The judgment established the mandatory nature of Order 7 Rule 11 CPC and the limited extent of civil court jurisdiction under the SARFAESI Act, particularly in cases of alleged fraudulent actions by secured creditors.

JUDGMENT :

SUVIR SEHGAL, J.

1. Instant revision petition has been filed under Article 227 of the Constitution of India challenging order dated 15.01.2021, Annexure P-3, passed by the learned Civil Judge (Junior Division), Ludhiana, whereby application under Order 7 Rule 11 of the Code of Civil Procedure filed by the Punjab National Bank (for short - “the Bank”) - respondent No.4 has been allowed and order dated 15.04.2021, Annexure P-4, passed by the learned Additional District Judge, Ludhiana, whereby appeal against the said order has been dismissed.

2. Facts, leading to the filing of the petition, are that late Tarlochan Singh, father of the plaintiff-petitioner, was allotted plot No.296-D in Model Town Extension, Ludhiana and construction of the ground floor on the plot was raised from the funds withdrawn by the petitioner from his GPF account with the Punjab Agricultural University, where he was employed. Tarlochan Singh expired intestate on 14.12.2007. He was carrying on the business of nuts and bolts under the name and style of M/s Shine Industrial Corporation as its proprietor, which was taken over by his younger son, Harpreet Singh respondent No.2. The property continued to be in the name of late Tarlochan Singh and in the year 2016, the petitioner discovered that on the basis of a forged Will dated 11.07.2007, which was registered on 19.05.2008, purportedly executed by his deceased father, the residential property was transferred in the name of his mother-respondent No.1. In August, 2019, when he found a notice under Section 13-(2) of the Securitization and Re-construction of Financial Assets and Enforcement of Security Interest Act, 2002, (for short – SARFAESI Act) pasted on the gate of his house, he came to know that the property had been mortgaged by respondent No.1 as a collateral security with the Punjab National Bank – (for short “the Bank”) at the behest of his brother-respondent No.2. He filed a suit for declaration to the effect that he is owner in possession of ½ share in the property or in the alternative to the extent of ¼th share and that the alleged Will purported to have been executed by his deceased father is forged and fabricated and the mortgage of the residential house is illegal, null and void and ineffective qua his share. Permanent injunction was sought, restraining the Bank from dispossessing the petitioner from the property or from auctioning or putting the same to sale till the determination of the respective shares of the parties. Upon being served, the Bank filed an application under Order 7 Rule 11 CPC, Annexure P-2, which has been allowed by the trial court vide order dated 15.01.2021, Annexure P-3 and appeal there against has been dismissed vide order Annexure P-4. Both these orders have been impugned in the present revision petition.

3. Counsel for the petitioner has contended that a specific plea regarding fraud having been committed has been raised in the plaint and the issues arising out of the suit are purely within the exclusive domain of the civil court and, therefore, the bar of jurisdiction of civil court under Section 34 of the SARFAESI Act does not apply. In support of his contentions, he has placed reliance upon the judgments of the Hon'ble Supreme Court in Mardia Chemicals Limited vs. Union of India and others 2004 (4) SCC 311 and Nahar Industrial Enterprises Limited vs. Hongkong and Shanghai Banking Corporation 2009 (8) SCC 646. A reference has also been made by him to the judgments of the Bombay High Court in Bank of Baroda vs. Gopal Shriram Panda, Law Finder DOC ID#1824684; Rajasthan High Court in ICICI Bank vs. Parmod Kumar Garg and another 2018 (1) Bank J. 360; Calcutta High Court in Housing Development Finance Corporation Limited vs. Dorjee Dolma Bhutia and others 2015 (45) RCR (Civil) 394 and Guwahati High Court in Bank of Baroda vs. Ranjan Chetia and others 2014 (64) RCR (Civil) 634, wherein the Courts have placed reliance upon the judgment of the Hon’ble Supreme Court