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High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE K. CHANDRU
G.V.Films Limited rep. By its Director P. Raghuraman
Versus
Indian Bank & Others
Application No.2258 of 2009 And O.A.No.765 of 2008 In C.S.No.48 of 2008 And Application No.2257 of 2009 And O.A.No.764 of 2008 In C.S.No.49 of 2008
Decided on: 13-07-2009
SARFAESI ACT - APPLICABILITY - AGRICULTURAL LAND - MORTGAGE - INJUNCTION - BALANCE OF CONVENIENCE - PRIMA FACIE CASE - JURISDICTION OF CIVIL COURT - RES JUDICATA - ADVERSE POSSESSION - BONA FIDE PURCHASER - RESTITUTION.
Fact of the Case:
The applicant, G.V.Films Limited, filed two suits, one for redemption of mortgage and the other for a declaration that the provisions of the SARFAESI Act do not apply to the security interest created on 2. 1989 and for a consequential permanent injunction. The properties which form the subject matter of both the suits are the same. The applicant also filed applications seeking for an interim injunction restraining the first respondent, its agents, servants or men from in any way disturbing the applicant's peaceful possession of the property described in the schedule attached to the judges summons pending disposal of the suit. The applicant also filed applications seeking for a direction to the first respondent Bank and its officers and all persons claiming under or through them to maintain status quo with reference to the suit property pending disposal of the suit.
Finding of the Court:
The court held that the civil court has jurisdiction to try the applicant's suit, notwithstanding the provisions of Sections 34 and 35 of the SARFAESI Act, 2002. The court also held that the applicant has not made out a prima facie case and the balance of convenience is not in their favour for the grant of an injunction. Hence, all the applications were dismissed with costs.
Issues: 1. Whether the civil court has jurisdiction to try the applicant's suit, notwithstanding the provisions of Sections 34 and 35 of the SARFAESI Act, 2002? 2. Whether the applicant has made out a prima facie case and the balance of convenience is in their favour for the grant of an injunction?
Ratio Decidendi: 1. The court held that the civil court has jurisdiction to try the applicant's suit, notwithstanding the provisions of Sections 34 and 35 of the SARFAESI Act, 2002, relying on the following precedents: - M.S.Ramachandran Sastrigal Vs. Kuppuswami Vanniar - Adanki Thirunkat Thata Desika Charyarulu (deceased) Vs. State of Andhra Pradesh and others - Ram Swarup and others Vs. Shikar Chand and another - Dhulabai etc. vs. State of M.P. and another - Smt.Munni Devi and another Vs. Gokul Chand and another - Katikara Chintamani Dora and others Vs. Guatraddi Annamanaidu and others - Periathambi Gounden Vs. District Revenue Officer, Coimbatore and others - State of Tamil Nadu Vs. Ramalinga Swamigal Madam - Church of North India Vs. Lavajibhai Ratanjibhai and others 2. The court held that the applicant has not made out a prima facie case and the balance of convenience is not in their favour for the grant of an injunction, relying on the following precedents: - Dina Dinshaw Merchant Vs. Dinshaw Ardeshir Merchant - Vallabh Das Vs. Dr. Madanlal and others - Rame Gowda (D) by Lrs. Vs. M.Varadappa Naidu (D) by Lrs & Anr. - Dalpat Kumar and another Vs. Prahlad Singh and others - T.Arivandandam Vs. T.V.Satyapal and another - Kamala and others Vs. K.T.Eshwara Sa and others - Janatha Textiles and others Vs. Tax Recovery Officer and another
Final Decision: All the applications were dismissed with costs. The applicant was directed to pay a sum of Rs.50,000/- (Rupees fifty thousand only) towards quantified cost to the first respondent Bank.
Heard both sides.
2. The applicant M/s.G.V.Films Limited is also the plaintiff in both the suits. While C.S.No.48 of 2008 has been instituted for redemption of the mortgage, C.S.No.49 of 2008 has been instituted for a declaration that the provisions of the SARFAESI Act do not apply to the security interest created on 2. 1989 and for a consequential permanent injunction. The plaintiff in both the suits is a Company by name G.V.Films Limited and the Bank against whom the relief is claimed in both the suits, is the Indian Bank. The properties which form the subject matter of both the suits is also the same.
3. Pending the suit, O.A.No.765 of 2008 is filed by the applicant/plaintiff, seeking for an interim injunction restraining the first respondent, its agents, servants or men from in any way disturbing the applicants peaceful possession of the property described in the schedule attached to the judges summons pending disposal of the suit.
4. Application No.2258 of 2009 is filed by the plaintiff seeking for a direction to the first respondent Bank and its officers and all persons claiming under or through them to maintain status quo with reference to the suit property, pending disposal of O.A.No.765 of 2008 in C.S.No.48 of 2008.
5. Likewise, O.A.No.764 of 2008 is filed is filed by the applicant/plaintiff seeking for an interim injunction, restraining the first respondent, its agents, servants or men from in any way disturbing the applicants peaceful possession of the property described in the schedule attached to the judges summons pending disposal of the suit.
6. Application No.2257 of 2009 is filed seeking for a direction to the first respondent-Bank and its officers and all persons claiming under or through them to maintain status quo with reference to the suit property pending disposal of O.A.No.764 of 2008 in C.S.No.49 of 2008.
7. The brief facts leading to the case are as follows:
7. 1. On 2. 1989, a Company by name Sujatha Films Limited and its promoter-Directors G.Venkateswaran and Sujatha Venkateswaran availed a loan of Rs.1.50 crores from the Indian Bank and executed necessary documents. The promoter-Directors also executed Letters of Guarantee. The said company Sujatha Films Limited shall hereinafter be referred to as "the borrower company for easy reference. For the loan availed by the borrower company, two other Companies by name M/s.Parsn Medicinal Plants Private Ltd. (R2) and M/s.Coconut Grobves Private Ltd.(R3) promoted by the very same promoter-Directors, stood guarantee. These two Companies, owned a large extent of land in Mamallapuram Village and they deposited the original title deeds relating to those lands with the first respondent-Bank as security for the loan availed by Sujatha Films Limited. These two respondents shall hereinafter be referred to as the guarantor/mortgagor-companies. It is those lands in Mamallapuram Village, over which a mortgage by deposit of title deeds was created, that form the subject matter of both the present suits.
7. 2. Mr.G.Venkateswaran and Mrs.Sujatha Venkateswaran happened to be the promoter-Directors of the borrower Company Sujatha Films Limited as well as the guarantor/mortgagor-Companies M/s. Parsn Medicinal Plants Pvt Ltd (R2) and M/s.Coconut Groves Pvt Ltd.(R3).
7. 3. Since the borrower committed default in repayment, the Indian Bank (respondent No.1) filed an application under Section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 before the Debts Recovery Tribunal, Chennai in the year 1997, in O.A.No.552 of 1997 for recovery of a sum of Rs.7,95,67,088/-together with interest at the contractual rate of 20.75% with quarterly rests. The said application subsequently got renumbered as O.A.No.2018 of 2001 and later as O.A.No.81 of 2007 and it is now pending on the file of the Debts Recovery Tribunal-III, Chennai. The borrower Company, its promoter-Directors and the guarantor/mortgagor Companies are cited as defendants 1,2,3,5
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