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2019 DIGILAW 1965 (ALL)

Kajal Goel v. State Bank of India

2019-08-19

JAYANT BANERJI

body2019
ORDER : Jayant Banerji, J. 1. The plaintiff-appellant has challenged the judgment and decree dated 26.9.2017 and 4.10.2017 respectively passed by the Additional District Judge, Court No. 3, Ghaziabad in Civil Appeal No. 87 of 2017 (Smt. Kajal Goel Vs. State Bank of India and another) as well as the judgment and decree dated 27.5.2017 and 3.7.2017 respectively passed by the Additional Civil Judge (Junior Division), Court No. 2, Ghaziabad in Original Suit No. 2803 of 2013 (Smt. Kajal Goel Vs. State Bank of India and another). 2. This appeal was admitted on 19.7.2018 on the following substantial question of law: "1. Whether courts below erred in deciding the preliminary issue only on the basis of law and not on the facts and ignored correct application of the law as enunciated by the Honourable Supreme Court in the matter of Ramesh B. Desai Vs. Bipin Vadilal Mehta? 2. Whether courts below misapplied the correct application of law by refusing to investigate the veracity of documents submitted by respondent as evidence before dismissing the suit?" 3. Heard Shri Amit Goel, the power of Attorney Holder of the appellant (who was permitted to appear by the order of the Court dated 12.02.2019) and Shri Satish Chaturvedi, learned counsel for the respondents. 4. The suit was filed on 22.10.2013 by the appellant against the State Bank of India seeking a relief of a decree of permanent injunction restraining the defendants and their employees from selling or attaching the property in question/Plot No. D-504, Indraprastha, Loni, Ghaziabad during pendency of the suit. 5. The second relief was of costs and the third was of any other relief that the plaintiff may be given from the defendant-SBI. 6. Certain relevant paragraphs of the plaint are stated below which are translated in English from Hindi:- "2. That, the plaintiff has started employment for production of Tea Light Candle in year 2009 under the scheme of Government of India (P.M.E.G.P.) for the poor. 3. That, the plaintiff has been granted a financial aid of Rs. 14,00,000/- by State Bank Of India in July 2009 on behalf of the Government Of India under the aforesaid P.M.E.G.P. (Prime Minister Employment Guarantee Programme) to start the said employment. 4. That, the bank, under the P.M.E.G.P. Scheme, had taken more than 5 % margin money from the plaintiff which was approximately Rs. 14,00,000/- by State Bank Of India in July 2009 on behalf of the Government Of India under the aforesaid P.M.E.G.P. (Prime Minister Employment Guarantee Programme) to start the said employment. 4. That, the bank, under the P.M.E.G.P. Scheme, had taken more than 5 % margin money from the plaintiff which was approximately Rs. 1,00,000/-, taken by the State Bank of India and remaining money which was financed by the State Bank of India was given to the plaintiff in parts which the plaintiff was opposing since beginning. 5. That, the State Bank of India which is reputed and nationalized bank, before giving the approved aid amount to the plaintiff stated that the plaintiff must first show her previous stock, then the advance money will be given to the plaintiff/applicant on the basis of that stock which was very wrong for such employment which has to be started afresh, and the government is also providing financial help to start the same. 6. That, the grant amount which has been paid to the plaintiff by the defendant Bank was received by the defendant Bank from Nodal Bank, even then no relaxation in interest was given to the plaintiff by the defendant Bank, and the defendant Bank, without any prior information and without the consent of the plaintiff, included it in the credit account. Thereafter, the defendant Bank irregularly deducted fund from the Cash Credit Account and the Term Loan Account of the plaintiff due to which there has been delay in promotion of the employment of the plaintiff, although some part of that money had been returned by the defendant bank, but some interest of it and other deductions are to be clarified by the defendant bank, because of which the plaintiff faced a lot of difficulties in employment and meanwhile the plaintiff also lost a very huge order for export and the documentary evidence thereof is in safe custody of the plaintiff. 7. That, under the guidelines of the PMEGP scheme, the plaintiff had been exempted from producing any type of guarantee and security, yet the plaintiff was forced to produce guarantee and security under the aforesaid scheme by the State Bank of India, then having made her husband A.K. Goyal the guarantor, the plaintiff mortgaged the documents of the guarantor's property Plot No. D-504 Indrapratham (sic) Loni, Ghaziabad with the bank. 8. 8. That, the plaintiff complained to the officers of the State Bank of India about the guarantee and security taken against the guidelines of the PMEGP scheme several times, and requested to return the documents of the guarantor's property Plot No. D-504 Indraprastha Loni, Ghaziabad kept as security, but no officer of the bank either considered any complaint of the plaintiff and neither replied satisfactorily. 9. That emails have been sent by plaintiff to the State Bank of India many times since 30.09.2011 and correspondence has been made but defendant Bank did not responded to any email and correspondence by plaintiff, nor returned the papers of the mortgaged property of the guarantor, nor did it correct the account of plaintiff. 