2021 INSC 0766
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.6669 OF 2021
Electrosteel Castings Limited ..Appellant(S)
VERSUS
UV Asset Reconstruction ..Respondent(S)
Company Limited &Ors.
J U D G M E N T 
M. R. Shah, J.
1. Feeling   aggrieved   and   dissatisfied   with   the   impugned
judgment   and   order   dated   13.08.2021   passed   by   the   High
Court of Judicature at  Madras in O.S.A. No.292 of 2019, by
which   the   Division   Bench   of   the   High   Court   has   dismissed
the said appeal preferred by the original plaintiff rejecting the
plaint/suit filed by the appellant herein – original plaintiff on
the   ground   that   the   suit   is   barred   by   Section   34   of   the
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SARFAESI   Act,   2002,   the   original   plaintiff   has   preferred   the
present appeal. 
2. The   facts   leading   to   the   present   appeal   in   nutshell   are   as
under:­
2.1 That   original   defendant   No.3   ­   respondent   No.3   herein
(hereinafter referred to as original defendant No.3) availed the
loan   facility   vide   Rupee   Loan   Agreement   dated   26.07.2011
from   defendant   No.2   ­   respondent   No.2   herein   –   SREI
Infrastructure   Finance   Limited   and   availed   the   financial
assistance   to   the   extent   of   Rs.500   crores.   The   appellant
herein – original plaintiff stood as guarantor. A mortgage was
created by the appellant herein – original plaintiff in favour of
defendant No.2 – respondent No.2 herein – financial creditor
over  its  factory   land  at  Evalur,  Tamil  Nadu  along   with  plant
and   machinery,   by   way   of   deposit   of   title   deeds   in   terms   of
the   declaration   to   secure   the   repayment,   discharge   and
redemption   by   original   defendant   No.3.   That   original
defendant   No.3   –   corporate   debtor   could   not   pay   the   loan
amount,   therefore   the   proceedings   under   the   Insolvency
Bankruptcy   Code,   2016   (IBC)   was   initiated   against   the
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corporate   debtor.   An   application   under   Section   7   of   the   IBC
was   filed   by   the   State   Bank   of   India   against   original
defendant   No.3   –   corporate   debtor.   The   default   amount   was
INR   923,75,00,000/­.   The   resolution   process   was   initiated
and   an   interim   resolution   professional   was   appointed   under
the provisions of IBC. A resolution plan came to be approved
by the Committee of Creditors under Section 30(4) of the IBC.
The   learned   Adjudicating   Authority   vide   order   dated
17.04.2018   approved   the   resolution   plan.   Under   the
approved   resolution   plan   an   amount   of   INR
241,71,84,839.18   was   required   to   be   paid   and   67,23,710
equity   shares  of  the  corporate  debtor   were  to  be  allotted.  As
per   the   case   on   behalf   of   the   plaintiff   –   appellant   herein   on
payment of aforesaid amount and transfer of aforesaid shares
No   Due   Certificate   was   issued   in   favour   of   the   corporate
debtor   –   original   defendant   No.3   on   25.06.2018   and   the
corporate   debtor   came   to   be   discharged.   It   appears   that
thereafter   an   assignment   agreement   was   executed   between
defendant No.2 – respondent No.2 herein and defendant No.1
–   respondent   No.1   herein   on   30.06.2018,   assigning   all   the
rights,   titles   and   interest   in   all   the   financial   assistance
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provided by  defendant No.2 – financial creditor  ­ respondent
No.2   herein   in   terms   of   agreement   dated   26.07.2011   in
favour   of   assignee   ­   respondent   No.1.   As   assignee   ­
respondent   No.1   herein   pursuant   to   the   assignment
agreement   dated   30.06.2018   had   issued   letter   to   all   the
interested   parties,   namely,   assignor   ­   financial   creditor,
guarantor   and   corporate   debtor   informing   that   assignor   –
financial   creditor   ­   respondent   No.2   herein   had   absolutely
assigned   all   the   rights,   title   and   interest   in   all   the   financial
assistance   granted   by   financial   creditor   ­   respondent   No.2
herein   from   time   to   time   to   corporate   debtor   in   favour   of
assignee   ­   respondent   No.1   herein   vide   assignment
agreement   dated   30.06.2018.   The   said   letter   was   responded
by the plaintiff – appellant herein stating the following :­
(i) “Respondent   No.2   had   duly   filed   its   claim
before   the   Resolution   Professional   in   accordance
with the provisions of IBC. 
