The jurisdiction of the civil court is excluded in matters related to the classification of loan accounts as NPA under the SARFAESI Act.

JUDGMENT :

1. Heard.

2. Since the subject matter of both the Revision Applications are same, both are disposed of by common judgment.

3. Since the Civil Revision Application No. 05/2021 is treated as lead Revision Application, the facts and contentions of the said Revision Application are set out hereunder for proper adjudication of the issue involved in both the Revision Applications.

4. The present Revision Applications is filed by original Defendant - Union Bank of India being aggrieved by the order dated 11/11/2020 passed by the learned 10th Joint Civil Judge, Senior Division, Nagpur below Exhibit 23 in Special Civil Suit No.69/2020.

5. The brief facts for filing of present Revision Application are as under:-

The Applicant No.1 is the Regional Manager, original Defendant No. 1 and Applicant No. 2 is Assistant General Manager of Union Bank of India - Defendant No.2. The Respondents herein are the original Plaintiffs in the Special Civil Suit No.69/2020. It is submitted that Respondent No.1 is a proprietary concern of Respondent No.2. Respondent No.4 is a Company registered under the Companies Act. Respondent Nos. 2 and 3 are the Directors and Promoters of Respondent No.4. It is the case of the Applicants herein that Respondent No.1 concern had availed various credit facilities from the Applicant - Bank since the year 2010 and the same were renewed and enhanced time to time and it was lastly sanctioned, renewed and enhanced to the extent of Rs.40 Crores (Rupees Forty Crores) by way of sanction letter dated 24/05/2015. In order to secure the said credit facilities, the Respondents had executed various security documents and the loan agreements in favour of Bank and also secured the said credit facilities by mortgaging their immovable properties by executing a simple Registered Mortgage dated 26/05/2015 and thereby created the security interest of the Applicant - Bank over their immovable properties. After availing and utilizing the aforesaid credit facilities of Rs.40 Crores (Rupees Forty Crores), the Respondents had committed default in operating the loan accounts as per the terms and conditions of the sanction letter and loan agreements. As a result of which, the loan accounts of the Respondent No.1 became N.P.A. as on 30/11/2017, as per directives and guidelines issued by Reserve Bank of India and the amount of Rs.20,36,06,163.24 was due and outstanding against the Respondents as on 30/11/2017. Left with no alternative, the Bank initiated the action for the recovery of its outstanding dues by exercising rights available against the Respondents under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “SARFAESI Act”). Accordingly, the Bank issued a demand notice under Section 13(2) of the SARFAESI Act to the Respondents on 27/12/2017 and thereby called upon the Respondents to make outstanding payment within a period of 60 days. As there was no compliance of the said notice, the Applicant - Bank moved an Application under Section 14 before the District Magistrate Nagpur for grant of assistance for taking the physical possession of the mortgaged properties. The said Proceedings are pending before the District Magistrate, Nagpur. The Applicant – Bank, apart from this Application, filed a recovery suit before the Debts Recovery Tribunal, Nagpur for recovery of Rs.19,67,50,000/- against the Respondents vide original Application LODG No.871/2019 which is pending before the Debts Recovery Tribunal, Nagpur.

6. It is submitted that the outstanding amount of Rs.20 Crores against Respondents is the public money and the Applicant - Bank wants to recover it by adopting the legal and proper procedure as laid down under the provisions of SARFAESI Act. After initiation of the said recovery Proceedings, the Respondents have filed a Suit for declaration, permanent injunction and damages against the Applicant - Bank before the learned 10th Joint