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Andhra High Court · body

2023 DIGILAW 1416 (AP)

Venkata Pavan Stone Crusher v. Asst. General Manager And Authorized Officer

2023-10-31

K.MANMADHA RAO

body2023
JUDGMENT 1. This Civil Revision Petition is filed by the petitioner against the Order, dtd. 18/1/2016 passed in I.A.No.1613 of 2015 in O.S No.28 of 2015 on the file of Court of I Additional District Judge, Rajahmundry (for short "the trial Court"). 2. The impugned application in I.A No.1613 of 2015 was filed by the petitioner/plaintiff under Order 1 Rule 10 CPC seeking to add respondents No.4 to 8 as defendants No.4 to 8 to the suit proceedings and to permit the petitioner to make necessary amendments. 3. Brief facts of the case are that the petitioner/plaintiff filed the suit for declaration that the action of the respondents 1 to 3 vide notice dtd. 5/12/2014 issued by 3rd respondent is void as the notice is arbitrary, contrary to law, violation of law and principles of natural justice and to declare that the respondents shall not have any right in any nature, in any manner in bringing the petition schedule property for sale fraudulently by suppressing the real facts and also for permanent injunction restraining them not to effect sale of petition schedule property as per the advertisement in Eenadu and Hindu Newspapers dtd. 20/1/2015 and other ancillary reliefs. Consequently, she filed I.A.No.207 of 2015 for temporary injunction in which the court ordered urgent notice, as such, the petitioner preferred the revision before the Hon'ble High Court of Judicature for the State of Telangana and for the State of Andhra Pradesh and the High Court ordered not to confirm the sale for specific period and subsequently an order was passed directing her to deposit reasonable amount so as to grant interim orders and due to critical health condition she is unable to deposit the same. Subsequently she came to know that the sale is confirmed for lesser price than market value. Accordingly, she filed a case against the respondents before Debt Recovery Tribunal, Visakhapatnam, as a precautionary measure, which is pending. It is further stated that the respondents No.1 to 8 colluded together and they brought the same for lesser value though the property is more than value of two crores. The petitioner got every right to succeed in the suit. The respondents No.1 to 3 moved their steps in executing a registered sale deed in favour of 8th respondent. It is further stated that the respondents No.1 to 8 colluded together and they brought the same for lesser value though the property is more than value of two crores. The petitioner got every right to succeed in the suit. The respondents No.1 to 3 moved their steps in executing a registered sale deed in favour of 8th respondent. then immediately, the petitioner filed an application for grant of temporary injunction against respondents restraining them not to execute any registered document in favour of 8th respondent or anybody with respect to petition schedule property pending disposal of I.A.No.1599/2015. However, the respondents No. 1 and 8 conspired together to create loss to the petitioner, as such, the 1st respondent got registered the schedule property in favour of 8th respondent before 4th respondent for Rs.80, 60, 000.00 by paying stamp duty for a sum of Rs.2, 14, 84, 000.00. It shows the attitude of the respondents 1 and 8. They managed the things in their favour inspite of the knowledge of filing I.A.No. 1599/2015. Thereafter, the 1st respondent issued a sale certificate in favour of 8th respondent on 12/5/2015 for Rs.80, 60, 000.00. The value of the petition schedule property as per the 4th respondent is Rs.2, 14, 84, 000.00. It all shows that they colluded with each other. The 8th respondent is influencing all the officials and is trying to create collusive registered sale deeds to complicate the proceedings. If the 8th respondent is allowed to execute further registered sale deeds there is every possibility for further damage and injury will be caused to them which cannot be compensated in terms of money. The 4th respondent is proper and necessary party, in view of brought into existence of registered document on 9/12/2015 by the 1st respondent in favour of 8th respondent in a hurried manner. The 5th respondent is also necessary party. The petitioner already obtained electric service connection vide No.1993 as she is paying necessary charges. She invested Rs.10, 00, 000.00 for getting electric connection. The respondents No.6 to 8 are necessary and proper parties. The respondents 1 and 2 did not follow the rules and regulations of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (For short 'SARFAESI Act'). Hence, the petition. 4. She invested Rs.10, 00, 000.00 for getting electric connection. The respondents No.6 to 8 are necessary and proper parties. The respondents 1 and 2 did not follow the rules and regulations of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (For short 'SARFAESI Act'). Hence, the petition. 