10. That the plaintiff requested the defendant Bank many times to provide aid in economic condition of employment but the defendant extended no helping hand to the plaintiff, rather agents of defendant misbehaved with her. Consequently the production of plaintiff's factory slowed down. 11. That in spite of this the plaintiff continued to send email to the defendant, on 22 February 2013 Shri Anirudh Kumar Chaudhary, the Chief Manager of Bank assured to meet and talk to the plaintiff but he did not talk to her till date, nor did he respond by means of email or correspondence. 12. That the plaintiff was compelled to send a legal notice to the Chief Manager of defendant Bank, Maharajpur Branch and Assistant General Manager of Bulandshahar Road Branch on 13.07.2013 and waited for the response of the defendant Bank. 13. That a person has informed the plaintiff that defendant Bank is auctioning mortgaged property of guarantor D-504 Indraprastha Loni Ghaziabad on 23.10.2013 the information of which has not been furnished by the defendant Bank till date. 14. That the above suit is being filed before the Hon'ble Court after being constrained to do so. 15. That the suit of the plaintiff is proved prima-facie and the balance of convenience is in favour of the plaintiff. If decree of permanent injunction is not passed in favour of the plaintiff and the defendants are not stopped from their illegal work, then the plaintiff shall suffer irreparable loss. 16. 15. That the suit of the plaintiff is proved prima-facie and the balance of convenience is in favour of the plaintiff. If decree of permanent injunction is not passed in favour of the plaintiff and the defendants are not stopped from their illegal work, then the plaintiff shall suffer irreparable loss. 16. That the cause of action for the suit arose for the first time at time of financial assistance provided to the plaintiff by the defendants under the P.M.E.G.P., and the depositing of amount in the account of the plaintiff by the Nodal Bank without the consent of the plaintiff, irregular deduction of fund and re-depositing in the account of the plaintiff, the sending of e-mail to the plaintiff on 22.02.2013 for talks by the Chief Manager S.B.I., Shri Aniruddh Kumar Chaudhary, and on sending of notice by the plaintiff to the defendants on 13.07.2013 and on notice sent by email on 17.08.2013 to the plaintiff for auction of the mortgaged property, which continues even today against the defendants. (English translation by the Court) 7. In the written statement, apart from denying the allegations levelled against the defendant-respondent, the defendant-respondent also raised an objection that under the provisions of Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, [SARFAESI Act], the civil court had no jurisdiction to hear and decide the suit aforesaid. An objection was also raised that under the provisions of Rule 11 of the Second Schedule of the Income Tax Act read with Section 29 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993[Act of 1993], the plaint was liable to be rejected. It was stated that the plaintiff-appellant who is the owner of M/S. Kajal Goel Candle Factory had taken term loan of Rs. 4,00,000/- and cash credit facility for a limit of Rs. 10,00,000/- on 19.5.2009 under the P.M.E.G.P. scheme on the recommendation of the District Industries Centre, Ghaziabad. The plaintiff-appellant and her husband, Shri Amit Goel as guarantor executed the necessary loan documents and handed them over to the defendant-respondent. For guaranteeing the repayment of the loan, Shri Amit Goel submitted the title deeds before the defendant-respondent no. 1 to create an equitable mortgage. The plaintiff-appellant and her husband, Shri Amit Goel as guarantor executed the necessary loan documents and handed them over to the defendant-respondent. For guaranteeing the repayment of the loan, Shri Amit Goel submitted the title deeds before the defendant-respondent no. 1 to create an equitable mortgage. That since the plaintiff-appellant failed to maintain proper financial discipline all her loan accounts became seriously irregular so much so that despite repeated reminders the repayment was not being made. The plaintiff did not pay the agreed installments and did not even submit the stock statements. Under the circumstances proceedings were required to be initiated. Accordingly, the defendant-respondent no. 1 sent a notice dated 29.3.2012 under Section 13(2) of the SARFAESI Act. That the plaintiff-appellant had no locus standi to institute the case and had no right to institute the suit. That the suit of the plaintiff-appellant was barred under the provisions of the Specific Relief Act. 8. On the basis of the pleadings of the parties, six issues were framed by the trial court on 18.4.2016 as under: (i) Whether the plaintiff is entitled to decree of permanent injunction from the court? (ii) Whether the plaintiff has given less valuation of the suit and whether the court fees is inadequate? (iii) Whether the court had no jurisdiction to hear and decide the suit in view of the provisions of Section 34 of the SARFAESI Act, 2002? (iv) Whether the suit of the plaintiff is barred by the provisions of the Specific Relief Act? (v) Whether the defendant is entitled special cost of Rs. 50,000/- from the plaintiff under the provisions of Section 35-A? (vi) The relief which the plaintiff is entitled to? (English translation by Court) 9. The issue no. 2 was decided as a preliminary issue in the negative in favour of the plaintiff-appellant by means of an order dated 18.4.2016. By means of an order dated 18.2.2017, on the application of the plaintiff, two more issues were added: (1) Whether the bank has flouted the direction of the RBI pertaining to the P.M.E.G.P.? (2) Whether the defendant has forcibly and malafidely closed the account? 10. On 8.5.2017 on the request of the parties for hearing on the issue no. 3, the arguments of the learned counsel for the parties were heard and 27.5.2017 was fixed for the disposal of issue no. 3. (2) Whether the defendant has forcibly and malafidely closed the account? 