Judgment :- Ms. R. Banumathi, J. O.A. No. 1169 and Others in C.S. No. 937 of2007 and O.A. No. 1240 and 1241 of 2007 in C.S. No. 980 of 2007. In C.S. No. 937 of 2007 and A. No. 1169 to 1172 of 2007 applicant/plaintiff challenges the impugned Assignment Deed, Mortgage Deed and Lease Deed (dated 10. 2007) and seeks for declaration that those documents are void abinitio on the ground of collusion and that those documents were executed without authority and are null and void. Along with the plaint, four applications were filed by the plaintiff for restraining defendants 1 to 5 and 8 and their men from acting and giving effect to the impugned deeds of assignment, mortgage and lease deed. 2. The dispute relates to the 7th defendant Companys immovable assets Udayam Theatre and Kalyana Mandapam. The premise comprises of theatre building viz., Udayam, Suriyan, Chandiran, Mini Udayam and Kalyana Mandapam — Udayam Kalyana Mandapam standing in the name of M/s. Aruna Theatres and Enterprises Pvt. Ltd. (for short Aruna Theatres/7th defendant) The land in question is in an extent of 23 grounds and 1930 sq.ft. situated at T.S. No. 2, Kodambakkam, Door No. 3, Pillar Road, Ashok Nagar, Chennai. The applicant/plaintiff is the Shareholder and Director of D-7 Company. He was appointed as Director of D-7 Company at the EGM of the Company held on 1. 2007. Challenging the documents, D-7 Company also filed the suit C.S. No. 980 of 2007. It has also filed applications O.A. Nos. 1240 and 1241 of 2007 for restraining defendants 1 to 5 from entering into the premises. D-7 and 6-8 are the family owned private Companies. Family members are the share-holders. As the dispute pertains to the family Company, other family members, who are shareholders, have filed number of impleading applications. All the applications shall stand disposed of by this common order. For convenience, parties are referred as per array in O.S. No. 937 of 2007. 3. Background facts in brief which proliferated the litigation and dispute between the parties are as follows: (i) One late Sankaranayana Pillai of Udayathur, Tirunelveli District had six sons living together with their children as members of a joint family. The eldest son Narayana Pillai was instrumental in starting food grains business at Madras for the benefit of the joint family. He was assisted by one of his brothers namely Sundaram Pillai. The eldest son Narayana Pillai was instrumental in starting food grains business at Madras for the benefit of the joint family. He was assisted by one of his brothers namely Sundaram Pillai. As the business flourished, the other brothers — Subramania Pillai, Karuppasamy Pillai, Paramasivam Pillai, Kalyanasundaram Pillai, also came to Chennai and they established more number of business. They expanded the business in several fields. The 7th defendant Company is a Theatre Complex business started in 1982 in about 23 grounds 1930 sq.ft. in Ashok Nagar and the 8th defendant Company is a flour mill started in 1989. The other brothers came to Madras at later stages. .(ii) Credit Facilitiesof Annai Muganibigai Roller Flour Mills Ltd. - M/s. Annai Mookambigai Roller Flour Mills (P) Ltd. (8th defendant) has been granted various credit facilities through KVB Kodambakkam branch from the year 1998 onwards. Aruna Theatres & Enterprises P. Ltd. has guaranteed the due repayment of all the credit facilities with interest thereon granted to the 8th defendant herein; On 110. 1998, Aruna Theatres executed the Letter of Corporate Guarantee in favour of the first respondent bank standing as the Guarantors for the financial assistance of total amount of Rs. 759.68 lakhs availed by the 8th defendant under various loan facilities. Further, as a security the 8th defendant as well as the guarantor Aruna Theatres have created an Equitable Mortgage by deposit of title deeds relating to their respective properties situate at No. 106, Alinjivakkam Village, Ponneri Taluk, Thiruvallur District (8th defendant) and suit property situate at No. 3, Pillar Road, Ashok Nagar, Chennai consisting of Land and theatre buildings namely Udayam Suriyan, Chandran & Mini Udayam and the Kalyana Mandapam – Udayam Kalyana Mandapam standing in the name of Aruna Theatres with an extent of 23 grounds and 1930 sq. ft. or 57,130 sq. ft. situated at T.S. No. 2, Part Block No.71, Kodambakkam Village, Door No. 3, Pillar Road, Ashok Nagar Chennai. Because of the irregular operations and non-payment of the loan dues to the first respondent bank by the 8th defendant Company, the account became a Non-Performing Asset. There was a huge out-standing amount of Rs. 12,53,77,604.56 as on 25. 2004 with further interest due from the 8th defendants, 7th defendant and the guarantors. (iii) Issuance of notice under Section 13(2) end 13(4) SARFAESI Act. 1st respondent/defendant Bank issued a Notice on 21. There was a huge out-standing amount of Rs. 12,53,77,604.56 as on 25. 2004 with further interest due from the 8th defendants, 7th defendant and the guarantors. (iii) Issuance of notice under Section 13(2) end 13(4) SARFAESI Act. 1st respondent/defendant Bank issued a Notice on 21. 2003 to the 8th defendant Company, 7th defendant and the guarantors under Section 13(2) of the Securitisation and Reconstruction of Financial Assets & En-forcement of Security Interest Act, 2002 (for short `SARFAESI Act). Subsequently, the 1st respondent Bank issued notice under Section 13(4) of SARFAESI Act, 2002 on 23. 2004 for taking possession of the Secured Assets of the above said 8th defendant Company and as well as the 7th defendant company since the borrower company and the guarantors have failed to clear the dues. (iv) O.A. No. 178 of 2004 on the file off DRT; Since the eighth defendant defaulted in repayment of loan, the Bank initiated proceedings against D-8 and its Guarantors including D-7 before DRT, Chennai by filing O.A. No. 178 of 2004 for recovery of Rs. 12.53 crores which was claimed to be outstanding as on 25. 2004. In the said application before DRT, the Bank filed application in LA. No. 414 of 2004 for appointment of Receiver, in which DRT appointed D-6–Justice K. Swami Durai (Retired) as the Receiver of D-7 Company. The Receiver has been remitting payments to the first defendant Bank regularly out of collections from the D-7 theatre property. The amount so remitted was kept as no lien account. .(v) C.P. No. 64 of 2006: Alleging acts of oppression ad mismanagement by the then Board of Directors majority share holders have filed the Company Petition. 4. Pending said proceedings, on 1. 2007 an Extraordinary General Meeting (EGM) of the 7th respondent company was held with the permission of the Company Law Board (CLB). CLB permitted the holding of the EGM with a condition that the resolution shall not be implemented without the leave of the CLB. The said EGM was held on 1. 2007 in which except one Mr. Balasubramaniam rest of the directors were removed from the Board and new directors were appointed including the plaintiff. 5. CLB permitted the holding of the EGM with a condition that the resolution shall not be implemented without the leave of the CLB. The said EGM was held on 1. 2007 in which except one Mr. Balasubramaniam rest of the directors were removed from the Board and new directors were appointed including the plaintiff. 5. The petitioners in the said petition filed an application C.A. 41 of 2007 in C.P. 64 of 2006 before the CLB seeking permission for the implementation of the resolutions passed at the EGM .The CLB after hearing all the parties to the proceedings allowed the implementation of the resolutions passed at the EGM. The said Order was challenged in High Court in C.M.A. 1900 of 2007 by the directors who were removed. High Court upheld the Order of the CLB thereby confirming the appointment of new directors and removal of the old directors at the EGM held on 1. 2007. This Court in the said C.M.A. inter alia passed directions that, "No major policy or important decisions to be taken by the Board of Directors without the consent of the Company Law Board. It was also ordered that there should not be any alienation, transfer, encumbrance of the Company assets without the consent of the Company Law Board. 6. Inspite of direction in C.M.A. No. 1900 of 2007 and communication to the first defendant Bank, the impugned transactions are allegedly entered into. 7. Alleged OTS and impugned transactions: The order of appointment of Receiver in I.A. No. 414 of 2004 was challenged before DRAT in M.A. No. 69 of 2005. During the course of proceedings in DRAT in the above said M.A., DRAT directed the first defendant Bank to explore the avenue of settling issues by an One Time Settlement between the parties. After negotiations, the first defendant Bank had accepted the One Time Settlement proposal to settle the dues by accepting the amount of Rs. 9.50 crores towards the entire settlement of the dues payable by the parties on or before 312. 2005. Since the dues could not be settled, OTS lapsed by 312. 2005. 8. At the time when the parties were seriously contesting C.P. No. 64 of 2006 and C.M.A. No.1900 of 2007, all the impugned documents are said to have been executed on 10. 2007. 2005. Since the dues could not be settled, OTS lapsed by 312. 2005. 8. At the time when the parties were seriously contesting C.P. No. 64 of 2006 and C.M.A. No.1900 of 2007, all the impugned documents are said to have been executed on 10. 2007. The second defendant is alleged to have revived his request for one time settlement and the Bank is said to have given one more opportunity to the second defendant to settle the dues by remitting the amount of Rs. 13.50 crores on or before 110. 2007. 9. According to the ,second defendant, in order to mobilize the funds, with his son Mani and his grandson Manthiram, the second defendant formed a partnership firm D-3 – Ashoka Associates (D-3 – A registered partnership firm). The second defendant is said to have paid the amount to KVB on 10. 2007. The first defendant Bank had executed the impugned deeds of Assignment in favour of the second defendant on 10. 2007 and the same was registered as Doc. No. 954 of 2007. 10. KVB executed and registered an assignment deed on 10. 2007 in favour of the 2nd defendant upon receiving Rs. 13.50 Crores as a full and final settlement towards the dues of the 8th defendant company. KVB vide the said deed of assignment assigned its rights an interest to the 2nd defendant the properties mortgaged by the 7th & 8th defendant companies. The 2nd defendant s turn on the very same day i.e., 10. 2007 had executed and registered a deed of assignment in favour of the 3rd defendant – Ashoka Associates which was allegedly formed only for the purpose of mobilising the funds for discharging the loan. The 3rd defendant in turn on the very same day i.e., 10. 2007 had executed and registered a lease deed in favour of the 4th defendant. 4th defendant is said to have paid Rs. 3.50 crores. The 3rd defendant also on the very same day i.e., 10. 2007 had executed and registered a deed of simple mortgage in favour of the 5th defendant. 5th defendant is said to have paid a loan of Rs. 12.60 crores to 3rd defendant, Ashoka Traders. 11. Challenging the above said documents of assignment, lease and mortgage, plaintiff shareholder and Director of the seventh defendant Company has filed C.S. No. 937 of 2007. 5th defendant is said to have paid a loan of Rs. 12.60 crores to 3rd defendant, Ashoka Traders. 11. Challenging the above said documents of assignment, lease and mortgage, plaintiff shareholder and Director of the seventh defendant Company has filed C.S. No. 937 of 2007. The seventh defendant Company itself has filed the suit C.S. No. 980 of 2007. 12. Case of the applicant/plaintiff as projected in the plaint and the application are as follows: Inspite of defendants 1 to 3 having knowledge about the order of the High Court in C.M.A. No. 1900 of 2007, the first defendant executed and registered assignment deed on 10. 2007 in favour of the second defendant, upon receiving Rs. 13.50 crores as full and final settlement towards the dues of D-8 Company. All the four documents which are under dispute were executed and registered on a single day i.e. 10. 2007, which clearly indicates collusion among the defendants 1 to 5 and thereby fraud has been played on defendants 7 and 3 by the defendants 1 to 5. According to the plaintiffs, sequence in which the four documents were registered would indicate the haste with which the documents were executed. Execution of the documents on the same day would also establish the intention of the defendants 2 to 5 to have colluded and connived to defeat the legitimate rights of the share holders of the plaintiff and attempt has been made to knock away the valuable property of Aruna Theatres for a throw away price and the first defendant has facilitated the perpetration of fraud by defendants 2 to 5. 13. It is the further case of the plaintiff that D-7 and D-8 Companies had no knowledge about the said documents until they were executed and registered and even without knowledge and consent of these two Companies and other shareholders, properties have been fraudulently transferred by the Bank to the second defendant who in turn transferred it to the third defendant who in turn leased and mortgaged it to defendants 4 and 5 respectively. 14. Plaintiff seeks for a declaration that Assignment Deed dated 10. 2007 executed by the Bank in favour of the second defendant, Deed of Assignment dated 10. 2007 executed by the second defendant in favour of Ashoka Associates (D-3), the Mortgage Deed dated 10. 14. Plaintiff seeks for a declaration that Assignment Deed dated 10. 2007 executed by the Bank in favour of the second defendant, Deed of Assignment dated 10. 2007 executed by the second defendant in favour of Ashoka Associates (D-3), the Mortgage Deed dated 10. 2007 executed by D-3 in favour of Lavanya and Co., (D-5) and the Lease Deed dated 10. 2007 by D-3 Ashoka Associates in favour of Pyramid Saimira Theatre Ltd. (D-4) are to be declared as null and void and for Permanent Injunction. Plaintiff has also filed interlocutory applications restraining the defendants 1 to 5 and 8 from acting on and giving effect to the impugned deeds of assignment, mortgage and Lease Deed. 15. Counter affidavits have been filed by the defendants. Two of them have raised objections as to the maintainability of the suit and that in view of the bar under Section 34 SARFAESI Act, and 18 of RDB Act, Civil Court has no jurisdiction to entertain the suit. 16. The first defendant bank has filed counter contending that on account of the statutory powers conferred on Karur Vysya Bank (KVB) as secured creditor, they assigned the rights along with security to the second defendant when he remitted Rs. 13.50 crores on 10. 2005. The assignment is legally sustainable. The first defendant Bank has given enough opportunities to D-7 and D-8 Companies on many occasions to settle the dues. The Companies having failed to utilize the said opportunities and repay the huge outstanding dues of the first defendant Bank, plaintiff is estopped from making any false allegations against the first defendant Bank which has acted in accordance with law. By virtue of the provisions of SARFAESI Act, 2002, the secured creditor can have recourse to one or more of the measures under Section 13(4) to recover its secured debts. These rights include the right of assignment lease as well as sale. The second defendant in-turn assigned his rights infavour of the third defendant-D-3-Ashoka Associates which is also legally enforceable right against the borrower and the guarantors. The third defendant - D-3 -Ashoka Associates has assigned and leased out the properties to D-4 which is also legally enforceable right. The first defendant Bank also challenges the locus standi of plaintiff Murugan in filing the present suit maintainability of the suit. 17. The third defendant - D-3 -Ashoka Associates has assigned and leased out the properties to D-4 which is also legally enforceable right. The first defendant Bank also challenges the locus standi of plaintiff Murugan in filing the present suit maintainability of the suit. 17. The second defendant has filed counter affidavit referring to issuance of notice under Section 13(2) on 21. 