The main legal point established in the judgment is the limitation on civil court jurisdiction under Section 34 of the SARFAESI Act and the duty of the court to scrutinize allegations of fraud and collusion.

JUDGMENT :

Prayer: Civil Revision Petition is filed under Article 227 of the Constitution of India, to set aside the fair and decretal order dated 08.10.2014 passed in I.A.No.9831 of 2014 in O.S.No.2309 of 2014 on the file of the learned XVIII City Civil Judge, Chennai.

1. This Civil Revision Petition is directed as against the fair and decretal order dated 08.10.2014 passed by the learned XVIII City Civil Judge, Chennai in I.A.No.9831 of 2014 in O.S.No.2309 of 2014, thereby dismissing the petition filed by the petitioner for rejection of plaint.

2. The petitioner is the third defendant in the suit filed by the respondents 1 & 2 for declaration declaring that the sale deed dated 10.02.2006, executed by the third respondent herein in favour of the fourth respondent in respect of the suit property as null and void. Further prayed to declare that the petitioner accepting the sale deed of the third respondent as a security interest is illegal and not valid in law and non-est.

3. The learned counsel appearing for the petitioner would submit that the suit properties were secured towards the repayment of financial assistant availed by M/s. RA Samy Trading Pvt. Ltd., by creating equitable mortgage by deposit of title deeds. Thereafter, the petitioner issued demand notice and also possession notice under the SARFAESI Act. Under Section 34 of the SARFAESI Act, there is a bar of civil Court jurisdiction in entertaining the suit or any action taken in pursuance of that Act.

4. The case of the respondents 1 & 2 is that originally, the suit property was allotted to the first and second respondents' father viz., the third respondent herein by a registered Will dated 13.09.1989. It was a conditional allotment and he has no right to create any encumbrance over the suit property. However the third respondent sold out the suit property to the fourth respondent herein by a registered sale deed dated 10.02.2006 and the fourth respondent pledged the suit property with the petitioner/Bank and obtained loan to the tune of Rs.25 crores. Since the fourth respondent defaulted in repayment of loan, the petitioner/Bank took action under the SARFAESI Act. Therefore, the respondents 1 & 2 filed suit as against the petitioner who intends to bring the suit property for sale, as they are having claim in the suit property. The suit property was brought for auction to be held on 15.09.2014 and as such the suit was filed.

5. However, the Court below dismissed the petition for the reason that the suit property has not been mortgaged to the bank as per the memorandum of deposit of title deed and therefore, the issues in the suit have to be gone into in full fledged trial. Further there is a bar under Section 34 of SARFAESI Act does not merit acceptance.

6. In this regard, the learned counsel appearing for the petitioner relied upon the judgment reported in 2011 (3) CTC 801 in the case of V.Thulasi Vs. Indian Overseas bank, in which the Hon'ble Division Bench of this Court held as follows:-

"29. By clever and astute drafting, the Plaintiff might create an illusion of cause of action by trying to bring civil suit within the parameters laid down by the Supreme Court in Mardia Chemicals case, (2004) 4 SCC 311. Pointing that Court has duty to see if such allegations of fraud are thrown just for the purpose of maintaining a suit, in Punjab National Bank v. J. Samsath Beevi 2010 (3) CTC 310, Justice V. Ramasubramanian held as under:

8. But at the same time, the Court has a duty to see, if such allegations of fraud are thrown, just for the purpose of maintaining a suit and ousting the jurisdiction of the Tribunal and to keep the Banks and Financial Institutions at bay. If by clever drafting, the Plaintiff creates an illusion of a cause of action, the Court is duty bound to nip it in the bud. To find out if it is just a case of clever drafting, the Court has to read the plaint, not formally, but in a meaningful manner. So is the dictum of the Apex Court in T. Arivandandam v. T.V. Sa