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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
ANIL KSHETARPAL, J.
State Bank of India – Appellant
Versus
Anish Kumar and others - Respondents
Civil Revision No.5669 of 2017(O&M)
Decided on : 21-03-2018
(B) Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, S.17 & S. 34 – Jurisdiction of Civil Court – Suit for Partition – Debt Recovery Tribunal has been empowered to decide the question of title and partition of the property – Held;
(i) Section 17 of the Act does not in any manner restrict the jurisdiction of the Debt Recovery Tribunal to decide the question of title or partition of the property – Language of Section 17 is clear and specific.
(ii) Debts Recovery Tribunal is entitled to decide any dispute which may arise in the facts and circumstances of the case, if the proceedings under Section 13 of the Act has been initiated and the applicant is aggrieved of the same. (Para 16)
(C) Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, S.17 & S. 13 & 17 – Jurisdiction of the Debts Recovery Tribunal – Question of Title – Debts Recovery Tribunal would be required to decide first of all the rights of the applicant – After the decision of the rights of the applicant, the DRT would be in a position to decide whether the measures taken under Section 13 of the Act against the secured assets is valid or invalid. (Para 16)
ANIL KSHETARPAL, J
1. The question which needs determination is “whether a civil suit for declaration, permanent injunction and for separate possession by way of partition with respect to a property which had been mortgaged and proceedings are pending under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002(hereinafter referred to as “SARFAESI Act, 2002”) is maintainable in the Civil Court, particularly when the plaintiff is claiming rights in the property which is sought to be taken over and auctioned by the secured creditors as per the provisions of the SARFAESI Act, 2002?”.
2. Learned civil court has dismissed the application filed under Order 7 Rule 11 of the Code of Civil Procedure on the ground that the relief of partition of the joint property has also been sought and no relief has been sought against the bank.
3. Plaintiff-respondent filed a suit claiming that he is owner of 1/8th share in the property bearing No.D-117-A, Phase-V, Focal Point, Ludhiana, which was initially owned by a firm, in which his father was a partner. He claims that the plot in question was allotted to the partnership firm. He further claims that Inder Lal, his father, unfortunately died on 28.11.2001 and hence on the death of his father, plaintiff being a natural heir has become owner of the said property to the extent of 1/4th share. Plaintiff further claims that he is not able to enjoy full fruits of the joint property and, therefore, the suit property be partitioned.
4. Plaintiff had impleaded his two brothers and mother as defendants. During the pendency of the suit, State Bank of India, the petitioner, was impleaded as defendant no.4, whereas the partnership firm was impleaded as defendant no.5.
5. Learned counsel for the petitioner-bank has drawn the attention of the court to the affidavits submitted by defendants no.1 to 3 claiming that they are partners of the firm M/s A.K. Engineering Company as per partnership deed dated 04.12.2001 and hence they are mortgaging the property in favour of the bank. Counsel for the petitioner-bank has argued that ultimately plaintiff wants to get the declaration that he is owner to the extent of 1/8th share and therefore, the mortgage of the property by the defendants No.1 to 3 with respect to 1/8th share of the property is without any authority. Learned counsel has drawn attention of the provisions of Sections 13, 17 and 34 of the SARFAESI Act, 2002 and has submitted that once the petitioner-bank had taken steps for enforcement of the security interest, any person claiming any right in the security interest, aggrieved by any of the measures referred to in Section 13 may make an application to the Debts Recovery Tribunal. While drawing attention of the Court to provisions of Section 34 of the Act of 2002, he submits that no civil court shall have jurisdiction.
6. Sections 13, 17 and 34 of the SARFAESI Act, 2002 are extracted as under:-
13. Enforcement of security interest.--
(1) Notwithstanding anything contained in section 69 or section 69A of the Transfer of Property Act, 1882, any security interest created in favour of any secured creditor may be enforced, without the intervention of the court or tribunal, by such creditor in accordance with the provisions of this Act.
(2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and -his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under subsection (4).
Provided that:-
(i) the requirement of classification of secured debt as non-performing asset under this sub-section shall not ap
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