2002 Act ousts Civil Court's jurisdiction, injunction requires three tests to be met.

JUDGMENT :

Anil Kshetarpal, J.

1. Defendant No.1 (mortgagee and financer) assails the correctness of order passed by the Civil Court on 01.11.2019, while dismissing the application under Order VII Rule 11 of the Code of Civil Procedure, 1908 (hereinafter referred to as the ‘CPC’) read with Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the ‘2002 Act’) and allowing application filed by the plaintiffs for grant of temporary injunction restraining defendant No.1 and 2 (the mortgagee) from taking steps to sell the property in accordance with the provisions of 2002 Act.

2. In order to comprehend the issue involved in the present case, the relevant facts, in brief, are required to be noticed.

3. The plaintiffs Sh. Jaspreet Singh and Sh. Harpreet Singh sons of Sh. Sarwan Singh sold the property vide sale deed dated 16.07.2015 for a total sale consideration of Rs.24,00,000/- in favour of Smt. Pooja Sharma (defendant No.4 in the suit). Thereafter, Smt. Pooja Sharma (vendee) and her husband (defendant No.3) availed three loans from the petitioner by mortgaging the property (residential house) in the year 2016. There was default in repayment of the loan and consequently, it was as a declared non-performing asset. On 23.09.2019, the petitioner issued a demand notice under Section 13(2) of the 2002 Act to defendants No.3 and 4, which was subsequently published in the newspaper on 14.04.2019. On 26.06.2019, notice to take possession of the secured assets was issued by the petitioner while exercising powers under 2002 Act. On 03.07.2019, civil suit for grant of decree of permanent injunction was filed by the vendors (the plaintiff) against the petitioner as well as the vendee and her husband. As already noticed, the application filed by the petitioner under Order VII Rule 11 of the CPC read with Section 34 and 35 of the 2002 Act has been dismissed by the impugned order. The petitioner has also registered an FIR against the borrowers.

4. This Bench has heard the learned counsel representing the parties at length and with their able assistance perused the paperbook along with the various judgments which have been relied upon by the learned counsel in support of their submissions.

5. On the one hand, the learned counsel representing the petitioner contends that the jurisdiction of the Civil Court is excluded in view of Section 34 of the 2002 Act, whereas, under Section 35, the 2002 Act has been placed at a higher pedestal when compared with other laws.

6. On the other hand while contending that the plaintiffs (the vendors) are neither borrowers nor guarantors, the learned counsel representing the respondent submits the sale deed can be challenged only in the Civil Court because the plaintiffs are alleging fraud at the hands of the vendee. He also relies upon the judgments passed in Housing Development Finance Corporation and another Vs. Triloki Nath Grover, (2013) 26 RCR (Civil) 375 and Punjab National Bank Vs. Ram Kishan, 2014 (1) PLJ 225, which is equivalent to (2014) 30 RCR (Civil) 115.

7. This Court has considered the submissions of the learned counsel representing the parties.

8. Before analyzing the arguments of the learned counsel representing the parties, it would be appropriate to take note of Section 17, 34 and 35 of the 2002 Act, which are extracted as under:-

“17. [Application against measures to recover secured debts].—(1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, [may make an application along with such fee, as may be prescribed,] to the Debts Recovery Tribunal having jurisdiction in the matter within forty five days from the date on which such measure had been taken:

[Provided that different fees may be prescribed for making the application by the borrower and the person other than the borrower.]

[Exp