4. The respondents No.1 and 2 filed their counter and denied all the allegations made in the petition and stated that the petitioner suppressed the very important facts that the respondents initiated the proceedings under the SARFAESI Act, as such, this court would not have jurisdiction. The petition ought not to have been numbered in view of the bar under Sec. 34 of the SARFAESI Act, 2002. The Civil court is not competent to decide the SARFAESI Act and even according to certain decisions of the Hon'ble Supreme Court. The 1st respondent bank being the secured creditor and having secured interest over the property of the petitioner invoked the provisions of SARFAESI Act and issued demand notice dtd. 1/7/2014 under Sec. 13(2) of the Act. In the said notice the 1st respondent demanded the petitioner and its guarantors to pay the amount due under the account at Rs.28, 28, 468.00. It was acknowledged by the petitioner. Later the 1st respondent issued possession notice on 15/10/2014 under Rule 8(1) of the Act. It was also published in leading news papers by spending thousands of rupees. The respondent No. 1 informed about the sale under Rule 6(2) to the petitioner vide notice dtd. 5/1/2015. It was also published in leading newspapers. Thereafter the 1st respondent gave e-auction notice on 19/1/2015. It was also published in leading news papers. The 1st respondent bank spent lakhs of rupees for publishing the notice in Telugu and English Daily newspapers. The petitioner got issued notice through its advocate with all false allegations against the 1st respondent and its officers and for every notice the 1st respondent got issued reply. The 1st respondent fixed the date of auction as 21/2/2015. The petitioner approached this court and tried to obtain exparte orders of injunction knowing fully well about the bar of civil petition under Sec.34 of the Act. 5. The 1st respondent fixed the date of auction as 21/2/2015. The petitioner approached this court and tried to obtain exparte orders of injunction knowing fully well about the bar of civil petition under Sec.34 of the Act. 5. The 4th respondent got filed a counter contending in substance that the 1st respondent presented the sale deed for registration before 4th respondent and he registered the same under Registration Act and he is not at all necessary and proper party and he need not be added as party and that the petition may be dismissed. 6. The 5th respondent got filed a counter contending in substance that the averments in petition are in no way concerned with the respondent except an allegation that the 8th respondent may apply for mutation in the revenue records and the 8th respondent did not apply for any mutation and the petition may be dismissed. 7. The 8th respondent got filed a counter resisting the prayer of the petitioner and denying the averments in the petition and stated that the allegations that he and 1st respondent colluded together is all false. He never influenced the officials. The application is not maintainable under Order 1 Rule 10 CPC since the subsequent alienees are not proper and necessary parties. He has no knowledge about the pendency of the suit by the date of registration of the document and he purchased the property without notice of pending litigation. The petitioner has not approached the court with clean hands as such this petition is liable to be dismissed. 8. No oral or documentary evidence adduced on either side before the trial Court. 9. Basing on the material and considering the contentions of both the counsels, the trial court has dismissed the petition on the ground that the petitioner having approached this Court when this Court did not grant injunction failed to comply the order of this Court and later chosen to approach the Debt Recovery Tribunal and further again knocked the doors of this Court so as to stall the proceedings initiated under the provision of SARFAESI Act" and also held that absolutely the respondents No.4 to 8 are not necessary for proper adjudication of the matter. Aggrieved by the same, the present civil revision petition came to be filed. 10. Aggrieved by the same, the present civil revision petition came to be filed. 10. During pendency of the present CRP, the respondent No.8 died and the proposed respondents No.9 to 12 have been brought on record as L.Rs. of the deceased-8th respondent vide order of this Court dtd. 3/8/2023 in I.A No.1 of 2021. 11. Heard Sri T.V. Jaggi Reddy, learned counsel appearing for the petitioner and Smt. V. Santhisree, learned counsel representing Smt. V. Dyumani, learned counsel appearing for the respondents. 12. On hearing, learned counsel for the petitioner submits that the order of the trial Court is contrary to law, facts of the case and suffers from jurisdictional errors. He submits that the trail Court ought to have seen that pending the suit the respondents No.1 to 3/defendants No.1 to 3 conducted the auction and got registered the suit schedule property in favour of the proposed respondent No.8/defendant No.8 with the connivance of respondent Nos.4 to 7 herein. The trial Court ought to have seen that the impugned I.A was filed under Order 1 Rule 10 CPC to add respondents No.4 to 8 herein, as they are proper and necessary parties to the adjudication of the suit. He further submits that the trial Court erred in holding that as the petitioner approached the High Court and also DRT, to stall proceedings under SARFAESI Act and hence the presence of the proposed respondents are not necessary for adjudication of the suit. 13. To support his contentions, learned counsel for the petitioner has relied upon a decision of Hon'ble Supreme Court reported in M/s Aliji monoji and Co. vs. Lalji Mavji and other., AIR 1997 SC 64 wherein the Apex Court held that "Under Order 1 Rule 10 - Proper party - Where the presence of a party is necessary for complete and effectual adjudication of the dispute, though no relief is sought, he is a proper party.? 