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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ANU SIVARAMAN, K.MANMADHA RAO
K.T. Govinde Gowda, S/o. Late Thimme Gowda – Appellant
Versus
Industrial Development Bank Of India [I.D.B.I.], Represented By Its DGM-ICG – Respondent
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
The jurisdiction of civil courts is barred under the SARFAESI Act for disputes regarding security interests, mandating resolution through the Debt Recovery Tribunal.
The main legal point established in the judgment is the limitation on civil court jurisdiction under Section 34 of the SARFAESI Act and the duty of the court to scrutinize allegations of fraud and co....
Fraud allegations must provide specific particulars to circumvent the jurisdictional bar under Section 34 of the SARFAESI Act, 2002; vague claims are insufficient.
Civil Courts retain jurisdiction to hear fraud allegations only when not covered by the DRT's jurisdiction in SARFAESI Act cases.
Sales executed after taking possession under the SARFAESI Act are void, affirming the authority of civil courts in possession disputes involving third parties.
The main legal point established in the judgment is that allegations of fraud and misrepresentation must be supported by compelling evidence, and contentions regarding the creation of a valid mortgag....
Court held that transactions made during the subsistence of a mortgage are void under the SARFAESI Act; the auction purchaser's rights were upheld despite challenges to the validity of earlier transf....
Civil courts' jurisdiction is barred under Section 34 of the SARFAESI Act in matters that can be determined by Debt Recovery Tribunals.
The bar under Section 34 of the SARFAESI Act cannot be extended to claims involving collusion and fraud, which are better addressed before the Civil Court.
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