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2017 Supreme(All) 2087

ALLAHABAD HIGH COURT
BEFORE : MRS. SUNITA AGARWAL, J.
GRAMIN BANK OF ARYAVART AND ANOTHER ....Petitioners
Versus
MAA LAXMI ICE & COLD STORAGE AND OTHERS ....Respondents
(Civil Misc. Writ Petition No. 4378 of 2017, decided on 18th September, 2017)

Advocates:
Counsel :
Amrish Sahai for the Petitioners; Rishi Chadha for the Respondents.

Headnote:Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Sections 34, 13(2), 14, 17 and 20 – Code of Civil Procedure, 1908 – Order VII, Rule 11 – Security interest – Enforcement of – Jurisdiction of Civil Court – Civil suit filed by respondent No. 1 and 2 for injunction on ground that a loan re-structuring agreement had been arrived between plaintiffs-respondents and defendant-bank and immovable properties of plaintiffs-guarantors have been delinked and bank had agreed to proceed only against the prime and collateral securities of borrower only – Jurisdiction of trial Court expressly barred under Section 34 – By means of re-structuring agreement, bank had acceded to the request of guarantors to proceed against the “secured asset” leaving few of them as mentioned in Schedule-C of agreement – As per loan agreement it cannot be said that bank had committed any fraud in proceeding with immovable properties mortgaged – Fraud is not only to be pleaded but is also to be proved by material evidence – Civil suit held barred under Section 34 of Act – Plaint rejected. [Paras 18 to 35]

       Result; Petition Allowed.

JUDGMENT

Hon’ble Mrs. Sunita Agarwal, J.—Counter affidavit filed by Sri Rishi Chadha learned counsel appearing for the respondent/plaintifs No. 1 and 2 is taken on record.

2. Sri Amrish Sahai learned counsel appearing for the petitioner herein submits that he does not propose to file rejoinder affidavit as the dispute being raised in the present petition is legal in nature.

3. With the consent of the learned counsel for the parties, the matter has been heard for final disposal at the admission stage itself.

4. The present petition is directed against the order dated 28.4.2017 passed by the Ist Additional Civil Judge (S.D.) Aligarh in Original Suit No. 91 of 2017 (M/s. Maa Laxmi Ice & Cold Storage and another v. Gramin Bank of Aryavart and others). The petitioners herein are the defendants in the aforesaid suit. They are challenging the jurisdiction of the Civil Court in entertaining the said suit in view of the express bar of Section 34 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act’ 2002 (hereinafter referred as ‘SARFASI Act’). The order impugned in the present petition is the order passed on the application 26-C filed by the defendants/petitioners under Section 34 of the SARFASI Act challenging the jurisdiction of the Civil Court to entertain and try the said suit.

5. The facts relevant to decide the controversy at hands are that the respondent Nos. 1, 2 and 3 availed certain financial facilities from the petitioner bank and mortgaged certain immovable properties on an agreement arrived between the parties. Certain credit facilities amounting to Rs. 3,48,07,000/- were sanctioned by the petitioner bank against the mortgage of certain immovable properties. The details of the immovable properties over which mortgage was created has been given in ‘paragraph No. 4’ of the present petition. It appears that respondent Nos. 1, 2 and 3 had failed to repay the loan and the interest thereon w.e.f 1.11.2015, as a result of it, a notice dated 3.8.2015 under Section 13(2) of the SARFASI Act was issued to the respondents. The claim of the petitioner bank is that the respondent Nos. 1, 2 and 3 had failed to give any reply to the said notice. As a result thereof, another notice dated 22.9.2016/23.9.2016 under Section 13(2) of the SARFASI Act was issued.

6. The proceeding initiated under the SARFASI Act has been culminated to the stage of taking possession under Section 14 of the said Act, with the passing of the order dated 9.5.2017. However, in the meantime, the present suit has been filed by the respondent Nos. 1 and 2 in the month of February, 2017 with the assertion that the bank was proceeding fraudulently against the prime and collateral securities of the plaintiffs/respondent Nos. 1 and 2 and the plaintiffs were entitled to the decree of permanent prohibitory injunction restraining the defendants No. 1 to 3 namely the petitioners herein from proceeding further under the SARFASI Act. The entire proceedings undertaken by the bank against the plaintiff/respondent No. 1 and 2 was, therefore, vitiated by fraud. The plea of fraud has been raised in paragraph No. 23 of the plaint which reads as under :

“23. That the plaintiffs hereafter furnish the elements of fraud and misrepresentation:

(a) The notice under Section 13(2) of the 2002 Act, served on 3.8.2015 about the accounts of plaintiff No. 1 shows that the defendants No. 1 and 2 has served the said notice involing the properties both as prime security of defendant No. 4 alongwith the properties of plaintiff No. 2 whereas at the time of Debt Restructuring Agreement, the loan, liabilities and securities of each of the entities were segregated and documented in the said agreement. It is relevant to state that in the said notice the defendants No. 1 and 2 have specified that the continuing securities already created for credit facilities to plaintiff No. 1 and defendant No. 4 were continuing mortgage in defendant No. 4 and vice versa;

(b)























































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