14. Learned counsel for the petitioner while relying upon the above decision submits that the respondents shall not have any right in any nature, in any manner in bringing the petition schedule property for sale fraudulently by suppressing the real facts and hence the proposed parties are also proper and necessary parties. Therefore, learned counsel requests this Court to pass appropriate orders by setting aside the impugned order. 15. Therefore, learned counsel requests this Court to pass appropriate orders by setting aside the impugned order. 15. Per contra, learned counsel for the respondents while denying the contentions of the petitioner and while reiterating the averments in the impugned order, submits that the 1st respondent filed caveat petition before the Debt Recovery Tribunal and the petitioner having received the same failed to approach the proper forum against the 1st respondent. The petitioner made several allegations against the bank and its officials and addressed notices marking copy of higher officials. She further submits that the 1st respondent is entitled to conduct sale for any of its secured properties. She further submits that this court is not the proper forum to agitate the grievances of the petitioner as per Sec. 34 of the Act. There is no collusion or any fraud on the part of the officials as alleged in the petition. She further submits that the allegation that the value of the land mortgaged in the bank is worth crores of rupees is not true and correct and no amount was credited into loan account and the petitioner wanted to mislead the court stating that much of the amount was recovered. She mainly submits that the respondents No.4 to 8 are not at all necessary parties for adjudication of the dispute. If necessary, the petitioner can ask them to come and depose as witnesses. The proposed parties are in no way connected with the suit transaction. Further, the intention of the petitioner is to bring the proposed parties as defendants thereby to stall the proceedings. This court cannot encourage this type of frivolous litigation under Order 1 Rule 10 CPC. 16. To support her contentions, learned counsel for the respondents has placed reliance upon a decision of Hon'ble Supreme Court reported in Electrosteel Castings Limited vs. UV Asset Reconstruction Company Limited and Ors., wherein the Apex Court held that: "8. This court cannot encourage this type of frivolous litigation under Order 1 Rule 10 CPC. 16. To support her contentions, learned counsel for the respondents has placed reliance upon a decision of Hon'ble Supreme Court reported in Electrosteel Castings Limited vs. UV Asset Reconstruction Company Limited and Ors., wherein the Apex Court held that: "8. Having considered the pleadings and averments in the suit more particularly the use of word 'fraud' even considering the case on behalf of the plaintiff, we find that the allegations of 'fraud' are made without any particulars and only with a view to get out of the bar under Sec. 34 of the SARFAESI Act and by such a clever drafting the plaintiff intends to bring the suit maintainable despite the bar under Sec. 34 of the SARFAESI Act, which is not permissible at all and which cannot be approved. Even otherwise it is required to be noted that it is the case on behalf of the plaintiff.? 17. In another case reported in Jagdish Singh vs. Heeralal and ors., wherein it was held that : 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-sec. (4) of Sec. 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-sec. (4) of Sec. 13 has got a statutory right of appeal to the DRT under Sec. 17. The opening portion of Sec. 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 Sec. 34 would take in the -measures? provided under sub-sec. (4) of Sec. 13 of the Securitisation Act. Consequently if any aggrieved person has got any grievance against any -measures? taken by the borrower under subsec. (4) of Sec. 13, the remedy open to him is to approach the DRT or the Appellate Tribunal and not the civil court. provided under sub-sec. (4) of Sec. 13 of the Securitisation Act. Consequently if any aggrieved person has got any grievance against any -measures? taken by the borrower under subsec. (4) of Sec. 