HON’BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY CIVIL REVISION PETITION No.780 of 2024

ORDER

This Civil Revision Petition, under Article 227 of the Constitution of India, is filed against the order dated 29.12.2023 in I.A.No.276 of 2022 in O.S.No.929 of 2022, passed by the III Additional Junior Civil Judge, Ranga Reddy District at L.B. Nagar.

2. Heard Sri CH. Ravinder, learned counsel for the petitioners, and Smt N. Arthi, learned counsel for respondent No.1.

3. Petitioner Nos.1 and 2 herein are defendant Nos.5 and 6, respectively, respondent No.1 is the plaintiff and respondent Nos.2 to 5 are defendant Nos.1 to 4, respectively, in the suit. For convenience, the parties will be hereinafter referred to as they are arrayed in the suit.

4. In concise, the facts of the case required for adjudication of the present Civil Revision Petition are that the plaintiff filed the suit- OS.No.929 of 2022 seeking the relief of partition of the suit schedule property and to allot 1/3^rd share to the plaintiff and also to declare the sale deed bearing document No.1991/2016, dated 07.04.2016, Certificate of Sale bearing document No.2840/2021, dated 28.04.2021, and Mortgage Deed bearing document No.3693/2016, dated 21.06.2016, as null and void.

5. Defendant No.3 alleged to have purchased the suit schedule property from the plaintiff and defendants No.1 and 2 through a registered sale deed bearing document No.1991/2016, dated 07.04.2016, by availing a house loan from Defendant No.4-Bank; that due to default committed by him in repayment of loan, the said loan was classified as ‘NPA’ and proceedings under the Securitization And Reconstruction of Financial Assets And Enforcement of Security Interest Act, 2022 (for brevity ‘SARFAESI Act’) were initiated against defendant No.3; and that defendant No.4-Bank conducted a public auction, in which defendant No.5 and 6 emerged as successful bidders and purchased the suit schedule property.

6. Meanwhile, defendant No.3 filed S.A.No.175 of 2020 before the Debt Recovery Tribunal-II, Hyderabad, (hereinafter referred to as ‘DRT’) challenging the sale and the same is pending. Defendant No.4 Bank has initiated measures under the SARFAESI Act, took possession of the suit schedule property, pursuant to order passed in Crl.M.P.No.102 of 2020 by the Chief Metropolitan Magistrate, Cyberabad at L.B. Nagar, and delivered the same to defendant Nos.5 and 6; that a sale certificate was issued in their favour, which was registered as Document bearing No.2840/2021, dated 28.04.2021, in the Sub-Registrar’s Office.

7. Defendant No.3 averred that since the sale is under challenge before the DRT, as per Section 34 of SARFAESI Act, the civil Court shall not have jurisdiction to entertain any suit or proceeding in respect of the matter which the DRT is empowered by or under the said Act and accordingly, he prayed to reject the plaint.

8. The trial Court, vide order dated 29.12.2023 dismissed the said application on the ground that in the plaint, since the status of the property is questioned and there is allegation against the secured creditor, in the light of the judgment of the erstwhile High Court of Andhra Pradesh in D.Ram Reddy Vs. Asset Reconstruction Company (India) Private Limited and others, 2016(6) ALT 533 (DB), the bar under Section 34 of SARFAESI Act would not at all apply and the civil Court is having jurisdiction to entertain the suit. Questioning the legality and validity of the said order, the present Revision Petition is filed.

9. Learned counsel appearing for the revision petitioners submitted that the impugned order passed by the trial Court is ex-facie illegal and

the jurisdiction to deal with the instant case lies with the DRT as defendant No.3 has mortgaged the property with defendant No.4-bank and as he committed default in repayment of loan amount, defendant No.4-bank has invoked the provisions of the SARFAESI Act. He further submitted that Section 34 of the SARFAESI Act debars the civil Court from entertaining any suit