IMPORTANT POINT
The SARFAESI Act does not render a sale agreement void if executed without the secured creditor's consent; rather, it allows for specific performance as long as the secured creditor's rights are preserved.

ORDER :

(S. Sounthar, J.) :

(Prayer: Petition filed under Article 227 of the Constitution of India praying to set aside the impugned order dated 25.09.2018 made in I.A.No.289 of 2018 in O.S.No.25 of 2011 on the file of the Fast Track/Mahila Judge, Namakkal.)

This Civil Revision Petition is filed challenging the order passed by the trial Court dismissing the application filed by the petitioner/first defendant seeking rejection of the plaint in O.S.No.25 of 2011 on the file of Fast Track Court/Mahila Court, Namakkal, filed by the first respondent herein against the petitioner and the second respondent.

2. The above said suit was filed by first respondent against the petitioner and the second respondent seeking specific performance of sale agreement dated 18.10.2010, allegedly entered into by the first respondent with the petitioner for purchase of plaint schedule property and also for consequential injunction restraining the second respondent from proceeding with auction of the suit property.

3. According to the first respondent, the petitioner herein obtained loan from the second respondent by mortgaging the suit property and in order to discharge the mortgage debt, he agreed to sell the property to the first respondent and entered into suit sale agreement dated 18.10.2010. It was stated by the first respondent that as per the terms of the agreement, sale price was fixed at Rs.30 lakhs and on the date of agreement, he paid a sum of Rs.5 lakhs to the petitioner by way of cash and another Rs.5 lakhs by way of cheque. Thus, on the date of agreement itself, a sum of Rs.10 lakhs was paid to the petitioner as an advance and it was agreed, the remaining Rs.20 lakhs should be paid within three months. It was also claimed by the first respondent that he had been ready and willing to perform his part of contract all along. However, the petitioner failed to take any steps to discharge the mortgage debt with the second respondent and hence, the first respondent issued a lawyer notice to the petitioner on 13.01.2011 expressing his readiness and willingness to complete the sale transactions. The petitioner came up with a reply containing false allegations, as if the petitioner received a loan of Rs.10 lakhs from the first respondent and as a security for the said loan transaction, the suit sale agreement was executed. It was also averred by the first respondent that he was ready to pay the entire amount due to the second respondent and get the sale transaction completed. However, the petitioner failed to accept the same. In these circumstances, the first respondent was constrained to file a suit for specific performance.

4. The petitioner/first defendant in the suit filed an application to reject the plaint on the ground that the suit is barred by section 34 of “The Securitisation and Reconstruction of Financial Assets and Enforcement of Security interest Act, 2002” (hereinafter referred to as “the SARFAESI Act for the sake of convenience and brevity), as suit sale agreement came into existence subsequent to notice under Section 13(4) of SARFAESI Act. The said petition for rejection of the plaint was dismissed by the trial Court and aggrieved by the same, this Civil Revision Petition is filed.

5. The learned counsel appearing for the petitioner submitted that the present suit for specific performance filed by the first respondent is barred by Section 34 of SARFAESI Act and hence, the plaint is liable to be rejected. The learned counsel further submitted that the suit sale agreement, which is sought to be specifically enforced came into existence subsequent to notice by second respondent/secured creditor under Section 13(4) of SARFAESI Act and in view of provisions of Section 13 sub-Section (13) of SARFAESI Act, the petitioner is disabled from transferring the suit property by way of sale, lease or otherwise. In nutshell, it is the contention of the learned counsel that any sale subsequent to notice under Section 13 sub-section (2) of SARFAESI A