10. On 8.5.2017 on the request of the parties for hearing on the issue no. 3, the arguments of the learned counsel for the parties were heard and 27.5.2017 was fixed for the disposal of issue no. 3. By means of the order impugned dated 27.5.2017, the issue no. 3 that whether the court had no jurisdiction to hear and decide the suit under the provisions of Section 34 of the SARFAESI Act, 2002, the issue was decided against the plaintiff-appellant. Consequently, the plaint of the suit was rejected. 11. Challenging the order dated 27.5.2017, the plaintiff instituted an appeal under Section 96 of the Code of Civil Procedure, 1908[CPC] being Civil Appeal No. 87 of 2017, before the Court of the District Judge, Ghaziabad. In the appeal, among the several grounds raised, a ground was that the alleged notice issued under Section 13 of the SARFAESI Act on 29.3.2012 referred to the plaintiff-appellant's account being declared as non-performing assets on 28.10.2011 was a false statement as regular deduction of installments were made by the bank officials. It was stated that the document was a photocopy which could not be read as evidence. It was also pointed out that the Debts Recovery Tribunal was not the right forum for the examination of the violation of the P.M.E.G.P. guidelines committed by the bank before classifying the accounts of the plaintiff-appellant as non-performing assets. By means of a judgment and decree dated 26.9.2017 and 4.10.2017 respectively, the appeal was dismissed and the order dated 27.5.2017 passed by the trial court was affirmed. 12. Challenging the aforesaid decree dated 4.10.2017, the instant second appeal was filed. 13. It is contended on behalf of the plaintiff-appellant that the courts below have grievously erred in rejecting the plaint and the appeal of the plaintiff-appellant. Nowhere in the plaint SARFAESI Act has been mentioned. The cause for filing the suit was the violation of the P.M.E.G.P. guidelines by the defendant-respondent. The attorney has urged that the scheme of the P.M.E.G.P. is based on people public partnership. That it is an admitted case that notices under Section 13(2) and 13(4) of the SARFAESI Act were not served. Nowhere in the written statement is there any mention about the possession notice. Attention of the Court was drawn to paragraph no. The attorney has urged that the scheme of the P.M.E.G.P. is based on people public partnership. That it is an admitted case that notices under Section 13(2) and 13(4) of the SARFAESI Act were not served. Nowhere in the written statement is there any mention about the possession notice. Attention of the Court was drawn to paragraph no. 25 of the written statement filed by the defendant-respondent that the defendant-respondent no. 1 had sent a notice dated 29.3.2012 to the plaintiff-appellant under the provisions of Section 13(2) of the SARFAESI Act. But, it is contended that the notice was never served and therefore the averment made by the defendant-respondent in paragraph no. 25 of the written statement is null and void. It has further been stated that the notice under Section 13(2) of the SARFAESI Act has been issued on 29.2.2012 by the Chief Manager of RASMECC (SARC), SBI, Ghaziabad but the possession notice under 13(4) of the SARFAESI Act read with Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 (SARFAESI Rules) was issued on 14.5.2013 by the authorised officer of SMECCC-SARC, SBI, Ghaziabad. It is contended that the objection taken by the defendant-respondent that a notice under Section 13(2) of the SARFAESI Act was sent, was not substantiated by the defendant-respondent inasmuch as the document 23 x filed by the defendant-respondent which are notices to the borrower and guarantor both dated 29.3.2012 under the provisions of Section 13(2) of the SARFAESI Act are mere photocopies of the original documents. Therefore, factual verification of these documents were required and in absence of that, the issue of jurisdiction of the court was not an issue of law but a mixed issue of law and fact and therefore the issue no. 3 could not have been tried as preliminary issue. The attorney has referred to the two additional issues framed by the court on 18.2.2017 to contend that the issue of jurisdiction was a mixed question of fact and law. It is contended that the judgment of the Supreme Court in the case of Mardia Chemicals Limited Vs. Union of India, (2004) 4 SCC 311 has held that a suit would be maintainable if it is based on the allegation of fraud. It is contended that the judgment of the Supreme Court in the case of Mardia Chemicals Limited Vs. Union of India, (2004) 4 SCC 311 has held that a suit would be maintainable if it is based on the allegation of fraud. The contention is that the additional issues clearly reflect that the matter related to fraud and therefore the suit was maintainable before the court below and would not be barred under the provisions of Section 34 of the SARFAESI Act. The attorney has referred to the judgment of the Supreme Court in the case of Ramesh B. Desai & Ors. Vs. Bipin Vadilal Mehta & Ors., (2006) 5 SCC 638 and the judgment of a Full Bench of the Madhya Pradesh High Court in the case of Ramdayal Umraomal Vs. Pannalal Jagannathji, AIR 1979 MP 153 to contend that the issue relating to jurisdiction of the court can be tried as a preliminary issue only if it can be disposed of without recording any evidence and that if the issue about jurisdiction is a mixed question of law and fact requiring recording of evidence, the same cannot be tried as a preliminary issue. 