2003 and under Section 13(4) on 23. 2003 and that Bank had taken symbolic possession of the property of D-7 Guarantor Company. According to the second defendant, he is the lone surviving founder Director of D-7 Company and with a view to save the family assets, he tried to negotiate with the Bank for OTS of Rs. 9. 5 crores but the offer lapsed on 312. 2005 as he could not mobilize funds. Later, the Bank has agreed to accept for Rs. 12.54 crores in full settlement, if payment is made before 21. 2007. In order to mobilize funds, the third defendant - D-3 - Ashoka Associates was formed and the third defendant paid the amount of Rs. 13.50 crores to the first defendant Bank on 10. 2007 and on the same day, deed of assignment was executed by the first defendant Bank in favour of the second defendant. It is the further case of the second defendant that with the said assignment executed in his favour, he had stepped into the shoes of the first defendant Bank as guarantor and redeeming eo-mortgager and therefore, all rights, including the possessory right of KVB are passed on to him. The third defendant was responsible for mobilizing funds to enable the second defendant to clear the debts to the Bank and therefore, the second defendant reassigned the debt along with security to D-3 firm and the third defendant thereupon executed simple mortgage deed in favour of D-5 and delivered the Title Deeds to D-5. To fetch income, the third defendant had entered into a lease Agreement with D-1 and there is no illegality in the second defendant reassigning the debts and security to the third defendant and the third defendant in turn executing the lease and mortgage deeds in favour of defendants 3 and 4. 18. D-4 - Pyramid Saimira has filed the counter raising the plea of bar under SARFAESI Act and RDB Act and want of locus standi of the plaintiff. 18. D-4 - Pyramid Saimira has filed the counter raising the plea of bar under SARFAESI Act and RDB Act and want of locus standi of the plaintiff. According to the D-4, it is Indias largest theatre chain complex and is a public listed Company in the Bombay Stock Exchange and National Stock Exchange and its bonds are listed in Singapore Stock exchange also. D-4 claims that its value of assets managed by its Group will exceed Rs. 2,000 crores. D-4 claims to have taken on lease the theatre complex on payment of Rs. 3.5 crores. D-4 claims that it will independently be in-vesting several crores of rupees into the theatre infrastructure which will become the property of theatre owners after the expiry of the lease period. According to D-4, it is not aware of the internal disputes between the second defendant and other Directors or the proceedings before the Company Law Board or any interim orders passed thereon. 19. D-5 - Lavanya and Co., has filed its counter raising objection as to locus standi of the plaintiff to institute the suit and also the maintainability of the suit, in view of the bar of Civil Courts jurisdiction under the SARFAESI Act and RDB Act. According to the D-5, at the request of the third defendant - Ashoka Associates advanced a loan of Rs. 12.6 crores on 10. 2007 repayable with interest @ 14% p.a. on or before 8. 2008 on deposit of title deeds of D-7 Company as security, to enable the second defendant to settle the dues to the first defendant Bank. The third defendant was responsible for mobilizing funds to enable the second defendant to clear the debts to the Bank and therefore, the second defendant reassigned the debt along with security to the third defendant firm and the third defendant thereupon executed a simple mortgage deed in favour of the fifth defendant and delivered the Title Deeds to him and the premises of the theatre complex. .20. D-8 Annai Moogambigai Roller Flour Mills — Principal Borrower has filed counter stating that the second defendant Director of D-8 being the principal borrower and mortgagor has no right of subrogation. According to D-5, the entire transaction by the first defendant Bank and the second defendant is in collusion with the defendants 3 to 5 and is not valid in law. According to D-5, the entire transaction by the first defendant Bank and the second defendant is in collusion with the defendants 3 to 5 and is not valid in law. According to D-8, any amount paid by the second defendant to the Bank would only amount to repayment of dues to the Bank and at the most, the Bank can only return the title deeds to the borrower Company discharging the mortgage. The Bank has got no right to as-sign its rights in the immovable property in favour of the .second defendant and the second defendant has got no right or authority to as-sign the rights in the immovable properties of D-7 and D-8 Companies in favour of the third defendant. .21. Contentions: .Contention of plaintiff is that in Mardia Chemicals v. Union of India and Others AIR 2004 SCC 2371 case, the Supreme Court has clearly clarified that to a limited extent, where there is serious allegation of fraud, as in the instant case, Civil Courts jurisdiction can be invoked. It was further submitted that as per the resolutions passed at the EGM on 23. 2004, the shareholders of the Company has only authorised the Chairman and the Board of Urn Company to negotiate with the first defendant Bank in order to arrive at an amicable settlement and is only authorised to sell the assets mortgaged with the Bank. The main contention urged is that neither the second defendant, or Chairman or a Director of D-7 Company, nor he, was authorized to lease or mortgage the properties of the Company to third persons and hence the second defendant has no authority either to negotiate or arrive at a settlement on behalf of D-7 Company. It was further contended that the documents executed between the defendants 1 to 5 are self-explanatory, evidencing collusion and fraud played on the defendants 7 and 8 and therefore, it is not within the purview of DRT to decide the validity of these documents and hence only the Civil Court has jurisdiction to decide on these issues and hence the suit is well maintainable. 22. Laying scathing attack on the first defendant Bank, on behalf of the D-7 Company, plaintiff C.S. No. 980 of 2007, the learned senior counsel Mr. T.V. Ramanujam has submitted that having assigned its right in "AS IS WHERE IS" condition, the Bank has no further right to pursue the matter. 22. Laying scathing attack on the first defendant Bank, on behalf of the D-7 Company, plaintiff C.S. No. 980 of 2007, the learned senior counsel Mr. T.V. Ramanujam has submitted that having assigned its right in "AS IS WHERE IS" condition, the Bank has no further right to pursue the matter. The learned counsel further argued that exercising power under Section 13(4) is the personal right to the Bank and the right under the Act is available only to KVB to proceed under the Act and the power under Section 13(4) cannot be assigned to the second defendant and ultimately to defendants 3 to 5 nor does it accrue the right in favour of any third party individual. The learned senior counsel inter alia raised the following contentions: Bank cannot be said to have exercised the right under SARFAESI Act by accepting the amount from the second defendant. The Bank had only received the amount as OTS for which there are separate guidelines and the impugned assignment is not under SARFAESI Act. The tripartite Agreement between KVB and defendants 2 and 3 is not in accordance with the SARFAESI Act and by entering into such OTS and such tripartite Agreement, Bank has waived its right and the Bank has no legal right to enter into any secret arrangement; Possession taken only by virtue of Section 19(18) by getting appointment of Receiver and the possession was not taken as contemplated under Section 13(4); The entire scheme of things would indicate that defendants 1 to 5 have devised a plan to knock away the property; The tripartite Agreement between the Bank and defendants 2 and 3 and the subsequent transactions – lease and mortgage cannot be thrust upon other shareholders. 23. The learned senior counsel Mr. T.V. Ramanujam has further urged that the Court has to pierce the veils of the assignment, Lease Deed and mortgage deed to find out the nature of transaction. Submitting that there is blatant attempt to knock away the valuable property for a song, the learned senior counsel urged that balance of convenience is upon the plaintiff and Interim Injunction is to be granted restraining the defendants 1 to 5 from acting upon the deeds and taking forcible possession. The learned senior counsel also urged that the Receiver, who is in management of the property, is earning income of about Rs. The learned senior counsel also urged that the Receiver, who is in management of the property, is earning income of about Rs. 20 to 30 lakhs per month and the same arrangement has to be continued in the interest of the shareholders. .24. On behalf of the principal borrower/D-8, learned counsel Mr. Sridhar has submitted that all the transactions by the Bank with the second defendant and the subsequent documents by the third defendant in favour of defendants 4 and 5 are sham and illegal and not valid in the eye of law and are liable to be set aside. The learned counsel also urged that under Section 92 of the Transfer of Property Act, any person, other than the mortgager, has the right of subrogation and the second defendant being the Director of D-8 Company is the mortgagor and he has no right of subrogation. 25. Appearing on behalf of the shareholders/intervenors, learned counsel Mr. Sathish Parasaran, Mr. Ragavalu, Mr. Tiruvengadam and Mr. Gopalakrishnan have submitted that the bar of jurisdiction of Civil Court is confined only to any action taken pursuant to the power exercised under SARFAESI Act. The main contention urged is that none of the impugned transactions fall within the purview of SARFAESI Act. Placing reliance upon the observation of the Supreme Court in paragraph no.51 of Mardia Chemicals v. Union of India and Others (supra) it was contended that where the action of the secured creditor is alleged to be fraudulent, jurisdiction of the Civil Court can be invoked. Submitting that the acts of the defendant is against the interest of the Company and for oblique motives, the learned counsel for the intervenors have highlighted various instances of fraud committed by defendants 1 to 5. Drawing the attention of the Court to the recitals in the Lease Deed in favour of D-5, Mr. Sathish Parasaran vehemently contended that the creation of lease for a period of 15 plus 10 years, in all aggregating to 25 years is very strange and unusual, clearly manifesting fraud. 26. Taking me through the pleadings and reiterating the averments in the counter, on behalf of the KVB, the learned senior counsel Mr. Habibulla Basha mainly contended that plaintiff Murugan, a shareholder in D-7 Company has no locus stanch to file the suit. 26. Taking me through the pleadings and reiterating the averments in the counter, on behalf of the KVB, the learned senior counsel Mr. Habibulla Basha mainly contended that plaintiff Murugan, a shareholder in D-7 Company has no locus stanch to file the suit. It was mainly argued that since the Bank has taken action under SARFASEI Act, any person aggrieved by any of the measures taken can prefer an appeal before DRT and the only remedy available is by way of appeal under Section 17 and further appeal to DRAT and Civil Court shall have no jurisdiction and the jurisdiction of the Civil Court is expressly barred under Section 34 of the Act. The learned senior counsel further urged that once the loan is discharged, the Bank has got every right to as-sign, sell, transfer or create encumbrance. It was further argued that to maintain the civil suit, allegations of fraud has not been substantiated and even if there is any fraud, it is a matter of evidence, which can be determined only at the time of trial. The learned senior counsel further submitted that when fraud is not ex facie discernible, the small window left open by the Supreme Court in Mardia Chemicals v. Union of India (supra) case cannot be taken advantage to maintain the suit. .27. Raising objection as to the locus standi of the plaintiff Murugan and maintainability of the Civil Suit, learned counsel for the second defendant Mr. N.V. Srinivasan has contended that when defendants 7 and 8 have failed to discharge loan and redeem the secured assets, only the second defendant has made earnest efforts to redeem the mortgage. The learned counsel further submitted that having discharged the debt, the second defendant steps into the shoes of KVB and the second defendant has got right of subrogate. It was further urged that apart from the common law remedy, even under SARFAESI Act, assignment is an accepted form of transfer of debt and KVB has rightly assigned debt to the second defendant. It was submitted that the third defendant Ashoka Associates had mobilized funds and to discharge the said borrowal, the second defendant has rightly assigned his interest in the secured assets in favour of the third defendant and the same cannot be challenged. In support of his contention, the learned senior counsel placed reliance upon umber of decisions. 28. It was submitted that the third defendant Ashoka Associates had mobilized funds and to discharge the said borrowal, the second defendant has rightly assigned his interest in the secured assets in favour of the third defendant and the same cannot be challenged. In support of his contention, the learned senior counsel placed reliance upon umber of decisions. 28. On behalf of the D-4, learned senior counsel Mr. P.S. Raman has submitted that as against the action taken by the Bank under Section 17 of the Act, any person aggrieved has to apply to the DRT and only DRT has jurisdiction, Placing reliance upon Transcore v. Union of India and Others AIR 2007 SC 712 : (2007) 1 MLJ 929 : 2006 (5) CTC 753 , the learned senior counsel submitted that the Supreme Court has ruled that the provisions of SARFAESI Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force and by virtue of Section 13(4) read with 13(6), mortgaged assets shall vest with the Bank and the Bank has rightly assigned its rights in favour of the second defendant. It was submitted that when there is no tangible evidence of fraud, civil suit is not maintainable and when jurisdiction is expressly excluded, Court should-be reluctant to entertain the suit. 29. Raising objection as to the locus standi of the plaintiff to challenge the transactions, on behalf of the D-5, learned senior counsel Mr. AR. L. Sundaresan has submitted that when jurisdiction of civil Court is specifically barred and when the Act contains self contained mechanism to challenge the act of the Bank, any aggrieved person Can only move DRT questioning the act of the Bank. It was further submitted that except the minimal averment in paragraph 11 of the plaint, no definite allegations of fraud are averred so as to maintain the civil suit. 30. Both Mr. P.S. Raman and Mr. AR. L. Sundaresan have submitted that balance of convenience lies in favour of defendants 4 and 5, as they have invested huge amount. It was further argued that if the documents are given effect to, the plaintiff and the other co-shareholders would be more benefited. Both of them further argued that had not the second defendant discharged the liability, the Bank would have exercised its right and the family would have been deprived of the property. It was further argued that if the documents are given effect to, the plaintiff and the other co-shareholders would be more benefited. Both of them further argued that had not the second defendant discharged the liability, the Bank would have exercised its right and the family would have been deprived of the property. It was further argued that defendants 4 and 5 having parted with huge amount facilitating discharge of the liability to the first defendant Bank, as per the terms of the documents, they must be put in possession of the property or otherwise/they would be subjected to great hardship and irreparable injury. 