2008 Supreme(Kar) 44

2008 (2) KLO 1281 (DB)
IN THE HIGH COURT OF KARNATAKA
S.R. Bannurmath and Jawad Rahim, JJ.
RFA No. 586 of 2001 (DEC)
R. Gopalakrishna - Appellant
Vs.
K.S.F.C. and Another - Respondents
Decided on 22-01-2008

Headnote:SECURITISATION & RECONSTRUCTION OF FINANCIAL ASSETS & ENFORCEMENT OF SECURITY INTEREST ACT, 2002 - Sections 13,17 & 34 & Recovery of Debts Due to Banks and Financial Institutions Act (51 of 1993), Section 17: [S.R. Bannurmath & Jawad Rahim, JJ Declaratory relief by guarantor for extinguishment of his guarantee claimed by guarantor before civil Court - Maintainability - Held, On perusal of Section 17 of the Securitisation Act, it is to be noted that the appeal provided therein is only in respect of any action taken or proposed to be taken under Section 13 of the Act and not otherwise. Present claim of the plaintiff guarantor for the declaration that his guarantee stands extinguished under Sections 133,135 and 139 of Contract Act because of acts of creditor and borrower is directly outside the purview of this provision also and hence the suit is maintainable before civil Court. It is also to be noted that under Section 13 of the Act, the machineries provided for enforcement of security interest or for recovery of money, but it does not give or provide any forum for a borrower or a guarantor like the appellant in the present case to raise directly such question and seek the declaratory relief. Even under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, vide Section 17, wherein the jurisdiction, power and authority of the institution is defined, it indicates that it is for the limited purpose and for the specified institutions alone, the civil Courts does not have jurisdiction. Similarly Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, does not create any bar in respect of suits of present nature. Similarly Section 35 of the said Act provides that the provisions of this Act, overrides other laws, does not expressly or impliedly prohibit the provisions of the civil Courts to try the suits of all nature as provided under Section 9 of C.P.C.,

       CODE OF CIVIL PROCEDURE, 1908 - Section 9: [S.R. Bannurmath and Jawad Rahim, JJ] Jurisdiction of civil Court - Held, The jurisdiction of civil court is not excluded either expressly or impliedly by provisions of Karnataka Land Revenue Act or by State Financial Corpations Act, 1951.

       CODE OF CIVIL PROCEDURE, 1908 - Section 9: [S.R. Bannurmath and Jawad Rahim, JJ] Jurisdiction of Civil Court - Bar under Section 3(5) of Karnataka Pubic Moneys (Recovery of Dues) Act, 1980 - Held, If one peruses Section 3 of the Karnataka Public Moneys (Recovery of Dues) Act, 1980, it nowhere debars the jurisdiction of the civil Court except sub-clause (5) of the Section. It is clear from words "against any person referred to therein, if proceedings to recover the same are pending before the Deputy Commissioner". occurring in Section 3(5) that no doubt under Section 3, there is some bar created for suit, but that bar is very specific. By harmonious construction of Section 3 especially sub-clause (5), it is clear that suits against any person i.e. borrower in respect of the debt, cannot be filed for the recovery. This bar, is against the creditor and not against the borrower. In the instant case, by reading the pleadings of the parties especially the plaint, the plaintiff guarantor is claiming the declaratory relief and consequential injunction on the ground that under Sections 133, 135, and 139 of the Contract Act, because of the acts of the creditor and the borrower, the liability of the plaintiff who is a guarantor stood extinguished. Such question cannot be raised either before the Special Tribunal of the machinery provided under the Act as they are not empowered with giving declaratory relief. Conclusion of the trial Court that in view of Section 3 of the Karnataka Public Moneys (Recovery of Dues) Act, 1979, the jurisdiction of the Civil Court stands ousted or barred, is incorrect.

       CODE OF CIVIL PROCEDURE, 1908 - Order 20, Rule 1: [S.R. Bannurmath & Jawad Rahim, JJ] Pronouncement of judgment - Stage of judgment - Held, Disposing of suit immediately after framing issues without recording evidence is illegal.