(ii) This claim was crystallised and admitted at
INR   577.90   Crores   and   also   formed   part   of   the
approved Resolution Plan of Vedanta Limited. 
(iii) Pursuant   to   the   approved   Resolution   Plan,
the   entire   debt   of   Respondent   No.2   has   been
discharged   by   way   of   allotment   of   shares   and
payment   in   cash   on   6.06.2018   and   21.06.2018
respectively. 
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(iv) It   was   also   highlighted   that   in   terms   of
section   3.2(xi)   of   the   approved   Resolution   Plan,
upon   discharge   of   financial   creditors   (including
Respondent   No.2),   the   financial   creditors   were
required   to   redeliver   and   cause   to   be   delivered   to
Petitioner   all   documents   encumbered   with   the
financial creditors. 
(v) Therefore,   when   no   due   was   outstanding
and   in   fact   redelivery   of   encumbered   assets   was
required, there was no basis under contract or law
for assignment of loan/debts/securities. 
(vi) It   was   emphasised   that   assignment
agreement   dated   30.06.2018   was   null,   void   ab
initio and without any basis.”
2.2 That   thereafter   on   the   basis   of   the   assignment   agreement
dated   30.06.2018,   the   assignee   –   original   defendant   No.1   –
respondent No.1 herein initiated the proceedings against the
plaintiff   –   appellant   herein,   who   stood   as   guarantor,   under
Section   13(2)   of   the   Securitisation   and   Reconstruction   of
Financial   Assets   and   Enforcement   of   Security   Interest   Act,
2002   (SARFAESI   Act)   by   issuing   a   notice   dated   27.12.2018,
demanding the payment of INR 587,10,08,309 due under the
rupee   term   loan   agreement   dated   26.07.2011.   Notice   dated
27.12.2018   of   the   SARFAESI   Act   was   responded   by   the
plaintiff   –   appellant   herein   vide   reply   dated   20.02.2019
stating that pursuant to repayment of amount in terms of the
approved resolution plan, all the claims of financial creditor ­
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respondent   No.2   herein   stand   extinguished   and
consequently,   no   claim   can   be   made   by   the   assignee   ­
respondent   No.1   herein   for   the   same   default   and   that   no
amount   is   due   and   payable   to   assignee   ­   respondent   No.1.
That   thereafter   a   possession   notice   dated   19.06.2019   was
issued under rule 8 (1) of the Security Interest (Enforcement)
Rules,   2002   by   the   assignee   to   the   plaintiff   –   appellant
herein.   Thus   a   possession   notice   was   published   in   the
newspaper on 22.06.2019. 
2.3 That   thereafter   the   plaintiff   –   appellant   herein   instituted   a
Civil   Suit   being   C.S.(D)   No.18962   of   2019   on   22.06.2019
before the High Court of Madras and prayed for the following
reliefs:­
“(i).   To   declare   that   the   1st   Defendant
acquired   no   rights   against   the   Applicant
herein   under   the   Assignment   Deed   dated
30.06.2018,   arid   consequently,   declare   that
the   1st   Defendant   is   not   a   secured   creditor
vis­a­vis, the Applicant herein; and
(ii).   Consequently,   to   declare   Possession
Notice   dated   19.6.2019   issued   by   the   1st
Defendant   herein   has   null   and   vend   and
render justice.”