14. Countering the submissions of the attorney for the plaintiff-appellant, Shri Satish Chaturvedi, learned counsel for the defendant-respondent stated that the only issue before the Court was whether the suit filed by the plaintiff-appellant was barred under the provisions of Section 34 of the SARFAESI Act. It is contended that the loan was advanced in the year 2009 and the accounts were declared NPA on 28.10.2011, whereafter notice under Section 13(2) was issued on 29.3.2012. Since the notice was also published in the newspapers. It is stated that the auction notice was of 17.9.2013 and the suit was filed on 22.10.2013 after publication of the auction notice. It is contended that the plaintiff-appellant admits the loan/financial facility of Rs. 14,00,000/- and the mortgage of the property is also admitted in paragraph nos. 3 and 7 respectively, that in paragraph no. 13 of the plaint, the plaintiff-appellant admits the notice of the auction and paragraph no. 16 of the plaint contains the recital of the auction notice dated 17.8.2013. Learned counsel then pointed out the relief clause and said that the suit has been filed to avoid recovery proceedings initiated by the defendant-respondent. 3 and 7 respectively, that in paragraph no. 13 of the plaint, the plaintiff-appellant admits the notice of the auction and paragraph no. 16 of the plaint contains the recital of the auction notice dated 17.8.2013. Learned counsel then pointed out the relief clause and said that the suit has been filed to avoid recovery proceedings initiated by the defendant-respondent. It is contended that the case is covered by the provisions of SARFAESI Act and a bare reading of the plaint shows that the suit is barred under the provisions of Section 34 of the SARFAESI Act. It is contended that the issue of jurisdiction as adjudicated by the courts below was a pure question of law and not a mixed question of fact and law. He has contended that the judgment of the Ramesh B. Desai (Supra) relied upon by the learned counsel for the plaintiff-appellant is not attracted under the facts and circumstances of the instant case and is distinguishable. The contention is that perusal of the provisions of Section 34 of the SARFAESI Act and the plaint clearly reflect that no factual finding was required to be given by the Court subsequent to verification of documents. It is contended that no substantial questions of law exists in the matter and this second appeal merits dismissal. Learned counsel has relied upon the judgments in the cases of M/S. Sree Anandhakumar Mills Limited Vs. Indian Overseas Bank, 2018 (10) SCJ 514 , State Bank of Patiala Vs. Mukesh Jain, (2017) 1 SCC 53 , Gramin Bank of Aryavart and another Vs. M/S. Maa Laxmi Ice and Cold Storage and others 2017 (125) ALR 799, M/S. Transcore Vs. Union of India AIR 2007 Supreme Court 712, Kanaiyalal Lalchand Sachdev & Ors. Vs. State of Maharashtra & Ors. (2011) 2 SCC 782 , M/s. Gadeo Electronics & Ors. Vs. Oriental Bank of Commerce and another AIR 2016 Allahabad 170, Jagdish Singh v. Heeralal & others (2014) 1 SCC 479 . 15. The suit was filed by the plaintiff-appellant seeking relief of permanent injunction to the effect that the defendant-respondents and their employees be restrained from selling or attaching the property in question being plot no. D-504, Indraprastha, Loni, Ghaziabad during pending of the suit. A perusal of the plaint does reveal that the loan/financial facility advanced by the defendant-respondent to the plaintiff-appellant is admitted. D-504, Indraprastha, Loni, Ghaziabad during pending of the suit. A perusal of the plaint does reveal that the loan/financial facility advanced by the defendant-respondent to the plaintiff-appellant is admitted. It is also admitted in the plaint that for the purpose of security, the guarantor, namely, Shri Amit Goel had mortgaged the aforesaid plot in favour of the bank to secure the repayment of the amount. It is also admitted that the plaintiff had knowledge of the auction proceedings being held at the instance of the plaintiff-appellant by the bank for recovery of the outstanding amount from the plaintiff-appellant. It needs no iteration that the issue of jurisdiction has to be raised at the first instance and at the earliest possible opportunity. Where any such objection regarding jurisdiction is raised, the court is required to consider the same. Section 34 of the SARFAESI Act is as under: “34. Civil court not to have jurisdiction.--No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any Court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993)." 16. In view of the objection raised by the defendant-respondent in its written statement the trial court was called upon to consider whether the plaint was liable to be rejected in view of clause (d) of the Order 7 Rule 11 C.P.C.. The plaintiff-appellant has attempted to demonstrate that the suit for injunction filed was maintainable in view of the fraud practiced by the bank in not following the P.M.E.G.P. scheme and in view of the wrong declaration of the loan accounts as non-performing assets. The plaintiff-appellant has stated that the notice dated 29.3.2012 sent under Section 13(2) of the SARFAESI Act was never served on her or the guarantor and a photocopy of the notice has been filed before the trial court which cannot be admissible as evidence. The plaintiff-appellant has stated that the notice dated 29.3.2012 sent under Section 13(2) of the SARFAESI Act was never served on her or the guarantor and a photocopy of the notice has been filed before the trial court which cannot be admissible as evidence. On 2.1.2014 before the trial court the bank had filed two photocopies of the notice under Section 13(2) of the SARFAESI Act, a photocopy of the notice of possession dated 14.5.2013 and a true copy of the sale deed dated 20.3.2009 submitted by the guarantor, Amit Goel for creation of the mortgage. The photocopy of the notice under Section 13(2) of the SARFAESI Act is numbered as Paper No. 23 x and the possession notice under Section 13(4) of the SARFAESI Act is numbered as 24 x and both appear to be photocopies of the documents. However, these documents were filed along with the written statement of the defendant-respondent dated 2.1.2014. 