31. The same pleadings and contentions are raised in C.S. No. 980 of 2007 also. For brevity, I refrain from repeating the pleadings and contentions of the parties in C.S. No. 980 of 2007. 32. Taking over all view of the rival contentions of the parties, the main questions falling for consideration are: .(i) Without the approval of Board of Directors of D-7, can the plaintiff maintain the suit and whether the plaintiff has no locus standi to file the present suit as contended by the defendants?; .(ii) Whether the jurisdiction of civil Court is barred in view of Section 17 and Section 34 of SARFAESI Act?; (iii) Whether the impugned transactions do not fall within the purview of SARFAESI Act as contended by the plaintiff and interveners? .(iv) Whether the second defendant is right in contending that when the Board of Directors of D-7 had given permission to KVB on 23. 2004 to deal with the property as per the provisions of SARFAESI Act, the plaintiff and other shareholders have no locus standi to question the same and that they are estopped from questioning the same?; (v) Whether the acceptance of amount from the second defendant by KVB and assignment of the right in favour of the second defendant and the tripartite Agreement and the subsequent lease and mortgage in favour of defendants 4 and 5 are vitiated by fraud?; .(vi) Whether the plaintiff has shown prima facie case and balance of convenience? (vii) On the ground that they have parted with money, whether the defendants 4 and 5 can claim equity of being put in possession of D-7 theatre and Kalyana Mandapam? 33. Point 1. (vii) On the ground that they have parted with money, whether the defendants 4 and 5 can claim equity of being put in possession of D-7 theatre and Kalyana Mandapam? 33. Point 1. Locus standi of plaintiff In C.S. No. 937 of 2007: Challenging the maintainability of the suit and that plaintiff has no locus standi, it was mainly contended that Section 291 of the Companies Act defines the powers of the Management of the Company vest with the Board of Directors and that the Board of Directors has the exclusive power of control over the day today affairs of the Company with regard to the management, decisions and while so, without consent and approval of the Board, the plaintiff, an individual shareholder has unilaterally filed the suit. It was further contended that the plaintiff has no legal authority and competency to file the suit. 34. The teamed senior counsel Mr. P.S. Raman placing reliance upon Nagappa Chettiar v. Madras Race Club AIR 1951 Mad. 831 submitted that a shareholder is entitled to institute a suit to enforce his individual rights against the Company, such as his right to vote or his right to stand a Director of the Company in an election. But if the shareholder however intends to obtain redress in respect of a wrong done to the Company or to recover monies as damages, alleged to be due to the Company, the action should ordinarily be brought by the Company itself and if the shareholder is to institute a suit in the name of the Company, in such a case, there must be sanction of the majority for such corporate action. .35. Placing reliance upon Archana Bansal v. NEPC India Ltd., 2. Southern Wind Farms Pvt. Ltd. (2007) 6 MLJ 648 : 2007 (5) CTC 504 , and challenging the locus standi of the plaintiff, learned senior counsel Mr. Habibulla Basha and Mr. N.V. Srinivasan have contended that the shareholder has no right to question the authority of the Bank and more so, while the Bank is exercising the statutory right under the SARFAESI Act. 36. They have placed reliance upon Bacha F. Guzdar, Bombay v. Commissioner of Income Tax, Bombay AIR 1955 SC 74 , the Honble Apex Court has held as "……. 36. They have placed reliance upon Bacha F. Guzdar, Bombay v. Commissioner of Income Tax, Bombay AIR 1955 SC 74 , the Honble Apex Court has held as "……. that a share-holder acquires a right to participate in the profits of the Company may be readily conceded but it is not possible to accept the contention that the share-holder acquires any interest in the assets of the Company. A share-holder has not got a right in the property of the Company. There is nothing in the Indian Law to warrant the assumption that a share-holder who buys shares buys any interest in the property of the Company which is a juristic person entirely distinct from the share-holders. The true position of a share-holder is that on buying shares an investor becomes entitled to participate its the profits of the company in which he holds the shares if and when the Company declares, subject to the Articles of Association, that the profits or any portion thereof should be distributed by way of dividends among the shareholders. He has undoubtedly a further right to participate in the assets of the Company which would be left over after winding up but not in the assets as a whole." 37. In Archana Bansal v. NEPC India Ltd., 2. Southern Wind Farms Pvt. Ltd. (supra) this Court held that a share holder has no locus standi to object the sale of the assets of the Company that too when the consent was given by the share holder. 38. It was submitted that in the present case in the EGM conducted on 23. 2004, the members of the Company passed a resolution accepting their inability to discharge the debts and informed the Bank to sell the assets and incidentally, the plaintiff himself was a party to the resolution. It was submitted that the ratio laid down by the Courts, in the above decisions is applicable to the present case since the consent of the members was available to the Bank by the resolution passed in the EGM held on 29.3 2004. Challenging the locus standi of the plaintiff, it was mainly contended that a share-holder has no right to question the authority of the Bank and in the absence of sanction of the majority, Court should refuse to interfere with the management of the Company at the in-stance of a shareholder. .39. Challenging the locus standi of the plaintiff, it was mainly contended that a share-holder has no right to question the authority of the Bank and in the absence of sanction of the majority, Court should refuse to interfere with the management of the Company at the in-stance of a shareholder. .39. The contention that the plaintiff being a shareholder has no locus stand to institute the suit does not merit acceptance. The plaintiff is not a mere shareholder but he was appointed as a Director of D-7 Company at tile EGM of the Company held on 1. 2007. Appointment of the plaintiff and others and Directors was challenged before the Company Law Board in C.P. No. 64 of 2006. In fact, the erstwhile Directors Muthusami and Durai sought to restrain the EGM Scheduled on 1. 2007. CLB has declined to pass any interim orders. After hearing the parties, the CLB by order dated 8. 2007, allowed the Company Application no. 41 of 2007 and ordered that the newly elected Directors are at liberty to implement the resolutions passed in the EGM on 1. 2007 with certain conditions. Aggrieved against the order of CLB, the said Muthusami and Durai have filed appeal in C.M.A. No. 1900 of 2007. Dismissing the CMA, the learned single Judge has directed the CLB to dispose of the main Petition C.P. No. 64 of 2006 after giving opportunities to all the parties to raise their contention and to pass orders on or before 38. 2008. The learned single Judge inter alia passed the direction that no major policy or important decision be taken by the Board of Directors without the consent of the CLB and no alienation, transfer, encumbrance of the Company assets without the consent of the CLB. 40. When direction given in C.M.A. No. 1900 of 2007 i.e. that no major policy or important decision taken and no alienation, transfer encumbrance of Company assets without the consent of the CLB has been flouted, the plaintiff being one of the Directors was constrained to file the suit. Defendants 1 to 5 having obtained the consent of the CLB, plaintiff being the Director, was prima facie justified in approaching the Civil Court. .41. Defendants 1 to 5 having obtained the consent of the CLB, plaintiff being the Director, was prima facie justified in approaching the Civil Court. .41. Insofar as the contention that the share-holder has no right to challenge the act of the Bank in executing the Assignment Deed in favour of the second defendant, it is relevant to note that D-7 is a Company owned by family members. All the shareholders are the members of the family. It is also a family business. Business is not separated from the family. Decisions, management and the leadership in the Company are influenced by the family. Contrary to Public Limited Companies, the family business faces intractable problems because of personal differences in the value and needs of different family members which lead to conflicts in the family business. The second defendant is not even a Director in D-7 Company. While so, when the second defendant and some of family members have acted against the Company and against the interest of the family members, 70 to 80% of the shareholders have joined together and the plaintiff being a Director has come forward file the suit, C.M.A. No. 1900 of 2007 was disposed of on 19. 2007 and it is stated that the parties were able to obtain the certified copy only on 10. 2007. It appears that in a haste and hurry of the impugned transactions were executed on a single day i.e. 10. 2007. In view of the exigency of situation and urgency of the matter, perhaps the plaintiff had filed the suit hardly having time to convene EGM to get the resolution passed, authorising him to file the suit. Objection raised by the defendants 1 to 5 as to the locus standi of the plaintiff in challenging the act of the Bank is too technical. 42. The objection raised as to the locus standi of the plaintiffs act of filing the suit has now become otiose since D-7 Company itself has now filed the suit C.S. No. 980 of 2007 challenging the impugned transactions. 43. Points No. 2 and 3: Bar of Jurisdiction: The SARFAESI Act is enacted to regulate securities and reconstruction of financial assets and enforcement of security interest and for matters connected therewith. 43. Points No. 2 and 3: Bar of Jurisdiction: The SARFAESI Act is enacted to regulate securities and reconstruction of financial assets and enforcement of security interest and for matters connected therewith. The Act enables the Banks and FI to realise long term assets, manage problems of liquidity, asset liability mis-match and to improve recovery of debts by exercising powers to take possession of securities, sell them and thereby reduce non-performing assets by adopting measures for recovery and reconstruction. The Act further provides for setting up of asset reconstruction companies which are empowered to take possession of secured assets of the borrower including the right to transfer by way of lease, assignment, or sale. The said Act also empowers the said asset reconstruction companies to take over the management of the business of the borrower. The constitutional validity of the said Act has been upheld in Mardia Chemicals Limited v. Union of India (supra). In the judgment in Mardia Chemicals v. Union of India (supra) the Supreme Court held that, in cases where the secured creditor has, taken action under Section 13 (4), it would be open to the borrower to file an appeal/application under Section 17 of the Act. 44. The learned senior counsel for KVB had submitted that the Bank had issued notice under Section 13(2) on 21. 2003. The amount had become Non Performing Assets (NPA) followed by issuance of notice under Section 13(4) on 24.03.2003 and took possession of both the securities as required under the relevant rules of the SARFAESI Act. It was contended that when action had been taken under the SARFAESI Act, the suit is specifically excluded from the purview of the civil Courts. 45. The learned senior counsel for the defendants 1 to 5 have submitted that SARFAESI Act is a self contained code en-acted for a special purpose and therefore, once s notice is issued under Section 13(2), it is to proceed in the same way and any aggrieved person against the measures taken by the Bank has to approach the respondent first and the DRAT later, and he cannot maintain the civil suit in view of the specific bar contained in Section 34 of the SARFAESI Act. Assailing the maintainability of the suit, the learned counsel for the defendants 1 to 5 urged the following points: Section 34 of the SARFAESI Act makes it abundantly clear that no Civil Court shall have jurisdiction to entertain any suit or proceedings in a matter in which DRT or Appellate Tribunal is empowered under the Act. The provision therefore lays down that no injunction shall be granted by any Court or authority in respect of any action taken or to be taken under the SARFAESI Act; In Mardia Chemicals Limited v. Union of India (supra), the Supreme Court has clearly held that the mortgage shall be enforced with-out intervention of the Court and the general law on the subject of mortgage could be over-ridden by a special enactment viz., SARFAESI Act. Section 35 clearly stipulates that the provisions of the SARFAESI Act shall override the other laws. In Transcore v. Union of India and Others (supra), the Supreme Court has held that Section 35 of the SARFAESI Act gives an overriding effect to that Act with all other laws mid such of other laws which are inconsistent with the SARFAESI Act. It was urged that the methodology of enforcement has been dealt with by the Supreme Court in Mardia Chemicals Limited v. Union of India (supra) making it clear that there can be no intervention of Civil Court and exception being that the action of the secured creditors when alleged to be fraudulent the Civil Courts can interfere with. It was further contended that the finding of the Supreme Court is further qualified by the fact that the claim should be so absurd and untenable which might require any further probe and the Supreme Court has confined this exception only in the case of English Mortgage and not for any other type of mortgage. 46. The main contention is that DRT is conferred with the statutory rights and therefore, the jurisdiction of the Civil Court is barred and further there are inbuilt mechanism in SARFAESI Act providing a machinery to an aggrieved person to approach DRT in the first Ltd DRAT in the later. Reliance was placed upon Bank of India rep. by its Branch Manager v. N. Natarajan and Another (2007) 5 MLJ 1206 : 2007 (4) CTC 360 . Reliance was placed upon Bank of India rep. by its Branch Manager v. N. Natarajan and Another (2007) 5 MLJ 1206 : 2007 (4) CTC 360 . In the said judgment, it was held that SARFAESI Act is a self contained code enacted for a special purpose and therefore once a notice is issued under Section 13(2), it has to proceed in the same way as contemplated under the Act and any aggrieved person against the measures taken by the Bank under Section 13(4) has to approach the DRT first and the DRAT later and he cannot maintain a Civil Suit as against the measures taken by the Bank, under Section 13(4) of the; Act and therefore it was held that the suit is also specifically excluded from the purview of Civil Courts for the action taken or to be taken by the Bank under Section 13(4) of the Act, 47. In Bank of India v. Manickam (2006) 4 MLJ 914 learned single Judge of this Court held that a suit filed by the plaintiff for declaration that the notice issued under Section 13(2) of SARFAESI Act is void, illegal and for Permanent Injunction is barred under Section 34 of the SARFAESI Act, because the Civil Court has no jurisdiction to entertain the suit and the plaint was rejected. 