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2.4 The suit was filed with an application seeking leave to file the
suit with the aforesaid prayers. As observed hereinabove, the
suit   was   filed   on   22.06.2019.   Immediately   thereafter
appellant herein – plaintiff also filed an application before the
Debt   Recovery   Tribunal   (DRT),   Chennai   under   Section   17(1)
of   SARFAESI   Act   on   17.07.2019   against   the   possession
notice   dated   19.06.2019   praying   that   the   assignee   has
acquired   no   rights   under   the   assignment   agreement   dated
30.06.2018 and consequently, assignee ­ respondent No.1 is
not   a   secured   creditor   vis­a­vis   the   appellant   –   plaintiff   and
also   to   declare   possession   notice   dated   19.06.2019   as   null
and void.   The registry  of DRT returned  the  application filed
under Section 17(1) of SARFAESI Act by observing as under:­
“Counsel   for   the   Appellant   has   represented   SA
without   complying   with   the   defects   read   out,
however   with   an   endorsement   that   he   is   a
proper   and   necessary   party   and   that   relief
prayed   for   vide   Para   VII(i)   is   maintainable.   He
has   reiterated   that   relief   has   to   be   sought   in
relation to the notice under challenge. 
May be returned.”
2.5 The   defendants   appeared   before   the   High   Court   in   C.S.(D)
No.18962 of 2019, affidavits and counter affidavits were filed
by   the   parties   to   the   suit.   By   order   dated   30.09.2019,   the
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learned Single Judge of the High Court dismissed application
No.4322   of   2019   and   C.S.(D)   No.18962   of   2019   on   the
ground of jurisdiction observing that the suit is for land and
property   situated   outside   the   jurisdiction   of   the   court   and
therefore   the   suit   is   not   maintainable.   It   was   also   observed
and held that the civil court’s jurisdiction is barred in view of
Section   34   of   the   SARFAESI   Act   and   only   DRT   had
competence to decide the matter. 
3. Feeling   aggrieved   and   dissatisfied   with   the   order   passed   by
the   learned   Single   Judge   of   the   High   Court   dismissing   the
application   as   well   as   the   suit   vide   order   dated   30.09.2019,
appellant herein – original plaintiff filed an appeal before the
Division   Bench   of   the   High   Court   being   O.S.A.   No.292   of
2019.   By   the   impugned   judgment   and   order   the   Division
Bench   of   the   High   Court   has   dismissed   the   said   appeal   in
view of the bar under Section 34 of the SARFAESI Act. 
4. Feeling   aggrieved   and   dissatisfied   with   the   impugned
judgment and order passed by the Division Bench of the High
Court   confirming   the   judgment   and   order   passed   by   the
learned Single Judge rejecting the plaint/dismissing the suit
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as   not   maintainable   in   view   of   the   bar   under   Section   34   of
the   SARFAESI   Act,   original   plaintiff   –   appellant   herein   has
preferred the present appeal. 
5. Dr.   A.M.   Singhvi,   learned   Senior   Advocate   has   appeared   on
behalf of the appellant and Shri Shyam Divan, learned Senior
Advocate   has   appeared   with   Shri   Huzefa   Ahmadi,   learned
Senior Advocate, on behalf of the respondents – defendants. 
5.1 Dr.   Singhvi,   learned   Senior   Advocate   appearing   on   behalf   of
the   plaintiff   ­   appellant   herein   has   vehemently   submitted
that in the facts and circumstances of the case both, learned
Single   Judge   as   well   as   the   Division   Bench   have   materially
erred   in   rejecting   the   plaint   and   dismissing   the   suit   on   the
ground   that   the   suit   is   barred   in   view   of   the   bar   under
Section 34 of SARFAESI Act. 
5.2 It   is   submitted   that   the   High   Court   has   not   properly
appreciated and  considered  the fact  that  in  the  suit plaintiff
had   pleaded   the   fraud   and   it   was   the   case   on   behalf   of   the
plaintiff   –   appellant   herein   that   the   assignment   agreement
dated   30.06.2018   is   fraudulent   and   relief   was   sought   to
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declare   the   assignment   agreement   dated   30.06.2018   as   null
and   void   by   the   plaintiff   –   appellant   herein,   the   said   relief
cannot   be   granted   by   the   DRT   under   the   provisions   of   the
SARFAESI Act and therefore the bar under Section 34 of the
SARFAESI Act shall not be applicable. 
