R. Subbiah, J.@mdashBeing aggrieved by the order dated 09.08.2010,allowing I.A. No. 329 of 2010 in O.S. No. 541 of 2008, filed under Order 39 Rule 1 and 2 read with Section 151 CPC and thereby granting temporary injunction restraining the appellant herein, from interfering with the Respondent''s peaceful possession and enjoyment of petition mentioned property, the Appellant/8th Defendant has preferred this appeal.
2. The circumstances, which led the Appellant/8th Defendant to file the present appeal, are as follows:
(a) The minor Respondent herein is the Plaintiff and she filed the suit through her mother, against the Defendants numbering 8 for partition and separate possession of her 1/4th share in Item I, 1/12th share in item II and 1/8th share in item III schedule properties and for a permanent injunction to restrain the 8th Defendant bank (the Appellant herein) from in any way dealing with the minor''s share in the above properties. The 1st Defendant is her father.
(b) The bank has also filed an objection under 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter for brevity''s sake referred to as ''SARFAESI ACT'') for taking possession of the properties.
(c) Pending suit, I.A. No. 329 of 2010 for temporary injunction was filed by the Plaintiff. The affidavit was sworn to by the mother, on behalf of the minor Plaintiff, and it has been stated that her father-in-law Krishnasamy @ J.V. Krishnamurthy got the suit properties by way of partition deed dated 12.12.1957, which was executed between himself and his brothers. The said Krishnamurthy had one son (the father of the minor Plaintiff) and two daughters, viz., Manjula and Anitha, who are Defendants 6 and 7in the suit. In the suit properties, the minor is entitled to 1/4th share in Schedule ''A'', 1/12th share in schedule ''B'' and 1/4th share in ''C'' schedule properties. The father of the minor Plaintiff i.e.the1st Defendant had mortgaged the suit properties with the 8th Defendant bank including the share of the minor. It is the contention of the mother of the Plaintiff that the mortgage created in favour of the8th Defendant bank shall not bind in respect of the share of the minor. But, in the said loan, the parents of the minor have executed personal guarantee along with the mortgage to stand as security for the loan availed by the borrowers. The parents of the minor Plaintiff have No. right whatsoever to mortgage the 4property forgetting that the minor is entitled to the shares in the suit properties. The guarantee given by the parents of the minor has No. validity and is not binding in law. While that being the position, the 8th Defendant bank resorted to SARFAESI proceedings ignoring the fact that the minor has filed the suit for partition. Hence, the minor Plaintiff has filed an application, seeking an order of injunction restraining the bank from dealing with the properties.
(d) The application was resisted by the 8th Defendant bank stating that the minor and her parents are all residing under the same roof. The parents of the minor stood as guarantors by executing a personal guarantee along with mortgage deed in respect of a loan borrowed by M/S. R.K.S. Health Care Limited. Originally the credit facilities were with Indian Bank, Lawley Road Branch, Coimbatore and they were subsequently took over by the 8th Defendant from the said bank. The parents of the minor are the beneficiaries in the said business concern. Therefore, the guardian mother now cannot pretend to be an ignorant of any loan and say that the minor''s interest is affected. The guardian of the minor is one of the signatories to the loan papers and she is fully aware of the fact that the loan is availed only in the interest and benefits of the family. The 8th Defendant bank has initiated action under the provisions of SARFAESI Act, which is a self contained code enacted for a special purpose and therefore, once a notice is issued u/s 13(2) of the Act, it has to proceed in the same way as contemplated under the Act and any aggrieved person against the measures taken by the bank u/s 13(4), has to approach the Debts Recovery Tribunal u/s 17 of the SARFAESI Act. Therefore, the civil suit filed by the minor Plaintiff is not maintainable and the application filed for temporary injunction against the bank is also not maintainable.
(e) The trial court, after hearing both sides, has allowed the application filed by the minor Plaintiff, negativing the contentions put forth by the 8th Defendant bank. Hence, the present appeal.
3. Heard the learned Counsel for both parties and perused the materials available on record.
4. It is the main submission of the learned Counsel appearing on behalf of the Appellant/8th Defendant bank that the respondent has got a statutory remedy u/s 17 of the SARFAESI Act. Further, u/s 34 of the SARFAESI Act, there is a bar for the civil courts to entertain the suit, where the proceedings under SARFAESI Act had already been initiated. Therefore, the injunction granted by the court below is liable to be set aside. In support of his submissions, the learned Counsel has relied on the decisions reported in
5. The learned Counsel for the Appellant further relied upon the partition deed executed between the father of the minor and his sisters dated 27.11.2004 and submitted that partition in respect of suit properties had already taken effect. Moreover, as per Section 6 of the Hindu Succession Act, the daughter has No. right to ask for partition on the date on which the partition took place between the family members. Therefore, even on merits, there is No. case for the respondent.
