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2020 DIGILAW 242 (MP)

Bank of Baroda v. Sarswatidevi Maheshwari

2020-02-13

S.C.SHARMA, SHAILENDRA SHUKLA

body2020
ORDER Heard. 1. The present revision is arising out of order dated 4.2.2020 passed by the Judicial Magistrate, Class I, Indore in Civil Suit No. 33A/2020. 2. Facts of the case reveal that Smt. Sarswatidevi Maheshwari (Sharda) has filed a civil suit against the Bank of Baroda, one Shailendra and J. P. Singh for declaration and for grant of permanent injunction. In the civil suit, the Bank was impleaded as one of the defendants as the Bank has initiated action in respect of the property, i.e., Plot No. 73, situated at Silver Colony, Indore, which is under the Abhishek Cooperative Society. The undisputed facts reveal that the plot in question was mortgaged with the Bank of Baroda in the year 2016 by defendants Shailendra and J. P. Singh. A loan obtained after completion of KYC formalities, legal scrutiny report, valuation report and e-Registry, sale deed dated 9.2.2016 as well as the earlier sale deed dated 8.6.1985 of the same plot. Initially, the borrowers kept on paying the instalments, however, after paying few instalments, the borrowers stopped paying the instalments and, therefore, the account was declared as Non-Performing Asset on 2.1.2019 and the Bank has initiated action u/s. 13 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The undisputed facts also reveal that one Nalini has purchased the plot in question, i.e., Plot No. 73, from Abhishek Cooperative Society on 8.6.1985; the sale deed is also on record filed by the learned counsel by the respondent. The same plot was later, on 20.5.1986, sold to non-applicant/plaintiff Smt. Sarswatidevi Maheshwari (Sharda). Smt. Sarswatidevi Maheshwari (Sharda) though purchased the plot in the year 1986, did not take any steps till February, 2019 stating that the plot has been fraudulently sold to Nalini earlier on 8.6.1985. Smt. Sarswatidevi Maheshwari (Sharda) woke up from the slumber only when the Bank has initiated recovery proceedings and has taken action u/s. 13 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. 3. The another undisputed fact also reveals that Smt. Sarswatidevi Maheshwari (Sharda) has filed a civil suit earlier, i.e., CS No. 656A/2019 against Nalini, Shailendra and J. P. Singh for declaring the sale deed which was executed in favour of Nalini dated 8.6.1985, as null and void. 3. The another undisputed fact also reveals that Smt. Sarswatidevi Maheshwari (Sharda) has filed a civil suit earlier, i.e., CS No. 656A/2019 against Nalini, Shailendra and J. P. Singh for declaring the sale deed which was executed in favour of Nalini dated 8.6.1985, as null and void. The most important aspect of the case is that Smt. Sarswatidevi Maheshwari (Sharda) is claiming to be the title holder of the property, she derives title based upon the sale deed dated 20.5.1986 which was sale deed executed by the Society, i.e., Abhishek Cooperative Society in her favour and the sale deed which was executed in favour of Nalini is dated 8.6.1985. It has also been executed by the Abhishek Cooperative Society. For the reasons best known to the plaintiff, the Cooperative Society has not been impleaded as one of the defendants in the first civil suit. Otherwise, the Cooperative Society could have very well produced its record before the trial Court. Smt. Sarswatidevi Maheshwari (Sharda) has later on filed a second civil suit, i.e., CS No. 33A/2020 now impleading the Bank of Baroda as one of the defendants and very conveniently she has omitted to implead Nalini and the Cooperative Society as defendants even though Smt. Sarswatidevi Maheshwari (Sharda) was well aware that she has filed the earlier suit against Nalini in whose favour there is a sale deed executed prior in time, i.e., 8.6.1985. The second civil suit was filed only after the Bank was auctioning the property as the borrowers have failed to repay the dues. An application was preferred in the second civil suit by the Bank of Baroda under Order 7 rule 11 of the Code of Civil Procedure, 1908 and the same has been dismissed. The present revision has been filed against the order dated 4.2.2020 passed by the learned Judge rejecting the application under Order 7 rule 11 of the Code of Civil Procedure, 1908. 4. Learned counsel for the Bank has argued before this Court that no such suit is maintainable keeping in view Section 17 and 34 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The trial Court has dismissed the application stating that there is a title dispute involved in the matter. 5. This Court has very carefully gone through the plaint which is on record and the order passed by the trial Court. The trial Court has dismissed the application stating that there is a title dispute involved in the matter. 5. This Court has very carefully gone through the plaint which is on record and the order passed by the trial Court. Undisputedly, there is a registered sale deed executed by Abhishek Cooperative Society in favour of Nalini, dated 8.6.1985, which is prior in time. Nalini has later on sold the property to other persons and finally it was sold to in favour of Shailendra and J. P. Singh jointly. All transactions are through registered sale deeds and, therefore, as the account became NPA, the Bank was justified in issuing a notice u/s. 13 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The another important aspect of the case is that the first sale deed was executed in favour of Nalini on 8.6.1985. The sale deed in favour of Smt. Sarswatidevi Maheshwari (Sharda) – respondent No. 1 (plaintiff) was executed on 20.5.1986. The M. P. Cooperative Societies Act is a complete Code in itself. Section 82 provides a remedy in case of such a dispute and in case a dispute was raised keeping in view section 82, a judgment could have been passed in respect of the sale deed by the appropriate authority but nothing has been done right from 1985 till date by Smt. Sarswatidevi Maheshwari (Sharda) who is the plaintiff. Otherwise also, there is a sale deed which is in favour of Nalini. She has sold the plot to other persons again through sale deed and Shailendra and J. P. Singh and they are the borrowers of the Bank and they are facing proceedings under The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. 