M/S MODI STRATFORD ENTERPRISE MANAGEMENT PRIVATE LIMITED vs PUNJAB & SIND BANK & ORS
$~2
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 21st February, 2024
+ CS(COMM) 394/2017
M/S MODI STRATFORD ENTERPRISE MANAGEMENT PRIVATE LIMITED ….. Plaintiff
Through: Mr. Sanjay K. Sharma, Advocate.
versus
PUNJAB & SIND BANK & ORS ….. Defendants
Through: Counsel for defendants.
CORAM:
HON’BLE MS. JUSTICE NEENA BANSAL KRISHNA
J U D G M E N T (oral)
1. Issues were framed vide Order dated 05.03.2020.
2. Issue Nos. 1 and 2, which were framed, are taken as the preliminary issues. These are as under:-
(i) Whether the alleged dispute between the parties does not fall within the ambit of Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 and thus the suit cannot be pursued as a commercial suit? OPD-1 to 7.
(ii) Whether the suit is liable to be dismissed for mis-joinder of defendant Nos. 1 to 6? OPD-1 to 6.
3. Submissions Heard on the two Preliminary issues.
Issue No. 2 – Whether the suit is liable to be dismissed for mis-joinder of defendant Nos. 1 to 6? OPD-1 to 6.
4. A plea has been taken on behalf of the defendants that the defendant Nos. 2 to 6, are the Chairperson and the Executive Directors of defendant No. 1, who are neither necessary nor a proper party to the present suit.
5. Learned counsel for the plaintiff concedes to deletion of defendant Nos. 2 to 6 and amend the title of the defendant No. 1, to be sued through the Chairperson.
6. In view of the submission made, the defendant Nos. 2 to 6 are hereby deleted and the title of the defendant No. 1 be corrected, to be sued through the Chairman of the Bank.
7. Amended memo of parties be accordingly filed.
8. The issue is decided accordingly.
Issue No. 1- Whether the alleged dispute between the parties does not fall within the ambit of Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 and thus the suit cannot be pursued as a commercial suit?
9. Learned counsel on behalf of the plaintiff has submitted that initially, the suit was filed as a Civil Suit but on account of the objection taken by the Registry, it has been registered as a Commercial Suit. It is further submitted that it is a bank transaction, which was undertaken by the plaintiff and he had transferred Rs. 2.10 Crores, through RTGS to defendant No. 1 and subsequently, when it went to redeem the FDR, the same was denied by the defendant No.7.
10. The plaintiff in its suit for recovery of Rs.3,06,34,100/- along with pendent lite and future interest, has specifically averred that on the representation of the Chief Manager of defendant No.7 through the plaintiffs Company representative solicited the plaintiff Company to make investments with defendant No.7 Branch of defendant No.1, Punjab & Sindh Bank, by way of FDRs/DRs for a period of one year with good return on the deposits with interest @ 9.5% per annum. Pursuant thereto, the plaintiff Company transferred a sum of Rs.2,10,00,000/- through RTGS on 11.12.2013, in the account details, as provided by defendant No.7 branch which was duly acknowledged by it and it confirmed opening of FDRs.
11. Thereafter, FDR/SDR was issued against the new account opened with defendant No.7 branch of the defendant No.1 bank. On the request of the plaintiff, defendant No.7 issued a Interest Certificate dated 14.03.2014 with interest calculated @ 9.20%. On the pointing out of the plaintiffs representative, the defendant No.7 agreed to rectify the interest rate for the period 12.12.2013 to 14.03.2014 @ 9.50% as was agreed and even issued a fresh FDR for the sum of Rs.2,14,99,100/-. The fresh FDR bearing No.884267 dated 14.03.2014 was accordingly issued for the said amount.