6. Per contra, the learned senior counsel appearing on behalf of the Respondent/minor Plaintiff submitted that the relief sought for by the minor is a remedy under the common law and that is not barred u/s 34 of the SARFAESI Act. So far as the right of partition is concerned, only the civil court can give a decree. The Debts Recovery Tribunal has No. jurisdiction to try the suit when the suit was for partition and separate possession. Moreover, as per the provisions under the Hindu Succession (Amendment) Act, 2005, a daughter is entitled to a share in the joint family property. Therefore, there cannot be a bar by exercising such right before the civil court. Therefore, the civil court is having jurisdiction to grant temporary injunction. In support of the said submission, the learned senior counsel has relied on an unreported judgment of this Court dated 29.10.2010 delivered in CRP.(PD.) No. 3777 of 2009.
7. Though several submissions were made on the merits of the case, I am going to deal only with the issue of jurisdiction of the civil court since the arguments of the learned Counsel appearing on either side would focus only on the issue, whether the civil court has got jurisdiction to grant an order of injunction as against the Appellant bank when already the Appellant bank had taken measures under the SARFAESI Act.
8. With regard to the jurisdiction of the civil court. It is the main contention of the respondent that the reliefs ought for in the suit is a common law remedy and the Debts Recovery Tribunal has No. jurisdiction to try with the same. Under such circumstances, there cannot be any bar for the civil court to grant injunction as against the Appellant bank in dealing with the suit properties. But it is the contention of the Appellant that when the Appellant bank had taken action under the SARFAESI Act, the civil court has No. jurisdiction to deal with the subject properties involved in the SARFAESI proceedings. Therefore, in view of the submissions, we have to see, whether the Debts Recovery Tribunal can give a relief to the minor Respondent if she approaches the Debts Recovery Tribunal. In this regard, it would be appropriate to refer the decisions relied on by the learned Counsel for the Appellant, which would give a fitting answer to this question. In 2008 (2) CTC 529 (supra), a Full Bench decision of this Court, it has been held as follows:
18. This question concerns the jurisdiction of the Debt Recovery Tribunal to pass any interim mandatory order relating to restoration of possession or restoration of management, pending the proceedings u/s 17 of the Securitisation Act. In Marida Chemicals case, the Supreme Court has held that the proceedings u/s 17 are not appellate proceedings, it is an initial action, which is brought before the forum as prescribed under the Act raising grievances against the action or measures taken by one of the parties to the contract. It is a stage of initial proceedings like filing a suit in the civil court. Proceedings u/s 17 of the Act are in lieu of the civil suit which remedy is ordinarily available, but for the bar u/s 34 of the Securitisation Act. Section 17(3) provides that if the Tribunal comes to the conclusion that any of the measures referred to in Sub-section (4) of Section 13 taken by the secured creditor are not in accordance with the provisions of the Act and the rules made there under, it can declare such action as invalid and restore possession of the secured assets to the borrower or restore the management of the possession to the borrower, as the case may be. It is, thus, clear that once the possession of the secured asset is taken, there would be No. occasion for the Tribunal to order redelivery of possession till final determination of the issue. In other words, it is only when the Tribunal comes to the conclusion that any of the measures, referred to in Section 13(4), taken by the secured creditor are not in accordance with the provisions of the Act and the rules made there under, then only the Tribunal can restore possession of such secured assets to the borrower. By virtue of Sub-section (7) of Section 17 of the Securitisation Act read with Section 19(12) of the Recovery of Debts Due to Banks and Financial Institutions Act the Tribunal undoubtedly possess ancillary power to pass interim orders subject to the conditions as it may deem fit and proper to impose, but it does not in any way override the special provisions contained in Section 17(3) of the Securitisation Act. The statutory scheme of the Securitisation Act is such that the borrower could take recourse to application u/s 17 only if one or other measure is taken by the secured creditor, and the Tribunal can restore the status quo ante only if it comes to the conclusion that any of the measure taken by the secured creditor is not in accordance with the provisions of the Act. The scheme cannot be by-passed by issuing a mandatory order for redelivery of the possession before conclusion of the proceedings u/s 17. We may mention that we are supported in our view by an unreported decision of the Division Bench of this Court in the case of Authorised Officer, Indian Bank v. The Debt Recovery Appellate Tribunal and 3 others (Writ Petition No. 46413 of 2006 decided on07.12.2006) and a decision of the Karnataka High Court in Syndicate Bank v. Basalingappa, AIR 2007 Kar 125.
