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BHARAT P. DESHPANDE
Shashikant Gangar – Appellant
Versus
Aditya Birla Finance Limited, Through its managing Director – Respondent
JUDGMENT :
(Bharat P. Deshpande, J.)
1. Rule.
2. Rule made returnable forthwith.
3. Heard finally with consent.
4. The present petition is filed thereby challenging the impugned order passed in Commercial Appeal no.6/2023 on 2.5.2024. By the said impugned order First Appellate Court dismissed the said appeal thereby confirming the order passed by the Commercial Court dated 2.11.2023 in Commercial Suit No. 2/2023.
5. Petitioner is the plaintiff in Commercial Suit No. 2/2023 filed before the Commercial Court at Ponda. Respondent no.1 being defendants filed an application under Order 7 Rule 11 of CPC for rejection of the plaint.
6. Vide order dated 2.11.2023 Commercial Court rejected the plaint on observing that suit is barred by law i.e Section 34 of SARFAESI Act. Petitioner/plaintiff filed Commercial Appeal No.6/2023 which was dismissed by the impugned order upholding the contentions of the respondents and confirming the findings of the trial Court, which is challenged in the present proceedings amongst various grounds as disclosed in the Writ Petition.
7. Heard Mr S. S. Kantak, learned Senior Advocate with Mr S. Gaonkar, learned Counsel for the Petitioner, Mr S. D. Lotlikar, learned Senio
Civil Courts retain jurisdiction to hear suits alleging fraud against secured creditors, despite Section 34 of the SARFAESI Act, provided specific allegations are made.
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 lack jurisdiction in matters under the SARFAESI Act, as grievances must be addressed to the DRT, per Section 34.
Exception to statutory proscription under Section 34 of the SARFAESI Act allows recourse to civil court where the action of the secured creditor is alleged to be fraudulent.
Allegations of fraud against a secured creditor allow civil court access despite statutory bars, permitting claims and proceedings to continue.
Civil courts lack jurisdiction under Section 34 of the SARFAESI Act for matters within the DRT's purview, and vague fraud allegations do not suffice to maintain a civil suit.
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.
The jurisdiction of the civil court is excluded in matters related to the classification of loan accounts as NPA under the SARFAESI Act.
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