17. In view of the plea raised by the defendant-respondent of the suit being barred under the provisions of Section 34 of the SARFAESI Act, the court below has examined the plaint and rejected it only on the basis of law. Section 34 of the SARFAESI Act bars the jurisdiction of the civil courts to entertain any suit or proceedings in respect of any matter which the Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under the SARFAESI Act to determine and, further, any court or other authority is barred from granting injunction in respect of any action taken or to be taken in pursuance of any power conferred by or under the SARFAESI Act or under the Recovery and Debts Due to Banks and Financial Institutions, Act, 1993 (Act of 1993). 18. Section 34 of the SARFAESI Act consists of two parts. First is the bar to entertain any suit or proceedings which the tribunals constituted under the SARFAESI Act are empowered by or under that Act to determine and, second, is the bar from granting injunction by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under the SARFAESI Act or under the Act of 1993. The plaintiff has sought a relief of permanent injunction. 19. The plaintiff has sought a relief of permanent injunction. 19. The SARFAESI Act was enacted for purpose of enabling secured creditors to seek enforcement of security interest without the intervention of the court or tribunal in accordance with the provisions of that Act. The plaintiff has sought a relief of permanent injunction. 19. The SARFAESI Act was enacted for purpose of enabling secured creditors to seek enforcement of security interest without the intervention of the court or tribunal in accordance with the provisions of that Act. Section 2 of the SARFAESI Act includes definitions of various terms and phrases, some of which that are relevant for purpose of the present adjudication are as follows {the terms marked (*) are those definitions as they stood prior to the amendment in the SARFAESI Act in 2016, while other definitions mentioned below remain unchanged}: "(f) "borrower" (*) means any person who has been granted financial assistance by any bank or financial institution or who has given any guarantee or created any mortgage or pledge as security for the financial assistance granted by any bank or financial institution and includes a person who becomes borrower of a securitisation company or reconstruction company consequent upon acquisition by it of any rights or interest of any bank or financial institution in relation to such financial assistance; (ha) "debt" (*) shall have the meaning assigned to it in clause (g) of section 2 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993); (j) "default" (*) means non-payment of any principal debt or interest thereon or any other amount payable by a borrower to any secured creditor consequent upon which the account of such borrower is classified as non-performing asset in the books of account of the secured creditor; (o) "non-performing asset" means an asset or account of a borrower, which has been classified by a bank or financial institution as sub-standard, [doubtful or loss asset,- (a) in case such bank or financial institution is administered or regulated by any authority or body established, constituted or appointed by any law for the time being in force, in accordance with the directions or guidelines relating to assets classifications issued by such authority or body; (b) in any other case, in accordance with the directions or guidelines relating to asset classifications issued by the Reserve Bank;] (zb) "security agreement" means an agreement, instrument or any other document or arrangement under which security interest is created in favour of the secured creditor including the creation of mortgage by deposit of title deeds with the secured creditor; (zc) "secured asset" means the property on which security interest is created; (zd) "secured creditor" (*) means any bank or financial institution or any consortium or group of banks or financial institutions and includes- (i) debenture trustee appointed by any bank or financial institution; or (ii) securitisation company or reconstruction company, whether acting as such or managing a trust set up by such securitisation company or reconstruction company for the securitisation or reconstruction, as the case may be; or (iii) any other trustee holding securities on behalf of a bank or financial institution, in whose favour security interest is created for due repayment by any borrower of any financial assistance; (ze) "secured debt" means a debt which is secured by any security interest; (zf) "security interest" (*) means right, title and interest of any kind whatsoever upon property, created in favour of any secured creditor and includes any mortgage, charge, hypothecation, assignment other than those specified in section 31;" 20. Section 13 of the Act provides the methods for enforcement of any security interest created in favour of any secured creditor without the intervention of the Court or the Tribunal, by such creditor in accordance with the provisions of the Act. Section 13(2) provides that where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-section (4). Sub-section (3) of Section 13 provides for the contents of the notice referred to in sub-section (2). Sub-section (3-A) provides an opportunity to the borrower to make a representation or raise any objection on receipt of the notice under sub-section (2) before the secured creditor. Sub-Section (4) provides that in case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the measures specified therein to recover his secured debt, which measures include taking possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset. Section 14 confers powers on