6. Learned counsel for the respondents has placed reliance upon the judgment delivered in the case of Mardia Chemicals Ltd. v. Union of India reported in (2004) 4 SCC 311 and heavy reliance has been placed upon paragraphs 50, 51 and 8.5. This Court has very carefully gone through the aforesaid judgment. In the present case, the action of the secured creditor is certainly not at all a fraudulent action and nor the claim of the secured creditor can be said to be an absurd and untenable claim. This Court has very carefully gone through the aforesaid judgment. In the present case, the action of the secured creditor is certainly not at all a fraudulent action and nor the claim of the secured creditor can be said to be an absurd and untenable claim. The claim in the present case is certainly tenable as the title holder of the property has mortgaged the property with the Bank and obtained loan from the Bank and has not cleared the dues and the Bank has initiated action u/s. 13 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and, therefore, the judgment relied upon by the learned counsel for the respondent does not help the plaintiff/respondent No.1 in any manner. 7. Reliance has also been placed upon the judgment delivered by the Division Bench of this Court in the case of Smt. Prabha Jain v. Central Bank of India reported in 2013 (1) MPHT 252 (DB). In the aforesaid case, there was a dispute regarding inheritance and a lady inherited a share in the property and the entire property was mortgaged with the Bank and in those circumstances the Court has held that the jurisdiction of the civil Court is not barred. In the present case, no such contingency is involved. The property was mortgaged with the Bank by the title holder of the property and, therefore, the trial Court has erred in law and facts in rejecting the application under Order 7 rule 11 CPC. 8. Reliance has also been placed upon the judgment delivered in the case of Rajan Kumar Das v. Punjab National Bank, Puri & Another reported in AIR 2016 Ori. 58 . It was again a case of ancestral property and Uma being the eldest male member was regularly and indiscriminatingly dealing with that ancestral property and funds and the property was also mortgaged with the Bank, whereas, in the present case, no such contingency is involved and the title holder of the property has mortgaged the property. 9. Reliance has also been placed upon the judgment delivered in the case of State Bank of India v. Sagar Pramod Deshmukh & Ors. reported in AIR 2011 Bombay 144. It is again a case of joint family property and it does not help Smt. Sarswatidevi Maheshwari (Sharda) in any manner. 10. 9. Reliance has also been placed upon the judgment delivered in the case of State Bank of India v. Sagar Pramod Deshmukh & Ors. reported in AIR 2011 Bombay 144. It is again a case of joint family property and it does not help Smt. Sarswatidevi Maheshwari (Sharda) in any manner. 10. Reliance has also been placed upon the judgment delivered in the case of M/s. Consolidated Construction Consortium Ltd. v. M/s. Indian Bank reported in AIR 2010 Madras 68. The aforesaid judgment also does not help the petitioner keeping in view the facts and circumstances of the case. 11. The present case is an open-and-shut case where the title holder of the property has mortgaged the property with open eyes with the Bank of Baroda, due diligence was observed by the Bank of Baroda while mortgaging the property, loan was not paid by the borrowers and in those circumstances the Bank has initiated action under The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and, therefore, the plaint against the Bank restraining the Bank from proceeding ahead in the peculiar facts and circumstances of the case keeping in view Sec. 17 and 34 of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 deserves to be dismissed. 12. The conduct of the plaintiff also deserves to be commented upon. In case of a cooperative dispute right from 1986 till date, though the plaintiff has not taken shelter of the provisions of the M. P. Cooperative Societies Act, even after completion of about 34 years. In the first civil suit which has been filed by Smt. Sarswatidevi Maheshwari (Sharda), the Bank has not impleaded as one of the defendants nor the Cooperative Society, who has sold the plot allegedly to the plaintiff Smt. Sarswatidevi Maheshwari (Sharda) and to Nalini, has been impleaded as defendant. In the second civil suit, Nalini has not been impleaded as defendant and, therefore, keeping in view the totality of the circumstances of the case, this Court is of the considered opinion that the application preferred by the Bank of Baroda defendant No.1 has been erroneously rejected in spite of there being a bar under the statute, hence the application under Order 7 rule 11 CPC deserves to be allowed and is accordingly allowed. As a consequence, the civil suit is dismissed.