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High Court of Judicature at Bombay
R.M. SAVANT, J.
Authorised Officer, Kotak Mahindra Bank Ltd. – Appellant
Versus
M/s. Brahmo Construction Pvt. Ltd. – Respondent
Civil Revision Application No. 34 of 2015
Decided On : 16-04-2015
It was further claimed that the creation of mortgage was not for the benefit of the family, but was for the purposes of satisfying the vices of the defendant No. 1. It was further alleged that the creation of mortgage was in collusion with the defendant No. 3 Bank and the third parties, which are interested in purchasing the property at throw-away price and the same was fraudulent. The plaintiffs’ claim was based on the said averments and had sought the relief for declaration that the notice dated 8.2.2010 issued by the defendant No. 3 Bank was fraudulent and void ab initio and hence a permanent injunction was claimed against the defendant No. 3 Bank from proceeding to deal with the property in accordance with the provisions of the said Act. A preliminary issue was raised objecting to the maintainability of the said suit on the touchstone of Section 34 of the said Act as also in view of the fact that the remedy under Section 17 was available to the Plaintiffs. On behalf of the plaintiffs, the judgment in Mardia Chemicals Ltd.’s case, 2004 (5) All MR 484 (SC) was relied upon to contend that where the action of the secured creditor is alleged to be fraudulent or his claim may be so absurd and entertainable, which may not require any probe whatsoever. The Single Judge whilst adjudicating the preliminary issue of the maintainability of the suit has observed that the Debts Recovery Tribunal under Section 17 of the SARFAESI Act cannot adjudicate upon the question as to whether the Defendant Nos. 1 and 2 were not the exclusive owners of the entire property and that they had no authority to mortgage the suit property with the Defendant No. 3 Bank. The Single Judge further observed that it also cannot adjudicate upon the question that the creation of mortgage was not for the benefit of the family, but was for the purposes of satisfying the vices of the defendant No. 1. The Single Judge further observed that it also cannot adjudicate upon the question as to whether the creation of mortgage was in collusion with the defendant No. 3 Bank and the third parties, which are interested in purchasing the suit property at throw-away price and the same was, therefore, fraudulent. In the said context it is held that the jurisdiction of the Civil Court to entertain, try and decide the said Special Civil Suit No. 52 of 2010 is not barred by Section 34 of the said Act.
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1. Admit, with the consent of the learned counsel for the parties heard forthwith.
2. The revisionary jurisdiction of this Court is invoked against the order dated 27/11/2014 passed by the learned 5th Joint Civil Judge, Junior Division Pune by which order the learned Judge has decided the preliminary issue and has ruled that his Court is having the jurisdiction to try and entertain the suit in question.
3. The facts giving rise to filing of the above Civil Revision Application, in brief, can be stated thus:
The Respondent herein is the original Plaintiff who has filed the suit in question being Regular Civil Suit No.1756 of 2014 seeking a permanent injunction for restraining the Applicant herein i.e. the Defendant-Bank from re-auctioning the property. The property in contention is CTS No.1194/27A admeasuring 552 sq.mtrs. situated at Shivajinagar, Pune which was mortgaged to the Defendant Bank as a security against the loan amount of one M/s. Pratam Motors. The Defendant Bank was pleased to sanction a loan of Rs.2,50,00,000/- with interest @ 18% p.a. and repayable in 48 installments and a loan of Rs.1,00,00,000/- with interest @ 36% and repayable in 12 installments to the said M/s. Pratham Motors. To secure the due repayment of the amounts advanced to the said M/s. Pratham Motors, the said property was mortgaged to the Defendant Bank by one Rajiv Yeshwant Bhale, who was the Managing Partner of the said M/s. Pratham Motors and two others under a registered Deed of Mortgage thereby the said mortgagors have mortgaged their right, title and interest in the said property known as “Yashomala”. On default being committed by the said M/s. Pratham Motors in repayment of the said loan amounts, the account maintained by the Defendant Bank was classified as a Non Performing Asset. The Authorized Officer of the Defendant Bank thereafter issued notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for brevity's sake herein after referred to as “the SARFAESI Act”) calling upon the said M/s. Pratham Motors and its partners/guarantors to pay an aggregate amount of Rs.3,92,35,022.38 payable as on 24/5/2012 with further interest @ 3% p.a. From 25/5/2012 till payment and/or realization. In view of the fact that inspite of the said notice, the same was not complied with, the Defendant Bank proceeded to take measures under Section 13(4) of the SARFAESI Act and had taken physical possession of the said property by following the due process of law and in conformity with the Security Interest (Enforcement) Rules, 2002 (for short “the Rules of 2002”). The said property was thereafter put up for auction on 14/11/2013. In view of the fact that no offer was received pursuant to the said auction, fresh auction was again held by again issuing public notice on 28/11/2013. The Plaintiff participated in the said auction proceeding which was conducted on “as is where is basis” and also on “as is what is basis”. The Plaintiff was declared as the successful bidder who had made the highest offer of Rs.8,51,00,000/- and paid 15% of the Earnest Money Deposit as per the terms of the auction proceedings. In view of the subsequent default committed by the Plaintiff in payment of the balance sale consideration/bid amount, the Defendant Bank proceeded to forfeit the Earnest Money Deposit made by the Plaintiff and cancelled the said sale and put up the said property i.e. the secured asset for re-sale again by public auction by issuing an attachment.
4. The Plaintiff aggrieved by the said act on the part of the Defendant Bank of re-auctioning the property, has filed the suit in question seeking permanent injunction. It is the case of the Plaintiff that at the time of payment of further amount, the Plaintiff came to know that the said property has been under the statutory attachment of the Income Tax Department. The Plaintiff therefore immediately asked for a explanation regarding th
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