the Chief Metropolitan Magistrate or District Magistrate within whose jurisdiction any secured asset or other documents relating thereto may be situated or found, to assist the secured creditors in taking possession of the secured asset. Section 17 of the Act provides that any person including a borrower who is aggrieved by the any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditors may make an application to the Debts Recovery Tribunal having jurisdiction and the Debts Recovery Tribunal has been conferred powers to examine the application and pass appropriate orders thereon. Under sub-section (2) of Section 17, the Debts Recovery Tribunal is required to consider an application made by any person (including a borrower) to ascertain whether any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor for enforcement of security are in accordance with the provisions of SARFAESI Act and rules made thereunder. Sub-section (3) of Section 17, as it stood prior to being substituted by Act No. 44 of 2016, read as follows: "(3) If, the Debts Recovery Tribunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that any of the measures referred to in sub-section (4) of section 13, taken by the secured creditor are not in accordance with the provisions of this Act and the rules made thereunder, and require restoration of the management of the business to the borrower or restoration of possession of the secured assets to the borrower, it may by order, declare the recourse to any one or more measures referred to in sub-section (4) of section 13 taken by the secured creditors as invalid and restore the possession of the secured assets to the borrower or restore the management of the business to the borrower, as the case may be, and pass such order as it may consider appropriate and necessary in relation to any of the recourse taken by the secured creditor under sub-section (4) of section 13. 21. 21. The substituted sub-section (3) of Section 17 reads as follows: "(3) If, the Debts Recovery Tribunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that any of the measures referred to in sub-section (4) of section 13, taken by the secured creditor are not in accordance with the provisions of this Act and the rules made thereunder, and require restoration of the management or restoration of possession, of the secured assets to the borrower or other aggrieved person, it may, by order,- (a) declare the recourse to any one or more measures referred to in sub-section (4) of section 13 taken by the secured creditor as invalid; and (b) restore the possession of secured assets or management of secured assets to the borrower or such other aggrieved person, who has made an application under sub-section (1), as the case may be; and (c) pass such other direction as it may consider appropriate and necessary in relation to any of the recourse taken by the secured creditor under sub-section (4) of section 13." 22. An appeal is also provided to the Appellate Tribunal against the orders of the DRT. 23. The Act of 1993 has been renamed as the Recovery of Debts and Bankruptcy Act, 1993 by the Act No. 13 of 2016. 'Debt' has been defined in Clause (g) of Section 2 of the Act of 1993, as follows: "(g) "debt" means any liability (inclusive of interest) which is claimed as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by the bank or the financial institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any civil Court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on, the date of the application;" 24. Section 19 of the Act of 1993 provides that where a bank or financial institution has to recover any debt from any person it may make an application to the Tribunal concerned and the Tribunal is empowered to decide the application of the bank after hearing the parties. Section 19 of the Act of 1993 provides that where a bank or financial institution has to recover any debt from any person it may make an application to the Tribunal concerned and the Tribunal is empowered to decide the application of the bank after hearing the parties. An appeal is also provided to the Appellate Tribunal under the provisions of Section 20 of the Act of 1993. The modes of recovery of debt determined by the tribunal is provided in Sections 25, 26, 27, 28, 29, 30, 30-A of the Act of 1993. 25. Thus, under the SARFAESI Act powers have been conferred on the defendant-bank, which is a nationalized bank, to take action or to contemplate action on default of a borrower in repayment of secured debt and where his account in respect of such debt is classified as a Non-Performing Asset, of putting him on notice and taking recourse to the measures specified to recover its secured debt. Under the Act of 1993 on the application of the bank for recovery of debt the Tribunals are empowered under Section 19 thereof to pass final orders pursuant to which the presiding officer of the tribunal is empowered to issue recovery certificate. Thus, even under the Act of 1993, for recovery of debt from any person powers have been conferred on a bank or financial institution for taking or contemplating action. Chapter IV of the Act of 1993 is a codification of the procedure of the Tribunals. 26. In the aforesaid backdrop the provisions of Section 34 of the SARFAESI Act are to be considered. A suit that falls in any of the aforesaid two parts of Section 34 of the SARFAESI Act would be barred. Consequently, no injunction can be granted by any court or authority and the suit in such cases would be barred. 27. A perusal of the case of the plaintiff-appellant in the plaint reveals that a financial facility amounting to Rs. 14,00,000/- was availed by the plaintiff-appellant for recovery of which auction proceedings were initiated by the bank. The plaintiff acknowledges the auction proceedings. There is also admission of a security interest being created with respect to the plot, the title deeds of which were submitted by the guarantor, Amit Goel to the bank as security for repayment of the amount. 