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IN THE HIGH COURT OF JUDICATURE AT MADRAS
R. SUBRAMANIAN, J.
State Bank of India, SAM Branch - Appellant
Versus
G. Moorthi and Ors. - Respondents
Application No. 253 of 2019 in CS No. 673 of 2018
Decided On : 15-03-2019
SARFAESI Act - Section 34 - Banks and Financial Institutions Act, 1993 - Section 17 - Suit seeking rejection of plaint - Permanent injunction restraining – Bank - Recovery of Debts - For a permanent injunction restraining defendants their men agents assigns or any person claiming through or under them or acting on their behalf from in any manner interfering with possession of plaintiff over suit schedule property; or dealing transferring, alienating or creating any encumbrances whatsoever upon suit schedule property, belonging to plaintiff and more fully described in the schedule hereunder – Held, Hobble Supreme Court held that civil suit would not lie in view of provisions of Section 34 of SARFAESI Act said judgment in my considered opinion cannot be applied to the facts of the present case, inasmuch as the present suit is by a third party seeking specific performance of an agreement of sale - If specific performance is granted question as to whether the encumbrances created by agreement vendor, would be binding on plaintiffs or not is another question to be decided independently and same may not have a bearing on grant or otherwise of relief of specific performance which is the main relief sought for in this suit - As regards Division Bench judgment relied upon by Indian Overseas Bank Sow carpet Branch, reported in here again must point out that in suit for injunction restraining the Bank from proceeding for sale of the property under the SARFAESI Act Division Bench held that plaint was liable to be rejected - Learned counsel would also draw my attention to another judgment of the learned Single Judge of this Court in State Bank of India Branch, Coimbatore v. Minor rep. by its mother/guardian reported in Mad wherein this Court had held that in view of the bar created under Section 34, a Civil Court cannot grant an injunction restraining the Bank from proceeding under SARFAESI Act. There is no dispute regarding the law laid down in this pronouncement - As I have already pointed out in view of the decision of Full Bench of this Court, what is to be seen is whether bar imposed either under Section 17 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, or under Section 34 of the SARFAESI Act, would cover the relief that is sought for in the suit - If answer is no, then suit cannot be rejected as barred by law – Court have already adverted to main prayer in suit, which is one for specific performance - It cannot be granted by the Debt Recovery Tribunal or the Debt Recovery Appellate Tribunal. Therefore, I am of the considered opinion that present suit cannot be said to be barred either under Section 17 of Recovery of Debts Due to Banks and Financial Institutions Act, 1993, or under Section 34 of SARFAESI Act – Application dismissed
ORDER :
R. Subramanian, J.
1. This application has been taken out by the 2nd defendant in the suit seeking rejection of the plaint. The suit in CS No. 673 of 2018 has been filed by the 1st respondent herein seeking the following reliefs.
(a) For a specific performance directing the 1st defendant to execute and register a Conveyance Deed in favour of the plaintiff in respect of the property morefully described in the schedule hereunder, within a fixed period of time; as per the deed of declaration dated 12.04.2013;
(b) For a declaration to declare that the encumbrances bearing document No. 63/2014 dated 07.07.2014 and document No. 28/2015 dated 21.12.2015 in favour of the 2nd defendant are null and void and not binding on the plaintiff and the suit schedule property;
(c) For a permanent injunction restraining the defendants their men, agents, assigns, or any person claiming through or under them or acting on their behalf, from in any manner interfering with possession of the plaintiff over the suit schedule property; or dealing, transferring, alienating or creating any encumbrances whatsoever upon the suit schedule property, belonging to the plaintiff and morefully described in the schedule hereunder;
2. The main contention of the applicant Bank is that the suit is barred under the provisions of Section 18 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest, Act 2002. It is also further claimed that pursuant to the decree granted by the Debt Recovery Tribunal, the Bank has initiated recovery proceedings in DRC No. 160/2015/SP for sale of the property and a sale proclamation had also been issued by the Debt Recovery Tribunal. It is further claimed that action has also been initiated under the SARFAESI Act, for bringing the properties belonging to the 2nd respondent for sale. It is at this juncture, the 1st respondent has come forward with the above suit and which according to the applicant-Bank is collusive in nature with the object of delaying the execution proceedings and the proceedings under SARFAESI Act.
3. The application is resisted by the 1st respondent contending that the suit is one for specific performance, inasmuch as, the said relief of specific performance cannot be sought for under the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, the suit cannot be said to be barred by any law. It is also claimed that the relief of declaration relating to the encumbrances dated 07.07.2014 and 21.12.2015 are only consequential reliefs and as such, they cannot be said to be barred. The only question that arises for consideration is as to whether the suit can be said to be barred by the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 or the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest, Act 2002.
4. I have heard Mr. M.L. Ganesh, learned counsel appearing for the applicant-Bank and Mr. N.L. Rajah, learned Senior Counsel appearing for Mr. V. Chandraprabu, learned counsel for the 1st respondent.
5. Mr. M.L. Ganesh, learned counsel appearing for the applicant Bank would submit that in view of the provisions of Section 18 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and Section 34 of the SARFAESI Act, the suit is barred and as such the plaint is liable to be rejected.
6. Section 18 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, reads as follows:
18. Bar of Jurisdiction.--On and from the appointed day, no court or other authority shall have, or be entitled to exercise, any jurisdiction, powers or authority (except the Supreme Court, and a High Court exercising jurisdiction under articles 226 and 227 of the Constitution) in relation to the matters specified in section 17.
A reading of the above provision would show that
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