The main legal point established in the judgment is that the jurisdiction of the civil court could be invoked in cases of fraud or absurd and untenable claims by the secured creditor, and the recognition of mortgage by deposit of title deeds and its binding nature on subsequent bonafide purchasers.

IA No. 6970 of 2011 (by Defendant 5 for condonation of delay)

1. For the reasons stated therein, the application is allowed. The delay in Defendant No.5 filing the written statement by is condoned.

IA Nos. 6546-47 of 2011 (Order VII Rule 11 CPC by Defendants 5 and 4)

2. These are two applicationsfiled by the Defendant Banks, seeking rejection of the plaint on the ground that there is a bar under Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’) to entertaining the suit.

3. The background to these applications is that the above suit has been filed by Ms. Ritu Gupta and Ms. Kavita Verma, Plaintiffs 1 and 2 against, Ms. Usha Dhand, Defendant No.1, Mr. Naveen Kapoor, Defendant No.2, Mr. Akash Deep Kapoor, Defendant No.3, PNB Housing Finance Limited (‘PNBHFL’), Defendant No.4, Syndicate Bank, Defendant No.5, Sub-Registrar-VIII, Shakarpur, Delhi, Defendant No.6, Bank of Baroda (‘BoB’), Defendant No.7 and UCO Bank, Defendant No.8 for a declaration that the Plaintiffs are the rightful owners of the property at J-2/9, Krishna Nagar, Delhi-110 051 measuring 114 sq. yds. (‘the suit property’), by virtue of the registered Sale Deed dated 28th April 2010; that the Sale Deeds dated 23rd August 23rd August 2006, 28th August 2006, 18th October 2006, 27th November 2006 and 26th February 2007 executed by Defendant No.1 in favour of Defendants 2 and 3 are null and void and for decree of permanent and mandatory injunction to restrain the Defendants from dealing with the suit property.

4. The Plaintiffs claim to have purchased the suit property from Defendant No.1 by virtue of the aforementioned registered Sale Deed dated 28th April 2010, a copy of which has been enclosed with the list of documents filed with the plaint. The Plaintiffs rely on the statement made in the Sale Deed that the property is free from all encumbrances. The Plaintiffs have also placed on record the chain of title documents pertaining to the purchase of the suit property by them and claim that they have become the lawful owners of the suit property by virtue thereof.

5. The Plaintiffs further state that after receiving the possession of the suit property from Defendant No.1 on 30th April 2010, they were shocked to know, on 26th August 2010, that Defendant No.4, PNBHFL, had taken symbolic possession of the property on that date, with the intention to sell it on 25th September 2010. It is stated that in order to safeguard their rights, the Plaintiffs filed an application before the Debt Recovery Tribunal-III (‘DRT-III’), Delhi under Section 17 of the SARFAESI Act, in which an order was passed by the DRT on 3rd September 2010 restraining Defendant No.4 from proceeding to take possession of the suit property. It is stated that on 31st August 2010, the Plaintiffs were surprised to know that Defendant No.5, Syndicate Bank, was also planning to take possession of the suit property. Another application was filed before the DRT, in which a similar restraint order was passed in favour of the Plaintiffs. It is stated that Defendant No.4 relied on the registered Sale Deed dated 23rd August 2006, purportedly executed by Defendant No.1 in favour of Defendants 2 and 3. It was stated that on the basis of the said Sale Deed, a mortgage by deposit of title deeds was created by Defendants 2 and 3 in favour of Defendant No.4 for securing financial assistance. On its part, Defendant No.5, Syndicate Bank, relied on another registered Sale Deed dated 26th February 2007 in respect of the same suit property purportedly executed by Defendant No.1 in favour of Defendant No.3. It was stated that this registered Sale Deed was deposited with Defendant No.5 for securing the financial assistance. It is pointed out that Defendant No.4 has, itself, filed an appeal in the Debt Recovery Appellate Tribunal (DRAT)against Defendants 2, 3 and 5.

6. The Plaintiffs state that, on inquiring with the office of the Su