The bar under Section 34 of the SARFAESI Act cannot be extended to claims involving collusion and fraud, which are better addressed before the Civil Court.

JUDGMENT

(Prayer: Application filed under Order XIV Rule 8 of O.S. Rules read with Order 1 Rule 10(2) of CPC read with 151 CPC, praying to reject the plaint on the ground that civil court jurisdiction is ousted in terms of Section 34 of SARFAESI Act and Section 18 of Recovery of Debts and Insolvency Act.)

1. This Application has been filed seeking to reject the plaint on the ground that civil court jurisdiction is ousted in terms of Section 34 of SARFAESI Act and Section 18 of Recovery of Debts and Insolvency Act.

2. The averments of the plaint in brief: The applicant/5th defendant is the Bank. Since the loan account of the 11th respondent/ 1st defendant is classified as an NPA as per extant RBI guidelines, the loan account has been migrated to Circle Sastra South in terms of the internal policy of the bank for proper resolution. The present suit is filed under 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, 2002. If the statutory remedies are available under a fiscal statute, the exercise of jurisdiction before the Civil Court jurisdiction is barred. The Debt Recovery Tribunal is vested with powers and the respondents/ plaintiffs could have very well raised all these points before the Debt Recovery Tribunal. The plaintiffs cannot seek an authentic direction from the 2nd defendant to execute and register a sale deed in his favour without paying the sale consideration for the schedule-mentioned property. Since the 2nd defendant has already parted away the Schedule 'B' mentioned property after conveying an undivided share of land in favour of the 3rd and 4th defendants, the plaintiffs cannot sustain the relief sought in the plaint. Despite knowing that a valid mortgage has been created in favour of the applicant/ 5thdefendant, respondents 1 to 10/ plaintiffs 1 to 10 have filed this suit without seeking any relief as against the applicant/ 5th defendant.

2.1. In fact, the plaintiffs set the law in motion by filing a SARFAESI application in S.A.No.272 of 2019 by challenging the possession notice dated 04.05.2019 issued under Section 13(4) of the SARFAESI Act before the Debt Recovery Tribunal-II, Chennai and the same was dismissed on 30.06.2022 by observing that the applicant has a valid mortgage over the schedule 'B' mentioned property.

2.2. Since the plaintiffs themselves have applied for regularization of authorized construction before the Housing and Urban Development Department, they cannot question the ownership of mortgagors in respect of 'B' Schedule property. In view of the above-mentioned reason, the plaint filed by the plaintiffs should be rejected.

2.3. In support of his above contention, the learned counsel for the applicant / 5th defendant has relied on the following citations:

3. The counter of the respondents1-10 /plaintiffs is in brief: The applicant/ 5th respondent is a secured creditor. The respondents 1 to 10 / plaintiffs 1 to 10 have filed a suit for the relief of declaration to declare the sale deed dated 02.02.2017 executed by the 12th respondent/ 2nd defendant in favour of respondents 13 & 14/ defendants 3 & 4 as null and void and consequently direct the 12th respondent/ 2nd defendant to execute and register a sale deed in respect of 'B' schedule property in favour of respondents 1 to 10/ plaintiffs 1to 10 herein. These reliefs can be granted only by a Civil Court of Competent Jurisdiction and the same cannot be agitated before the Debt Recovery Tribunal under Section 17 of the SARFAESI Act. The respondents 1 to 10 / plaintiffs 1 to 10 have n