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2014 DIGILAW 160 (ORI)

LALIT KUMAR JOSHI v. SAJJAN KUMAR JOSHI

2014-03-06

RAGHUBIR DASH

body2014
JUDGMENT : Raghubir Dash, J. - This appeal is against the order dated 03.11.2012 passed by learned Civil Judge (Senior Division), 1st Court, Cuttack in I.A. No. 497 of 2012 arising out of C.S. (I) No. 587 of 2012 refusing to grant interim injection under Order-39, Rule-1 and 2 of the C.P.C. read with Section 151 of the C.P.C. The Appellant herein is the petitioner and Respondent Nos. 1 to 3 are the opposite parties in the same order before the learned lower court. 2. The Appellant-petitioner has filed the suit claiming the suit schedule property to be the joint family property of the Appellant and defendant Nos. 1 to 5 (Defendant No. 1 is the Respondent No. 1. Defendant Nos. 2 to 5 are not parties to the I.A.). The Respondent No. 1, who is Appellant's father as well as karta of the joint family, has mortgaged the suit property with ING Vysya Bank Ltd. (Respondent No. 3 represented by Respondent No. 2) and availed credit facility to the extent of Rs. 65,00,000/- (Rupees sixty five lakh) without taking the Appellant's consent and has exclusively utilized the loan in the business of M/s. Gananayak & Co. of which Respondent No. 1 is the proprietor. Respondent No. 1 having failed to repay the loan, the loan account became Non-Performing Account (N.P.A.) for which the Respondent-Bank initiated a proceeding u/s 13(2) and 13(4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, 'the Securitisation Act') and has taken possession of the suit property. The suit property is a dwelling house being jointly occupied by the Appellant, Respondent No. 1 and two of the Appellant's brothers (Defendant Nos. 3 and 4, who are not arrayed as parties to the I.A.) Immediately after it came to the knowledge of the Appellant from paper publication that the bank has started proceedings under the Securitisation Act, he filed the suit for partition and for permanent injunction. It is pleaded by the Appellant in his plaint that fraud has been practised by his father, Respondent No. 1, while purchasing the suit property by not describing himself in the sale deed as karta of the Hindu undivided family but showing himself to be the vendee even though it was acquired for the joint family to be used as dwelling house of the joint family. 3. 3. Respondent No. 1 has not appeared before the lower trial court to contest the case. On behalf of the Respondent-Bank it is contended that in view of the provisions of Section- 34 of the Securitisation Act, the suit as well as the interim application is not maintainable. It is also contended that the suit property was purchased by Respondent No. 1 and the R.O.R. was mutated in his name. He also renewed the Khas Mahal lease and got the registered lease from the Government. He has mortgaged the property with the Bank as security against the loan availed by him. On 30.09.2012 the loan outstanding as against M/s. Gananayak & Co., of which Respondent No. 1 is the sole proprietor, stood at Rs. 74,51,199.49 paise only. The Appellant-plaintiff has no interest in the suit property. He has filed the suit in collusion with his father in order to stall the proceeding initiated by the Bank under the Securitisation Act. 4. Observing that the civil court has no jurisdiction to try the dispute of this nature, the learned trial court held that the petitioner has no prima facie case and the balance of convenience does not lie in his favour, whereas the Respondent-Bank will be put to irreparable loss if the interim application is allowed. Thus, the I.A. has been dismissed. 5. The impugned order has been challenged on the grounds that the learned court below has erred in law by observing that the dispute of this nature cannot be tried in the civil court, in as much as, the suit is for partition of an undivided dwelling house. That apart, plea of fraud has specifically been taken by the Appellant. Reiterating the same stand, the learned counsel for the Appellant further argues that the suit would become infructuous, if an order of status quo is not passed prohibiting the Respondent-Bank from putting the mortgaged property to auction till disposal of the partition suit. It is also contended that since the Appellant is neither the borrower nor a guarantor in respect of the loan transaction or any other person directly associated with the loan, the Bar under Section- 34 of the Securitisation Act cannot be made applicable as against the suit filed by him. 6. It is also contended that since the Appellant is neither the borrower nor a guarantor in respect of the loan transaction or any other person directly associated with the loan, the Bar under Section- 34 of the Securitisation Act cannot be made applicable as against the suit filed by him. 6. Learned counsel for the Respondent-Bank, on the other hand, has submitted that the civil court has no jurisdiction to entertain any suit or proceedings which touches the procedure contained in the Securitisation Act having overriding effect over other existing laws. Citing the judgment in the case of Jagdish Singh Vs. Heeralal and Others he has further argued that even in a suit for partition and permanent injunction, the provisions of the Securitisation Act would have overriding effect and the Appellant herein has to seek for remedy available under the provisions of the Securitisation Act in respect of the suit property on which he claims interest. 7. In support of the Appellant-petitioner's stand that the civil court has got jurisdiction to entertain the dispute in as much as plea of fraud has been taken in the plaint, a judgment of the Hon'ble apex Court reported in Mardia Chemicals Ltd. Vs. Union of India (UOI) and Others Etc. Etc., is cited placing reliance on the following observations of the apex Court: 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 probe 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. 