IMPORTANT POINT
A suit under CPC is not maintainable when statutory remedies exist for debt recovery under specific acts, even if ownership of the property is established.

JUDGMENT :

Hanchate Sanjeevkumar, J.

1. The plaintiff has filed this first appeal calling in question the order dated 20.09.2021 passed by the XVI Additional City Civil and Sessions Judge (CCH-12), Bengaluru, in O.S.No.7993/2000 on preliminary issue regarding maintainability of the suit and I.A.No.7 filed under Order VII Rule 11(d) of Code of Civil Procedure (for short, ‘CPC’).

2. For the purpose of convenience, ranking of the parties is referred to as per their status before the trial Court.

PLAINT

3. It is the case of the plaintiff that the plaintiff has filed suit against defendants for seeking declaratory relief to declare that the suit property belongs to the plaintiff and cannot be auctioned in pursuance of auction notice dated 13.11.2000 bearing No.K.R.H.S./STU/370:98-99 for the alleged debts due by the 2nd defendant to the 1st defendant. It is stated that total area of the suit property is 4004 sq.mtrs. and its value is more than Rs.8 crore and after realizing loan amount due to the 1st defendant, the 1st defendant be directed to refund the balance amount of more than Rs.7 crore to the plaintiff and also sought for permanent injunction restraining defendants, their men, officials and agents from proceeding to auction schedule property in pursuance of the notification dated 13.11.2000.

4. It is stated that plaintiff is owner of the property by virtue of final decree passed in O.S.No.7336/1997 dated 30.09.1997 filed by plaintiff and her mother against her father for partition and separate possession of their share in the joint family properties and the suit came to be decreed on 21.08.1999 and suit property was allotted to the share of the plaintiff on 21.08.1999 and prior to that, the plaintiff and her mother had filed O.S.No.74/1996 on the file of the Family Court, Bengaluru city on 30.05.1996 for maintenance of a sum of Rs.10,000/- per month. Therefore, by virtue of the decree, plaintiff has got her names entered as the ‘khatedar’ in respect of schedule property in the records on Bengaluru Mahanagar Palike and she is paying taxes regularly. When this being the fact, 1st defendant has proceeded to auction of the suit property in pursuance of alleged arrears due to it by the 2nd defendant in which the father of plaintiff is also one of the partner on the basis that the schedule property was given as security to the said loan. Since the 2nd defendant has not repaid the loan and suit property was put to auction on the guise that it was given as security for the loan obtained by the 2nd defendant though the said property is not given as security to the 1st defendant, therefore, it is contended that auction notice issued by the 1st defendant is not correct. Hence, the plaintiff has issued legal notice to the 1st defendant. Therefore, it is the case of the plaintiff that the plaintiff being owner of the suit property and the suit property was not given as security to the loan obtained by the 2nd defendant from the 1st defendant and thus, the proceedings to conduct auction of schedule property is not correct, therefore, filed suit for declaration that the action of the 1st defendant of putting the suit property in auction is illegal and accordingly filed suit for declaration and consequential relief of permanent injunction.

5. The suit against 2nd defendant is dismissed as steps were not taken.

WRITTEN STATEMENT

6. The 1st defendant-KSFC has filed written statement contending that the suit is not maintainable as remedy for the 1st defendant is not by filing suit but invoking the provisions of Karnataka Public Moneys (Recovery of Dues) Act, 1979 (for short, ‘the KPMRD Act 1979’) and under the provisions of The Karnataka State Financial Corporation Act, 2005 (for short, ‘the KSFC Act’). This pleading of the 1st defendant that the 2nd defendant is a partnership firm and father of plaintiff is one of the partners and suit property was given as security to the loan taken by the 2nd defendant and therefore, the 2nd defendant has become defa