The duty of the court to investigate prima facie fraud, the need for material particulars of fraud in a civil suit, and the role of justice and equity in the administration of justice.

Pradeep Nandrajog, J.

Appellants were the plaintiffs. Respondent No. 1 was the defendant No. 1 in the suit. Shakuntala Rani Raizada, Sarita Gupta and Rashtriya Import Export Inc. the sole proprietary firm of Sarita Gupta were defendants 2, 3 and 4 respectively. Plaintiffs sought a declaration that the alleged mortgage created by defendant No. 3 in favour of defendant No. 1 with respect to the second floor of property No. E-9, Kalindi Colony was illegal, void, ab-initio, non-est and a nullity. Permanent injunction was sought restraining defendant No. 1 from taking any action qua the second floor of property No. E-9, Kalindi Colony u/s 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002. As pleaded in the plaint, plaintiffs claimed title through defendant No. 2 under a registered sale deed dated 07.05.2010, pleading that defendant No. 2 had acquired title to the property E-9, Kalindi Colony on the strength of a will dated 26.05.1984 executed in her favour by her husband Indira Mohan Rai Raizada who died on 26.08.1992 and was the original allotted of the land. It was pleaded that after the death of the husband of defendant No. 2 and after she got the property mutated in her name she demolished the existing construction and rebuilt the same and sold the second floor to the plaintiffs on 07.05.2010. Pleading that the plaintiffs were surprised when a notice dated 31.07.2010 was pasted outside the building by defendant No. 1 threatening to take possession and sell the second floor on the strength of an alleged mortgage created by defendant No. 3 in favour of defendant No. 1 suit was filed.

2. It was pleaded in the plaint that inquiry conducted by the plaintiffs reveal that one Sunil Bhat and defendant No. 3 got executed a sale deed dated 27.02.2009 from defendant No. 2 in the name of defendant No. 3 qua the second floor of E-9, Kalindi Colony and defendant No. 2 sought cancellation of the sale deed vide CS(OS) No. 1004/2009. In said suit, on 26.05.2009 an injunction order was passed against defendant No. 3 and Sh. Sunil Bhat restraining them from creating any third party rights in the second floor of E-9, Kalindi Colony. The suit was finally settled on 10.07.2009 and as per which the sale deed dated 27.02.2009 was cancelled.

3. Since the bank i.e. defendant No. 1 gave no particulars to the plaintiffs qua its claim for the mortgage, it is apparent that the plaintiffs could not plead material particulars qua the fraud and unfortunately for them, the counsel little realized that it is permissible to file a suit seeking declarations with a prayer that upon disclosure made by the opposite party qua facts within the knowledge of the opposite party, the plaintiff reserves liberty to amend the plaint; and this has proved fatal for the plaintiffs inasmuch as IA No. 17596/2010 under Order 7 Rule 11 CPC filed by defendant No. 1 that the bar created by Section 34 of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 renders a civil court incapacitated to entertain the plaint has succeeded. Reliance by the plaintiffs on the observations made by the Supreme Court in the decision reported as Mardia Chemicals Ltd. Vs. Union of India (UOI) and Others Etc. Etc., (2004) 4 SCC 311 that if it is the case of a party that the mortgage in favour of a bank or a financial institution has been obtained by fraud, a civil suit may be maintainable, has been noted but relief declined in the absence of material particulars of the fraud pleaded in the plaint.

4. Courts in India are not only courts of law but are courts of justice and equity. Justice and equity plays a very important role in the administration of justice. If prima facie fraud emerges from the documents produced before the Court, it becomes the duty of the Court to look into the same.

5. If the learned Single Judge would have looked into the documents filed by the defendant No. 1 it would ha