48. On behalf of defendants 1 and 2, it was contended that when the Tribunal is conferred with the statutory rights, there are inbuilt mechanism to provide for a machinery for enforcement of a right and the finality of statutory provision is intended, and therefore, the jurisdiction of the Civil Court is expressly barred. Further, contending that even in the absence of such exclusionary provision the Civil Courts jurisdiction is impliedly barred, the learned senior counsel Mr. Habibulla Basha and Mr. M. Srinivasan the learned counsel for the defendants 1 and 2 placed reliance upon the following decisions: State Bank of Bikaneir and Jaipur v. Pallab Das & Co. AIR 1999 SC 3408 : (1999) 7 SCC 539 ; United Bank of India v. Debts Recovery Tribunal (2000) BC 662, Krishna Filament Co. Ltd. v Industrial Development Bank, 2004 (118) CC 35, Bank of India vs. M. M. Natarajan and Another (supra). 49. The learned senior counsel Mr. AIR 1999 SC 3408 : (1999) 7 SCC 539 ; United Bank of India v. Debts Recovery Tribunal (2000) BC 662, Krishna Filament Co. Ltd. v Industrial Development Bank, 2004 (118) CC 35, Bank of India vs. M. M. Natarajan and Another (supra). 49. The learned senior counsel Mr. P.S. Raman has submitted that under Section 9-C.P.C., Courts shall have jurisdiction to fry all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred. The learned senior counsel further urged that the opening words of the Section gives a very wide jurisdiction to the civil Courts to try all suits of a civil nature but however, this wide power is qualified by providing the exception that excepting suits of which their cognizance is either expressly or impliedly barred. 50. In support of his contention, the learned senior counsel placed reliance upon a celebrated judgment on the point Dhulabhai and Others v. State of MP. and Another AIR 1969 SC 662. In the said decision, Supreme Court inter alia summarized the following principles relating to the exclusion of jurisdiction of Civil Courts: "1. Where the statute gives a finality to the orders of the special Tribunals the Civil Courts jurisdiction must be held to be excluded if there is adequate remedy to do what the Civil Courts would normally do in a suit Such provision, however, does not exclude those cases where filing provisions of the particular Act have not been complied with or the statutory Tribunal has not acted in conformity with the fundamental principles of judicial procedure. 2. Where there is an express bar of the jurisdiction of the Court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil Court. Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. Where there is no express exclusion the examination of the remedies and the scheme of the particular Act to find out the intendment becomes necessary and the result of the inquiry may be decisive. In the latter case it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all the questions about the said right and liability shall be determined by the Tribunals so constituted, and whether remedies associated with actions in Civil Courts are prescribed by the said statute or not………..” 51. D-4 has also placed reliance upon the decision of the Supreme Court in Swami Atmananda and Others v. Sri Ramakrishna Tapovanam and Others AIR 2005 SC 2392 : (2005) 10 SCC 51 : (2005) 3 MLJ 65. In the said case, the question before the Supreme Court was to whether the jurisdiction of the Civil Court stands ousted in terms of Section 53 and 53-A of the Tamil Nadu Recognized Private Schools (Regulation) Act 1973. Observing that the jurisdiction of the Civil Court is required to-be invoked in such matters specified therein under Section 53-A, the Supreme Court has held as under: "A party to a dispute may not join the other in referring the same to the civil Court. The party may agree or may not agree therefor. A person having a grievance as against another must have a remedy. The maxim "ubi jus, ibi remedium is not an empty formality. The jurisdiction of the civil Court exemplifies the said doctrine. How the jurisdiction of the civil Court is required to be invoked is a matter to be examined by the civil Court. Unlike a private Tribunal or a statutory Tribunal which would not derive a jurisdiction unless a reference in terms of the provisions of the Act concerned is made to the civil Court enjoys a plenary jurisdiction. Hence, a "reference" under Section 53-A of T.N. Act 29 of 1974 is not akin to reference in respect of a dispute pending under the Industrial Disputes Act. The wording "referred by the persons interested" in Section 53-A(1) of the said Act would mean a person who has a grievance as regards a claim of the other side relating to the educational agency of the educational institutions.. The wording "referred by the persons interested" in Section 53-A(1) of the said Act would mean a person who has a grievance as regards a claim of the other side relating to the educational agency of the educational institutions.. It can be done by filing a suit before the civil Court. The term "persons", which is plural, has been used having regard to the fact that an educational agency need not be a person alone but would also include a society registered under the Societies Registration Act or a body corporate in terms of the Companies Act." 52. In support of their contention that the Civil Courts jurisdiction is barred, and that the aggrieved party is to approach DRT, defendants 1 to 4 relied upon Mardia Chemicals Limited v. Union of India (supra) and Transcore v. Union of India and Others (supra), No doubt in Mardia Chemicals Limited v. Union of India (supra), the Apex Court has held that the aggrieved person has to approach on the DRT haying jurisdiction under Section 17 of the Act. But bar of jurisdiction of civil Court in RDB Act and SARFAESI Act do not include a suit where a action of secured creditor is assailed as fraudulent. The question is well settled by the Apex Court in Mardia Chemicals Limited v. Union of India (supra) wherein in para 51 of its judgment, the Supreme Court has held as under: "51. However, to a very limited extent jurisdiction of the civil Court can also be invoked, where for example, the action of the secured creditor is alleged to be fraudulent or their claim may be so absurd and untenable which may not require any proble, whatsoever or to say precisely to the extent the scope is permissible to bring an action in the Civil Court in the cases of English mortgages. We find such a scope having been recognized in the two decisions of the Madras High Court which have been relied upon heavily by the learned Attorney General as well appearing for the Union of India, namely, V. Narasimhachariar v. Egmore Benefit Society, AIR 1955 Madras 135 p. 135 at p. 141 and 144, a judgment of the learned single Judge where it is observed as follows in para 22: "The remedies of a mortgagor against the mortgagee who is acting in violation of the rights, duties and obligations are twofold in character. The mortgagor can come to the Court before sale with an injunction for staying the sale if there are materials to show that the power of sale is being exercised in a fraudulent or improper manner contrary to the terms of the mortgage. But the pleadings in an action for restraining a sale by mortgagee must clearly disclose a fraud or irregularity on the basis of which relief is sought: "Adams v. Scott, 1859 (7) WR (Eng.) 213 (Z49). I need not point out that this restraining on the exercise of the power of sale will be exercised by Courts only under the limited circumstances mentioned above because otherwise to grant such an injunction would be to cancel one of the clauses of the deed to which both the parties had agreed and annul one of the chief securities on which persons advancing moneys on mortgages rely. (See Rashbehary Ghose Law of Mortgages, Vol. 11, Fourth Edn. Page 784). .53. While summarizing, the Supreme Court has inter alia held: ."80.5. As discussed earlier in this judgment, we find that it will be open to maintain a civil suit in Civil Court, within the narrow scope and on the limited grounds on which they are permissible, in the matters relating to an English mortgage enforceable without intervention of the Court." 54. Since the plaintiff is assailing the transaction on the ground of fraud, in view of the judgment of the Supreme Court, the suit is maintainable. The contention of the defendants 1 to 5 assailing the maintainability of the Suit and that the remedy, of the plaintiff is to approach DRT having jurisdiction under Section 17 of the act, does not merit acceptance. 55. The contention of the defendants 1 to 5 assailing the maintainability of the Suit and that the remedy, of the plaintiff is to approach DRT having jurisdiction under Section 17 of the act, does not merit acceptance. 55. Action of the secured creditor is alleged to be fraudulent and the Supreme Court is confining this exception only in case of English Mortgage, the learned senior counsel has drawn the attention of the Court to the definition of English Mortgage under Section 58(e) of T.P. Act The learned senior counsel submitted that in this case, the mortgage entered into with the Bank with regard to secured assets is an equitable mortgage by deposit of title deeds and not an English mortgage and therefore, the civil suit is barred in view of Section 34 of the SARFAESI Act and the plaintiff cannot take advantage of the observations of the Supreme Court in para 50 of the Mardia Chemicals Limited v. Union of lndia (supra) case. The learned senior counsel further submitted that the case on hand does not satisfy the principles laid down in paragraph 50 and paragraph 80.5 of Mardia Chemicals Limited v. Union of India (supra) and therefore, the suit is not maintainable. 56. In my considered view, the above contention cannot be countenanced. As rightly contended by Mr. Sathish Parasaran, in Mardia Chemicals Limited v. Union of India (supra), Supreme Court mainly focussed on "fraud or untenable claim." Only as an illustrative example, the Supreme Court has referred to English mortgage. The observation of the Supreme Court In paragraph 50 and paragraph 80.5 are not confined only to English mortgage as contended by the learned senior counsel for the first defendant Bank. In the present case, though the mortgage is not an English mortgage, but only an equitable mortgage by deposit of title deeds, the principles laid down by the Supreme Court in Mardia Chemicals Limited v. Union of lndia (supra) is applicable. When the action of the Bank — secured creditor is assailed on the ground of fraud, the suit is maintainable. In my considered view, there is no force in the contention that in view of Sections 17 and 34 of SARFAESI Act the suit is barred. .57. When the action of the Bank — secured creditor is assailed on the ground of fraud, the suit is maintainable. In my considered view, there is no force in the contention that in view of Sections 17 and 34 of SARFAESI Act the suit is barred. .57. Contention of the plaintiff and intervenors is that the suit is not barred under the provisions of SARFAESI Act since none of the impugned transactions would fall within the purview of SARFAESI Act. The learned senior counsel Mr. T.V. Ramanujam has submitted that the debt has been discharged and the Bank has received the one time settlement amount from strangers viz., defendants 4 and 5 and admittedly possession of the theatre and Kalyana Mandapam is with DRT and therefore, the action of the secured creditor would not come within the purview of SARFAESI Act. 58. The learned counsel Mr. Sathish Parasaran also submitted that the Secured Creditor can exercise right only in the manner prescribed under Section 13(8) of the Act and KVB had to strictly comply with Section 13(8) and when the Bank has entered into private negotiations with defendants 2 to 5 and also presumably with the erstwhile ousted Directors mid had executed a deed of assignment under common law and not under the provisions of SARFAESI Act, assignment by KVB and the subsequent assignment would not come under the provisions of the SARFAESI Act. 59. The contention that action initiated by the first defendant Bank is not to be construed under SARFAESI Act does not merit acceptance. The first defendant has proceeded under the provisions of SARFAESI Act by issuing Notice under Section 13(2) and 13(4). The Bank has also filed O.A. No. 178 of 2004 before the DRT. Under Section 13 of the Act, notwithstanding anything contained in Section 69 or 69-A of T.P. Act any security interest created in favour of ally secured debtor may be enforced without the intervention of Court or Tribunal by such creditor in accordance with the provisions of the Act. 60. Observing that the object of Section 13 of SARFAESI Act is recovery of dues by non-adjudicatory process and that on the basis that secured interest needs to be enforced expeditiously and referring to RDB Act and SARFAESI Act, in Transcore v. Union of India and Others (supra), the Supreme Court has held as under at p. 952 of MLJ: "47. Observing that the object of Section 13 of SARFAESI Act is recovery of dues by non-adjudicatory process and that on the basis that secured interest needs to be enforced expeditiously and referring to RDB Act and SARFAESI Act, in Transcore v. Union of India and Others (supra), the Supreme Court has held as under at p. 952 of MLJ: "47. We have already analysed the scheme of both the Acts. Basically, the NPA Act is enacted to enforce the interest in the financial assets which belongs to the bank/Fl by virtue of the contract between the parties or by operation of common law principles of by law. The very object of Section 13 of NPA Act is recovery by non-adjudicatory process, A secured asset under NPA Act is an asset in which interest is created by the borrower in favour of the bank/Fl and on that basis alone the NPA Act seeks to en-force the security interest by non-adjudicatory process. Essentially, the NPA Act deals with the rights ofthe secured creditor. The NPA Act proceeds on the basis that the debtor has failed not only to repay the debt, but he has also failed to maintain the level of margin and to maintain value of the security at a level is the other obligation of the debtor. It is this other obligation which invites applicability of NPA Act. It is for this reason, that Sections 13(1) and 13(2) of the NPA Act proceeds on the basis that security interest in the bank/Fl; needs to be enforced expeditiously without the intervention of the Court/Tribunal; that liability of the borrower has accrued and on ac-count of default in repayment, the account of the borrower in the books of the bank has become non-performing. For the above reasons, NPA Act states that the enforcement could take place by non- adjudicatory process and that the said Act removes all fetters under the above circumstances on the rights of the secured creditor" 61. In the Transcore v. Union of India and Others (supra), the Supreme Court has also held that the secured creditor can proceed with both proceedings and held as under: "50. (We hold that withdrawal of the OA pending before the DRT under the DRT Act is not a precondition for taking recourse to NPA Act. In the Transcore v. Union of India and Others (supra), the Supreme Court has also held that the secured creditor can proceed with both proceedings and held as under: "50. (We hold that withdrawal of the OA pending before the DRT under the DRT Act is not a precondition for taking recourse to NPA Act. It is for the bank/F1 to exercise its discretion as to cases in which it may apply for leave and in cases where they may not apply for leave to withdraw. We do not wish to spell out those circumstances because the said First Proviso, to Section 19(1) is an enabling provision, which provision may deal with myriad circumstances which we do not wish to spell out herein." 