 on or  before  31st  August
2011.


(ii). After such deposit  has  been  made  the  learned  trial  judge  shall
dispose the case within a period of three months on  merits,  without  being
influenced by this Court's findings.

(iii) If the Condition of deposit as ordered by this Court, is not  complied
with by either of the parties, the interim injunction, restraining  the  8th
respondent/Robust Hotels Private Limited, from acting or  taking  any  steps
contrary to and/or in derogation of the rights of the petitioners under  the
technical service agreement, the  projects  consultancy  agreement  and  the
Royalty agreement all dated October  26,  1988,  entered  into  between  the
petitioners /EIH and another and the respondents 1 and  2/B.H.  and  EL  and
BICL will come into effect from 01.09.2011.”

25.   As noted above the agreement dated 4th February, 2002  Annexure  P.  4
between Balaji Hotels Enterprises Ltd. and its successor  Balaji  Industrial
Corporation Ltd. with EIH contemplated that EIH will no  longer  participate
in the hotel unit and Technical Service Agreement  will  be  terminated  and
BHEL shall refund the  amount  of  Rs.  15.12  Crores  for  which  time  was
extended by EIH to BHEL by 31st December 2002.  When the EIH  came  to  know
that Tourism Finance Corporation India Ltd. has issued an advertisement  for
inviting offers for take over / joint venture,  sale  of  hotel  brought  at
Mount Road, Chennai it immediately  wrote  to  Tourism  Finance  Corporation
India Ltd. informing about its  agreement  with  BHEL.   The  EIH  has  also
informed in writing vide letter dated 15th July, 2004 Annexure P. 8  to  the
Asset Reconstruction Company  (India) Ltd. about their advance of Rs.  15.12
Crores which it had made to BHEL.
26.   Subsequently, suit, namely, C.S. No. 257 of 2005 was filed by the  EIH
Ltd. and Oberoi Hotels, plaint of which suit has been brought on  record  by
annexure     P. 14.
27.   Interim injunction was issued by the learned Single Judge of the  High
Court in the aforesaid suit to the following effect:
“That 1. Assets  Reconstruction  Company  (India)  Limited,  2.  ICICI  Bank
Limited 3. IFCI Limited 4. Tourism Finance  Corporation  of  India  Limited,
and 5. Anand Rathi Securities  Private  Limited,  the  respondents  3  to  7
herein, whether by itself, its servants, agents and/or assigns or  otherwise
howsoever be and are hereby restrained by an  order  of  interim  injunction
until further orders of this court from dealing with, disposing of,  selling
and/or encumbering in any manner howsoever the hotel unit of the  Respondent
No. 1 situated at Mount Road,  Chennai  in  favour  of  any  person  without
disclosing the rights of the Applicants to operate and manage the  hotel  in
terms of the Technical Services, Project  Consultancy  &  Royalty  Agreement
dated 26th October 1988 and the Agreements dated 12th   January  2000,  10th
June, 2000 and 4th  February 2002.”

28.   The essence of  interim  injunction  issued  by  the  Court  was  that
Respondent Nos. 3 to  7  of  that  suit  were  restrained  by  an  order  of
injunction from dealing with, disposing of, selling  and/or  encumbering  in
any  manner  howsoever  the  hotel  unit  of  Balaji  Hotels  &  Enterprises
Ltd.(BHEL), in favour of any person  without disclosing the  rights  of  the
applicants to operate and  manage  the  hotel  in  terms  of  the  Technical
Services, Project Consultancy & Royalty Agreement dated 26th  October,  1988
and the Agreements dated 12th   January  2000,  10th   June,  2000  and  4th
February, 2002.

29.   Thus, the injunction ordained that while dealing with the  hotel  unit
the rights of the applicant be disclosed.  The subsequent  facts,  as  noted
above indicate that even after the aforesaid injunction the  IFCI  Ltd.  and
Tourism Finance Corporation of India Ltd. by  deed  of  transfer  dated  5th
July, 2007 transferred the hotel unit to Robust  Hotels  without  disclosing
the rights of the applicant as provided by the Agreement mentioned  therein.
The Agreement dated 4th July,  2002  clearly  provided  that  the  BHEL  was
required to repay the amount  of  Rs.  15.21  Crores  to  the  EIH  by  31st
December, 2002 whereafter, EIH had nothing to do with the operation  of  the
hotel.
19.   Learned senior counsel for the appellants have  placed  much  reliance
on the Section 34 of the Sarfaesi Act, 2002.  Section  34  of  the  Sarfaesi
Act, 2002 provided as follows:
"34. Civil court not to  have  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)."