5.3 It is submitted that when the suit is filed alleging ‘fraud’ the
bar   under   Section   34   of   the   SARFAESI   Act   shall   not   be
applicable   and   the   suit   for   the   reliefs   sought   in   the   plaint
shall be maintainable. 
5.4 It is submitted  that  even otherwise considering  the  fact that
subsequently   and   before   the   assignment   agreement,   the
proceedings under the IBC against the corporate debtor with
respect to the loan agreement dated 26.07.2011were initiated
and the resolution plan was approved and entire amount due
and payable under the approved resolution plan was paid to
the   successful   resolution   applicants   and   even   67,23,710
equity shares of the corporate debtor came to be transferred
as per the approved resolution plan and the original loanee –
corporate   debtor   was   discharged   and   NOC   was   issued,
therefore,   assignment   deed   can   be   said   to   be   ‘fraudulent’
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after   the   resolution   plan   under   IBC   and   the   amount   paid
under   the   resolution   plan   and   on   transfer   of   the   shares   as
per   the   approved   resolution   plan   and   the   corporate   debtor
was discharged.  Therefore, there shall not be any dues to be
paid by the appellant herein as guarantor.  
5.5 It   is   submitted   that   as   such   not   only   the   assignment
agreement   dated   30.06.2018   is   null   and   void   and   is
‘fraudulent’ even the assignee cannot be said to be a secured
creditor so far as the  appellant  is concerned. 
5.6 It   is   further   submitted   by   Dr.   Singhvi,   learned   Senior
Advocate   appearing   on   behalf   of   the   appellant   that   there   is
no legally enforceable debt by the plaintiff – appellant herein
for   the   reasons   stated   above   and   therefore   the   initiation   of
the proceedings under the SARFAESI Act are bad in law and
not maintainable. 
5.7 In the alternative, it is prayed by Dr. Singhvi, learned Senior
Advocate   appearing   on   behalf   of   the   appellant   that   in   case
this   Court   is   not   inclined   to   entertain   the   present   appeal,
confirming the judgment and order passed by the High Court
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rejecting   the   plaint/dismissing   the   suit,   in   that   case   the
original   plaintiff   –   appellant   may   be   given   an   opportunity   to
file the proceedings before the DRT under the SARFAESI Act
and all the contentions including that assignment agreement
is   null   and   void;   that   assignee   cannot   be   said   to   be   the
secured   creditor   under   the   assignment   agreement   dated
30.06.2018;   and   that   there   are   no   dues   so   far   as   the
appellant   –   plaintiff   is   concerned   may   be   kept   open.   He   has
stated   that   in   that   case   the   appellant   shall   file   appropriate
proceedings   before   the   DRT   within   a   period   of   two   weeks
from today. 
6. Present appeal is vehemently opposed by Shri Shyam Divan,
learned   Senior   Advocate   and   Shri   Huzefa   Ahmadi,   learned
Senior   Advocate,   appearing   on   behalf   of   the   contesting
defendants – original defendants – respondents herein. 
6.1 It   is   vehemently   submitted   that   the   suit   before   the   learned
Single   Judge   filed   by   the   appellant   is   rightly   held   to   be   not
maintainable   in   view   of   the   bar   under   Section   34   of   the
SARFAESI Act. 
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6.2 It   is   vehemently   submitted   that   as   such   the   suit   is   rightly
held to be not maintainable. It is submitted that initiation of
the   proceedings  by   the  appellant   by   filing   of   the  suit   for   the
reliefs sought in the plaint is nothing but abuse of process of
law and court. 
6.3 It is submitted that the allegations of ‘fraud’ are nothing but
a   clever   drafting   only   with   a   view   to   bring   the   suit
maintainable   before   the   civil   court   despite   the   bar   under
Section 34 of the SARFAESI Act. 