9. In
25. As per the ratio laid down in
10. It has been held in CDJ 2010 MHC 3339 (supra), as follows:
11. True that the Plaintiff may institute a suit for partition before the competent Civil Court but she cannot lawfully challenge the proceedings initiated by the secured creditor under the SARFAESI Act, before the Civil Court as there is a clear bar u/s 34 of the SARFAESI Act. Section 34 of the SARFAESI Act imposes a bar on the Civil Court to grant any relief of injunction with respect to any action taken in pursuance of the power conferred under the SARFAESI Act. Therefore, the trial Court has No. authority to entertain the prayer for injunction sought for by the Plaintiff as against the secured creditors who had already initiated proceedings under the SARFAESI Act.
12. It is not as if the Plaintiff is remediless. In fact, the first Respondent took up the matter both before the Debts Recovery Tribunal as well as Debts Recovery Appellate Tribunal but miserably failed in his attempts. Even if the revision Petitioner has got any grievance as against the measures taken under the SARFAESI Act, she can very well knock at the doors of the Debts Recovery Tribunal invoking the provisions u/s 17 of the SARFAESI Act.
13. The Debts Recovery Tribunal has an authority even to invalidate or nullify any action already taken if it is established that any error or wrong ful use of the powers has been established before it, invoking u/s 17 of the SARFAESI Act.
14. In view of the above facts and ircumstances, the Court finds that the revision etitioner fails to establish prima-facie case for grant of permanent injunction as against the fourt hand fifth Defendants who are the secured creditors. The Nationalized Bank could not realise the debt on account of the partition suit initiated by the Plaintiff, questioning the initiation of proceedings y the fourth and fifth Defendants under the SARFAESI ct also.
15. In view of the above, the Court finds that here is virtually No. merit in the Civil Revision etition preferred by the revision Petitioner /Plaintiff....
11. Yet another decision cited by the Appellant is eported in
22. In order to prevent misuse of such wide owers and to prevent prejudice being caused to a borrower on account of an error on the part of the Banks or Financial Institutions, certain checks and balances have been introduced in Section 17 which allow any person, including the borrower, aggrieved y any of the measures referred to in Sub-section (4) of Section 13 taken by the secured creditor, to make an application to the DRT having jurisdiction in the matter within 45 days from the date of such measures having taken for the reliefs indicated in Sub-section (3) thereof.
23. The intention of the legislature is, therefore, clear that while the Banks and Financial Institutions have been vested with stringent powers for recovery of their dues, safe guards have also been provided for rectifying any error or wrongful use of such powers by vesting the DRT with authority after conducting an adjudication into the matter to declare any such action invalid and also to restore possession even though possession may have been made over to the transferee. The consequences of the authority vested in DRT under Sub-section (3) of Section 17 necessarily implies that the DRT is entitled to question the action taken by the secured creditor and the transactions entered into by virtue of Section 13(4) of the Act. The Legislature by including Sub-section (3) in Section 17 has gone to the extent of vesting the DRT with authority to even set aside a transaction including sale and to restore possession to the borrower in appropriate cases. Resultantly, the submissions advanced by Mr. Gopalan and Mr. Altaf Ahmed that the DRT has No. jurisdiction to deal with a post 13(4) situation, cannot be accepted. The dichotomy in the views expressed by the Bombay High Court and the Madras high Court has, infact, been resolved to some extent in
24. We are unable to agree with or accept the submissions made on behalf of the Appellants that the DRT had No. jurisdiction to interfere with the action taken by the secured creditor after the stage contemplated u/s 13(4) of the Act. On the other hand, the law is otherwise and it contemplates that the action taken by a secured creditor in terms of Section 13(4) is open to scrutiny and cannot only be set aside but even the status quo ante can be restored by the DRT.
12. A reading of the above judgments would show that the proceedings u/s 17 of the SARFAESI Act are inlieu of the civil suit which remedy is ordinarily available, but for the bar u/s 34 of the SARFAESI Act. In the instant case, the main contention of the respondent is that minor''s interest is involved in the suit properties and, therefore, they sought for an order of injunction against the Appellant bank since the 8th Defendant bank is taking steps for the sale of the entire suit properties under the SARFAESI Act. Per contra, it is the submission of the learned senior counsel for the respondent that the relief sought for by the minor is are medy under common law and therefore, bar u/s 34 will not apply.