30.   The scope and ambit of Section 34 of  Sarfaesi  Act,  2002  have  been
considered by this Court in several cases.  It is sufficient  to  refer  the
judgment of this Court in Nahar Industrial Enterprises Limited  Versus  Hong
Kong & Shanghai Banking Corporation (2009) 8 SCC 646. This Court  held  that
the jurisdiction of  the Civil Court is plenary in nature,  unless the  same
is ousted, expressly or by necessary implication, it will have  jurisdiction
to try all types of suits.
31.   Following was laid down in para 110 -111:-
"110. It must be remembered that  the  jurisdiction  of  a  civil  court  is
plenary in nature. Unless the same is  ousted,  expressly  or  by  necessary
implication, it will have jurisdiction to try all types of suits.

111.  In Dhulabhai v. State of M.P., this  Court  opined:  (AIR  pp.  89-90,
para 32)
      “32. … The result of this inquiry into the diverse views expressed  in
this Court may be stated as follows:

(2)   Where there is an express bar of the jurisdiction  of  the  court,  an
examination of the scheme of the particular Act to find the adequacy or  the
sufficiency of the remedies provided may be relevant but is not decisive  to
sustain the jurisdiction of the civil court.

      Where there is no express exclusion the examination  of  the  remedies
and the scheme of the particular Act to  find  out  the  intendment  becomes
necessary and the result of the inquiry may be decisive. In the latter  case
it is necessary to  see  if  the  statute  creates  a  special  right  or  a
liability and provides for the determination of the right or  liability  and
further lays down that all questions about  the  said  right  and  liability
shall be determined by the Tribunals so constituted,  and  whether  remedies
normally associated with actions in civil courts are prescribed by the  said
statute or not.”

32.   A perusal of Section  34  indicates  that  there  is  express  bar  of
jurisdiction of the Civil Court to the following effect:
“(i)  Any suit or  proceeding  in  respect  of  any  matter  in  which  Debt
Recovery Tribunal or Appellate Tribunal is empowered by or  under  this  Act
to determine.
(ii)  Further, 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.”

      Thus the bar of jurisdiction of Civil Court has to  correlate  to  the
above mentioned conditions. For purposes of this case, we are  of  the  view
that this Court need not express any opinion as to whether  suits  filed  by
EIH were barred by Section 34 or not, since the issue are yet to be  decided
on merits and the appeal by Robust Hotels have been filed  only  against  an
interim order.


33.   The submissions, which  have  been  much  pressed  by  learned  senior
counsel for EIH is on the effect and consequence  of  acting  in  breach  of
injunction order dated 18th March, 2005. At the time, when injunction  order
was issued by learned Single  Judge,  Robust  Hotels  was  not  in  picture,
however, subsequently, it has also  been  impleaded  in  the  suit  and  the
challenge to the impleadment of Robust Hotels has failed up to  this  Court.
There can be no doubt that IFCI and  Tourist  Finance  Corporation  who  had
executed the deed of transfer in favour of Robust Hotels  and  were  parties
to suit, were bound by the said interim injunction.  The interim  injunction
was only to the effect that the liability of BHEL to  repay  the  amount  of
Rs.  15.21  Crores  up  to  particular  date  was  to  be  communicated  and
recognised to any subsequent purchaser.  The recognition  of  right  of  the
plaintiff of receiving of Rs. 15.21 Crores was with the object  that  anyone
purchasing the hotel  unit  should  be  aware  of  the  liability  and  said
liability should also be adverted and taken care of.
34.   Learned senior counsel for the EIH has referred to and relied  on  the
judgment of the Full Bench of Madras High Court in Century Flour Mills  Ltd.
Versus S. Suppiah and Others  AIR  1975  Madras  270  and  another  judgment
reported in 1985  of  All  England  Report  211  Clarke  and  Others  Versus
Chadburn  and  Others,  for  the  proposition  that  any  action  taken   in
disobedience or disregard in injunction order, becomes void & illegal.
35.   Madras High Court in Century Flour  Mills  Ltd.  stated  following  in
para 9:
“In our opinion, the inherent powers of this court under Section 151  C.P.C.
are wide and are not subject to any limitation.  Where  in  violation  of  a
stay order or injunction  against  a  party,  something  has  been  done  in
disobedience, it will be the duty of the court as a policy to set the  wrong
right and not allow the perpetuation of the wrong doing.  In our  view,  the
inherent power will not only be available in such a case, but  it  is  bound
to be exercised in that manner in the  interests  of  justice.   Even  apart
from Section 151, we should observe that as a  matter  of  judicial  policy,
the court should guard against  itself  being  stultified  in  circumstances
like this by  holding  that  it  is  powerless  to  undo  a  wrong  done  in
disobedience of the court's orders.  But in this case it  is  not  necessary
to go to that extent as we hold that the power is  available  under  Section
151, C.P.C.”