14,00,000/- was availed by the plaintiff-appellant for recovery of which auction proceedings were initiated by the bank. The plaintiff acknowledges the auction proceedings. There is also admission of a security interest being created with respect to the plot, the title deeds of which were submitted by the guarantor, Amit Goel to the bank as security for repayment of the amount. Thus, without reference to any document filed by the bank and on a bare perusal of the plaint it is evident that some action was taken or would be taken against the plaintiff-appellant in pursuance of the powers conferred under the SARFAESI Act or under the Act of 1993. Such being the facts, grant of injunction by any court or any other authority is barred under Section 34 of the SARFAESI Act. The courts below have considered the matter with regard to the applicability of the provisions of Section 34 of the SARFAESI Act and have concluded that the suit would be barred under Order 7 Rule 11 of C.P.C. and have rejected the plaint which, in the facts and circumstances of the case is justified. 28. The contention of the attorney for the plaintiff-appellant is that firstly, the notice under Section 13(2) of the SARFAESI Act was not received by him. Secondly, the notice under Section 13(2) was issued in view of the account being wrongly classified as Non-Performing Asset and consequently in view of the fraud committed by the bank, the suit would be maintainable. He referred to the decision of the Supreme Court in the case Mardia Chemicals (supra) wherein it is observed in paragraph nos. 51 and 52 as follows: "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 his 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. 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, AIR pp. 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, AIR pp. 141 and 144, a judgment of the learned Single Judge where it is observed as follows in para 22: (AIR p. 143) "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. I need not point out that this restraint 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 Ghose, Rashbehary: Law of Mortgages, Vol. II, 4th Edn., p. 784)" 52. The other decision on which reliance has been placed is A. Batcha Saheb Vs. Nariman K. Irani more particularly on paragraph 8." 29. The attorney of the plaintiff-appellant has further emphasized that fraud is reflected in view of the additional issues framed by the trial court on 18.2.2017. 30. Fraud has been defined under Section 17 of the Indian Contract Act, 1872, which is as follows: "17. Nariman K. Irani more particularly on paragraph 8." 29. The attorney of the plaintiff-appellant has further emphasized that fraud is reflected in view of the additional issues framed by the trial court on 18.2.2017. 30. Fraud has been defined under Section 17 of the Indian Contract Act, 1872, which is as follows: "17. 'Fraud' defined.--'Fraud' means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:- (1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true; (2) the active concealment of a fact by one having knowledge or belief of the fact; (3) a promise made without any intention of performing it; (4) any other act fitted to deceive; (5) any such act or omission as the law specially declares to be fraudulent." 31. In the opinion of the court none of the allegations made in the plaint as referred to above contain the elements of fraud as specified in Section 17 of the Indian Contract Act, 1872. A suit can be maintainable against a secured creditor only to a very limited extent. Particularly, a suit for restraining by injunction a secured creditor/bank from taking action or contemplating action under the SARFAESI Act or under the Act of 1993, alleging fraud, must clearly disclose a case of fraud, and specific averments and allegations are required to be made. The allegations in the plaint in the present case can hardly be said to be specific with reference to fraud. Merely because two additional issues were framed by the trial court which allegedly disclose commission of fraud, could not have come in the way of courts below from considering whether the plaint is liable to be rejected under the provisions of Section 34 of the SARFAESI Act. To maintain a suit on the basis of fraud there shall have to be specific pleadings in the plaint that would demonstrate fraud which is wanting in the plaint of the plaintiff-appellant. The provisions of Order 6 Rule 4 of C.P.C. require that specific particulars with regard to fraud are to be stated in the pleadings. To maintain a suit on the basis of fraud there shall have to be specific pleadings in the plaint that would demonstrate fraud which is wanting in the plaint of the plaintiff-appellant. The provisions of Order 6 Rule 4 of C.P.C. require that specific particulars with regard to fraud are to be stated in the pleadings. It is not in dispute that for purpose of adjudication whether a suit is barred under the provisions of Clause (d) of Rule 11 of Order 7 C.P.C., only the plaint averments are to be seen. The plaint averments themselves, in the case at hand, do not disclose fraud but reveal that the suit would be barred in view of Section 34 of the SARFAESI Act. As a matter of fact, the provisions of Section 17 of the SARFAESI Act, as referred above, provide adequate safeguards and efficacious remedy for the grievances of the plaintiff-appellant as sought to be agitated in the plaint. In the case of Jagdish Singh (supra) the Supreme Court observed: "24. Statutory interest is being created 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 realising 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 under Section 17. The opening portion of Section 