The main legal point established in the judgment is that the jurisdiction of the Civil Court is barred under Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, and any person aggrieved by the measures taken by the secured creditors is entitled to invoke the jurisdiction of DRT and is debarred from invoking the jurisdiction of the Civil Court under Section 34.

JUDGMENT

ORDER

Anil Kshetarpal, J. (Oral). - The nationalised bank assails the correctness of the order passed by the trial Court on 30.07.2021. It is the stand of the bank that the jurisdiction of a Civil Court is barred under Section 34 of Securitisation and Reconstruction of Financial Assets and enforcement of Security Interest Act, 2002 (in short, 'the 2002 Act'). The Civil Court has rejected the application on the ground that the plaintiff has alleged fraud played on him by the secured creditor i.e. the Bank. The Court has relied upon the judgment passed by the Supreme Court in Mardia Chemicals Ltd, etc, vs. Union of India and another., AIR 2004 SCC2371.

2. The petitioner before this Court is alleged to have stood as a guarantor to the loan amount disbursed to M/s Saphire Digital Printers (defendant No.l). On default, the proceeding under the 2002 Act has been initiated against the borrowers as well as guarantors. The respondent (plaintiff) claims to have not only signed the agreement of guarantee but he also deposited the original title deeds with the bank in lieu of the loan amount. In substance, the plaintiff while filing the suit has alleged as under

"4. That as a matter of fact, Mr Neeraj Choudhary proprietor of M/s Sapphire Digital Printers was a close friend of the brother of the plaintiff who told the plaintiff that his father was on a very higher rank in a Nationalized Bank and that he could arrange Loan Against Property LAP very easily against the property bearing No 49 Sector-15, Faridabad for which initially he took the photocopies of the title of the property and later on assured the plaintiff that proposal was accepted and that original papers along-with ID proof and certain signed blank and stamp papers were required for further formality which were handed over to him but the plaintiff came to know later on that said Mr. Neeraj mis-utilized the documents and signatures by scanning the same and convened the same to the alleged Guarantee Deed dated 26-02-2016 in the loan account of his Firm known as M/s Sapphire Digital Printers The plaintiff ran from pillar to post to lodge an FIR against said Sh Neeraj and was successful later on when FIR No 260 of 2019 under Section 406/420 IPC was lodged against Mr. Neeraj and Bank Officials (who helped Mr Neeraj in committing fraud with the plaintiff).

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8. That It is further submitted that the bank officials of the defendant No 3 in connivance with the defendant No 1 i.e. proprietor of M/s Sapphire Digital Printers 86 Others committed criminal breach of trust with the plaintiff and fraud has been committed to grab the property of the plaintiff whereas the property in question, in view of the opinion of the defendant No 3 i.e. Punjab National Bank's approved Advocate, could never be mortgaged unless and until the permission to mortgage was obtained from HUDA and Memorandum of deposit of title deed was got signed which was never got signed by the plaintiff. The bank official had a connivance with the defendant No.l i.e. proprietor of M/s Sapphire Digital Printers and as such they did not follow the instructions of Bank's approved lawyer and sanctioned the loan in the name of the defendant No.l."

Section 34 of the 2002 Act is extracted as under

"Civil court not to have jurisdiction.-No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Debts Recovery/ Tribunal or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery/ of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993)."

3. It is evident that the jurisdiction of Civil Court is barred under the 2002 Act while granting liberty to any person including the borrower, who is aggrieved of any of the measures taken by the secured creditors to file an appli