12. Subsequently, when the plaintiff sought encashment of the said FDR, it was informed that the plaintiff Company had raised a loan of Rs.1,93,49,000/- on 18.03.2014 against the security of the said FDR which stands adjusted on 11.07.2014 by defendant No.7. It is claimed that this alleged settlement was done without intimation or consent of the plaintiff. It is further asserted that the plaintiff never opened any Demand Loan Account or took an overdraft facility from defendant No.7. Therefore, the suit for recovery of Rs. 3,06,34,100/- along with pendent lite and future interest, has been filed on behalf of the plaintiff.
13. A preliminary objection has been taken on behalf of defendant No.1 and 7 that the present suit of the plaintiff does not fall within the definition of “commercial dispute” as defined by Section 2(C)(i) of Commercial Courts Act, 2015. According to the plaintiff there has been commission of aggravated offences of fraud, forgery, cheating, diversion of funds, money laundering all of which falls within the punitive realm of Indian Penal Code, 1860 and Prevention of Money Laundering Act, 2002. The alleged dispute is inextricably connected with the aforesaid offences which are presently under the investigation of the law enforcement agency.
14. It was further submitted that the CBI, Banking Security and Fraud Cell, Mumbai has lodged Case No.RCBSM2014E000/CBI/BS&FC/MUMBAI under Section 120B, 419, 420, 467, 468 and 471 IPC read with Sections 13(2) and 13(1)(d) of Prevention of Corruption Act, 1998. Pursuant to the registration of aforesaid Criminal Case, the CBI has seized the original documents relating to the Current Account No.03001100032853 as also the transactions effected therein on 21.07.2014 vide Production-cum-Seizure Memo dated 21.07.2014. The CBI vide its Notice dated 16.10.2014 has also directed the defendant No.7 to produce certain documents under Section 91 of the Criminal Procedure Code, 1973. The accounts and banking transactions involving the Modi Group of Companies of which the plaintiff is one of the constituent, is under criminal investigation by CBI.
15. Additionally, a response dated 21.08.2015 to the Notice under Section 91 and 160 Cr.P.C has been submitted by defendant No.1 to the Investigating Officer. It is submitted that the Current Account of the plaintiff is lying dormant with a credit balance of Rs.1,31,586/-. It is unimpeachably and unambiguously clear that the defendants do not owe any amount to the plaintiff under FDR No.884267 or under any other transaction.
16. The Section 2(C)(i) of Commercial Courts, Act, 2015 reads as under :
ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents; (ii) export or import of merchandise or services
17. The fundamental question at this initial stage which is to be considered is whether the suit qualifies as a commercial suit for which essentially the averments made in the plaint are necessarily required to be looked into.
18. There is no denial that an FDR was opened with defendant No.7 Bank which is also admitted and acknowledged by defendant No.7. The only defence which has been raised by defendant No.7 is that the FDR amount has been adjusted against a Demand Loan Account which had allegedly been opened on the request of the plaintiff Company. This fact of opening of Demand Loan Account has been challenged by the plaintiff.
19. Essentially, the plaintiff has entered into a commercial transaction of opening a FDR with the defendant No.1 and 7, which is not denied. It is only a defence of defendant No.1 and 7 that the FDRs that were opened by them during their commercial business transactions, is not payable to the plaintiff for the reason that this amount has been adjusted against the Demand Loan Account opened by the plaintiff in their Bank.
20. It is evident that it is a commercial transaction of opening of FDR which is the fulcrum/foundation of the present suit for recovery. It clearly qualifies as a “commercial dispute” in terms of the definition under Section 2(C)(i) of the Commercial Courts Act, 2015. The defendant may disown their liability to refund the FDR amount on the grounds as mentioned above, but the nature of dispute is essentially commercial as pleaded in the plaint.
21. Therefore, the Issue No.1 in regard to the dispute not being a commercial suit, is decided against the defendant.
CS(COMM) 394/2017
22. List before learned Joint Registrar for recording of evidence on the remaining issues on 21.03.2024.
(NEENA BANSAL KRISHNA)
JUDGE
FEBRUARY 21, 2024
va
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