The jurisdiction of civil courts is barred under the SARFAESI Act for disputes regarding security interests, mandating resolution through the Debt Recovery Tribunal.

JUDGMENT :

K. MANMADHA RAO, J.

The present Commercial Appeal No.207/2021 is filed by the Appellants/Plaintiffs challenging the judgment and decree dated 07.04.2021 passed in Com.O.S.No.580/2021, by the X Addl. District & Sessions Judge, (Commercial Court) Bengaluru (hereinafter referred to as ‘the Commercial Court’).

2. The appellants herein are the plaintiffs and the respondents herein are the defendants in Com.O.S.No.580/2021 before the Commercial Court.

3. For convenience of reference, the parties are hereinafter referred to as arrayed before the Commercial Court in Comm.O.S.No.580/2021.

4. The appellants/plaintiffs filed the Commercial Original Suit seeking the following prayers:-

[a] Declare that the Draft/Preliminary Guarantee Agreement along with annexed Declaration cum Undertaking Letter dated 10/06/2013 produced as Annexure-B & C, will not constitute as MORTGAGE DEED in respect of Lands in Sy.No.124/6 of Karivobanahalli Village, Yeswanthapura Hobil, Bangalore North Taluk, measuring 7 Acres 20 guntas pertaining to the Joan availed by Defendant No.2 from Defendant No:1 Bank.

[b] Declare that the Plaintiffs are not GUARANTORS OR SURETIES and/or have not created any SECURITY INTEREST in favour of Defendant No.1 Bank under the Draft/Preliminary Guarantee Agreement dated 10/06/2013 along with annexed Declaration cum Undertaking Letter dated 10/06/2013 produced as Annexure-B & C and are not liable under the above documents or any other documents in respect of short term loan availed by the Defendant No.2 from Defendant No.1 Bank.

[c] Consequently for a Mandatory Injunction directing the Defendant No.1 to return all the Original Title Deeds and other connected documents to the Plaintiffs pertaining to Lands in Sy.No.124/6 of Karivobanahalli Village, Yeswanthapura Hobli, Bangalore North Taluk, measuring 7 Acres 20 guntas which are owned and possessed by the Plaintiffs.

[d] For a Permanent Injunction restraining the Defendants 1 & 2 by themselves or any one else claiming through or under them in any way alienating, encumbering or auctioning the same to anyone.

5. The case of the plaintiffs is that the plaintiffs are the absolute owners in possession and enjoyment of land bearing Sy.No.124/6 measuring 7 acres 20 guntas situated at Karivobanahalli Village, Yeshwanthpura Hobli, Bangalore, North Taluk. On 10.04.2013, the representatives of defendant No.2 – Company registered under the Companies Act, namely Shri Surendra (Managing Director), Shri C. Suresh Babu (Proprietor of Uma Associates), Sri Shivayogi, Sri Ravindra, and Sri Ranganath, approached the Plaintiffs requesting them to act as guarantors for a short-term loan for a period of one year to be availed from Defendant No.1- Bank for Bangalore metro Rail Corporation (BMRCL)-related projects. Based on trust and discussions held repeatedly, particularly at Uma Associates, Bangalore, and on 10.04.2013, the plaintiffs handed over all original title deeds and documents pertaining to the said land to Defendant No.2, which were thereafter submitted to Defendant No.1 through Defendant No.2.

6. On 10.06.2013, the representatives of Defendant No.2 took the plaintiffs along with Sri D.J. Nagaraj to the office of Defendant No.1 - Bank at Hyderabad around 8:30 PM, where the plaintiffs were made to sign unfilled printed documents labelled as Draft/Preliminary Guarantee Agreement and Declaration cum Undertaking Letter. The plaintiffs assert that these signatures were obtained without the presence of any officials or witnesses from Defendant No.1 Bank. Thereafter, Defendants No.1 and 2 colluded and converted the unsigned preliminary drafts into fully executed Guarantee Agreements without the plaintiffs’ knowledge, consent, or presence, thereby creating self-styled documents.

7. The Plaintiffs were not provided copies of the said documents despite repeated requests. On 24/02/2016, the Plaintiffs filed an RTI Application with Defendant No.1 seeking copies of (i) loan applications submitted by Defendant No