36.   Judgment of Madras High Court in Century Flour Mills  Ltd.  Versus  S.
Suppiah and Others  and   Clarke  and  Others  Versus  Chadburn  and  Others
(Supra) had been relied and approved by  this  Court  in  Delhi  Development
Authority Versus Skipper Construction Co. (P) Ltd. and Another (1996) 4  SCC
622.
37.   Another judgment relied upon is Anita International Versus  Tungabadra
Sugar Works Mazdoor Sangh and Others (2016) 9  SCC  44.   In  the  aforesaid
case, in a Company Petition, filed in the Madras High Court for  winding  up
of Deve Sugars Ltd., an  order  of  winding  up  was  passed.   An  Official
Liquidator was directed to take possession of the property of  the  company.
State Bank of Mysore had extended some loan to the Deve Sugar  Ltd.  and  on
default having been committed, an O.A. was filed before  the  Debt  Recovery
Tribunal by  the  Bank  for  the  recovery  of  the  amount.   The  Recovery
Certificate was issued for a sum of Rs. 8.40 Crores.  State Bank  of  Mysore
filed a Company Application in the pending Company Petition before the  High
Court of Madras, seeking leave to  proceed  before  Debt  Recovery  Tribunal
(DRT),  Bangalore.
38.   The High Court, while granting the leave to the State Bank  of  Mysore
passed an order that no coercive steps are to be taken  against  the  assets
of the company during or after concluding  all  the  proceeding  before  the
tribunal. The order passed by Madras High Court has been extracted  in  para
3 of the judgment which is to the following effect:
“(3)  The Company Court in the High Court of Madras,  while  granting  leave
to State Bank of Mysore, passed  the  following  order  on  10..2000  (while
disposing of Company Applications Nos. 1251-53 of 1999):

      This company application, praying to this Court to grant leave to  the
applicant Bank to proceed and prosecute further OA No. 1300  of  1997  filed
by them against the respondent Company in the  Debts  Recovery  Tribunal  at
Bangalore.

      Company applications coming on this day before this Court for  hearing
in the presence of Mr. R. Varichandran, Advocate for the  applicant,  herein
and the Official Liquidator, High Court, Madras, the  respondent,  appearing
in person, and upon reading the Judge's summons and affidavit and report  of
the Official Liquidator filed herein, the court made the following orders:

       Leave  is  granted  subject  to   the  condition  that  the  Official
Liquidator is impleaded and no coercive steps are taken against  the  assets
of the Company during or after the conclusion of the proceedings before  the
Tribunal.”


39.   A perusal of the above order reveals that leave  was  granted  subject
to the condition that the Official  Liquidator  was  impleaded  before  DRT,
Bangalore, and further that no coercive steps would  be  taken  against  the
assets of the Company Deve Sugars Ltd., during or after  the  conclusion  of
proceedings before DRT, Bangalore.

