IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
Prashant Kumar Mishra, D.V.S.S. Somayajulu, JJ.
Amara Venkata Siva Kumar, S/o. late Amara Sathyanarayana Murthy – Appellant
Versus
Amara Venkateswarlu, S/o. late Amara Sathyanarayana Murthy – Respondent
Appeal Suit No.212 of 2022
Decided On : 09-02-2023
Code of Civil Procedure, 1908 - Sections 96 and 9 - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Sections 34, (4) of 13 ,9 and 17 - Deliver possession - Allot half share to the plaintiff - Suit seeking partition of the plaint schedule property - Debts Recovery Tribunal - Plaintiff to explain as to how civil court has got jurisdiction to entertain the plaint as bank has already initiated proceedings under the SARFAESI Act with regard to plaint schedule property - It was observed in docket certified copy of the sale deed stands in the name of the 1st defendant - Held, Civil court jurisdiction is completely barred, so far as "measures" taken by a secured creditor under subsection (4) of Section 13 of Securitisation Act, against which an aggrieved person has a right of appeal before the DRT or the Appellate Tribunal, to determine as to whether there has been any illegality in "measures" taken. The Bank, in instant case, has proceeded only against secured assets of borrowers on which no rights of Respondents 6 to 8 (sic Respondents 1 to 5) have been crystallised, before creating security interest in respect of secured assets - Plaintiff claims interest in the property in respect of proceedings under the SARFAESI Act have already been initiated - Plaintiff is not borrower or guarantor, he being interested in the property which is the subject matter of the proceedings under SARFAESI Act - appeal dismissed
JUDGMENT :
Prashant Kumar Mishra, J.
This appeal under Section 96 of the Code of Civil Procedure, 1908, filed by the plaintiff, assails the legality and validity of the docket order dated 12.04.2022 passed by the learned Principal Senior Civil Judge, Guntur in an unnumbered plaint in C.F.R.No.5448 of 2021, rejecting the plaint on the ground that in the obtaining factual matrix, the civil court has no jurisdiction to entertain the suit in view of the provision contained in Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, “SARFAESI Act”).
2. The plaintiff has preferred the suit seeking partition of the plaint schedule property by dividing it into two equal shares between the plaintiff and the 1st defendant; allot half share to the plaintiff and deliver possession to him by metes and bounds.
3. When the plaint was presented before the trial court, an objection was raised by the office calling upon the plaintiff to explain as to how the civil court has got jurisdiction to entertain the plaint as the bank has already initiated proceedings under the SARFAESI Act with regard to the plaint schedule property. Further objection was raised that when the plaint schedule property stands in the name of the 1st defendant, how can the plaintiff seek relief of partition. It was observed in the docket order dated 07.01.2022 that certified copy of the sale deed dated 26.12.2022 stands in the name of the 1st defendant, it is not showing the names of the family members and there is no recital in it that the family consists of parties to the suit. It was also noticed that the 1st defendant stood as guarantor for a third party and placed the property as surety with a bank, which had already initiated proceedings for taking possession of the property under the SARFAESI Act; in that view of the matter, the plaintiff is liable to explain as to how the civil court has got jurisdiction to entertain the plaint.
4. By the impugned order, the learned Principal Senior Civil Judge, Guntur, has held that in view of the provision under Section 34 of the SARFAESI Act, civil court does not have jurisdiction either to entertain the suit or to grant orders restraining the bank from taking action in pursuance of the power conferred under the said Act for recovery of debts; if the plaintiff is aggrieved of the steps taken under Section 13 of the SARFAESI Act, there is remedy of appeal under Section 17 of the said Act, to the Debts Recovery Tribunal having jurisdiction in the matter and without availing the remedy of appeal and bypassing the same, plaintiff has no right to approach the civil court.
5. It is submitted by the learned counsel for the appellant/plaintiff that the suit is essentially for partition of the plaint schedule property and the bank is not a party to the suit; therefore, in between the plaintiff and the defendants, provisions of the SARFAESI Act would not operate or apply in the matter relating to partition of family property. He would further submit that the trial court has wrongly interpreted the provision contained in Section 34 of the SARFAESI Act.
6. To consider the submissions made by the learned counsel for the appellant/plaintiff at Bar, it is necessary to refer to the plaint averments. Paragraph III (b) of the plaint clearly states that the property was purchased in the name of 1st the defendant under registered sale deed dated 26.12.2002 and all the bills like electricity service connection, house property tax etc., were obtained in the name of the 1st defendant.
7. At paragraph III (d), plaintiff has specifically pleaded that a notice dated 29.10.2021 was issued by Pridivi Asset Reconstruction and Securitization Company Limited on behalf of Karur Vysya Bank to the 1st defendant to the address of the property, which was received by the plaintiff, who was shocked to know that the said property was given as security by the 1st defendant as guarantor for the loan take
Jagdish Singh v. Heeralal and others
United Bank of India v. Satyawati Tondon and others
Mardia Chemicals Ltd. and others v. Union of India and others
Civil Courts retain jurisdiction over partition disputes despite the SARFAESI Act barring jurisdiction in matters concerning measures taken by secured creditors.
Debt recovery proceeding – No Civil Court can exercise jurisdiction to entertain any suit or proceeding in respect of any action taken in pursuance of any power conferred by SARFAESI Act.
Point of Law : SARFAESI Act- Recovery of Debt – Jurisdiction of Civil Court – DRT has exclusive jurisdiction – jurisdiction of the Civil Court to decide all the matters of civil nature, excluding tho....
Application against measures to recover secured debts – Jurisdiction - Jurisdiction of Civil Court is not ousted. However, Civil Courts have to be extremely cautious while granting any interim order ....
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