6.4 It   is   vehemently   submitted   by   the   learned   senior   counsel
appearing   on   behalf   of   the   respondents   herein   –   original
defendants   that   except   using   the   word   ‘fraud’/’fraudulent’,
there   are   no   other   particulars   pleaded   in   support   of   the
allegations of fraud. It is submitted that pleading of ‘fraud’ is
made   at   two   places   in   the   plaint   namely   para   31   and   para
46. At both these places, the assertion is that consequent to
the   alleged   discharge   of   the   debt   of   the   corporate   debtor
through   the   proceedings   under   the   IBC,   no   assignment   of
such   debt   in   favour   of   assignee   could   have   been   made   and,
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thus, for this reason, the initiation of proceedings under the
SARFAESI   Act,   is   fraudulent.   It   is   submitted   that   on   the
aforesaid   ground   the   assignment   deed   cannot   be   said   to   be
‘fraudulent’.  
6.5 It  is  further   submitted   that   the   word  ‘fraud’/’fraudulent’  are
used   in   the   plaint   only   with   a   view   to   bring   the   suit
maintainable  before   the   civil   court   and   to   get  out   of   the   bar
under   Section   34   of   the   SARFAESI   Act.   It   is   submitted   that
after   a   month   of   filing   of   the   suit,   the   appellant   filed   an
application under Section 17(1) of SARFAESI ACT before the
DRT, Chennai, assailing the possession notice issued by  the
assignee   under   section   13(4)  of   the   SARFAESI   Act,  however,
in the said application, no allegation of any kind of fraud was
made against any of the respondents. 
6.6 It   is   submitted   that   in   any   case   a   bare   review   of   the
assertions   in   paras   31   and   46,   it   can   be   seen   that   no
material  particulars have  been  pleaded  so as  to  constitute  a
pleading   of   ‘fraud’   as   required   under   Order   VI   Rule   4   of   the
Civil   Procedure   Code,1908   (CPC).   It   is   submitted   that   apart
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from   use   of   adjectives   such   as   ‘fraudulent’   etc.,   qua   the
assignment   deed,   no   actual   material   particulars   have   been
given   with   regard   to   the   ‘fraud’.   It   is   submitted   that   the
pleadings   in   para   31   and   para   46   do   not   satisfy   the   test   of
‘fraud’ under Section 17 of the Indian Contract Act, 1872.
6.7 It   is   vehemently   submitted   by   the   learned   Senior   Advocates
appearing on behalf of the respondents herein that as per the
settled   preposition   of   law   pleading   without   any   material
particulars   would   not   tantamount   to   a   pleading   of   ‘fraud’.
Reliance is placed on the decisions of this Court in the cases
of   Bishundeo Narain & Anr. vs. Seogeni Rai & Jagernath,
(1951)   SCR   548 ;   Ladli   Parshad   Jaiswal   vs.   The   Karnal
Distillery Co. Ltd., Karnal &Ors., (1964) 1 SCR 270 ; Canara
Bank   vs.   P.   Selathal   &   Ors., (2020)   13   SCC   143 ;   H.S
Goutham vs. Rama Murthy & Anr., (2021) 5 SCC 241 ; Ram
Singh   vs.   Gram   Panchayat   Mehal   Kalan   &   Ors., (1986)   4
SCC   364 ;   and   Union   of   India   &   Anr.   vs.   K.C   Sharma   &
Company & Ors., (2020) 15 SCC 209 . 
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6.8 Making   the   above   submissions   and   relying   upon   the
decisions   of   this   Court   in   aforesaid   cases,   it   is   prayed   to
dismiss the present appeal. 
7. We   have   heard   the   learned   senior   counsel   appearing   on
behalf of the respective parties at length. 
7.1 It is the case on behalf of the plaintiff – appellant herein that
in   the   plaint   there   are   allegations   of   the   ‘fraud’   with   respect
to the assignment agreement dated 30.06.2018 and it is the
case   on   behalf   of   the   plaintiff   –   appellant   herein   that
assignment agreement is ‘fraudulent’ in as much as after the
full   payment   as   per   the   approved   resolution   plan   under   the
IBC   and   the   original   corporate   debtor   is   discharged,   there
shall not be any debt by the plaintiff – appellant herein as a
guarantor   and   therefore   Assignment   deed   is   fraudulent.
Therefore, it is the case on behalf of the plaintiff – appellant
herein   that   the   suit   in   which   there   are   allegations   of   ‘fraud’
with   respect   to   the   assignment   deed   shall   be   maintainable
and  the  bar   under  Section  34  of  SARFAESI   Act  shall  not   be
applicable. 
