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2013 Supreme(Kar) 1282
IN THE HIGH COURT OF KARNATAKA AT DHARWAD BENCH
N. KUMAR and H.S. KEMPANNA, JJ.
HANAMANTAGOUDA —Appellant
Vs.
MALLIKARJUNAGOUDA AND OTHERS —Respondent
Miscellaneous First Appeal No. 21492 of 2013
Decided on : 29-07-2013
Advocate Appeared:
S.N. Banakar, for the Appellant
The possession order under Section 14 of the Act can be challenged through the appropriate legal remedy, and disputes regarding liability should be addressed under Section 17.
Headnote:
Temporary Injunction - Loan Transaction Dispute - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 14, Section 17, Section 34
Fact of the Case:
The plaintiff, a retired public prosecutor, filed a suit to declare a loan transaction between defendants as not binding on him and sought a permanent injunction to restrain the sale of a property. The defendants argued that the plaintiff colluded with his brothers to delay the bank's recovery proceedings and had executed a Power of Attorney to mortgage the property in favor of the bank.
Finding of the Court:
The trial Court found that the plaintiff made a prima facie case but concluded that the balance of convenience favored the defendant. It dismissed the application for injunction.
Issues: Dispute over loan transaction, validity of possession order under Section 14 of the Act, and the plaintiff's attempt to challenge the order through a civil suit.
Ratio Decidendi: The court held that the possession order under Section 14 of the Act could be challenged through the appropriate legal remedy, and the plaintiff's attempt to dispute his liability should be addressed under Section 17. The trial Court's decision to decline the temporary injunction was upheld.
Final Decision: The appeal was dismissed.
N. KUMAR, J.-This appeal is filed against the order passed by the trial Court under Order 39, Rule 1 and 2 read with Section 151 of CPC declining to grant an order of temporary injunction.
The appellant is the plaintiff in O.S. No. 114/2012. He is a retired public prosecutor. He has filed the suit for declaration that the alleged loan transaction between defendant No. 6 and defendant No. 2 is not binding on the plaintiff and defendant No. 6 has no right to recover the loan amount by selling 1/6th share in the suit schedule-A property to the extent of 1/6th share and consequently sought for decree of permanent injunction restraining defendant No. 6 from selling schedule-A property to an extent of 1/6th share.
2. In the body of the plaint, it is categorically pleaded that, in respect of schedule B and C properties there was already a partition among the plaintiff and defendant Nos. 1 to 5 and they are in possession since many years. They are enjoying the respective shares and managing the same. However, schedule-A property is the joint ancestral family property of plaintiff and defendant Nos. 1 to 5, wherein the plaintiff has got 1/6th share. The grievance is that, defendant No. 6 has moved the Deputy Commissioner to take possession of the schedule-A property under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short hereinafter referred to as the 'Act'). The Deputy Commissioner has passed an order invoking Section 14 of the Act. The validity of the order was challenged by the plaintiff before this Court in W.P. No. 61542/2012, which came to be disposed of on 20.03.2012 with a direction to approach the Debt Recovery Tribunal by filing an application. Accordingly, the plaintiff has filed an application sofar as setting aside the order under Section 14 of the Act. The plaintiff also made an application before the Deputy Commissioner for recalling the order under Section 14 of the Act. It is in this background as the decree obtained against defendant No. 2 is not binding on the plaintiff's 1/6th share in the suit schedule properties, his 1/6th share neither can be brought to sale nor his possession could be disturbed. Therefore, he has preferred a suit for partition of his 1/6th share and for permanent injunction restraining the defendant No. 6 from dispossessing the plaintiff.
3. After service of summons, the defendants entered appearance and filed the written statement pointing out, the defendant No. 6 has sanctioned the loan amount of Rs. 10,00,000/- repayable at agreed rate of interest in the name of Progency Systems Pvt. Ltd. The defendant No. 2 Sri. Venkanagaouda Devanagouda Andanigoudar who is brother of plaintiff and Sri. G.I. Inamati have stood as guarantors to the said loan amount. As a security for the said loan amount, immovable property bearing CTS No. 4/6A measuring 9.43 guntas situated at Lakkamanahalli Dharwad is legally mortgaged to defendant No. 6 bank by executing a deed evidencing of deposit of title deed which is registered. The plaintiff colluding with his brothers has filed this suit just to drag the legal proceedings of recovery initiated by the bank under the said Act. The plaintiff has executed a General Power of Attorney to mortgage the said property in favour of defendant No. 6 and has kept quite all these years. Till obtaining possession orders from Dharwad District Magistrate, there is no single complaint letter from plaintiff either to the bank or Police Station or any case in respect of the said mortgage property. Since the borrowers had requested to extend the time for taking possession and allow them to settle the loan amount, defendant No. 6 had co-operated in not seizing the property. The plaintiff and his family members very well know about the execution of the mortgage of the property in favour of the bank and also very well know about execution of the Power of Attorney in favour of his brother. The case is being
