2019 Supreme(Ori) 70
IN THE HIGH COURT OF ORISSA, CUTTACK
A.K. RATH, J.
Geeta Meheta — Appellant
Versus
Branch Manager, Indian Overseas Bank And Another — Respondent
Civil Miscellaneous Petition No. 1447 of 2018
Decided on : 29-03-2019
Advocate Appeared:
R.K. Mohanty, Adv., R.K. Rout, Adv., S. Mohanty, Adv., G.D. Kar, Adv., A.K. Mohanty, Adv., B.C. Swain, Adv.
The main legal point established in the judgment is the application and interpretation of Sec.34 of the SARFAESI Act, which deprives civil courts of jurisdiction in matters determined by the Debts Recovery Tribunal.
Headnote:
SARFAESI Act - Mortgage Dispute - Sec.13, Sec.34 - Summary of Acts and Sections: The court discussed the provisions of Sec.13 and Sec.34 of the SARFAESI Act, which deal with enforcement of security interest and jurisdiction of civil courts, respectively. The interpretation of these provisions influenced the court's decision regarding the dispute over the mortgage of Schedule-A property and the Bank's authority to proceed under the SARFAESI Act.
Fact of the Case:
The plaintiff filed an application for partition and permanent injunction, claiming ownership of Schedule-A land and challenging the Bank's attempt to take possession under the SARFAESI Act. The trial court rejected the application, citing Sec.34 of the SARFAESI Act. The appeal against this decision was also dismissed by the District Judge.
Finding of the Court:
The court found that the plaintiff's claim was barred by Sec.34 of the SARFAESI Act, which deprives civil courts of jurisdiction in matters determined by the Debts Recovery Tribunal. The court also noted the previous dismissal of the plaintiff's application by the DRT, which had attained finality.
Issues: The main issues were the interpretation of the mortgage agreement, the applicability of Sec.34 of the SARFAESI Act, and the plaintiff's conduct in approaching the civil court despite the dismissal of her application by the DRT.
Ratio Decidendi: The court held that the plaintiff's claim was barred by Sec.34 of the SARFAESI Act, as the matter fell within the jurisdiction of the DRT. The court also emphasized the finality of the DRT's decision and the plaintiff's alleged suppression of facts.
Final Decision: The court dismissed the plaintiff's appeal, upholding the trial court's decision to reject the application for partition and permanent injunction.
JUDGMENT :
A.K.Rath, J.
This petition challenges the judgment dated 27.08.2018 passed by the learned District Judge, Cuttack in FAO No.28 of 2018. By the said judgment, learned District Judge dismissed the appeal and confirmed the order dated 29.11.2017 passed by the learned Senior Civil Judge, 1st Court, Cuttack in I.A No.1 of 2017 whereby and whereunder learned trial judge rejected the application of the plaintiff-petitioner under Order 39 Rule 1 and 2 CPC.
2. Plaintiff-Petitioner instituted the suit for partition of Schedule-A land and permanent injunction. She filed an application under Order 39 Rule 1 and 2 CPC stating that she is the owner in possession of Schedule-A land. She had purchased Schedule-A land admeasuring Ac.0.106 dec. by means of a registered sale deed no.1542 dated 17.04.1996. After obtaining approval from C.D.A., she has constructed a two storied building. Schedule-B land measuring Ac.0.053 dec. was mutated in her name. Accordingly, mutation khata no.650/996, plot no.1/1553 was carved out. After Schedule-B land was carved out from Schedule-A land, remaining land corresponds to Schedule-C land. To establish a company, defendant no.3 approached the Bank for a loan of Rs.1,20,00,000/-. Schedule-B land had been given as collateral security. Title deeds were deposited with the Bank. Due to default in payment of the loan amount, the Bank initiated a proceeding under Sec.13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act ('SARFAESI Act') against defendant no.3. On 10.5.2015, she came to know that Schedule-B land would be auctioned. Challenging the auction sale notice, she approached the Debt Recovery Tribunal, Cuttack ('DRT') in S.A. No.17 of 2015. There was no demarcation between Schedule-B and Schedule-C land, which is within the compact area of Schedule-A land within a common boundary wall. The Bank approached the Collector under Section 14 of the SARFAESI Act for taking over physical possession of Schedule-B land. The Collector allowed the application of the Bank. On 6.3.2017, the officials of the Bank along with police personnel visited Schedule-C land and intimated her that they would take possession of Schedule-A land. No demarcation had been made by the Bank officials separating Schedule-C land from Schedule-B land. The Bank officials had not tried to ascertain which portion of Schedule-A land has been mortgaged. She has inducted one Hina Begum as a tenant over Schedule-A land on monthly rent. Hina Begum has filed C.S No.76 of 2017. The Bank is not entitled to take over possession of the entire Schedule-A land. She has a prima facie case, balance of convenience tilts in her favour and she would suffer irreparable loss in the event injunction is not granted. Therefore, the Bank be restrained from dispossessing her from the suit land till disposal of the suit.
3. Defendants 1 and 2 filed objection to the interim application stating that the suit is barred by Sec.34 of the SARFAESI Act. The Bank had sanctioned loan to defendant no.3, daughter-in-law of the plaintiff. Schedule-A land was mortgaged in favour of the Bank as collateral security. Defendant no.3 did not pay the loan amount. The Bank filed O.A. Case No.604 of 2015 before the DRT, Cuttack for recovery of Rs.6,51,52,898/-. The plaintiff filed S.A No.17 of 2015 to stay e-auction notice dated 9.5.2015. Defendant no.3 is the daughter-in-law of the plaintiff. She approached this Court in WPC No.25624 of 2014 seeking a direction against the Bank from taking any coercive action. DRT, Cuttack directed for eauction sale of the mortgaged property. The Bank initiated a proceeding under Sec.14 of the SARFAESI Act before the Collector to render police assistance. Pursuant to the order of the Collector, the Bank had deposited Rs.1,11,774/- before the DCP., Cuttack. If the Bank would not be allowed to take possession of the mortgaged property, it would suffer irreparable loss.
4. Learned trial court dismissed the