40.    It  appears  that  in  the  recovery  proceedings,  the  assets  were
auctioned and Anita Internationals were the  auction  purchaser.  The  issue
was raised before the High Court that in view of the order  of  Madras  High
Court  dated 10.03.2000, proceedings for recovery as  well  as  confirmation
of the auction were invalid. It was also contended  before  the  High  Court
that the Company Court had no jurisdiction, the arguments raised before  the
Court that Company Court has no jurisdiction and  it  was  a  Debt  Recovery
Tribunal which has exclusive jurisdiction, was rejected by this  Court.   It
is useful to refer para 49 and 51 of the judgment which is to the  following
effect:
“(49.)      In order to support their claim, it was submitted on  behalf  of
the appellants that jurisdiction in matters of recovery  agitated  by  banks
and financial institutions under the RDB Act has been  repeatedly  expounded
by  this  Court.   The  Debts  Recovery  Tribunals  concerned,  before  whom
recovery proceedings are  initiated,  have  exclusive  jurisdiction  in  the
matter. It was also pointed out that this Court has  clearly  declared  that
even the jurisdiction of  Recovery  Officers  in  matters  of  execution  of
recovery  certificates  was  likewise  exclusive.   It   was   the   pointed
contention of the learned counsel for the appellants that in matter  wherein
banks and financial institutions approach a Debts Recovery  Tribunal,  which
on due  consideration  issues  a  recovery  certificate,  the  same  can  be
executed only through a Recovery Officer.  It was submitted that  a  Company
Court has no jurisdiction in  the  matter.   The  learned  counsel  for  the
appellants substantiated the above assertion on the basis of  the  decisions
rendered by this Court in  Allahabad  Bank,  M.V.  Janardhan  Reddy,  Andhra
Bank, Rajasthan State Financial Corpn. and Official Liquidator cases.

(51.) It is not possible for  us  to  accept  the  contentions  advanced  on
behalf of the appellants. In this behalf it would  be  relevant  to  mention
that in M.V. Janardhan Reddy case  the  Company  Court  by  an  order  dated
13.8.1999 required  that  its  permission  should  be  obtained  before  the
Recovery Officer finalised the sale.  Thereafter, the Company  Court  by  an
order dated 25.03.2005 directed  that  sale  by  the  Recovery  Officer  was
subject to confirmation by the Company Court.   In  the  above  sequence  of
facts, this Court clearly held that the condition  imposed  by  the  Company
Court could not be violated by the Recovery Officer.  It was concluded  that
the sale made by the Recovery Officer in violation of the orders  passed  by
the  Company  Court  was  without  the  authority  of  law,  the  same   was
accordingly set aside.  The  explanation  tendered  by  the  learned  Senior
Counsel representing the appellants was that even  in  the  above  judgment,
this Court had not  disturbed  the  exclusive  jurisdiction  of  a  Recovery
Officer in executing the recovery certificate.  In our considered view,  the
above contention is immaterial to the issue under consideration.  The  issue
under consideration is whether or  not  an  order  passed  by  the   Company
Court(in the present case the order dated  10.3.2000)  was  binding  on  the
Recovery Officer?  And, whether the proceedings conducted  by  the  Recovery
Officer in violation of the above order were sustainable in law? We have  no
hesitation in concluding that in M.V. Janardhan Reddy case, an order  passed
by the Company Court was held to be binding on the Recovery Officer.   Based
on exactly the same consideration, we are of the view  that  the  acceptance
of the bid of Anita International by the Recovery officer on  11.8.2005  and
the confirmation of the  sale  in  its  favour  on  12.9.2005  were  clearly
impermissible and therefore, deserve to be set aside.”


