Revisional jurisdiction can only be invoked when allowing the application will finally terminate the proceeding: Rajasthan HC

Credits: The Wire

By - Hiranmayi Gowravajhula*

The Rajasthan High Court bench at Jaipur in a review petition regarding a loan fraud involving 8 banks held that the court's revisional authority can only be invoked when granting the application will result in the proceeding’s definitive end.

The revision petition was filed against the order passed by the Commercial Court wherein the application filed by IDFC First Bank under Order VII, Rule 11 (rejection of suit barred by limitation) read with Section 151 Code of Civil Procedure (Statutory recognition of inherent powers of courts) and Sections 8 and 5 (extent of judicial intervention) of the Arbitration and Conciliation Act, 1996 was dismissed on the ground that the commercial court had no jurisdiction to decide the case and is barred by law. 

This case initially arose when Dr. Aruna Bamniya secured a loan from 7 banks worth Rs. 98,34,413/- and the loan amount credited to her account was fraudulently transferred to Kishan Hospital and Research Centre. Consequently, Dr. Aruna Bamniya agreed to invoke the Arbitration clause to resolve the matter. However, IDFC First Bank filed the above-mentioned application to recover the personal loan amount from her worth Rs. 10,42,000/-. 

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“The question which arises for consideration before this Court is whether the impugned order may be categorized an order passed under Section 37(1)(a) of the Arbitration and Conciliation Act (appealable orders) or it is an order passed under Order VII, Rule 11 Code of Civil Procedure. It has also to be looked into whether allowing the application under Order VII, Rule 11 Code Of Civil Procedure will terminate the proceedings of the suit.” said the court considering the peculiarity of the facts of the case. 

The High Court further stated that the revisional authority can be exercised only when granting the application will result in the definitive termination of the process. “…allowing the application of one of the defendants filed under Order VII, Rule 11 Code Of Civil Procedure will not terminate the suit filed by the plaintiff against all the seven defendant – banks.” the court said. Considering that there was an arbitrator already appointed, the court dismissed the application on the ground that it is barred by law. 

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With regard to Section 115 of the Code of Civil Procedure (revisional jurisdiction of high courts), the court stated that there shall be no revocation of the order of the commercial court. “…the impugned order is certainly an interlocutory order passed by the Commercial Court, against which, there is bar on the Court to entertain any civil revision.” the bench held.

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*Hiranmayi Gowravajhula is a 1st year student pursuing B.B.A.LL.B from Symbiosis Law School, Hyderabad.