62. As noted earlier, after issuance of Section 13(2) notice (dated 21. 2003) and Section 13(4) notice (dated 23. 2003), the Bank has proceeded to file O.A. No. 178 of 2004 and the matter is still pending with DRT. When notice had been issued under SARFAESI Act, offer and negotiation for OTS does not take away the nature of proceedings as one under SARFAESI Act and there is no force in the contention that in view of non-compliance of Section 13(8), the action of the first defendant Bank would not come within the purview of SARFAESI Act. 63. Points No. 4 and 5: Whether the impugned transactions are tainted with fraud ? The point falling for consideration is whether the plaintiff has shown a prima facie case that transactions are to be avoided as they are tainted with fraud and cancellation of the impugned documents would be proper. 64. As noted earlier, defendants 7 and 8 Companies are Private Limited Companies. The shareholders are six branches of the family with 55 shareholders and 7596 shareholdings. Each family has a shareholding of 1266 shares each, (vide report filed by Mr. A.V. Radhakrishnan, Advocate as observer of the joint meeting held on 7.10 2005). The second defendant who projects himself as the well-wisher of the family (of course with concealed selfish interest) is one of the Director of D-8 Company. D-8 Company Flour Mills availed credit facilities and the second defendant was one of the Director of D-8 Company. The second defendant was also the then Director of D-7 — Aruna Theatres in 1998 when D-8 availed credit facilities. 65. For the credit facilities and loan amount of Rs. D-8 Company Flour Mills availed credit facilities and the second defendant was one of the Director of D-8 Company. The second defendant was also the then Director of D-7 — Aruna Theatres in 1998 when D-8 availed credit facilities. 65. For the credit facilities and loan amount of Rs. 759.68 lakhs borrowed by D-8, D-7 Aruna Theatre offered Corporate Guarantee. D-7 a Company registered under the Companies Act had offered the Corporate Guarantee to the loan amount borrowed by D-8 from KVB. For offering Corporate Guarantee. Board of D-7 Aruna Theatres have passed requisite resolution in its Board Meeting held on 110. 1998. resolving and authorizing to execute the guarantee in favour of KVB, guaranteeing due repayment of all the loans and advances granted to D-8 by KVB. 66. Be it noted that the Udayarn Theatre and Kalyana mandapam is located Ashok Nagar in prime locality in Chennai in a vast extent of about 29 grounds presently valued about more than Rs. 100 crores. Such valuable properties of Aruna Theatres were mortgaged to KVB by deposit of title deeds in order to secure a loan of Rs. 759.68 lakhs given by the Bank to D-8. It is relevant to note that the second defendant had been and continues to be the majority shareholder and Director in D-8 Annai Moogambigai. That means, apart from having offered personal guarantee, 2nd defendant as a Director of the Company is the principal borrower. 67. Before adverting to specific and various details alleging fraud, we may briefly highlight few circumstances prima, facie leading to proof of fraud. 68. Alleging mismanagement of Aruna Theatres, there has been division amongst the family members/shareholders. Business of Aruna Theatres had been in control of Muthusami, Durai and Venkatachalam for nearly a decade (1997 -2007). It is alleged that during their tenure, the affairs of Aruna Theatres were so grossly mismanaged and its ac-counts consistently showed loses and several shareholders/family members have been in penurious circumstance and in dire need of financial support. Such situation is alleged to have continued till Receiver took charge on 16. 2006. It is stated that only after Receiver had taken charge, the real income generated by the theatre came to the shareholders knowledge. 69. The erstwhile Director Muthusami had filed W.P. No. 21844 of 2007 and made an abortive attempt to restrain the Receiver from disbursing the amount. 2006. It is stated that only after Receiver had taken charge, the real income generated by the theatre came to the shareholders knowledge. 69. The erstwhile Director Muthusami had filed W.P. No. 21844 of 2007 and made an abortive attempt to restrain the Receiver from disbursing the amount. In W.P. No. 21844 of 2007, Receiver has filed elaborate counter enumerating series of acts of mismanagement by the erstwhile Director Muthusami. The Receiver has noted that the said Muthusami had made an arrangement with his wife Gandimathi; and Muthusami and his wife have been getting Rs. 99,000/-p.m. from the income of the theatre. That apart, the Receiver has also referred to the grant of largesse to Kalyana Sundaram, son of Muthusami, wherein the erstwhile Director Muthusami had executed lease of Kalyana Mandapam in favour of his son for a paltry sum of Rs. 50,000/-p.m. whereas the actual income of Kalyana Mandapam would be far more. In the counter affidavit, the Receiver has also alleged that as against the receipt of Rs. 1,00,000/- p.m., from one of the tenants Nazir. only a sum of Rs. 18,000/-was shown as rent by the erstwhile Director Muthusami. We are not on the merits of the alleged acts of m ismanagement levelled against the erstwhile Direc-tor. Suffice it to note that there are serious allegations of gross mismanagement of D-7 Aruna Theatre by the erstwhile Director Muthusami. 70. The learned counsel for the plaintiff and the interveners have submitted that only in view of the misappropriation of the income from the family business, KVBs loan account stood undischarged and the loan account was classified as NPA. KVB issued Section 13(2) notice on 21. 2003, Section 13(4) notice was issued on 30.3.2004 and KVB took symbolic possession of Aruna Theatre properties. Since the loan amount was not discharged, the Bank has filed O.A. No. 178 of 2004 claiming Rs. 12,53,77,6052. KVB has filed I.A. No. 414 of 2004 for appointment of Receiver, Justice Swamidurai (D6) was appointed as Receiver on 15. 2005 and he has assumed charge on 16. 2006. In the present proceedings, Receiver has filed report stating that the Receiver has earned good and substantial income as compared to the meagre income shown by the said Muthusami and the previous management. 71. 2005 and he has assumed charge on 16. 2006. In the present proceedings, Receiver has filed report stating that the Receiver has earned good and substantial income as compared to the meagre income shown by the said Muthusami and the previous management. 71. Complaining of oppression and mismanagement against the then Directors of Aruna Theatres viz, Muthusami, Durai and Venkatachalam, majority of the shareholders have filed C.P. No. 64 of 2006 under Section 397 and 398 of the Companies Act. They have prayed for dissolution of the Board of Directors and to call for EGM to constitute a new Board of Directors and also prayed to restore the monies and properties misappropriated by the then Director Muthusami. Pending the said Company Petition, the majority shareholders themselves called for EGM and by a resolution dated 1. 2007, removed the Directors Muthusami, Durai and Venkatachalam. One Balasubramanian, plaintiff and three others have filed C.A. No. 41 of 2007 in C.P. No. 64 of 2006 seeking leave of CLB for implementation of the resolutions passed at EGM of the Company held on 1. 2007. CLB ordered C.A. No.41 of 2007 on 9.8 2007 ordering that the applicants thereon are at liberty to implement the resolutions passed at the EGN held on 1. 2007. CLB inter alia directed that such order would be subject to the out come of the main petition 72. The ousted Directors unsuccessfully challenged the order of CLB dated 8. 2007 in C.M.A. No. 1900 of 2007. After hearing the parties at length, the learned single Judge observed that the order of CLB does not suffer from any illegality, calling for interference. While dismissing the CMA. the learned single Judge has inter alia issued the following directions: “a) No major policy or important decisions to be taken by the Board of Director without the consent of the Company Law Board. b) No alienation, transfer, encumbrances of the Company assets without the consent of the Company Law Board. c) The Board of Directors shall take only decisions to manage the day to day affairs of the Company till the Company Law Board passes final order." .73. It is relevant to note that the second defendant and one Muthusami were said to have played a key role in bringing about the impugned documents. In the CMA proceedings. both the second defendant and Manthiram were represented by the counsel Mr. It is relevant to note that the second defendant and one Muthusami were said to have played a key role in bringing about the impugned documents. In the CMA proceedings. both the second defendant and Manthiram were represented by the counsel Mr. N.V. Srinivasan, who is the present counsel for the second defendant, Incidentally, it may be noted that in the CMA proceedings the second defendant supported the ousted Directors and assailed the resolution dated 5.1 2007. We may usefully refer to the contention of the second defendant and Manthiram in the CMA proceedings as is stated in paragraph 8 of the order in C.M.A. No. 1900 of 2007 which reads as under: .“Counsel appearing for the 16th, 17th and 19th respondents submitted that the order of the Company Law Board is erroneous and it ought not to have given effect to the resolutions passed in the Extraordinary General Meeting held on 1. 2007 directing the removal of the appellants 2 and 3 and the sixth respondent as Directors, pending disposal of the main petition." 74. The above contention of the second defendant and the said Manthiram would clearly show that they were supporting the ousted Director Muthusami and P. Durai (son of the second defendant) by assailing the resolution passed on. 1. 2007. .75. In the DRT proceedings, the ousted Director Muthusami had filed LA. No. 53 of 2007 to direct KVB not to honour any cheques issued by the Receiver pending disposal of the application. After hearing both parties, DRT has dismissed the application filed by the said Muthusami. As against the said order, Muthusami had moved DRAT. DRAT disposed of the appeal observing that in case Muthusami succeeds, the shareholders in whose favour the cheques have been issued are liable to return the money to the Receiver or to abide by the orders that would be passed ultimately in the appeal. Aggrieved by the order of DRAT, the said Muthusami has filed W.P. No. 21844 of 2007 seeking for a direction to KVB not to honour any cheques issued by the Receiver. Division Bench of this Court disposed of the said writ petition (on 29. 2007) remitting the case to DRAT to dispose of the case preferably within a fortnight from the date of receipt of a copy of the order. Division Bench of this Court disposed of the said writ petition (on 29. 2007) remitting the case to DRAT to dispose of the case preferably within a fortnight from the date of receipt of a copy of the order. Evidently, the intention of the ousted Director Muthusami is against the dividend being paid to other share-holders. The ousted Director Muthusami appears to have left no stone unturned in seeing that the other shareholders are not paid the dividend. it is that person whom the second defendant has been supporting and now feigning to protect the interest of the family members/other shareholders. 76. The learned counsel for the interveners Mr. Sathish Parasaran and Mr. K. Raghavan have submitted as to how during the pendency of the aforesaid proceedings, the delinquent Directors have been conducting negotiations with Pyramid Saimira for executing the lease/mortgage of Aruna Theatres. The learned counsel have drawn the attention of the Court to the letters dated 212. 2006 and 4. 2007 sent by majority shareholders of Aruna Theatres to KVB and Pyramid Saimira respectively, requesting them not to bring about any illegal lease Agreement or mortgage to Aruna Theatres properties and that the majority shareholders with the help of the Receiver were willing to settle the Bank loans. 77. We may usefully refer to the following contents of the letter dated 4. 2007 addressed to Pyramid Saimira: We the Majority Share Holders (80%) of Aruna Theatres and Enterprises Pvt. Ltd., (Udhayam Theatres Complexes) heard that the Pyramid Saimira Theatre Ltd., is going for a Lease Agreement with previous Director Mr. K. Muthuswamy, M.D. and Mr. Dorai, without the knowledge of other two Directors Mr. S. Venkatachalam and Mr. S. Balasubramaniam. We kindly informing you that Mr. K. Muthuswamy(Removed from Director) Mr. P. Durai(Removed from Director) AND Mr. S. Venkatachalam(Removed from Director) has been removed from the Directors of the company by conducting extraordinary General Body Meeting by the share holders of the company on 1. 2007. We the 80% Majority Share Holders of Aruna Theatres and Enterprises Pvt. Ltd., objecting strongly for the Lease Agreement or any other mortgage with Pyramid Saimira Theatre Ltd., or any other company, We 80% share holders of Aruna Theatres and Enterprises Pvt. Ltd., are not responsible for any Lease Agreements or any Mort-gage of the Company. 2007. We the 80% Majority Share Holders of Aruna Theatres and Enterprises Pvt. Ltd., objecting strongly for the Lease Agreement or any other mortgage with Pyramid Saimira Theatre Ltd., or any other company, We 80% share holders of Aruna Theatres and Enterprises Pvt. Ltd., are not responsible for any Lease Agreements or any Mort-gage of the Company. So we kindly request you not to engage the illegal Lease Agreements or any other mortgage or Aruna Theatres and Enterprises Pvt Ltd., which leads to spoil the name of Pyramid Saimira Theatre Ltd. 78. Evidently, there had been secret concerted attempts to create lease Agreement or mortgage to Aruna Theatre properties. After disposal of C.P. No. 64 of 2006 and C.M.A. No. 1900 of 2007 there seems to have been concealed hectic efforts to knock away the Udayam Theatre properties. As discussed infra, D-3 Ashoka Associates with no business of its own, was created only for the alleged purpose of mobilizing funds for repaying the loan amount to KVB. After disposal of C.M.A. No. 1900 of 2007, the order was sent to KVB on 10. 2007. The tripartite Agreement on 10. 2007 between KVB, the second defendant and the third defendant Ashoka Associates appears to be the document brought into existence as a prelude to other documents to take away the interest of other shareholders in the property. 79. On 10. 2007, the following four impugned documents were brought into existence and registered consecutively: .(i) Deed of Assignment dated 10. 2007 between Karur Vysya Bank and D-2 S. Paramasivam Pillai (Regd. as D. No. 954 of 2007); .(ii) Deed of Assignment dated 9.10 2007 between D-2 Paramasivam Pillai and D-3 Ashoka Associates (Regd. as D. No. 955 of 2007); (iii) Deed of Mortgage dated 10. 2007 between D-3 Ashoka Associates and D-5 Lavanya Co. and the Mortgagee Lavanya paying Rs. 12,60,00,000/- (Regd. as D. No. 956 of 2007); (iv) Lease Deed dated 10. 2007 between Ashoka Associates and Pyramid Saimira for 15 years plus 10 years security deposit for Rs. 3,50,00,000/- lease rent Rs. 5,00,000/-with lock in period of 12 years (Regd. as D. No. 957 of 2007). 80. All the four documents were hurriedly brought out and registered consecutively on the same day i.e. 10. 2007. 