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.
Therefore, the issue considered by the Apex Court bench in the appeal filed by the bank 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?
Allowing the appeal, the bench comprising of Justice Uday Umesh Lalit, Justice Indira Banerjee and Justice MR Shah noted the judgment in Punjab National Bank v. O.C. Krishnan and others, (2001) 6 SCC 569. Which had held that, without exhaustion of the remedies under the RDDBFI Act, the High Court ought not to have exercised its jurisdiction under Article 227. It observed:
” without exhausting the remedy of appeal provided under the RDDBFI Act, the suits with the basic relief of challenging the decree passed by the DRT were liable to be dismissed, as observed and held by this Court in the case of O.C. Krishnan and others (supra).”
The bench observed that since the plaints are vexatious, frivolous, meritless and nothing but an abuse of process of law and court, it s is a fit case to exercise the powers under Order 7 Rule 11 (d) of the CPC. It added:
“Be that as it may, considering the pleadings/averments in the suits and the allegations of fraud, we are of the opinion that the allegations of fraud are illusory and only with a view to get out of the judgment and decree passed by the DRT. We are of the opinion that therefore the suits are vexatious and are filed with a mala fide intention to get out of the judgment and decree passed by the DRT.”