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HIGH COURT OF JUDICATURE AT MADRAS
G. RAJASURIA, J.
Indian Bank Circle Office, Cuddalore & Another
Versus
V.K. Balaji
S.A. No. 302 of 2013 & M.P. No. 1 of 2013
Decided on: 05-07-2013
SARFAESI Act - Permanent Injunction - Section 34 of the SARFAESI Act, 2002 - 2007(2) CTC 193 - 2011 GUJ 163 - 2008 CAL 9 - 2008 KANT 14 - 2011(2) CTC 474 - 2012 (6) CTC 153 - W.A.No.4752/2011 - W.P.No.4913 of 2012 - AIR 1956 MAD 19 - 2004 SUPREME COURT CASES 311 - (2009) 8 SUPREME COURT CASES 366 - M.O. ABDUL RAHIM ROWTHER AND OTHERS V. SWAMINATHA ODAYAR AND OTHERS - RAJKOT NAGARIK SAHAKARI BANK LIMITED V. JIGNESH JAYANTILAL RAMANUJ AND ANOTHER - MANAGER, UCO BANK V. SAMAR SARKAR AND OTHERS - HUTCHISON ESSAR SOUTH LTD V. UNION BANK OF INDIA, REP. BY ITS AUTHORISED OFFICER - K.R. RADHAKRISHNAN V. K & N TRADE, REP. BY MANAGING PARTNER L.KANNAN AND OTHERS - ASHAKINA BEGUM V. 1.T.M.VARATHARAJAN AND OTHERS
Fact of the Case:
The plaintiff sought a permanent injunction to restrain the defendants from interfering with their possession of a leased property. The defendants claimed that the suit was not maintainable under Section 34 of the SARFAESI Act, 2002, and cited the judgment of the Division Bench of the Court in LAKSHMI PRODUCTS V. STATE OF INDIA (2007(2) CTC 193) as precedent.
Finding of the Court:
The first appellate Court decreed the suit in favor of the plaintiff, but the second appeal set aside the judgment and decree of the first appellate Court, dismissing the original suit. The Court found that the suit was not maintainable under Section 34 of the SARFAESI Act, and there was perversity and illegality in the judgment and decree of the first appellate Court.
Issues: The main issues revolved around the maintainability of the suit under Section 34 of the SARFAESI Act, the applicability of the judgment in LAKSHMI PRODUCTS V. STATE OF INDIA (2007(2) CTC 193), and the legality of the tenancy claimed by the plaintiff.
Ratio Decidendi: The Court held that the suit was not maintainable under Section 34 of the SARFAESI Act, and the judgment in LAKSHMI PRODUCTS V. STATE OF INDIA (2007(2) CTC 193) was applicable. The Court also found that the plaintiff's claim of tenancy was unsustainable under Section 65-A of the Transfer of Property Act.
Final Decision: The judgment and decree of the first appellate Court were set aside, and the original suit was dismissed by allowing the second appeal. No costs were awarded.
1. This Second appeal is focused by the defendants animadverting upon the judgment and decree dated 08.02.2012 passed by the Subordinate Court of Chidambaram, in A.S.No.42 of 2011, in reversing the judgment and decree dated 3.11.2011 passed by the Principal District Munsif Court, Chidambaram, in O.S.No.35 of 2009, which was one for permanent injunction.
2. The parties are referred to hereunder according to their litigative status and ranking before the trial Court.
3. Compendiously and concisely, the germane facts as stood uncurtained and unveiled, which are absolutely necessary for the disposal of this Second Appeal, would run thus:
(i) The respondent herein, as plaintiff filed the suit seeking the following relief:
"to pass a decree for permanent injunction in favour of the plaintiff and thereby restrain the defendants and persons claiming under them from in any manner interfering with the plaintiff's peaceful possession and enjoyment of the suit property."
(extracted as such)
(b) The warp and woof of the averments as set out in the plaint would run thus:
(i) The immovable property, viz., the residential unit, described in the schedule of the plaint was taken on lease by the plaintiff on 14.12.2006 from one N.Ramanathan and a sum of Rs.1,10,000/- was paid as advance by the former in favour of the latter.
(ii) The agreement which emerged between them was to the effect that the Government rate of interest that might accrue on the said sum of Rs.1,10,000/- (rupees one lakh ten thousand) should be treated as monthly rent by the landlord. Under such arrangement, as a lessee, the plaintiff is in possession and enjoyment of the suit property.
(iii) The plaintiff sometime before the filing of this suit came to understand that the said Ramanathan mortgaged the suit property in favour of the defendant bank and availed loan. The bank, took steps to bring the suit property for sale and accordingly the sale also was effected on 25.3.2009. The bank officials visited the suit property and demanded the father of the plaintiff who was there, to vacate it immediately. Whereupon the suit was come to be filed seeking the aforesaid prayers.
(c) Per contra, in a bid to torpedo and pulverise the averments as found set out in the plaint, the second defendant filed the written statement; the gist and kernel of the same would run thus:
(i) The averments as found set out in the plaint are false and frivolous and fraught with falsity and mendacity. The said Ramanadhan referred to in the plaint availed home loan on 27.10.1998 from D2 and created a mortgage by deposit of title deeds by way of securing the prompt repayment of the said loan amount of Rs.7,65,000.00(rupees seven lakhs sixty five thousand). Inasmuch as there was no discharge of the loan, under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as 'the SARFAESI Act' for short) the bank took steps and the suit property was taken possession on 19.9.2008 and steps were taken to sell the suit property, inviting sealed tenders from the public.
(ii) In a bid to stall such proceedings, the plaintiff and the said Ramanathan in collusion with each other created some documents between themselves and the former, accordingly filed the suit. As such, the suit filed was not maintainable. The defendants prayed for the dismissal of the suit.
(d) Whereupon issues were set down for trial by the trial Court, during which, the plaintiff examined himself as P.W.1 and marked Exs.A1 to A15. On the defendants' side one Sankar was examined as D.W.1 and Exs.B1 to B3 were marked.
(e) Ultimately, the trial Court dismissed the suit, as against which, the appeal was filed. Whereupon the first appellate Court reversed the findings of the trial Court and decreed the suit, granting relief to the effect that the plaintiff should not be dispossessed otherwise than in accordance with law.
4. Challenging and impugning the judgment and decree o
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