2007 between Ashoka Associates and Pyramid Saimira for 15 years plus 10 years security deposit for Rs. 3,50,00,000/- lease rent Rs. 5,00,000/-with lock in period of 12 years (Regd. as D. No. 957 of 2007). 80. All the four documents were hurriedly brought out and registered consecutively on the same day i.e. 10. 2007. By perusal of the documents it is seen that the time of presentation of the documents is 12.00 p.m. The documents are typed, containing all the minute details. Needless to point out that there must have been much deliberation and counselling for preparation of the four impugned documents. In fact, the stamp papers for all the four documents and also the tripartite Agreement were purchased on 10. 2007. The preparation of documents must have taken quite a lot of time. Certainly the minute details affecting the interest of the other shareholders were not meant to be disclosed to other shareholders of D-7-Company. 81. To cap it all, reiterating the compromise memo was also filed on the same day i.e. 10. 2007 before the DRT-1 by KVB in the pending original application O.A. No. 178 of 2004 and on that basis, praying for discharge of the Receiver and for handing over of possession of Aruna Theatres and petrol bunk and Kalyana Mandapam to the Assignee. As rightly contended by the learned counsel Mr. Sathish Parasaran, the four documents that were brought into existence on 10. 2007 were meant to be top secret and not meant to be disclosed to the shareholders of Aruna Theatres at least until possession of the theatre was taken over. .82. Various inter se features of the four documents would prima facie show that the documents are tainted with fraud. As noted above, ail the four documents were created, executed and registered and on the very same day, memo was filed before DRT to terminate the proceedings and to hand over possession of the Theatre and the Kalyana Mandapam to its assignee. The manner in which all the four documents were executed and registered on the same day i.e. 10. 2007 and filing of memo before the DRT on the said day 10. 2007 would shock the conscience of any person with essential legal .skills and knowledge. 83. The Bank is armed with power under Section 13(4) and right to take over management and possession of the NPA. 2007 and filing of memo before the DRT on the said day 10. 2007 would shock the conscience of any person with essential legal .skills and knowledge. 83. The Bank is armed with power under Section 13(4) and right to take over management and possession of the NPA. The Public Sector Bank vested with such power must act in fairness and ensure law and justice as well as prevent injustice. The Bank has undoubtedly meaningful role to recover the money. No doubt, public money is meant for public purpose, to be recycled to the needy entrepreneurs. Power vested in the Banks under SARFAESI Act must be exercised without detriment to the trust and confidence reposed in them. 84. If we lift the veil of all the four documents, it would lead to the irresistible inference of fraud being played upon D-7 and other shareholders. All the four documents were brought into existence under the colour of SARFAESI Act and the second defendant evidently acting as conduit on behalf of others, perhaps at the instance of ousted Directors who have been hotly pursuing the matter to regain the control of D-7 Aruna Theatre by discharging the receiver. .85. As rightly contended by the learned counsel for the plaintiff and the intervenors, if the impugned documents are to be given effect to, the net result would be that Aruna Theatres will get into the hands of a rank outsider viz., Pyramid Saimira by virtue of the Lease Deed dated 10. 2007 for a period of 15 years which may be extended by a further period of ten years, in all aggregating to 25 years. The lease rent of Rs. 29,00,000/- or Rs. 5,00,000/- p.m. may be calculated according to the recitals in the documents would be collected by a stranger D-3 — Ashoka Associates. The shareholders would evidently be deprived of their proportionate share of profit. Pyramid Saimira and mortgagee Lavanya and Co. are admittedly related concerns. One Mr. Narayanan is said to be the sole proprietor of Lavanya and Co., who is also the Director of D-4 Pyramid Saimira. By the impugned deeds of Mortgage and lease, D-4 Pyramid Saimira has positioned itself as the long term lessee of the theatre and the Kalyana Mandapam whereas the proprietorship concern Lavanya and Co., has positioned itself to the mortgagee in respect of the same property. By the impugned deeds of Mortgage and lease, D-4 Pyramid Saimira has positioned itself as the long term lessee of the theatre and the Kalyana Mandapam whereas the proprietorship concern Lavanya and Co., has positioned itself to the mortgagee in respect of the same property. As rightly contended by the learned counsel for the plaintiff and the interveners, there is every reason being Pyramid Saimira introducing one of its Directors as the money lender and mortgagee in the form of Lavanya &. Co., i.e. in case of defau It in repayment in respect of Lavanya & Co.s loan and on the expiry on the repayment date i.e. 8. 2008, the sale of the property by mortgagee Lavanya &. Co. cannot be ruled out. As rightly contended by the learned counsel for the plaintiff and the intervenors, in any public auction of the property, unexpired 25 years lease with the Pyramid Saimira with a lock-in period of 12 yean will be deterrent for any third party that would propose to purchase the property, which would in all probability ultimately rest the property in favour of Pyramid Saimira at a low price. The contention urged by the learned counsel for the plaintiff and the intervenors cannot lightly be brushed aside as unfounded. 86. It is very unfortunate that KVB which is to perform its public duties has become a part of this dubious plan. In my considered view, there seems to be intentional deliberation on the part of KVB to become part of these dubious transactions. As presently demonstrated, KVB does not seem to have acted with care and circumspection. No doubt, SARFAESI Act is enacted for expeditious recovery of the debts due to the Banks and Financial Institutions from defendants and not to adjudicate the squabbles between the defendants amongst themselves. Equally, it is true that if the Banks/Tribunals start adjudication over the inter se disputes of the defendants/Directors there shall be no end and the entire object of the Act will be frustrated and defeated. But, in the process of expeditious recovery of the debts, there can be no compromise on transparency and accountability of the transaction. 87. Section 13 of SARFAESI Act. is a drastic provision. But, in the process of expeditious recovery of the debts, there can be no compromise on transparency and accountability of the transaction. 87. Section 13 of SARFAESI Act. is a drastic provision. Section 13 provides that any security interest created in favour of any secured creditor may, notwithstanding anything contained in Section 69 or Section 69-A of the Transfer of Property Act, 1882, be enforced, without the intervention of the Court or Tribunal, by such creditor in accordance with the provisions of the proposed legislation. Sufficient safeguard is provided in the act to protect the interest of borrowers. Without any hesitation, it can be stated that such safeguarding provisions were not complied with by KVB. 88. SARFAESI Act is enacted for expeditious recovery of the debts due to the banks and financial institutions from defendants and not to adjudicate the squabbles between the defendants amongst themselves. .89. By entering into private negotiations with the second defendant, there is non-com-pliance of Section 13(8). May be that for OTS, KVB has given time for settlement. Absolutely, there is no justification for private negotiations with defendants 2 and 3 for an assignment of its interest in the Aruna Theaters: 90. Justifying assignment in favour of the second defendant, the first defendant Bank KVB has referred to resolutions passed by the shareholders of D-7 Company in the EGM of the Company held on 23. 2004 wherein the shareholders of the Company passed a number of resolutions accepting their inability to discharge the debts and informing the Bank to sell the assets of the Company. The first defendant Bank lays emphasis upon the fact that the plaintiff Murugan himself was a party to the said resolution. Of course, in the EGM held on 23. 2004, the shareholders passed the resolution authorizing the Chairman for selling the D-7 Companys assets. The relevant resolution passed in EGM on 23. 2004 is as follows: "1. It is be and hereby approved the recommendations of the Chairman for selling the companys assets viz. Udayam Suriyan, Chandran and Mini Udayam Cinema Theatre complex with accessories, fittings etc. and Kalyana Mandapam viz. Udhayam Kalyana Mandapam constructed there upon at T.S. No. 2 Park Block, No. 71. Kodambakkam Village, Door No. 3, Pillar Road, Ashok Nagar, Chennai, which are mortgaged to Karur Vysya Bank Limited to secure the credit facilities granted to M/s. Annai Moogambigai Roller Flour Mills P. Ltd. 2. and Kalyana Mandapam viz. Udhayam Kalyana Mandapam constructed there upon at T.S. No. 2 Park Block, No. 71. Kodambakkam Village, Door No. 3, Pillar Road, Ashok Nagar, Chennai, which are mortgaged to Karur Vysya Bank Limited to secure the credit facilities granted to M/s. Annai Moogambigai Roller Flour Mills P. Ltd. 2. Further it is resolved that the Chairman & the Board of Directors of the company are authorised to negotiate with the Karur Vysya Bank, arrive at an amicable and acceptable settlement and out of the sale proceeds that may fetch arising out of the mortgaged properties, the amount may be paid to Karur Vysya Bank and get back the documents of title relating to the properties mortgaged to Karur Vysys Bank." 91. In, the above said resolution, shareholders affirmed: .(i) sale of D-7 Companys assets; .(ii) authorizing the Chairman and one of the Directors in the Board of the Company for entering into sale Agreement with the prospective purchaser. 92. For the dubious assignment in favour of the second defendant, defendants 1 to 3 certainly cannot take shelter under the aforesaid resolution of the shareholders in the EGM on 29.3,2004 authorizing the Chairman to enter into Sale Agreement with the prospective purchaser. 93. Firm intention of the shareholders to sell D-7 Companys assets was further reiterated in the subsequent meeting held under the supervision of Observer — Advocate Mr. A .V. Radhakrishnan, who is also presently representing the first defendant Bank. As per the direction of DRAT (in MA No. 69 of 2005), Advocate Mr. A.V. Radhakrishnan held joint meeting on 10. 2005 among the shareholders/legal heirs/Directors of M/s. Aruna Theatre and Annai Moogambigai and officials of the Bank and Advocates who represented some of the shareholders. In the said joint meeting, majority of the shareholders agreed that the Bank dues has to be paid and majority of the shareholder felt that they have to sell the theatre property and Annai Moogambigai to honour the commitment and to share the balance money among themselves. In his report, the Observer — Advocate Mr. In the said joint meeting, majority of the shareholders agreed that the Bank dues has to be paid and majority of the shareholder felt that they have to sell the theatre property and Annai Moogambigai to honour the commitment and to share the balance money among themselves. In his report, the Observer — Advocate Mr. A.V. Radhakrishnan has observed that: "Out of the total shareholders attended i.e. 36 holding 6,049 shares only 4 share holders holding 476 shares voted against the sale of the theatre property and 3 shareholders holding 300 shares kept silent and the rest voted in favour of the sale of the theatre property." In the said meeting, barring exception of a couple of shareholders, the majority of the shareholders (more than 80%) have consented for the sale of the theatre property to prospective buyer to pay one time settlement and to share the balance among the shareholders as per the shareholdings. Most of the shareholders expressed their concern that the remaining amount derived out of sale proceedings of the theatre property should be proportionately shared among the shareholders. .94. It is relevant to note that in the meeting held on 10. 2005, Mr. Ananda Natarajan, Deputy General Manager, KVB, Mr. Mohandas Selva Kumar, Legal Officer to KVB were also present along with others. By participating in the meeting, evidently the Bank officials must have noted the firm assertion of the share holders to sell the assets of Aruna theatres. The Bank itself was quite aware of the intention of the majority shareholders for the sale of the theatre property and concern of the shareholders that the remaining amount derived out of sale proceedings of the theatre property to be shared among the share-holders. While so, I fail to understand as to why KVB should strike a private deal with the second defendant in circumstances of suspicion. 95. The learned senior counsel for the defendants 1 to 5 have forcibly contended that when fraud like any either charge of criminal offence were made in a civil or criminal proceedings it must be established beyond reasonable doubt and a finding as to fraud cannot be based on suspicion and conjecture. It was further contended that unless sufficient materials and evidence is placed on record, the Court cannot sustain the allegation of fraud. It was further contended that unless sufficient materials and evidence is placed on record, the Court cannot sustain the allegation of fraud. It was further argued that excepting the vague averments in para 11 of the plaint, no specific details of fraud is alleged. It was mainly argued that circumstances of mere suspicion cannot be taken as proof of fraud. 96. Of course, precise and specific details of fraud alleged against the other party must be given in the pleadings and Courts will not al-low allegations of fraud to be made lightly. Fraud in most of the cases cannot be directly proved but it has to be inferred from the surrounding circumstances and the conduct of the parties. Fraud is secret in its origin and inception and the means adopted for its success and fraudulent motive on design cannot be proved to the very hilt and it should be proved from the circumstances placed before the Court. 97. At the stage of trial, the party alleging fraud is bound to establish fraud by cogent evidence. At this stage, the Court is concerned about the prima facie case whether the documents are vitiated and are actuated by fraud. At this stage, for establishing prima facie case, it would be sufficient even if the plaintiff creates suspicion that the documents have been vitiated and are actuated by fraud. In my considered view, the circumstances noted above and the recitals in the impugned transfer documents and the terms of the transaction are in-compatible with the hypothesis that the Bank had acted in good faith. .98. My above view is fortified by more than one circumstance. As noted earlier, at the time when Annai Moogambigai availed loan and credit facilities from KVB, D-7 Aruna Theatres extended Corporate Guarantee to KVB and passed resolution to that effect on 110. 1998. Likewise, in the EGM held on 23. 2004, shareholders of D-7 Company passed the resolution authorizing the Chair-man for selling the Companys assets. As discussed above, the Bank itself is aware of the firm assertion of the majority of the shareholders to sell the Companys assets. When D-7 Aruna Theatres, has extended Corporate Guarantee, one fails to understand how an individual – second defendant can enter into negotiation with KVB. As discussed above, the Bank itself is aware of the firm assertion of the majority of the shareholders to sell the Companys assets. When D-7 Aruna Theatres, has extended Corporate Guarantee, one fails to understand how an individual – second defendant can enter into negotiation with KVB. It also passes ones comprehension as to how Bank can enter into, such private negotiations and the tripartite Agreement when it is incumbent upon KVB to discharge its public duties under Section 13(4). 