Point of Law: 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 or judgment against Bank and it should be awake to fact that plaintiff and defendants might have filed the suit collusively to defeat interest of Bank.

JUDGMENT :

This appeal is filed by the plaintiff against the order dated 23.04.2019 passed by XXII Additional City Civil and Sessions Judge, Bengaluru, on I.A.No.5 in O.S.No.3780/2017. By the impugned order, the trial court has allowed I.A.No.5 filed by defendant no.4 under Order VII Rule 11(b) and (d) of CPC and has rejected the plaint as not maintainable in view of the bar under Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘SARFAESI Act’).

2. For the sake of convenience, the parties are referred to herein as per their status before the trial court.

3. It is contended by the plaintiff that she is the owner of the property bearing No.45 (old no.71/6) situated at 4th Cross, Meenakshinagar, Kamakshipalya, Bengaluru – 560 079, totally measuring 900 square feet, which is hereinafter referred to as the suit schedule property.

4. It is alleged that the plaintiff had sold the property in favour of defendant no.1 by virtue of a registered sale deed dated 27.11.2009. Thereafter, the suit schedule property has been mortgaged in favour of defendant nos.4 and 5Banks for loans availed. It is the contention of the plaintiff that defendant nos.1, 2 and 3 have jointly colluded with each other and have played fraud upon the plaintiff and have obtained the sale deed dated 27.11.2009 and thereafter defendant nos.1 and 2 colluding with respondent nos.4 and 5 (bank officials) have mortgaged the suit schedule property in favour of the said Banks. It is stated that upon default committed by the borrowers, defendant nos.4 and 5-Banks initiated necessary proceedings for attachment and sale of the suit schedule property. Hence, the plaintiff has preferred O.S.No.3780/2017 wherein she has sought for a declaration that the alleged sale deed dated 27.11.2009 in respect of the suit schedule property is an act of fraud and not binding on the plaintiff. She has also sought for a relief of declaration that the mortgage deed dated 20.08.2013 executed by defendant no.1 in favour of defendant no.5 in respect of the suit schedule property and the mortgage executed by defendant no.1 in favour of defendant no.4 also in respect of the suit schedule property are acts of fraud, illegal, null and void and not binding upon the plaintiff and consequently has sought for a permanent injunction restraining the defendants from interfering with her peaceful possession and enjoyment of the suit schedule property.

5. Upon service of summons, defendant nos.1 to 3 have not filed written statement. Defendant no.5 has filed written statement. Defendant no.4 which in the meanwhile had invoked its powers under Section 13(4) of the SARFAESI Act, has filed an application under Order VII Rule 11(b) and (d) of CPC seeking dismissal of the suit on the ground that the suit is barred by Section 34 of the SARFAESI Act, Article 54 of the Limitation Act and that the suit is undervalued. The plaintiff has filed her objections to the said application. The trial court has not examined whether the suit is barred by Article 54 of the Limitation Act or has been undervalued, but on the ground that it is barred by Section 34 of the SARFAESI Act has rejected the plaint as not maintainable. Aggrieved by the said order, the plaintiff has preferred this appeal.

6. Upon service of notice, respondent nos.4 and 5 (defendant nos.4 and 5) have appeared through their respective Counsel. Respondent nos.1, 2 and 3 have not contested the appeal. As I.A.No.5 in the original suit which resulted in rejection of the plaint was filed by respondent no.4 (defendant no.4). It has contested this appeal. The learned counsel for respondent no.5 has remained absent. Heard the learned counsel for the appellant and respondent no.4-Bank.

7. The contention of the plaintiff is that as per Section 34 of the SARFAESI Act, the Civil Court shall not have jurisdiction to entertain any suit or proceedings only in respect of a matter which the Debts Recovery Tr