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2025 Supreme(Online)(MAD) 1913
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
K.GOVINDARAJAN THILAKAVADI, J
Anoob J.singh – Appellant
Versus
The Authorized Officer – Respondent
C.R.P(MD)No.3113 of 2024 | C.M.P(MD)No.17855 of 2024
For the Appellants/Petitioners: Mr.M.R.Srinivasan
For the Respondents: Mr.C.Karthick
Civil courts lack jurisdiction over matters under the SARFAESI Act, as established by Section 34, which bars proceedings that fall within the purview of the Debts Recovery Tribunal.
Headnote:(A) Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act - Section 34 - Jurisdiction of civil courts - The trial court rejected the plaint on grounds that civil courts lack jurisdiction over matters under the Act, citing the Supreme Court's ruling that such jurisdiction is barred for matters empowered to be determined by the Debts Recovery Tribunal. (Paras 3, 10, 12, 16)
(B) Fraudulent actions - The court noted that civil courts may only intervene in cases where the creditor's actions are alleged to be fraudulent or absurd, which was not applicable in this case. (Paras 14, 15)
Facts of the case:
The plaintiffs sought a declaration that a deposit of title deed agreement was illegal and void, claiming fraud by the defendants for failing to provide a promised loan. The trial court found the suit barred by Section 34 of the SARFAESI Act.
Findings of Court:
The court upheld the trial court's rejection of the plaint, confirming that the relief sought fell under the jurisdiction of the Debts Recovery Tribunal.
Issues: The main issues were whether the suit could be entertained by a civil court given the jurisdictional bar under the SARFAESI Act and the nature of the plaintiffs' claims.
Ratio Decidendi: The court ruled that the trial court correctly applied Section 34 of the SARFAESI Act to reject the plaint, emphasizing the limited circumstances under which civil courts may intervene.
Result: Civil Revision Petition dismissed.
| Table of Content |
|---|
| 1. conclusion and dismissal of the petition. (Para 1 , 18) |
| 2. declaration of agreement as illegal and void. (Para 2) |
| 3. trial court's rejection of plaint based on jurisdiction. (Para 3 , 9) |
| 4. arguments on jurisdiction of civil court. (Para 4 , 5 , 6 , 7) |
| 5. supreme court's interpretation of sarfaesi act. (Para 10 , 11 , 12 , 13 , 14 , 15 , 16) |
ORDER :
The present Civil Revision Petition assails the fair and decreetal order, dated 10.09.2024 passed in O.S(SR)No.2499 of 2024 on the file of the Principal District Court, Kanyakumari at Nagercoil and consequently, for a direction to the learned Principal District Judge, Kanyakumari to number the O.S(SR)No.2499 of 2024 and dispose the same on merits.
2. The facts, in brief, giving rise to the present appeal are as under:
The above suit has been filed seeking declaration that the agreement relating to deposit of title deed, dated 29.04.2022 (document No.2080/2022 of Kollencode Sub Registry) as illegal and void, besides for a decree for mandatory injunction directing the defendants to return the documents mentioned in 'B' schedule to the plaintiffs and for permanent injunction restraining the defendants sale of 'A' schedule property by auction sale, besides from causing any disturbance to the enjoyment of the plaintiffs over the suit properties. The claim of the plaintiffs is that at the instance of the second defendant Bank, the plaintiffs took over M/s.J.J.Water Power Solutions run by a third party, who had obtained loan from the second defendant Bank and defaulted. At the time of such take over, the second defendant had assured to lend Rs.1 Crore 40 Lakhs for the purpose of maintaining and running the said firm, subject to the condition that the first plaintiff should mortgage his properties. Pursuant to the same, the second plaintiff, father of the first plaintiff, under compulsion of the first plaintiff had executed the agreement to deposit title deeds on 29.04.2022 with respect to 'A' schedule properties owned by the second plaintiff. But the second defendant did not give loan as promised. On the other hand, the second defendant wanted the first plaintiff not only to run the Company, but also to buy the Company's property and to write an agreement in the name of the Bank for Rs.70 Lakhs. On 31.05.2022, the plaintiff purchased the property of the Company from the legal heirs of its owner, who had died and executed an agreement in the name of the Bank in respect of the Company's property. The plaintiffs would contend that the defendants did not give loan as promised as per the agreement on 29.04.2022. Besides that on 24.06.2024, the first defendant, namely, the Authorized Officer, Indian Bank issued a demand notice to the plaintiffs threatening to auction the 'A' schedule properties and that the second defendant feigned ignorance when questioned about the same. Contending that the act of the defendants is fraudulent, the suit has been filed. It is further contended that the first defendant has abused the process of law by misusing the powers provided under SARFAESI Act.
3. The Trial Court rejected the plaint on the ground that Section 34 of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act [Hereinafter referred to as "SARFAESI Act"] bars jurisdiction of the civil Court in respect of matters which Debts Recovery Tribunal or an Appellate Tribunal is empowered to determine in respect of any action taken or to be taken in pursuance of any power conferred under the Act. Assailing the same, the present revision petition is preferred.
4. The learned Counsel appearing for the revision petitioner would submit that the above suit is filed to declare the agreement relating to deposit of title deed as illegal and void and for mandatory injunction directing the defendants to return the documents and for permanent injunction restraining the defendants in selling the suit property by auction sale. The contention of the revision petitioner in th