99. In the deed of assignment executed by KVB in favour of the second defendant, it is stated that Paramasivam Pillai —the second defendant in his capacity as one of the Guarantors for the loans "has got the right of redemption of the mortgaged assets as per Section 91 of the Transfer of Property Act and right of subrogation, as per Section 140 of the Indian Contract Act." The second-defendant has rendered personal guarantee in his capacity as the Director of Annai Moogambigai which was the principal borrower. Insofar as Corporate Guarantee, the second defendant Paramasivam Pillai had executed the deed of guarantee on behalf of the corporate entity M/s. Aruna Theatres, a Company registered under the Companies Act. It is relevant to note that for entering into such private negotiations of assigning the shareholders, Aruna Theatres had neither authorized the second defendant nor passed any resolution to that effect. The Bank which was aware of the firm assertion of the shareholders of D-7 Aruna Theatres to sell the Companys assets had not bothered to discharge its public duties with transparency. In my considered view, for realizing its outstanding dues of about Rs. 13.50 crores, by entering into private negotiations and assignment, the Bank has allowed the properties worth Rs. 100 crores to be bartered away to the hands of the second defendant who is supporting the ousted Director Muthusami. 100. The Tripartite Agreement though dated 7. 2007, the stamp papers were purchased on 10. 2007. It is significant to note that for the two assignment deeds and Lease Deed and mortgage deed, all the stamp papers were purchased on 10. 2007. It is not difficult to perceive that after the order in C.M.A. No. 1900 of 2007 was passed on 19. 2007 with the direction not to alienate the Companys assets, hectic efforts seem to have been made in a secret manner to bring in the impugned documents. 101. 2007. It is not difficult to perceive that after the order in C.M.A. No. 1900 of 2007 was passed on 19. 2007 with the direction not to alienate the Companys assets, hectic efforts seem to have been made in a secret manner to bring in the impugned documents. 101. Under Section 13(4) of the SARFAESI Act, the secured creditor has got the right to take possession of the secured assets of borrower including the right to transfer by way of lease assignment or sale for realizing the secured debt. Under Rule 8 of Security Interest (Enforcement) Rules, 2002, the authorized officer of the Bank has to serve to the borrower notice of thirty days for sale of immovable secured assets. In the instant case, without giving notice to the D-8 and D-7, KVB has straight-away assigned its rights in the immovable properties in favour of D-8. 102. In my considered view. Banks are dealing with public money for public benefit. Therefore, their approach should be public oriented and helpful to the loanee also. While dealing with the power of Financial Corporations under State Financial Corporations Act, the Supreme Court had inter alia laid the guidelines that the sale of the unit should always be made by public auction. Section 13(4) empowers the Bank to transfer, assign or sell. In view of nature of duty, it is enjoined upon Bank to perform its duty in public oriented spirit. In my considered view, KVB cannot be said to have discharged its public duty commensurate with the trust and confidence reposed in it. 103. The question might arise as to why in such haste and hurry, the four documents were executed on a single day. As rightly contended by the learned counsel for the plaintiff and the intervenors, the concealed intention of the parties is exposed by filing Memo before DRT to withdraw O.A. No. 178 of 2004. The consequence will be, once O.A. No. 178 of 2004 is withdrawn, the Receiver would be discharged. Once the receiver is discharged, and the assignee would be put in possession either by force or under the cover of SARFAESI Act. 104. No resolution was passed by the share-holders authorizing the second defendant for negotiating with the Bank and to enter into a tripartite Agreement and to get the assignment. Once the receiver is discharged, and the assignee would be put in possession either by force or under the cover of SARFAESI Act. 104. No resolution was passed by the share-holders authorizing the second defendant for negotiating with the Bank and to enter into a tripartite Agreement and to get the assignment. When the Bank is quite aware of the division among the shareholders and the majority of them expressing desire for sale, why should the Bank go in for private negotiation for assignment of its interest and not for sale as contemplated under Section 13(4). Tripartite Agreement and the assignment in favour of D-2 is certainly not in bona fide exercise of power under Section 13(4) SARMSI Act; 105. A word about the formation of the third defendant D-3 – Ashoka Associates: The third defendant firm comprising of partners (i) P. Mani (2) Manthiram (3) M. Paramasivam (4) Paramasivam Pillai was registered on 212. 2006. Absolutely, the firm has no business of its own. Only purpose for formation of its business is for the purpose of mobilizing funds for repaying the KVB loans. In his affidavit filed along with application to vacate stay, the second defendant has stated: " .... in order to mobilize the funds, my son, P. Mani and my brothers grandson Mr. Manthiram and myself formed a partner-ship known as D-3 – Ashoka Associates, a registered partnership firm carrying on business at No. 9, Davidson Street, Chennai 600 001 who is impleaded as third respondent/3rd defendant in the suit." 106. There is much force in the contention of the learned counsel for the plaintiff and the interveners, that the third defendant D-3 – Ashoka Associates was brought into existence by the second defendant and is coterie to act as a conduit for financial dealings with third par-ties and as a smoke screen to shield the identity of real beneficiaries of the transactions in particular, the ousted Directors. 107. There had been number of letter correspondence from D-3 – Ashoka Associates to KVB making request for OTS. The first of such correspondence is dated 210. 2006 requesting to consider their proposal for OTS by accepting Rs. 9.5 crores. Letter dated 11. 107. There had been number of letter correspondence from D-3 – Ashoka Associates to KVB making request for OTS. The first of such correspondence is dated 210. 2006 requesting to consider their proposal for OTS by accepting Rs. 9.5 crores. Letter dated 11. 2006 from Annai Moogambigai to KVB states that D-3 – Ashoka Associates has come forward to mobilize funds to clear the debt and to redeem the mortgaged assets of Annai Moogambigai as well as that of Aruna Theatres and that D-3 – Ashoka Associates has al-ready deposited Rs. 3 crores. In the said letter, D-8 Company has stated that their Board of Directors have given consent for allowing D-3 Ashoka Associates to enter into OTS on be-half of their Company to redeem the mortgaged asset. No document had been produced to show that the Board of Directors of D-8 Company had authorized D-3 –Ashoka Associates to negotiate on its behalf for OTS. In fact, the Director of D-8 Company had filed counter affidavit on behalf of the D-8 denying any such authorization in favour of D-3 – Ashoka Associates. For the sake of arguments, even if we assume that Ashoka Associates was so authorized by D-8 the fact remains that D-7 Aruna Theatres had not authorized D-3 Ashoka Associates to negotiate on its behalf. There is much force in the contention of learned senior counsel Mr. T.V. Ramanujam as to how a third party can enter into private negotiation with KVB for redeeming the mortgage which itself is a formidable circumstance indicating that the impugned transactions are not bona fide. 108. One Manthiram is said to have sent the letter dated 210. 2006 and another letter dated 9.1 1.2006. No one seems to have authorized the said Manthiram to communicate with KVB. It may be recalled that D-3 – Ashoka Associates was registered only on 212. 2006. D-3 – Ashoka Associates remained unregistered till 211. 2006. The Bank in its letter dated 112. 2006 to D-3 -Ashoka Associates has stated that the Bank is agreeable to the offer of D-3 -Ashoka Associates paying Rs. 12.50 crores for assigning the debts of Annai Moogambigai. 109. It is very unfortunate that KVB has not even verified as to who is D-3 –Ashoka Associates and how they are interested in D-7 and D-8 Company. 2006 to D-3 -Ashoka Associates has stated that the Bank is agreeable to the offer of D-3 -Ashoka Associates paying Rs. 12.50 crores for assigning the debts of Annai Moogambigai. 109. It is very unfortunate that KVB has not even verified as to who is D-3 –Ashoka Associates and how they are interested in D-7 and D-8 Company. KVB has not chosen to verify the authorization and any resolution passed by D-7 and D-8 and authorizing D3 – Ashoka Associates to negotiate on their behalf. In my considered view, there is no diligent exercise of power under SARFAESI Act. The next correspondence from KVB to the third defendant D-3 – Ashoka Associates is dated 11. 2007 wherein it is stated that the third defendant has agreed to pay Rs. 12.50 cores on behalf of Paramasivam Pillai. It is relevant to note that on 11. 2007, Paramasivam Pillai was not a partner in D-3 – Ashoka Associates. He has been brought in as partner only w.e.f. 17. 2007, as is seen from the Certificate of Registration. As rightly contended by the learned senior counsel Mr. T.V. Ramanujam that a third party has volunteered to discharge the debt without the consent of the borrower viz., D-7/Guarantor and that the name of Paramasivam Pillai has been used only as a camouflage. If one pierces the veil, it could be seen that the real person who has volunteered to discharge the debt is neither the third defendant nor the second defendant but they were only acting at the behest of others. 110. The learned counsel for the plaintiff and intervenors have submitted that the said Manthiram who is the brothers grandson of the second defendant is stated to be a stranger to D-7 and D-8 Companies. It was stated that the said Manthiram was holding 50 shares in Aruna Traders and even those shares are said to have been pledged with some third party, acting contrary to the memorandum of Articles of Association of D-7 Company. The said Manthiram who is the shareholder having only 50 shares cannot represent the Company more so when nobody has authorized him to deal with the assets of the Company. The said Manthiram who is the shareholder having only 50 shares cannot represent the Company more so when nobody has authorized him to deal with the assets of the Company. In my considered view, Bank entering into private negotiation with Manthiram and the said Manthiram as a partner of Asoka Associates dealing with the transaction and the tripartite Agreement are not in bona fide exercise of provisions of the SARFAESI Act. The learned senior counsel Mr. T.V. Ramanujam has submitted that at the behest of others, Manthiram has been corresponding with the Bank to knock away the properties of D-7 Company and that the second defendant is only a name lender. At this stage, this Court is not expressing any opinion on this contention. Suffice it to note that the impugned documents are not free from doubts and there are serious questions to be tried in the suit. 111. D-3 –Ashoka Associates started corresponding with KVB in or about October 2006 i.e. after the Receiver had taken charge on 16. 2006. By that time, D-3 –Ashoka Associates came to the fore, alleging mismanagement and oppression by erstwhile Managing Director, Muthusami, the majority shareholders had filed C.P. No. 64 of 2006 before the CLB. Only after majority of the shareholders started complaining mismanagement, D-3 – Ashoka Associates a third party started its hectic efforts in corresponding with KVB for OTS. Till such time, the first defendant Bank had been rightly pursuing the matter by filing O.A. No. 178 of 2004 and getting Receiver appointed and taking control of the management of D-7 Company. After intervention of the third defendant D-3 -Ashoka Associates, the Bank had detracted from its rightful course. In my considered view, the Bank was not justified in having private negotiation with a third party D-3 – Ashoka Associates which is nothing but a puppet firm formed at the instance of disgruntled shareholders. 112. Definition of fraud is only to be found in Section 17 of the Contract Act. We may usefully refer to the definition of fraud according to the Story (E.Q), which is referred to in the following passage in SARKARS LAW OF EVIDENCE 15th Edition page no. 112. Definition of fraud is only to be found in Section 17 of the Contract Act. We may usefully refer to the definition of fraud according to the Story (E.Q), which is referred to in the following passage in SARKARS LAW OF EVIDENCE 15th Edition page no. 853: “According to Story, "Fraud properly includes all acts, omissions, and concealments, which involve a breach of legal or equitable duty, trust or confidence, justly reposed, and are injurious to another, or by which an undue and unconscientious advantage is taken by another" (Story, Eq Juris 252). A person does a thing fraudulently if he does it with intent to defraud. Two elements are necessary: deceit, i.e. to say, some one is deceived, and injury or loss to the same person. Two kinds of fraud are mentioned viz (1) Actual or positive fraud which includes, cases of the intentional and successful employment of any cunning, deception, or artifice, used to circumvent, cheat or deceive another (Story, Eq s 186). (2) Constructive or legal fraud includes such contracts or acts as though not originating in any actual evil design or contrivance to perpetrate a fraud yet, by their tendency to deceive or mislead others, or to violate private or public confidence, are prohibited by law (Story, Eq)." 113. In my considered view, the acts of defendants 2 and 3 would fall within the actual fraud and the act of KVB would fall as per the above definition of constructive fraud. With its over enthusiasm to recover loan amount, KVB has also fallen prey in the concerted secret acts of the parties. The colourable exercise of power under SARFAESI Act prima facie seems to be a deliberate deceptive act with the design of regaining control over the property by getting the Receiver removed. 114. The learned senior counsel Mr. Habibuilla Basha has submitted that as per Section 13(4), the moment Bank takes possession of the property, it actually steps into the shoes of the owner of the property and the action resorted to by the Bank in assigning the debt to the second defendant and in resorting to assignment/sale is legally tenable and is in accordance with the provisions of the SARFAESI Act and consequently, any in-junction granted in respect of any action initiated under SARFAESI Act is untenable in law. Placing reliance upon AIR 1954 Bombay 273 and 1994 (207) ITR 691 Kerala, learned senior counsel further submitted that apart from SARFAESI Act, doctrine of assignment is an accepted form of transfer of debt under equitable doctrine. It was further urged that the second defendant is no stranger to the contract and by assigning to the second defendant, the Bank has rightly assigned the secured assets to a guarantor who has agreed to be personally liable for the debt. 115. Section 13 of SARFAESI Act is a drastic provision. It provides that any security interest created in favour of the secured creditor to be enforced without intervention of the Court or Tribunal by such creditor in accordance with the provisions of the Act. Section 13(4) confers power upon the secured creditor to take recourse to one or more of certain measures to recover the secured debt in case borrower fails to discharge his liability in full. Where the possession of any secured asset is required to be taken by the secured creditor, Section 14 contains provisions to enable the secured creditor to take the assistance of Chief Metropolitan Magistrate or District Magistrate in taking possession of secured asset, Power is vested with the secured creditors/Bank or Financial Institutions in public interest that money must be kept in circulation. Such wide power vested with the Banks or financial institutions is to be exercised with care and circumspection with transparency. 