8. But the above cited observation does not come to the rescue of the Appellant in as much as the secured creditor is not shown to have acted fraudulently in sanctioning the loan in favour of Respondent No. 1. On the other hand, the fact situation of the case of Jagdish Singh v. Heeralal and others (supra) is almost similar to that of the case in hand. In that case the Bank of India had advanced a loan of Rs. 25,00,000/- (Rupees twenty five lakh) to M/s. Guru Om Automobiles through its proprietor, Respondent No. 6 and the loan was secured by equitable mortgage executed by Respondent Nos. In that case the Bank of India had advanced a loan of Rs. 25,00,000/- (Rupees twenty five lakh) to M/s. Guru Om Automobiles through its proprietor, Respondent No. 6 and the loan was secured by equitable mortgage executed by Respondent Nos. 7 to 9 in respect of a peace of land as well as in respect of three houses which were in the respective names of Respondent Nos. 6 to 8. Since there was difficulty in repayment of loan, the Bank issued notice u/s 13(2) of the Securitisation Act and took steps under Section- 13(4) of the Securitisation Act. Ultimately, the mortgaged properties were put to auction and the auction was settled in favour of the Appellant in the cited case. After payment of the entire auction price, the sale in favour of the auction purchaser was confirmed. Respondent Nos. 7 to 9 challenged the sale notice before the DRT, Jabalpur, which was dismissed. At this juncture, Respondent Nos. 1 to 5 filed a civil suit for declare on of title and partition for permanent injunction against the auction purchaser as well as the Bank and Respondent Nos. 6 to 9 alleging that Respondent Nos. 1 to 9 constituted a HUF and the mortgaged properties were purchased in the names of Respondent Nos. 6 to 9, out the funds of HUF. The civil court upheld preliminary objection that the suit is not maintainable observing that if the plaintiffs had any right, they ought to have filed an appeal under Section- 17 of the DRT Act and not a suit in view of the specific bar contained in Section- 34 of the Securitisation Act. Being aggrieved, the plaintiffs in the suit preferred appeal before the High Court of Madhya Pradesh at Indore which was allowed with the observation that on the bare perusal of the contents of the plaint it cannot be suggested at all that the civil suit is barred under any provisions of the Securitization Act or that civil court has no jurisdiction in the matter. Aggrieved by the same, the auction purchaser preferred the appeal before the apex Court. While interpreting the expression 'any person' appearing in Section- 17(1) of the Securitisation Act, Hon'ble apex Court has observed as follows: Therefore, the expression 'any person' referred to in Section 17 would take in the plaintiffs in the suit as well. Aggrieved by the same, the auction purchaser preferred the appeal before the apex Court. While interpreting the expression 'any person' appearing in Section- 17(1) of the Securitisation Act, Hon'ble apex Court has observed as follows: Therefore, the expression 'any person' referred to in Section 17 would take in the plaintiffs in the suit as well. Therefore, irrespective of the question whether the civil suit is maintainable or not, under the Securitisation Act itself, a remedy is provided to such persons so that they can invoke the provisions of Section 17 of the Securitisation Act, in case the bank (secured creditor) adopt any measure including the sale of the secured assets, on which the plaintiffs claim interest. Thus the plaintiff-Appellant of the case in hand cannot be permitted to take the plea that he being not privy to the loan transaction the bar under the Securitisation Act is not applicable against him to institute the suit for partition. 9. In the reported case, their Lordships have further observed as follows: Statutory interest is being credited in favour of the secured creditor on the secured assets and when the secured creditor proposes to proceed against the secured assets, sub-section (4) of Section 13 envisages various measures to secure the borrower's debt. One of the measures provided by the statute is to take possession of secured assets of the borrowers, including the right to transfer by way of lease, assignment or realizing the secured assets. Any person aggrieved by any of the "measures" referred to in sub-section (4) of Section 13 has got a statutory right of appeal to the DRT u/s 17. The opening portion of Section 34 clearly states that no civil court shall have jurisdiction to entertain any suit or proceeding "in respect of any matter" which a DRT or an Appellate Tribunal is empowered by or under the Securitisation Act to determine. The expression 'in respect of any matter' referred to in Section 34 would take in the "measures" provided under sub-section (4) of Section 13 of the Securitisation Act. Consequently if any aggrieved person has got any grievance against any "measures" taken by the borrower under sub-section (4) of Section 13, the remedy open to him is to approach the DRT or the Appellate Tribunal and not the civil court. Consequently if any aggrieved person has got any grievance against any "measures" taken by the borrower under sub-section (4) of Section 13, the remedy open to him is to approach the DRT or the Appellate Tribunal and not the civil court. Civil Court in such circumstances has no jurisdiction to entertain any suit or proceedings in respect of those matters which fall under sub-section (4) of Section 13 of the Securitisation Act because those matters fell within the jurisdiction of the DRT and the Appellate Tribunal. Further, Section 35 says, the Securitisation Act overrides other laws, if they are inconsistent with the provisions of that Act, which takes in Section 9 C.P.C. as well. 10. The present Appellant filing the suit for partition has prayed for interim injunction restraining the Respondent-Bank from evicting the petitioner from the suit house as well as selling, alienating or creating any third party interest over the suit property till disposal of the suit. Since the civil court jurisdiction is completely barred so far as the "measures" taken by a secured creditor under the 13(4) of the Securitization Act, the civil court cannot grant temporary injunction restraining the secured creditor from taking the "measures" under Section- 13(4) of the Securitization Act. If at all the Appellant-petitioner is aggrieved by the "measures" taken by the Respondent-Bank u/s 13(4) of the Securitisation Act, he may seek appropriate relief under the provision of the Securitisation Act. In that view of the matter, the impugned order passed by the learned lower court refusing to grant interim injunction is not liable to be interfered with. Accordingly, the appeal stands dismissed on contest with cost. Final Result : Dismissed