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2010 Supreme(Mad) 497

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE M. JEYAPAUL
Sumathi
Versus
Sengottaiyan & Others
C.R.P.(PD) No.1591 of 2009 and M.P.No.1 of 2009
Decided on: 05-02-2010

Advocates Appeared:
For the Petitioner:R. Marudhachalamurthy, Advocate.
For the Respondents:R1 & 2, G. Ramadoss, R4 & 5, S. Arunkumar, Advocates.

The judgment establishes that the Civil Court is barred from granting relief against actions under the SARFAESI Act, and a plaintiff must establish a prima facie case for injunction.

Headnote:

SARFAESI Act - Partition Suit - Section 14 of SARFAESI Act - Section 34 of SARFAESI Act

Fact of the Case:

The plaintiff filed a suit for permanent injunction to stop the auction of properties by the Punjab Nationalized Bank under the SARFAESI Act and also filed a suit for partition against family members. The courts rejected the plea for interim relief and dismissed the revision petition.

Finding of the Court:

The court found that the plaintiff failed to establish a prima facie case for grant of permanent injunction as the Civil Court is barred from granting relief under Section 34 of the SARFAESI Act. The plaintiff's partition suit hindered the bank's recovery of debt.

Issues: Jurisdiction of Civil Court, Bar under Section 34 of SARFAESI Act, Prima facie case for injunction, Effect of partition suit on bank's recovery proceedings

Ratio Decidendi: The court held that the Civil Court cannot grant relief against actions under SARFAESI Act due to the bar under Section 34. The plaintiff's partition suit hindered the bank's recovery proceedings, and the plaintiff failed to establish a prima facie case for injunction.

Final Decision: The Civil Revision Petition stands dismissed, and there is no order as to costs.

Judgment :-

Heard the submissions made on either side.

2. The plaintiff filed a suit for permanent injunction restraining defendants 4 and 5, the Punjab Nationalized Bank, who being the secured creditor, initiated recovery proceedings under the Securitisation and Reconstruction of Financial Assests and Enforcement of Security Interest Act, 2002 (herein after referred to as SARFAESI Act) not to auction the suit properties till the rights of the parties are finally decided. The suit is also filed by the plaintiff for the relief of partition as against his father, brother and sister who have been arrayed as D1 to D3.

3. The application filed by the plaintiff, seeking a prayer for interim injunction restraining the Punjab National Bank from auctioning the suit properties was negatived by the Trial Court. The appeal preferred by the plaintiff as against the said order passed by the Trial Court also met the same fate.

4. The fourth and fifth defendants got the suit properties mortgaged in their favour by the first and second defendants, after verifying the fact that the properties were purchased by the first defendant wayback in the year 1966 and 1974 and the remaining portion of the property purchased by the second defendant in the year 1994. The Punjab National Bank initiated Proceedings under SARFAESI Act. The appeal preferred by the first defendant before the Debts Recovery Tribunal, Coimbatore was dismissed. The further appeal preferred by the first defendant before the Debts Recovery Appellate Tribunal came to be dismissed as the conditional order was not complied with by the first defendant. Writ proceedings initiated by the first defendant was also dismissed by this Court. At the time when the Punjab National Bank, who is the secured creditor in this case initiated proceedings under Section 14 of the SARFAESI Act to get physical possession through the District Magistrate and District Collector, Salem, the daughter of the first defendant, who is the plaintiff in this case initiated the present suit seeking for partition of the very same properties which are the subject matter of the SARFAESI proceedings.

5. The plaintiff having contended that the suit properties are the joint family properties of the family consisting of the plaintiff and defendants 1 to 3 and that therefore, she has got a share in the said property, filed the suit for partition.

6. The trial Court as well as the Appellate Court having found that there was no prima-facie case and that therefore the plaintiff cannot stall the SARFAESI proceedings initiated by the fourth and fifth defendants, who are the secured creditors, rejected the plea for interim relief sought for by the plaintiff.

7. The learned counsel appearing for the revision petitioner / plaintiff would submit that the Civil Court has got jurisdiction to entertain not only the suit but the application filed for interim relief as against the fourth and fifth defendants, who have of course proceeded under the SARFAESI Act. It is his further submission that unless the imminent auction proceedings, initiated by the fourth and fifth defendants are not stalled atleast till the termination of the trial of the partition suit, the plaintiff will encounter multiplicity of proceedings and her lawful rights also will be knocked away by the Bank.

8. Per contra, the learned counsel appearing for the fourth and fifth defendants would vehemently contend invoking provisions under Section 34 of the SARFAESI Act that the Civil Court is barred from granting any relief to a party who questions the proceedings initiated under the SARFAESI Act. It is his further submission that if at all the plaintiff had got any grievance as against the measures taken under the SARFAESI Act at the instance of the fourth and fifth defendants, she should have knocked at the doors of the Debts Recovery Tribunal, invoking the provisions under Section 17 of the SARFAESI Act. Coming to the merit of the case, it is submitted by the learned coun








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