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7.2 However,   it   is   required   to   be   noted   that   except   the   words
used   ‘fraud’/’fraudulent’   there   are   no   specific   particulars
pleaded with respect to the ‘fraud’. It appears that by a clever
drafting and using the words ‘fraud’/’fraudulent’ without any
specific  particulars  with  respect  to   the  ‘fraud’,  the  plaintiff  –
appellant  herein  intends  to   get  out   of  the  bar  under  Section
34   of   the   SARFAESI   Act   and   wants   the   suit   to   be
maintainable.   As   per   the   settled   preposition   of   law   mere
mentioning   and   using   the   word   ‘fraud’/’fraudulent’   is   not
sufficient   to   satisfy   the   test   of   ‘fraud’.   As   per   the   settled
preposition   of   law   such   a   pleading/using   the   word   ‘fraud’/
‘fraudulent’   without   any   material   particulars   would   not
tantamount   to   pleading   of   ‘fraud’.   In   case   of   Bishundeo
Narain and Anr. (Supra)   in para 28, it is observed and held
as under:­
“....   Now   if   there   is   one   rule   which   is   better
established   than   any   other,   it   is   that   in   cases   of
fraud,   undue   influence   and   coercion,   the   parties
pleading  it must  set  forth full particulars and the
case   can   only   be   decided   on   the   particulars   as
laid.   There   can   be   no   departure   from   them   in
evidence. General allegations are insufficient even
to   amount   to   an   averment   of   fraud   of   which   any
court   ought   to   take   notice   however   strong   the
language   in   which   they   are   couched   may   be,   and
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the same applies to undue influence and coercion.
See Order 6, Rule 4, Civil Procedure Code.”
7.3 Similar view has been expressed in the case of  Ladli Parshad
Jaiswal   (Supra)   and   after   considering   the   decision   of   the
Privy   Council   in   Bharat   Dharma   Syndicate   vs.   Harish
Chandra   (64   IA   146) ,   it   is   held   that   a   litigant   who   prefers
allegation of fraud or  other  improper  conduct must place on
record  precise  and   specific details  of  these  charges.  Even   as
per  Order VI  Rule 4 in all cases in which the party  pleading
relies on any  misrepresentation, fraud, breach of trust, wilful
default, or undue influence, particulars shall be stated in the
pleading.   Similarly   in   the   case   of   K.C   Sharma   &   Company
(Supra)   it   is   held   that   ‘fraud’   has   to   be   pleaded   with
necessary   particulars.   In   the   case   of   Ram   Singh   and   Ors.
(Supra),   it is observed and held by this Court that when the
suit   is   barred   by   any   law,   the   plaintiff   cannot   be   allowed   to
circumvent that provision by means of clever drafting so as to
avoid   mention   of   those   circumstances   by   which   the   suit   is
barred by law of limitation. 
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7.4 In   the   case   of   T.   Arivandandam   vs.   T.V.   Satyapal   &   Anr.
(1977)   4   SCC   467 ,   it   is   observed   and   held   in   para   5   as
under:­
“5.   We   have   not   the   slightest   hesitation   in
condemning   the   petitioner   for   the   gross   abuse   of
the   process   of   the   court   repeatedly   and
unrepentently   resorted   to.   From   the   statement   of
the facts found in the judgment of the High Court,
it   is   perfectly   plain   that   the   suit   now   pending
before   the   First   Munsif's   Court,   Bangalore,   is   a
flagrant   misuse   of   the   mercies   of   the   law   in
receiving   plaints.   The   learned   Munsif   must
remember that if on a meaningful — not formal —
reading   of   the   plaint   it   is   manifestly   vexatious,
and   meritless,   in   the   sense   of   not   disclosing   a
clear   right   to   sue,   he   should   exercise   his   power
under   Order   7,   Rule   11   CPC   taking   care   to   see
that   the   ground   mentioned   therein   is   fulfilled.
And, if clever drafting has created the illusion of a
cause   of   action,   nip   it   in   the   bud   at   the   first
hearing by examining the party searchingly under
Order 10, CPC. An activist Judge is the answer to
irresponsible law suits.”  
