2014 Supreme(Chh) 158
IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
Sanjay K. Agrawal, J.
Neerendra Kumar
Vs.
Rishika
Civil Rev. No. 74/2013
Decided On: 26.04.2014
For Appellant/Petitioner/Plaintiff:Sachin Singh Rajput, Advocate
For Respondents/Defendant: Akhil Agrawal, PL
Headnote:
Civil Procedure Code,1908 – Section – 115 and 9 - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 13(4) ,34,13(2) and 17(1) - Transfer of Property act, 1882 - Section 69 and 69A - Debts Recovery Tribunal - Section 17 - Court of District Judge - Section 17A - Applicant - Bank provided financial assistance to one Processor is proprietor of firm - Loan was granted to him under two separate heads i.e. one loan of was granted under cash credit hypothetication and another loan was granted in shape of Bank guarantee in which non-applicant No. 3 herein stood as a guarantor and mortgaged his property Advocates Appeared - Accordingly, applicant-Bank in exercise of its power served notice to borrower to make payment of loan - Borrower having failed to re-pay loan within statutory period, applicant-Bank proceeded and issued possession notice of mortgage property and ultimately possession was taken which was duly published and sale notice was served upon guarantor by Annexure and sale notice was published vide Annexure to sell mortgaged property thereafter, respondents No. 1 & 2 herein, being daughter and son of respondent No. 3 guarantor filed instant suit for declaration of their title and permanent injunction contending inter alia that in mortgage suit property each one of them has 2/3rd share and, therefore, the applicant-Bank be restrained from alienating the suit property; and also filed application for temporary injunction restraining applicant-Bank from auctioning Scheduled suit property – Held, court are of view that civil court jurisdiction is completely barred, so far as the "measures" taken by a secured creditor under sub-section (4) of Section 13 of Securitisation Act, against which an aggrieved person has a right of appeal before DRT or Appellate Tribunal to determine as to whether there has been any illegality in the "measures" taken - Bank, in instant case, has proceeded only against secured assets of borrowers on which no rights of Respondents 6 to 8 have been crystallized, before creating security interest in respect of the secured assets - Consequently, civil revision is allowed - Order impugned passed by trial court holding that Civil court has jurisdiction to entertain suit filed by plaintiffs is set aside and the civil Suit (Rishika & another Vs. Neerendra Kumar and others) pending in the court of 2nd Civil Judge, Class-II, filed by respondents No. 1 & 2/plaintiffs for declaration and permanent injunction stands dismissed being expressly barred by provisions of Section 34 of Act of 2002.
Sanjay K. Agrawal, J.
1. The Root question that falls for consideration in this revision is whether civil court shall have jurisdiction to entertain the suit for declaration of title and permanent Injunction in respect of the any action/measure taken by applicant-Bank under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (henceforth 'the Act of 2002')? This is revision under section 115 of the Code of Civil Procedure (for short 'the CPC') filed by the applicant/defendant No. 1 questioning the legality and propriety of the order dated 19.03.2013 passed by 2nd Civil Judge, Class-II, Mahasamund in Civil Suit No. 2-A/2011 deciding the issue of jurisdiction of Debt Recovery Tribunal under Section 34 of the Act of 2002 in negative.
2. Imperative facts required to be noticed for consideration of this revision are as under:-
(3.1) The applicant - Punjab National Bank (hereinafter referred to as 'the applicant-Bank') provided financial assistance to one M/s. Shankar Paddy Processor. Shri Sanjay Agrawal is the proprietor of the firm. The loan was granted to him under two separate heads i.e. one loan of Rs. 15 lakhs was granted under the cash credit hypothetication and another loan of Rs. 5 lakhs was granted in shape of Bank guarantee in which non-applicant No. 3 Mr. Vibhash Agrawal herein stood as a guarantor and mortgaged his property bearing Khasra No. 39/4, Advocates Appeared : measuring 10,500 sq.ft. situated at Bagbahara at Lalpur, District Mahasamund, which is "secured asset" as defined in Section 2(zc) of the Act of 2002.
(3.2) Borrower - Company failed to re-pay the loan and the same resulted into non-performing assets (NPA). Accordingly, the applicant-Bank in exercise of its power under Section 13(2) of the Act of 2002 served notice to the borrower to make payment of the loan. Borrower having failed to re-pay the loan within the statutory period, applicant-Bank proceeded under the Act of 2002 and issued possession notice of the mortgage property and ultimately possession was taken on 18.1.2011 vide Ex. A-2 which was duly published on 20.01.2011 and sale notice was served upon the guarantor by Annexure A-3 and sale notice was published on 24.6.2012 vide Annexure A-5 to sell the mortgaged property under Section 13(4) of the Act, thereafter, respondents No. 1 & 2 herein, being the daughter and son of respondent No. 3-Vibhash Agrawal, guarantor filed instant suit for declaration of their title and permanent injunction contending inter alia that in the mortgage suit property (secured asset), each one of them has 2/3rd share and, therefore, the applicant-Bank be restrained from alienating the suit property; and also filed application for temporary injunction restraining the applicant-Bank from auctioning the Scheduled suit property.
(3.3) The applicant-Bank filed its written statement and raised a specific plea that suit is barred by provisions of Section 34 of the Act of 2002 and the suit is liable to be dismissed as barred by Act of 2002.
3. The trial Court framed issues including the issue of jurisdiction of civil Court under Section 34 of the Act of 2002 and decided the issue of jurisdiction as preliminary issue against the applicant and by the impugned order held that the suit is not barred by the provisions of Section 34 of the Act of 2002 and it has jurisdiction to entertain and hear the suit as there is no provision in the Act of 2002 for granting decree for partition and same can only be granted by civil court.
4. Feeling aggrieved and dissatisfied with the impugned order holding the Civil Court has jurisdiction in the matter, the instant revision under Section 155 of the CPS has been filed.
5. Shri S.S. Rajput, learned counsel appearing for the applicant would submit that the instant suit has been filed by respondents No. 1 & 2 being the son and daughter of respondent No. 3-Vibhash Agrawal (guarantor) only to circumvent the provisions of Act of 2002 and