34 clearly states that no civil court shall have the 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. The 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 CPC as well." 32. In the case of Ramesh B. Desai (supra), the Supreme Court was considering an appeal filed against a judgment of the High Court by which an appeal preferred against an order passed by the Company Judge was dismissed. In the company petition, an objection was taken by means of an application to dismiss the company petition without going into the merits of the petition on the ground the same is barred by limitation. That application was allowed by the learned Company Judge and his order was affirmed by the Division Bench of the High Court. The Supreme Court held that a plea of limitation cannot be decided as an abstract principle of law divorced from facts as in every case the starting point of limitation has to be an assertion which is entirely a question of fact. A plea of limitation is a mixed question of law and fact. Thus, the suit cannot be dismissed as barred by limitation without proper pleadings, framing of an issue of limitation and taking of evidence. 33. The decision of the Ramesh B. Desai (supra) would not be of avail to the plaintiff-appellant as the issue of limitation was being considered by the Supreme Court in which case it was held that the starting point of limitation being an assertion would be a question of fact and a plea of limitation is a mixed question of law and fact. 34. In the case of Bishundeo Narain v. Seogeni Rai, AIR 1951 SC 280 , Justice Vivian Bose, speaking for the bench of the Supreme Court made this observation: "28. It is also to be observed that no proper particulars have been furnished. 34. In the case of Bishundeo Narain v. Seogeni Rai, AIR 1951 SC 280 , Justice Vivian Bose, speaking for the bench of the Supreme Court made this observation: "28. It is also to be observed that no proper particulars have been furnished. Now if there is one rule which is better established than any other, it is that in cases of fraud, undue influence and coercion, the parties pleading it must set forth full particulars and the case can only be decided on the particulars as laid. There can be no departure from them in evidence. General allegations are insufficient even to amount to an averment of fraud of which any court ought to take notice however strong the language in which they are couched may be, and the same applies to undue influence and coercion. See Order 6 Rule 4 of the Civil Procedure Code." 35. In a decision of this Court in the case of Al-Habib Food Processing v. Punjab National Bank, while dismissing the writ petition, it was observed: "15. The plaint case set up by petitioner does not allege any fraudulent act on the part of respondent-defendant Bank or that it has not taken loan and is not liable to pay the same or the property in dispute has not been mortgaged or placed as security. Having obtained the loan after placing the property in question as security, now plaintiff cannot be allowed to turn back and to raise dispute whether the property was liable to be made a security or not etc. and at his instance it cannot be said that limited permissible scope allowed by Apex Court in Mardia Chemicals (supra) is attracted in the case in hand. 16. In the above facts and circumstances, I find myself in entire agreement with Trial Court that suit in the case in hand, ex facie having challenged notices issued under Section 13(2) of Act, 2002 is clearly barred by Section 34 of Act, 2002 in the light of the exposition of law laid down by Apex Court in Mardia Chemicals (supra)." 36. In another decision of this Court in the case of Shitla Prasad v. Banwari (since deceased) and others (2014) 102 ALR 25, while considering a second appeal filed by the defendant in a suit for cancellation of a sale deed, this Court considered the law regarding the requirement of specific pleadings to sustain a suit based on fraud and observed: " ..... though it cannot be doubted that a plaint must disclose requisite facts for making a case of fraud but, in the present case, those facts have been pleaded and hence the requirement of Order VI, Rule 4 is well satisfied. On that account the plaintiff cannot be non-suited." 37. As stated above, the non-specific pleadings in the plaint of the instant case do not disclose fraud. Hence, for considering the bar of Section 34 of the SARFAESI Act, factual analysis after consideration of issues on the basis of evidence was not required in the facts and circumstances of the present case. Therefore, courts below were justified in considering the issue of jurisdiction as a preliminary issue. 38. In the decision of Full Bench relied upon by the attorney of the plaintiff-appellant in the matter of Ramdayal Umraomal (supra) the court held that the question of jurisdiction, given the facts and circumstances of that case required recording of evidence and held that if the issue about the jurisdiction is a mixed question of law and fact requiring recording of evidence, the same cannot be tried as a preliminary issue. The case of Ramdayal Umraomal is based on its own facts and is distinguishable from the facts of the instant case. 39. Therefore, the first substantial question of law is answered that the courts below did not err in deciding the preliminary issue of the bar of Section 34 of the SARFAESI Act only on the basis of law. With regard to the second question of law, in view of the provisions of the SARFAESI Act, it is held that the courts below were justified in passing the impugned judgments without investigating the veracity of the documents submitted by the respondents as evidence before dismissing the suit. This second appeal is, accordingly, dismissed. Application No. 5 of 2018 An order has been passed today on the application separately.