13. In my considered opinion, though the relief sought for by the minor in the suit is for partition of the suit properties, the Debts Recovery Tribunal can decide the issue as to, whether the minor''s interest is involved in suit properties or not ? and in the event of the Debts Recovery Tribunal coming to the conclusion that the minor''s share over the mortgaged properties is affected, it could grant appropriate relief to the respondent so far as her share is concerned with regard to the SARFAESI proceedings. Under such circumstances, in my considered opinion, the civil court has No. jurisdiction to grant an order of injunction as against the Appellant bank, that too, after the bank had initiated action under the provisions of SARFAESI Act. Only when the action of secured creditor is fraudulent or the claim of the secured creditor is so absurd, the civil court can have a jurisdiction to grant a relief as against the secured creditor. But, in the instant case, there is No. such allegation as against the Appellant bank.
14. The learned Counsel for the Appellant, in support of this contention, has also relied on the decision reported in
19. ....
35. In order to prevent misuse of such wide powers and to prevent prejudice being caused to a borrower on account of an error on the part of the banks or financial institutions, certain checks and balances have been introduced in Section 17 which allow any person, including the borrower, aggrieved by any of the measures referred to in Sub-section (4) of Section 13 taken by the secured creditor, to make an application to the DRT having jurisdiction in the matter within 45 days from the date of such measures having taken for the reliefs indicated in Sub-section (3) thereof.
36. The intention of the legislature is, therefore, clear that while the banks and financial institutions have been vested with stringent powers for recovery of their dues, safe guards have also been provided for rectifying any error or wrongful use of such powers by vesting the DRT with authority after conducting an adjudication into the matter to declare any such action invalid and also to restore possession even though possession may have been made over to the transferee....
39. We are unable to agree with or accept the submissions made on behalf of the Appellants that the DRT had No. jurisdiction to interfere with the action taken by the secured creditor after the stage contemplated u/s 13(4) of the Act. On the other hand, the law is other wise and it contemplates that the action taken by a secured creditor in terms of Section13(4) is open to scrutiny and cannot only be set aside but even the status quo ante can be restored by the DRT."
20. We are in respectful agreement with the above enunciation of law on the point. It is manifest that an action u/s 14 of the Act constitutes an action taken after the stage of Section 13(4), and therefore, the same would fall within the ambit of Section 17(1) of the Act. Thus, the Act itself contemplates an efficacious remedy for the borrower or any person 1 affected by an action u/s 13(4) of the Act, by providing for an appeal before the DRT....
22. In the instant case, apart from the fact that admittedly certain disputed questions of fact viz. non-receipt of notice u/s 13(2) of the Act, non-communication of the order of the Chief Judicial Magistrate etc. are involved, an efficacious statutory remedy of appeal u/s 17 of the Act was available to the Appellants, who ultimately availed of the same. Therefore, having regard to the facts obtaining in the case, the High Court was fully justified in declining to exercise its jurisdiction under Articles 226 and 227 of the Constitution.
15. On the contrary, the learned senior counsel for the Respondent, by relying upon the unreported judgment of this Court dated 29.10.2010 delivered in CRP.(PD) No. 3777of 2009, submitted that if a decree is passed in favour of the minor respondent in the partition suit, the subject matter of the suit will not be available for partition if the bank is allowed to proceed under SARFAESI Act and therefore, to preserve the subject matter of the partition suit, the civil court will definitely have jurisdiction to grant interim orders, pending the suit. But, in my considered opinion, as per the Full Bench judgment, when Debts Recovery Tribunal is having a power to deal with the issue with regard to the involvement of right of any third party in the suit property, the said Tribunal could give an appropriate relief with regard to that share from the SARFAESI Act. Under such circumstances, I am not inclined to accept the submissions made by the learned senior counsel for the Respondent that the civil court has jurisdiction to grant injunction restraining the Appellant from dealing with the properties though the bank has initiated action under the SARFAESI Act. Further more, the object of the SARFAESI Act is for speedy remedy for recovery of amount. If injunction is allowed to continue, that would defeat the object of the said Act. In the instant case, the parents of the minor have already approached the Debts Recovery Tribunal and the applications filed by them were dismissed.
16. With regard to the yet another submission made by the learned Counsel for the Respondent that the minor Respondent is not a borrower of the loan amount and under such circumstances, the civil suit filed by the minor Respondent is maintainable, it is to be noted that the loan papers were signed by the parents of the minor Respondent; that they already approached the Debts Recovery Tribunal and the applications filed by them were also dismissed. From the said facts, I am of the considered opinion that the parents of the minor Respondent, having failed in their attempt, are trying to restrain the measures taken by the bank through the minor Respondent. Therefore, I am not inclined to accept the submissions made by the learned senior counsel for the Respondent in this regard. Under such circumstances, the order dated 09.08.2010 passed by the trial court is liable to be set aside and, accordingly, the same is hereby set aside.
In the result, the civil miscellaneous appeal is allowed. No. costs. Consequently, connected M.P. is closed.