41.   This Court further held that it is not open either a party to the  lis
or to any third party to determine at their own that an order  passed  by  a
Court is valid or void.   A  party  to  the  lis  or  the  third  party  who
considers an order passed by a court as voidable or non est,  must  approach
the court of  competent jurisdiction to have the said order  set-  aside  on
such grounds, as may be available in law. This Court held that the order  of
the Company Court of Madras High Court was to  be  complied  with  and  sale
held in violation of the said order was to be set aside.
42.   The entitlement of EIH to receive Rs.  15.21  Crores,  which  was  the
condition of the agreement dated 4th February, 2002 was to be  reflected  in
any future transaction by virtue of the injunction order dated  18th  March,
2005 dealing with  the  property,  has   rightly  been  taken  note  by  the
Division Bench of the High Court and  we  do  not  find  any  error  in  the
directions issued by Division Bench of the High  Court,  directing  1st  and
2nd Respondent, i.e., erstwhile owner and 8th Respondent  Robust  Hotels  to
deposit the sum of Rs. 15.12 Crores.
43.   We, however, are of the view that it was not necessary  for  the  High
Court to presume that the conditions of deposit, as  ordered  by  the  court
shall not be complied with. Orders of the court are issued  to  be  complied
with  and  a  court  does  not  lack  power  to  ensure  the  compliance  by
appropriate proceedings. Thus, further directions of  the  High  Court  that
'if the condition of deposit as ordered by this court has not complied  with
by either of the  parties....',  interim  injunction,  restraining  the  8th
Respondent' was uncalled for.  The interim order passed by the  High  Court,
directing for deposit of Rs.  15.12  Crores  has  done  substantial  justice
between parties, which need no interference by this  Court  in  exercise  of
its jurisdiction under Article 136. We, however, are of the  view  that  the
directions issued by the Division Bench in para 38 need to be affirmed  only
to the following extent:
“(a) (i). This Court without prejudice, directs the 1st and 2nd  respondents
/ erstwhile owners / BH and EL and another  or  the  8th  respondent  /  the
present owner / Robust Hotels Private Limited to deposit a sum of Rs.  15.12
Crores into the credit of O.S. No. 12159 of 2010 on or  before  31st  August
2011.”

44.   It goes without saying that  the  trial  judge  has  to  expeditiously
proceed to decide the suit. The deposit was to be made under  the  order  of
the High Court till 31st August, 2011. This Court passed  an  interim  order
on 29th August, 2011 due to which no deposit was made, we  thus  extend  the
time for deposit of the amount till 31st January, 2017.  The  appeals  filed
by Robust are disposed of as above.
45.   Now, we come to appeals filed by EIH.  EIH  filed  an  appeal  against
the order of the Division Bench dated 13th March, 2012 by which  order,  the
Division Bench has dismissed the appeal against the order dated 8th  August,
2011, passed by the learned Single Judge. Order dated 8th August,  2011  was
passed in O.A. No. 233 of 2011  by  which  application,  the  plaintiff  has
prayed for interim injunction, restraining the  defendants  from  purporting
to act or to give effect to  or  taking  any  step  in  furtherance  of  the
purported deed of transfer dated 5th July, 2007 and the certificate of  sale
of movable and immovable property dated 5th July,  2007  or  from  enforcing
the same in any manner whatsoever pending the suit.
46.   The learned Single Judge passed an order, refusing the  interim  order
as prayed for in O.A. No. 233 of 2011. The Division Bench, while  dismissing
the appeal made following observations in Para 62 at page 50:
“62.  The maintainability of suits, which are pending on  the  file  of  the
City Civil Court as well as on the file of this Court in  C.S.  No.  164  of
2011, can be adjudicated in the course of trial and this  Court  finds  some
force in the submission made by the learned  senior  counsel  appearing  for
the appellants that the said findings may definitely prejudice  their  case.
Hence, this Court expunge the observations made by the  learned  Judge  with
regard to the maintainability of the suit  in  O.  S.  No.  12159  of  2010,
pending on the file the III Addl. Judge, City Civil Court, Chennai and  C.S.
No. 164 of 2011 pending on the file of this Court.”


47.   The Division Bench as well as learned Single Judge has  already  noted
that hotel has already commenced its operation and contracts have been  made
with third parties for the operation of the  hotel  and  bookings  are  also
being taken from the customers.  We  have  already  noticed  the  directions
issued by Division Bench, directing the defendant Nos. 1, 2  and  8  to  the
suit C.S. No. 257 of 2005 to deposit an amount of  Rs.  15.21  Crores  which
order  had  done  substantial   justice   between   parties.   Taking   into
consideration the overall circumstances, specially  when  issues  raised  in
C.S. No. 164 of 2011 are yet to be adjudicated, the orders  passed  by  both
learned  Single  Judge  and  Division  Bench,  refusing  to  grant   interim
injunction in view of the facts as noted above cannot be faulted.
48.   In result, the appeals of Robust Hotels &  ors.  are  disposed  of  by
modifying the order of the Division Bench as above. The appeals of EIH  Ltd.
and ors. are dismissed.

                                       ....................J.
                                       (PINAKI CHANDRA GHOSE)

                                        ...................J.
                                             (ASHOK BHUSHAN)
NEW DELHI:
DECEMBER 07,  2016












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