'Abuse Of Process, Frivolous Litigation' : Supreme Court Affirms Cost Of Rs 5 Lakhs Imposed On Litigant

Quoting its earlier observations about how "the Indian judicial system is grossly afflicted with frivolous litigation" and how "a new creed of litigants has cropped up which does not have any respect for truth", the Supreme Court has said that the Bombay High Court's imposition of Rs. 5 lakhs cost on a lady aged 78 was "absolutely justified" in view of her "consistent effort to abuse the process of law as well as the process of Court".Strongly criticising the filing of numerous proceedings before the tiers of forums upto the Supreme Court itself and the deliberate non-disclosure of absolutely relevant facts, the Apex Court went on to record that it was initially persuaded to initiate contempt proceedings against the Petitioner, but it is not doing so purely due to the age of the Petitioner as she is a lady of 78 years of age.The bench of Justices C.T. Ravikumar and Sudhanshu Dhulia was hearing the SLP against the June 13 decision of the Bombay High Court dismissing the petitioner's appeal with a cost of Rs. 5 lakhs. Through the appeal before the High Court, she had challenged the May order of the Trial Court by which her 2022 suit for a stay of the auction under the SARFAESI was dismissed as the defendants' application under Order VII Rule 11 of the C. P. C. for rejection of the plaint was allowed.The facts, as recorded by the top court are, that petitioner had availed credit facility from the Oriental Bank of Commerce, Mumbai and had outstanding dues running approximately to the tune of Rs. 277,00,00,000/-. The Bank ultimately moved an application before Debts Recovery Tribunal for recovery of its dues from the present petitioner and others. This original application was allowed by the DRT, Mumbai on 24.07.2006 and consequently recovery certificate was issued and the borrowers and guarantors were directed to repay the outstanding dues. The order dated 24.07.2006 was challenged before the Debts Recovery Appellate Tribunal and so were several other orders and measures which were subsequently taken by the Bank for the recovery of the amount under the provisions of the SARFAESI Act. On 30.09.2013, the Bank had assigned the debts concerning the present dispute as well as the underlying securities in favour of M/s. Phoenix A.R.C. Pvt. Ltd., the secured creditor. Thereafter, a settlement took place between the present petitioner and M/s. Phoenix A.R.C. Pvt. Ltd. and a settlement deed was signed between the parties on 01.10.2013. The present petitioner was a signatory to the said settlement wherein the petitioner undertook to repay M/s. Phoenix A.R.C. Pvt. Ltd. a sum of Rs. 27,31,04,000/- on or before 30.09.2014. The petitioner also agreed to handover the possession of the secured asset to M/s. Phoenix A.R.C. Pvt. Ltd. The petitioner also gave an undertaking not to obstruct execution in case of the recovery certificate which may be issued in case of default of consent terms. All the same, the petitioner failed to repay the amount or even handover the possession of the secured asset to M/s. Phoenix A.R.C. Pvt. Ltd. Not only this, in clear breach of the consent terms and the settlement dated 01.10.2013, attempts were being made by the petitioner in obstructing the execution of the recovery certificate by filing numerous proceedings before the authorities under the SARFAESI Act as well as before the Bombay High Court and the Supreme Court of India. The Supreme Court noted the long list of cases filed by the petitioner before the DRT and the District Court as well as the Bombay High Court and the top court.The bench of Justices Ravikumar and Dhulia remarked, "We have already narrated the long list of dates and the number of cases which have been filed by the Petitioner. We have also been apprised by Mr. Kavin Gulati, learned senior counsel, appearing for Respondent Nos. 1 and 2 herein and Mr. Huzefa Ahmadi, learned senior counsel appearing for the Respondent No.4 herein that the total number of SLPs which have been filed before this Court by the Petitioner are as follows...These petitions were either dismissed or withdrawn. In some of these petitions the plea of fraud and collusion at the hands of Respondent Nos. 1, 2 and 4 with the secured creditor was raised and then the petitions were consequently withdrawn. It was again an unconditional withdrawal. Therefore, the Petitioner cannot be permitted to raise the same plea again by filing the present petition. All the same, the same plea has been taken now in the present case as well. What is most regrettable is that the Petitioner has not mentioned the filing of most of the SLPs in the present SLP before this Court...""Regretfully, as we have already observed, there is no reference made by the Petitioner of the earlier SLPs filed by the Petitioner, which as we have noted either stood dismissed or were withdrawn by the Petitioner. We, therefore, have no hesitation to say the petitioner has not approached this Court with clean hands. To the contrary there has been a...

'Abuse Of Process, Frivolous Litigation' : Supreme Court Affirms Cost Of Rs 5 Lakhs Imposed On Litigant

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'Abuse Of Process, Frivolous Litigation' : Supreme Court Affirms Cost Of Rs 5 Lakhs Imposed On Litigant

Mehal Jain

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