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U. DURGA PRASAD RAO, KIRANMAYEE MANDAVA
K. Jayamma – Appellant
Versus
Syndicate Bank – Respondent
JUDGMENT :
(U. Durga Prasad Rao, J.)
Challenge in this appeal is to the order dated 03.11.2022 in I.A.No.771/2018 in O.S.No.75/2017 passed by the VI Additional District Judge, Kadapa allowing the petition filed by the respondents/defendants No.1 & 2 under Order 7 Rule 11 (d) of C.P.C. r/w Sec. 34 of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘SARFAESI Act’) and rejecting the plaint.
2. The factual matrix of the case is thus:
(a) Plaintiffs filed O.S.No.75/2017 on the file of Principal District Judge, Kadapa against the Syndicate Bank and some others for declaring the plaintiff’s title over the plaint schedule site of Ac.0- 22½ cents out of Ac.0-90 cents in Kadapa Town and permanent injunction restraining the defendants from interfering with plaintiff’s peaceful possession thereof and also for declaration that the sale deed No.525/2006, dated 20.01.2006 executed by D4 in favour of D3 registered before S.R.O., Kadapa is null and void and not binding on the plaintiffs.
(b) Plaintiff’s case is that, the 1st plaintiff is the wife of late Karumuri Munaiah, and plaintiffs 2 to 4 are their children. The said Karumuri Munaia
Civil courts lack jurisdiction in matters under the SARFAESI Act, as grievances must be addressed to the DRT, per Section 34.
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 ....
Civil courts' jurisdiction is barred under Section 34 of the SARFAESI Act in matters that can be determined by Debt Recovery Tribunals.
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.
The civil court retains jurisdiction to adjudicate on the validity of sale and mortgage deeds under the SARFAESI Act, and a plaint cannot be partially rejected under Order VII Rule 11.
Civil Courts retain jurisdiction to hear suits alleging fraud against secured creditors, despite Section 34 of the SARFAESI Act, provided specific allegations are made.
Fraud allegations must provide specific particulars to circumvent the jurisdictional bar under Section 34 of the SARFAESI Act, 2002; vague claims are insufficient.
The main legal point established in the judgment is the limitation on civil court jurisdiction under Section 34 of the SARFAESI Act and the duty of the court to scrutinize allegations of fraud and co....
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