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IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
K.Manmadha Rao, J.
Venkata Pavan Stone Crusher - Appellant
Versus
Asst.General Manager And Authorized Officer - Respondent
Civil Revision Petition No. 2492 of 2016
Decided On : 31-10-2023
SARFAESI Act - Addition of Parties - Sec. 13, Sec. 34, Sec. 35 - The court dismissed the petition seeking to add respondents No.4 to 8 as defendants to the suit proceedings under Order 1 Rule 10 CPC, citing the bar under Sec. 34 of the SARFAESI Act, 2002. The court held that the presence of the proposed parties was not necessary for adjudication of the suit.
Fact of the Case:
The petitioner filed a suit seeking declaration that the actions of the respondents were void and for permanent injunction. The respondents initiated proceedings under the SARFAESI Act, leading to a dispute over the sale of the property. The trial court dismissed the petition, citing the petitioner's failure to comply with previous court orders and the lack of necessity for the proposed parties in the adjudication of the suit.
Finding of the Court:
The court found that the petitioner's approach to the High Court and the Debt Recovery Tribunal, and the subsequent pursuit of the suit, did not warrant the addition of the proposed parties. The court held that the relief sought by the petitioner could be decided without the presence of the proposed parties.
Issues: The main issue was whether the addition of respondents No.4 to 8 as defendants was necessary for the adjudication of the suit, considering the proceedings under the SARFAESI Act.
Ratio Decidendi: The court relied on the provisions of Sec. 34 of the SARFAESI Act, which bars the jurisdiction of civil courts to entertain suits or proceedings in respect of matters determined by the Debt Recovery Tribunal or the Appellate Tribunal. The court also considered the petitioner's pursuit of the suit and the relief sought, concluding that the proposed parties were not necessary for the adjudication of the suit.
Final Decision: The Civil Revision Petition was dismissed, and no costs were awarded. The court found no merit in the petition and held that the trial court's dismissal of the application was lawful.
JUDGMENT
1. This Civil Revision Petition is filed by the petitioner against the Order, dtd. 18/1/2016 passed in I.A.No.1613 of 2015 in O.S No.28 of 2015 on the file of Court of I Additional District Judge, Rajahmundry (for short "the trial Court").
2. The impugned application in I.A No.1613 of 2015 was filed by the petitioner/plaintiff under Order 1 Rule 10 CPC seeking to add respondents No.4 to 8 as defendants No.4 to 8 to the suit proceedings and to permit the petitioner to make necessary amendments.
3. Brief facts of the case are that the petitioner/plaintiff filed the suit for declaration that the action of the respondents 1 to 3 vide notice dtd. 5/12/2014 issued by 3rd respondent is void as the notice is arbitrary, contrary to law, violation of law and principles of natural justice and to declare that the respondents shall not have any right in any nature, in any manner in bringing the petition schedule property for sale fraudulently by suppressing the real facts and also for permanent injunction restraining them not to effect sale of petition schedule property as per the advertisement in Eenadu and Hindu Newspapers dtd. 20/1/2015 and other ancillary reliefs. Consequently, she filed I.A.No.207 of 2015 for temporary injunction in which the court ordered urgent notice, as such, the petitioner preferred the revision before the Hon'ble High Court of Judicature for the State of Telangana and for the State of Andhra Pradesh and the High Court ordered not to confirm the sale for specific period and subsequently an order was passed directing her to deposit reasonable amount so as to grant interim orders and due to critical health condition she is unable to deposit the same. Subsequently she came to know that the sale is confirmed for lesser price than market value. Accordingly, she filed a case against the respondents before Debt Recovery Tribunal, Visakhapatnam, as a precautionary measure, which is pending. It is further stated that the respondents No.1 to 8 colluded together and they brought the same for lesser value though the property is more than value of two crores. The petitioner got every right to succeed in the suit. The respondents No.1 to 3 moved their steps in executing a registered sale deed in favour of 8th respondent. then immediately, the petitioner filed an application for grant of temporary injunction against respondents restraining them not to execute any registered document in favour of 8th respondent or anybody with respect to petition schedule property pending disposal of I.A.No.1599/2015. However, the respondents No. 1 and 8 conspired together to create loss to the petitioner, as such, the 1st respondent got registered the schedule property in favour of 8th respondent before 4th respondent for Rs.80, 60, 000.00 by paying stamp duty for a sum of Rs.2, 14, 84, 000.00. It shows the attitude of the respondents 1 and 8. They managed the things in their favour inspite of the knowledge of filing I.A.No. 1599/2015. Thereafter, the 1st respondent issued a sale certificate in favour of 8th respondent on 12/5/2015 for Rs.80, 60, 000.00. The value of the petition schedule property as per the 4th respondent is Rs.2, 14, 84, 000.00. It all shows that they colluded with each other. The 8th respondent is influencing all the officials and is trying to create collusive registered sale deeds to complicate the proceedings. If the 8th respondent is allowed to execute further registered sale deeds there is every possibility for further damage and injury will be caused to them which cannot be compensated in terms of money. The 4th respondent is proper and necessary party, in view of brought into existence of registered document on 9/12/2015 by the 1st respondent in favour of 8th respondent in a hurried manner. The 5th respondent is also necessary party. The petitioner already obtained electric service connection vide No.1993 as she is paying necessary charges. She invested Rs.10, 00, 000.00 for getting electric connection. The res
The main legal point established in the judgment is that the provisions of the SARFAESI Act, particularly Sec. 34, bar the jurisdiction of civil courts in matters determined by the Debt Recovery Trib....
Civil courts' jurisdiction is barred under Section 34 of the SARFAESI Act in matters that can be determined by Debt Recovery Tribunals.
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 ....
The bar under Section 34 of the SARFAESI Act cannot be extended to claims involving collusion and fraud, which are better addressed before the Civil Court.
Rejection of plaint – Jurisdiction of Civil Court in respect of matters which do not fall within jurisdiction of DRT or DRAT under Sections 17 and 18 of SARFAESI Act is not ousted or barred under pro....
Civil courts lack jurisdiction under Section 34 of the SARFAESI Act for matters within the DRT's purview, and vague fraud allegations do not suffice to maintain a civil suit.
Civil Courts have jurisdiction in SARFAESI Act matters only when the secured creditor has not initiated actions under the Act. Limitation laws apply strictly to such actions.
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