IN THE HIGH COURT OF MADHYA PRADESH AT INDORE BEFORE HON'BLE SHRI JUSTICE ANIL VERMA ON THE 24 OF JULY, 2024 SECOND APPEAL No. 3082 of 20123 (M/s Shri Krishnan Tradings & another Vs State of MP and others)

Appearance:

(Shri P.C. Shrivas Advocate for appellants)

(Shri Kratik Mandloi Panel Lawyer for State)

(Shri A.S. Bahrawat Advocate for respondent no.3.)

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JUDGMENT

Heard on admission.

1/ The appellants/plaintiffs have filed the present second appeal under section 100 of Code of Civil Procedure, 1908 (in short CPC) against the impugned judgment and decree dated 8.12.2023 passed by

4^th District Judge Dhar District Dhar in civil appeal no. RCA/67/2023 whereby the order dated 22.11.2023 passed by II Civil Judge Junior Division Dhar by which suit filed by appellant/plaintiff for permanent injunction has been dismissed, has been affirmed.

2 Brief facts of the case are that the plaintiffs filed a civil suit for permanent injunction by stating that they are owner of land bearing survey No. 4/1/2 area 0.188 hectare and survey No. 4/2/1 area 0.105 hectare situated at village Akoliya. The appellants have mortgaged the land with respondent No.3 Bank. The loan became NPA therefore, respondent no. 3/Bank has taken symbolic possession of suit land and proceedings under Section 13(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) has been started before the District Magistrate Indore and the District Magistrate has delegated his powers to SDO Pithampur but defendant/respondents on the basis of unregistered sale deed tried to dispossess the plaintiff from the suit property and all proceedings under SARFAESI Act and proceedings regarding auction are based upon grave irregularity which are not binding upon the plaintiff, therefore, appellants prayed permanent injunction thereby restraining respondents from interfering in possession of appellants in the suit premises without applying due process of law. During pendency of the civil suit, respondent no. 3 has preferred an application under Order 7 Rule 11 CPC read with Sections 17 and 34 of SARFAESI Act. The trial court after hearing both the parties has held that suit is not maintainable as per provisions of Sections 17 and 34 of SARFAESI Act and dismissed the suit. Being aggrieved by the same the appellants have preferred first appeal which has been also dismissed by the first appellate court. Hence this second appeal has been preferred by appellants.

3 Learned counsel for appellants contended that the impugned order and judgment passed by both the courts below are against law and facts. The matter has been challenged before the DRAT Allahabad and proceeding conducted by Tehsildar is beyond his jurisdiction and Tehsildar hatched conspiracy with opponents and fraudulently tried to grab the suit property of appellants, therefore, the civil court is competent to entertain the civil suit. The impugned order passed by the trial court is erroneous, illegal and perverse.

4 Heard learned counsel for the appellants and perused the record with due care.

5 Counsel for appellants vehemently submitted that when suit is filed alleging fraud, bar under Section 34 of SARFAESI Act shall not be applicable.

6 The Hon'ble Apex court in case of Electrosteel Castings Limited Vs. UV Asset Reconstruction Company Ltd reported in (2022) 2 SCC 573 while dealing with Section 34 in the matter of fraud has held as under:-

“7.2 However it is required to be noted that except the words used “fraud”/”fraudulent” there are no specific particulars pleaded with respect to the“fraud”. It appears that by a clever drafting and using the words“fraud”/”fraudulent” without any specific particulars with respect to the fraud, the plaintiff appellant herein intends to get out of the bar under Section 34 of SARFAESI Act and wants the suit to be maintainable. As per the set