116. It is the contention of the defendants 1 and 2 that the second defendant being one of the guarantor, has got the right of redemption. It is the further contention of defendants 1 and 2 that the moment second defendant has re-deemed debt from the Bank, as per Section 92 of T.P. Act, the second defendant has got the right of subrogation. In support of their contention, reliance is placed upon Alam Ali v. Benicharan and Others AIR 1936 Allahabad 33 and Kadamba Sugar Industries Pvt. Ltd. v. Devru Ganapathi Hegde Bhairi AIR 1993 Kar. 288 . 117. In support of their contention, reliance is placed upon Alam Ali v. Benicharan and Others AIR 1936 Allahabad 33 and Kadamba Sugar Industries Pvt. Ltd. v. Devru Ganapathi Hegde Bhairi AIR 1993 Kar. 288 . 117. It was also urged that as a surety, the second defendant also acquires right under Section 140 of the Indian Contract Act Emphasis is laid upon Section 140 which reads as under: "Where a guaranteed debt has become due, or default of the principal debtor to perform a guaranteed duty has taken place, the surety, upon payments or performance of all that he is liable for, is vested with all the rights, which the creditor had against the principal debtor.” 118. The second defendant is the Director of D-8 Annai Mogambigai and as a Director he has guaranteed the loan amount borrowed by D-8 Annai Moogambigai. The second defendant as the Director of Annai Moogambigai is the Principal Debtor. Under Section 92 T.P. Act, any person other than the mortgager, has got right of subrogation. As contended by Mr.Sridhar, the learned counsel for the 8th defendant, the second defendant being the Director of D-8 Company and also a mortgager has no right of subrogation. 119. It is also relevant to note that when the Principal Debtor D-8 Annai Moogambigai has availed credit facilitates, it has created mortgage of its immovable properties in eight items of landed properties of Alinjivakkam Village, Ponneri Taluk. Vide Tripartite Agreement for description of 8 items in Alinjivakkam Village, Ponneri Taluk, which were mortgaged by Annai Moogambigai. As the Principal Borrower, the second defendant has obtained release of all the said eight items of immovable properties evidently at the cost of Guarantors property. Viewed from any angle, there is lack of fairness in the tripartite Agreement which is a prelude to the four impugned transfer documents. 120. In any event, for the credit facilities availed by D-8, D-7 has extended Corporate Guarantee. Presently, the second defendant is neither Director nor shareholder in D-7 Company. In fact, the second defendant himself claims only as a Founder Director of D7 Company. By sailing along with the ousted Directors, the second defendant has no right or interest to act on behalf of the D-7 Company. As rightly submitted by learned senior counsel Mr. Presently, the second defendant is neither Director nor shareholder in D-7 Company. In fact, the second defendant himself claims only as a Founder Director of D7 Company. By sailing along with the ousted Directors, the second defendant has no right or interest to act on behalf of the D-7 Company. As rightly submitted by learned senior counsel Mr. T.V. Ramanujam that the name of the second defendant has been used only as a camouflage to give a colour of SARFAESI Act to the entire transaction. The learned counsel has further urged that the second defendant has been acting at the behest of defendants 4 and 5 and the ousted Directors and at their behest has chosen to voluntarily discharge the debt with intent to knock away the properties of D-7 Company. Merits of this contention remains to be seen at the stage when the parties adduce oral and documentary evidence. 121. Facts and circumstances when put together leads to the irresistible conclusion that the impugned four transfer documents are not free from doubt. On the other hand, D-7 Company, the plaintiff and other intervenors have shown a prima facie case that the documents are tainted. 122. Point Nos. 6 and 7: Prima facie case and balance of convenience: In O.A. No. 178 of 2004, DRT has appointed Justice K. SWAMI DURAI (Retired) as Receiver, who has taken charge on 6. 2006. After issuing Section 13(4) notice on 23. 2004, KV B is said to have taken symbolic possession on 30.3.2004. Stating that symbolic possession was taken on 30.3.2004 in the tripartite Agreement, KVB has agreed that it would file memo of compromise before DRT and would get discharge of the Receiver forthwith and hand over possession to the second defendant. The relevant recitals in the tripartite Agreement would read as under: "7. The party of the First Part agrees that by virtue of settlement made by the Party of the Second Part herein, the Party of the First Part will file a Memo of Compromise before DRT-I, Chennai in O.A. No. 178 of 2004 now transferred to DRT-III, Chennai and renumbered as O.A. No. 18 of 2007 for reporting settlement out of Court in the matter. 8. 8. The party of the First Part further agrees to handover the loan documents executed by the borrowers/Guarantors and the title deeds of the security properties deposited by the mortgagors to the Party of the Second Part. 9. The Party of the First Part shall move an application before DRT— III in O.A. No. 18 of 2007 (earlier O.A. No. 178 of 2004) for discharge of the Receiver forthwith and to handover possession to the Party of the Second Part herein." 123. Much arguments were advanced in respect of possession, after issuance of notice under Section 13(4) SARFAESI Act whether Bank had taken symbolic possession or actual possession. It is not necessary to delve deep on these contentions since presently possession is with the Receiver. In fact, even in the deed of assignment in favour of the second defendant, the Bank has transferred and assigned all their rights and interest in the mortgaged assets "AS IS WHERE IS" basis and on "WHAT IS WHERE IS" basis. While so, the Receiver has to be discharged in the manner known to law. Unless the inter-se dispute between the parties is settled, which could be resolved only in this suit, the Receiver cannot be discharged even if O.A. No. 178 of 2004 is disposed of. 124. For issuing a temporary injunction, the considerations that would weigh with the Court are: (1) whether the plaintiff has made out a prima facie case, (2) whether the balance of convenience is in favour of the plaintiff, that is to say, whether it would cause greater inconvenience to which the defendant would be put if it is granted, and (3) whether the plaintiff would suffer an irreparable injury if his prayer for temporary injunction is not allowed. 125. A Court should not grant temporary injunction or stay automatically to every per-son that approaches it for an interim relief. It is the duty of the Court to take into consideration the relevant matters before granting interim orders. 126. Thus, it is well-settled that a Court while considering the grant of an injunction has to satisfy itself whether its interference is necessary to protect the party applying for such relief from the particular type of injury which the Court would call "irreparable" injury before the legal right of the party is established at the trial. 127. 126. Thus, it is well-settled that a Court while considering the grant of an injunction has to satisfy itself whether its interference is necessary to protect the party applying for such relief from the particular type of injury which the Court would call "irreparable" injury before the legal right of the party is established at the trial. 127. Further, the Court is required to examine what would be the comparable mischief and inconvenience that would result from refusal of such an injunction. It is only on a careful consideration and comparison between the convenience of the two sides, that a Court should proceed to record a judicial verdict as to the grant or refusal of such an interim relief. 128. The object of an interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were to be resolved in his favour at the trial; but the plaintiffs need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated under the plain-tiffs undertaking in damages if the uncertainty were resolved in the defendants favour art the trial. The Court must weigh one need against another and determine where the balance of convenience lies. On behalf of the defendants 4 and 5, it was contended that having parted with huge amount, the defendants 4 and 5 have prima. facie case and balance of convenience is in their favour. It was also submitted that the fourth defendant is a theatre chain Company having huge annual turn over to in-vest more in the infrastructure. On behalf of the fourth defendant, learned senior counsel Mr. P.S. Raman has submitted that the fourth defendant has more resources and expertise and it would be in a position to show more dividend from D-7 Theatre if possession is handed over to fourth defendant. It was also submitted that having parted with huge amount, the possession is to be handed over to the fourth defendant. 129. Mr.AR. L.Sundaresan, learned senior counsel for fifth defendant has submitted that the validity of the transactions cannot be examined at the interlocutory stage and the fifth defendant a major beneficiary/contributor of Rs. It was also submitted that having parted with huge amount, the possession is to be handed over to the fourth defendant. 129. Mr.AR. L.Sundaresan, learned senior counsel for fifth defendant has submitted that the validity of the transactions cannot be examined at the interlocutory stage and the fifth defendant a major beneficiary/contributor of Rs. 12.60 crores which has been paid to the Bank to settle the dues of D-7 Company, the fifth defendant had rightly taken original title deeds of the suit property. It was further submitted that after parting with the amount of Rs. 12.60 crores the fifth defendant is not getting any interest for the said loan amount and that the fourth defendant may be put in possession. It was further submitted that if the injunction is not vacated, the defendants 4 and 5 would be subjected to great hardship and serious prejudice would be caused to them. 130. The contention that the defendants 4 and 5 have invested the amount and that they are deprived of the interest does not merit acceptance. Both of them have invested having full knowledge of the dispute. If the injunction is vacated, it would lead to disastrous consequences and the plaintiff and shareholders of D-7 Company would be subjected to great hardship and irreparable injury. Interest of the shareholders would be greatly affected. Though defendants 4 and 5 have invested huge amount, if at all they succeed, they can very well be compensated in terms of money. But if the injunction is vacated on the strength of four impugned transfer documents, D- would take possession, causing serious prejudice to the shareholders of D-7 Company. 131. Plaintiffs have established a prima facie case by showing that the four impugned transfer documents are not free from doubt. There is a fair and serious question to be tried in the suit. As such, the Receiver is now in the management of the theatre. The Receiver has also filed report stating that he is able to show good income from D-7 Theatre. The Receiver has Filed elaborate report which would show that there is an income of about Rs. 29 to 30 lakhs p.m. The learned counsel Mr. K.S. Natarajan representing the Receiver has submitted that if the Receiver is allowed to invest about Rs. 30 lakhs, the income would be further improved. The Receiver has, so far deposited Rs. The Receiver has Filed elaborate report which would show that there is an income of about Rs. 29 to 30 lakhs p.m. The learned counsel Mr. K.S. Natarajan representing the Receiver has submitted that if the Receiver is allowed to invest about Rs. 30 lakhs, the income would be further improved. The Receiver has, so far deposited Rs. 2,60,72,435 with KVB which is said to have been received by Bank and kept under No Lien Account. The Receiver is said to be taking every efforts to earn more income. By perusal of the report, I am convinced that the Receiver is duly discharging his duties and the same arrangement could be continued till the disposal of the suit. By weighing the inconvenience of either side, I am of the considered view the balance of convenience lies in favour of the plaintiff. If the Interim Injunction is vacated, the plaintiff and the other shareholders would be subjected to greater hardship and inconvenience. In the interest of justice and keeping in view the interest of majority of shareholders, the temporary injunction already granted on 110. 2007 is made absolute. 132. Consequently, the defendants are refrained from acting upon the four impugned documents dated 10. 2007. Impleading Applications: 133. The other shareholders of D-7 Company have filed number of impleading applications. D-7 Company has 55 shareholders and 7,596 shareholdings. All the shareholders are the family members. Majority of the share-holders are for sale of the theatre property which is very valuable property worth more than Rs. 100 crores. Since the shareholders are members of the family in the facts and circumstances of the case, for proper and complete adjudication, shareholders are necessary parties to the suit in C.S. No. 937 of 2007 filed by one of the Shareholder-cum-Director – Murugan. Hence, all the impleading applications are allowed. 134. In the result, Receiver Mr. Justice Swami Durai and the Advocate Receiver appointed along with him by DRT in O.A. No. 178 of 2004 are ordered to be continued on the same terms until further orders notwithstanding the result of O.A. No. 178 of 2004 pending on the file of DRT. O.A. No. 1169, 1170, 1171, 1172 of 2007 in C.S. No. 937 of 2007: Interim Injunction already granted is made absolute. A. No. 6926, 6927, 6928, 6929, 6930, 6935,6936 of 2007 in C.S. No. 937 of 2007 :These applications are dismissed. O.A. No. 1169, 1170, 1171, 1172 of 2007 in C.S. No. 937 of 2007: Interim Injunction already granted is made absolute. A. No. 6926, 6927, 6928, 6929, 6930, 6935,6936 of 2007 in C.S. No. 937 of 2007 :These applications are dismissed. A. No. 7048 of 2007 in O.A. No. 1169 of 2007 A. No. 7049 of 2007 in O.A. No. 1170 of 2007 A. No. 7050 of 2007 in O.A. No. 1171 of 2007 A. No. 7051 of 2007 in O.A. No. 1172 of 2007 A. No. 7054 of 2007 in C.S. No. 937 of 2007 A. No. 7057 of 2007 in O.A. No. 1169 of 2007 A. Nos. 7132 to 7134 and 7232 to 7235 of 2007 in C.S. No. 937 of 2007 A. No. 7058 of 2007 in O.A. No. 1170 of 2007 A. No. 7059 of 2007 in O.A. No. 1179 of 2007 A. No. 7060 of 2007 in O.A. No. 1172 of 2007 A. No. 7061 of 2007 in C.S. No. 937 of 2007 A. No. 7164 of 2007 in C.S. No. 937 of 2007 :These petitions are allowed. A. No. 7660 of 2007 to 7678 of 2007 in C.S. No. 937 of 2007: These petitions are allowed. O.A. No. 1240 and 1241 of 2007 in C.S. No. 980 of 2007: These petitions are allowed. Temporary Injunction granted as prayed for.