Punjab & Haryana HC seeks explanation from District Court Judge for appearing to have shown undue favour to a plaintiff; transfers case

The Punjab and Haryana High Court recently sought an explanation from a District Judge for supposedly showing undue favour to the plaintiff in a suit..Justice Arvind Singh Sangwan, who heard the matter, stated:.“The District Judge being the administrative head of the District, is required to keep a check on the subordinate judiciary...the manner in which the orders in the civil suit are passed show that an effort is made to delay the proceedings to enable the plaintiffs to gain time”..The District Judge has been ordered to file a detailed explanation for the supposed favours, within 30 days.The Court added, "It is not understandable as to why the District Judge/Appellate Court is adjourning the appeal despite the fact that the suit stands dismissed for non-prosecution on 29.11.2019 and the plaintiffs on both counts are seeking adjournments and both the Courts, on face of record are showing undue favour to the plaintiff".During the course of hearing, Justice Sangwan took note that case proceedings were also being delayed on account the time taken to exchange case records between the Trial Court and the District Court. The case records had not been exchanged despite the lapse of months and despite the fact that both Courts were housed in the same building. .The High Court has now directed the transfer of the case to an Additional District Judge..The case arose out of a suit filed by SEL Manufacturing Company Limited and Neeraj Saluja praying for the restructuring of a loan availed from SBI. Additionally, they also filed an interlocutory application seeking to restrain SBI from taking coercive steps against them for the alleged non-payment of the loan. .When the Civil Court rejected this prayer, the plaintiffs approached the Nawanshahar District Judge who granted the plaintiffs relief in ad interim proceedings. .When the Bank appeared to argue the matter, the plaintiffs failed to appear. As a result of the plaintiffs’ non-appearance, the suit was dismissed for non-prosecution. Despite this, the District Court, on appeal, extended the temporary injunction..Aggrieved, the Bank challenged the District Judge's order in a petition filed under Article 227 of the Constitution before teh High Court..In proceedings before the High Court, SBI informed the Court that recovery proceedings had already been initiated under the Insolvency and Bankruptcy Code and that the plaintiff had already unsuccessfully assailed the same before the National Company Law Tribunal, the National Company Law Appellate Tribunal, the High Court and the Supreme Court..The High Court found that the Bank's appeal deserved to be allowed since there was "total non-application of judicial mind" on the part of the appellate court (District Judge) in continuing the injunction order even after the original suit was dismissed for non-prosecution..The High Court observed that the order granting such injunction did not spell out reasons for grant of the same, while overturning the lower court’s order. The High Court added that the District Judge's order was passed without heed to the fact that recovery proceedings had already been initiated..In continuing the ad interim order, the District Court acted in violation of all settled principles, the Court stated..The Judge emphasised that detailed reasons should be provided for granting an injunction in an appeal when the trial court had refused to grant the same. .In this regard, the order reads,"It is well-settled principle of law that if an injunction application filed by the plaintiffs is dismissed by the Civil Court, the Appellate Court unless by recording detailed reason of urgency may grant interim injunction for a short period or in ordinary course, after giving a short notice to the contesting defendants may pass an interim order. Both these principles of law have been ignored by the District Judge.".Holding that that the continuation of the interim order was not in public interest, the Court allowed the Bank's appeal..Read the Order: