IMPORTANT POINT
Civil courts lack jurisdiction in matters under the SARFAESI Act, as grievances must be addressed to the DRT, per Section 34.

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 Munaiah was the absolute owner of the suit schedule property which was purchased by him from Bheema Rama Chandraiah under a registered sale deed No.1110/1982, dated 20.02.1982 and he was enjoying the same. Previously land in an extent of Ac.0-90 cents in Sarcar punji D.No.205/4, Ac.0-50 cents in Sarcar punji D.No.204/3 and Ac.0-41 cents in Sarcar punji D.No.206/5 were owned by D4 who acquired the same under registered sale deed No.2681/1968, dated 06.07.1968 from one D.Pichaiah. Later on, 4th defendant along with his father Shaik Dasthagiri sold away their properties which include Ac.0-90 cents of land by leaving Ac.0-10 cents for road in Sarcar punji D.No.205/4 in which suit schedule property fell in favour of Bheema Rama Chandraiah under a registered sale deed No.1855/1980, dated 30.04.1980. The said Bheema Rama Chandraiah enjoyed the property and developed the land and sold away to various persons. In that process, Bheema Rama Chandraiah sold away the suit schedule property with specific boundaries and measurements to 1st plaintiff’s husband Karumuri Munaiah under registered sale deed No.1110/1982, dated 20.02.1982. Ever since, the plaintiff’s family has been in enjoyment of the same. However, the vendor has not handed over the link documents to Karumuri Munaiah. While so, Karumuri Munaiah died on 19.03.2008 leaving behind the plaintiffs as his clause-I heirs. After his death, the plaintiffs have been enjoying the suit schedule property.

(c) While so, during September, 2016 the plaintiffs came to know that the defendant No.3 has created fake registered document as if he purchased the total extent of Ac.0-90 cents in Sarcar punji D.No.205/4 from 4th defendant under registered sale deed No.525/2006, dated 20.01.2006 and mortgaged the same to defendant Nos.1 & 2 bank which includes suit schedule property. In July, 2017 plaintiffs came to know that defendant bank has been conducting auction of suit schedule property by invoking the provisions of SARFAESI Act, as the 3rd defendant committed default in payment of the loan amount. The 3rd defendant has no valid title and right over an extent of Ac.0-90 cents in Sarcar punji D.No.205/4 which covers the suit schedule property. He fabricated some registered sale deeds with the connivance of some people and defrauded bank and thereby, the bank also will not get any right or title over the suit schedule property.

Hence, the suit against defendant Nos.1 & 2-Bank and defendants 3 & 4-the parties to the alleged sham collusive sale deed dt.20.01.2006.

3. Pending the suit, the defendant bank filed I.A.No.771/2018 under Order VII Rule 11 (d) of CPC r/w Section 34 of SARFAESI Act to reject the plaint on the main ground that the 3rd defendant has mortgaged the subject property and obtained loan and he committed default and