7.5 A similar view has been expressed by this court in the recent
decision in the case of  P. Selathal & Ors.  (Supra).
8. Having   considered   the   pleadings   and   averments   in   the   suit
more particularly the use of word ‘fraud’ even considering the
case on behalf of the plaintiff, we find that the allegations of
‘fraud’ are made without any particulars and only with a view
to   get   out   of   the   bar   under   Section   34   of   the  SARFAESI   Act
and   by   such   a   clever   drafting   the   plaintiff   intends   to   bring
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the suit maintainable despite the bar under Section 34 of the
SARFAESI   Act,   which   is   not   permissible   at   all   and   which
cannot be approved. Even otherwise it is required to be noted
that it is the case on behalf of the plaintiff – appellant herein
that   in   view   of   the   approved   resolution   plan   under   IBC   and
thereafter   the   original   corporate   debtor   being   discharged
there shall not be any debt so far as the plaintiff – appellant
herein   is   concerned   and   therefore   the   assignment   deed   can
be said to be ‘fraudulent’.  The aforesaid cannot be accepted.
By   that   itself   the   assignment   deed   cannot   be   said   to   be
‘fraudulent’.   In   any   case,   whether   there   shall   be   legally
enforceable   debt   so   far   as   the   plaintiff   –   appellant   herein   is
concerned   even   after   the   approved   resolution   plan   against
the   corporate   debtor   still   there   shall   be   the   liability   of   the
plaintiff   and/or   the   assignee   can   be   said   to   be   secured
creditor   and/or   whether   any   amount   is   due   and   payable   by
the plaintiff, are all questions which are required to be dealt
with and considered by the DRT in the proceedings initiated
under   the   SARFAESI   Act.   It   is   required   to   be   noted   that   as
such   in   the   present   case   the   assignee   has   already   initiated
the   proceedings   under   Section   13   which   can   be   challenged
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by the plaintiff – appellant herein by way of application under
Section 17 of the SARFAESI Act before the DRT on whatever
the legally available defences which may be available to it. We
are   of   the   firm   opinion   that   the   suit   filed   by   the   plaintiff   –
appellant   herein   was   absolutely   not   maintainable   in   view   of
the   bar   contained   under   Section   34   of   the   SARFAESI   Act.
Therefore, as such the courts below have not committed any
error in rejecting the plaint/dismissing the suit in view of the
bar under Section 34 of the SARFAESI Act. 
9. In   view   of   the   above   and   for   the   reasons   stated   above,   the
present   appeal   fails   and   the   same   deserves   to   be   dismissed
and is accordingly dismissed. However, it will be open for the
appellant   herein   to   initiate   appropriate   proceedings   before
the   DRT   under   Section   17   of   the   SARFAESI   Act   against   the
initiation   of   the   proceedings   by   the   assignee   –   respondent
No.1 herein under Section 13 of the SARFAESI Act inter alia
on   the   ground:­   (1)   that   the   assignee   cannot   be   said   to   be
secured creditor so far as the appellant is concerned; (2) that
there   is   no   amount   due   and   payable   by   the   plaintiff   –
appellant   herein   on   the   ground   that   in   view   of   the
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proceedings under IBC  against the corporate debtor and the
corporate   debtor   being   discharged   after   the   approved
resolution   plan,   there   shall   not   be   any   enforceable   debt
against the appellant. If such an application is filed within a
period   of   two   weeks   from   today   the   same   be   considered   in
accordance   with   law   and   on   merits   after   complying   with   all
other   requirements   which   may   be   required   while   filing   the
application under Section 17 of the SARFAESI Act. However,
it   is   made   clear   that   we   have   not   expressed   anything   on
merits in favour of either of the parties on the aforesaid two
issues.   Present   appeal   is   accordingly   dismissed,   however,   in
the   facts   and   circumstances   of   the   case   there   shall   be   no
order as to costs
…………………………………J.
 (M. R. SHAH)
…………………………………J.
(SANJIV KHANNA)
New Delhi, 
November 26, 2021
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