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2014 Supreme(AP) 1360

IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
K.C. Banu & Anis, JJ.
Axis Bank – Appellants
Vs.
Kothapeta Settibalija Ramamandiram Committee and Others – Respondents
Civil Miscellaneous Appeal Nos. 579 & 713 of 2014
Decided On : 11.12.2014

Advocates:
Advocate Appeared:
For Appellant/Petitioner/Plaintiff: Chitta, Counsel.
For Respondents/Defendant: Dhanamjaya, Counsel.

Headnote:

Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Sections 13(2) and (4) - Civil Procedure Code, 1908 - Order XLIII Rule 1 - Debts Recovery Tribunal - Working Capital - Plaint schedule property - Original Suit - Schedule property in favor - Seeking interim injunction restraining appellants in both Appeals/respondent from conducting auction of plaint schedule property during pendency of suit was allowed - Civil Miscellaneous Appeals are directed against order and decree - Judge for trial of cases Scheduled Castes and Schedule Tribes - Petition are that petitioner Society filed for declaration of title to plaint schedule property and for grant of perpetual injunction on ground that Society acquired plaint schedule property registered Will executed by and also settlement deed – Held, Hon’ble Apex Court clearly held that civil Court is completely barred so far as measure taken by a secured creditor of Securitization Act against which an aggrieved person has a right of appeal before Debts Recovery Tribunal or Appellate Tribunal to determine as to whether there has been any illegality in measures taken - In present case appellant Banks had already issued notices of SARFAESI Act - If contention of first respondent/petitioner is taken into consideration regarding fraud played and whether property mortgaged is an agricultural land or not has to be decided by Debts Recovery Tribunal but not by civil Court - A civil Court is not competent to decide provisions of SARFAESI Act - Thus we are of view that civil Court has erroneously adjudicated matter without having jurisdiction and therefore impugned order is liable to be set aside - In view of above discussion Civil Miscellaneous Appeals are allowed setting aside order and decree - Appeal allowed (Para 23)

JUDGMENT

Anis, J.

1. These Civil Miscellaneous Appeals under Order XLIII Rule 1 of the Code of Civil Procedure, 1908 (for short, 'C.P.C.') are directed against the order and decree, dated 01.04.2014, in I.A. No. 601 of 2013 in O.S. No. 155 of 2013, on the file of the Special Judge for trial of cases under Scheduled Castes and Schedule Tribes (POA) Act-cum-X Additional District & Sessions Judge, East Godavari, at Rajahmundry (for short 'the trial Court'), whereunder and whereby the petition filed by the first respondent/petitioner under Order XXXIX Rules 1 and 2, seeking interim injunction restraining the appellants in both Appeals/respondent Nos. 1 and 2 from conducting auction of plaint schedule property, during pendency of the suit was allowed. The appellants in both the Appeals are respondent No. 2 and respondent No. 1 respectively; respondent No. 1 and respondent No. 3 in both the Appeals are the petitioner and respondent No. 3 respectively, in I.A. No. 601 of 2013 in O.S. No. 155 of 2013.

2. For the sake of convenience, the parties hereinafter will be referred to as they are arrayed in the Interlocutory Application.

3. The brief averments made in the petition are that the petitioner Society filed O.S. No. 155 of 2013 for declaration of title to plaint schedule property and for grant of perpetual injunction on the ground that the Society acquired plaint schedule property under a registered Will dated 30.07.1951 executed by Pilli Peda Tatayya and also settlement deed dated 26.11.1964 executed by his wife. But, defendant Nos. 4 to 7 in the Original Suit under a Will dated 14.06.1969 brought into existence the sale deeds in favour of respondent No. 3, though Pilli Bapanamma, relinquished her life interest in the schedule property in favour of petitioner Society on 26.11.1964 itself and she has no title to bequeath the property to defendant Nos. 4 to 7. The Will dated 14.09.1969 executed by Pilli Bapanamma in favour of defendant Nos. 4 to 7 is a forged and fabricated document. The then Managing Trustee of the petitioner Society filed O.P. No. 54 of 2011, claiming title to the plaint schedule property and if Pilli Bapanamma had executed such a Will, he would not have filed the O.P. Respondent Nos. 1 and 2 granted loan to third respondent on the forged and fabricated documents and they are not entitled to invoke the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (for short 'the SARFAESI Act'). The plaint schedule property is an agricultural land and the SARFAESI Act cannot be invoked against it and therefore, prayed the Court to grant interim injunction in his favour.

4. Defendant Nos. 4 to 7 in the Original Suit are not the parties to the Interlocutory Application.

5. The first respondent, who is the appellant in C.M.A. No. 713 of 2014 filed the counter denying the material averments and specifically stated that the first respondent Bank sanctioned financial assistance of Rs. 5.00 Crores to respondent No. 3, when he approached for the purpose of Working Capital, upon furnishing guarantee agreements and upon deposit of registered sale deed dated 08.11.2014 (sic), it created an equitable mortgage on 09.10.2011. The third respondent also produced copies of land title deed book and pattadar passbook in favour of his vendors (defendants 4 to 7) in the suit. Plaint schedule property is not an agricultural land. When third respondent committed default in payment of loan, provisions of the SARFAESI Act were invoked by issuance of Notice under Sections 13(2) and (4) of the SARFAESI Act, its publication in local news papers and also by issuance of possession notice. When no objection was raised by anybody, possession was symbolically obtained and the property was brought for sale. Defendants 4 to 7 are the daughters of Pilli Suryanarayana, who is the son of Pilli Thatayya and Pilli Bapanamma, and the present President of the petitioner Society is Pilli Subrahmanyam, who is the brother of P



































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