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-sec. (4) of Sec. 13 of the Securitisation Act because those matters fell within the jurisdiction of the DRT and the Appellate Tribunal. Further, Sec. 35 says, the Securitisation Act overrides other laws, if they are inconsistent with the provisions of that Act, which takes in Sec. 9 CPC as well. 23. We are of the view that the civil court jurisdiction is completely barred, so far as the -measure? taken by a secured creditor under sub- Sec. (4) of Sec. 13 of the Securitisation Act, against which an aggrieved person has a right of appeal before the DRT or the Appellate Tribunal. to determine as to whether there has been any illegality in the -measures? taken. The bank, in the instant case, has proceeded only against secured assets of the borrowers on which no rights of Respondent Nos.6 to 8 have been crystalised, before creating security interest in respect of the secured assets. In such circumstances, we are of the view that the High Court was in error in holding that only civil court has jurisdiction to examine as to whether the -measures? taken by the secured creditor under sub-sec. (4) of Sec. 13 of the Securitisation Act were legal or not. In such circumstances, the appeal is allowed and the judgment of the High Court is set aside. There shall be no order as to costs. 18. As seen from the impugned order, it is observed that, the relief sought for by the plaintiff/petitioner in the main suit is to declare the action of the respondents vide notice dtd. 5/12/2014 issued by the 3rd defendant received by the plaintiff on 7/1/2015 as null and void and for permanent injunction. The case of the respondents is that the petitioner availed loan from the defendants and ultimately she fell due a huge sum and that the defendants are proceeding against the mortgaged property under the SARFAESI Act. 5/12/2014 issued by the 3rd defendant received by the plaintiff on 7/1/2015 as null and void and for permanent injunction. The case of the respondents is that the petitioner availed loan from the defendants and ultimately she fell due a huge sum and that the defendants are proceeding against the mortgaged property under the SARFAESI Act. Even according to the plaint, the plaintiff/ petitioner categorically admitted that she availed loan from the 1st defendant and that the suit schedule property is the mortgaged property. Though the plaintiff/petitioner alleged fraud against the defendnats but her contention is that the respondents issued notice under challenge in the Court under the SARFAESI Act. 19. It is pertinent to mention here that, Sec. 34 of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, reads as follows: 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). 20. It is also to be noted from the impugned order that, whether respondents No.4 to 8 are liable to be added as parties to the suit. Even according to the petitioner after filing of the suit he had chosen to institute the proceedings before the Debt Recovery Tribunal. It is not the case of the petitioner that the notice which he challenged in the court is one which is out of the purview of jurisdiction of the DRT. If that is so, she would not have instituted the proceedings before the DRT. Now the fact remained is that the petitioner has chosen to pursue the proceedings before this Court as well as the proceedings before DRT. 21. If that is so, she would not have instituted the proceedings before the DRT. Now the fact remained is that the petitioner has chosen to pursue the proceedings before this Court as well as the proceedings before DRT. 21. Coming to the facts of the present case on hand, though a subsequent transferee during the pendency of the suit can be joined as a party depending upon the facts and circumstances of the case, it is not that in each and every case where transfer is effected during pendency of the suit each and every transferee can be joined as a necessary party. Under Order 1 Rule 10 CPC is as to whether the presence of the subsequent transferee is necessary to decide the main suit. In the impugned order, the trial Court has already pointed out that absolutely the relief prayed by the plaintiff with regard to the relief of declaration can as well be decided even without the presence of the proposed parties. Already the relief of injunction sought for became infructuous even according to the plaintiff. Now there remains the relief of declaration only. 22. In the present case, it is also to be noted that the petitioner raised any contentions which are beyond purview of Sec. 13 of the Act. The relief sought for by the plaintiff is to declare the notice issued under SARFAESI Act is illegal and void. There is no dispute that the petitioners approached the DRT even after filing of the suit. Under these circumstances, there is every doubt with regard to the maintainability of the suit in view of the bar contained under Sec. 34 of the Act. 23. In a case of Shyamali Das vs. Illa Chodhry & Ors., AIR 2007 Supreme Court 215 wherein the Hon'ble Supreme Court dealing with a situation to pass an interim order against a party who yet to come on record held that such an application is not maintainable. Having gone through the above, the petitioner is not entitled to injunction against R.8 who yet to be joined as party as R.8. 24. In another case reported in Mardia Chemicals td., etc. Vs. Having gone through the above, the petitioner is not entitled to injunction against R.8 who yet to be joined as party as R.8. 24. In another case reported in Mardia Chemicals td., etc. Vs. union of India and others etc., 2004 (3) ALD 50 (SC) wherein the Hon'ble Supreme Court held that the provisions under the 'SARFAESI Act' are not able to be challenged on the ground that the banks are vested with arbitrary powers without any guidelines to be followed. 25. The above said decision has nothing to do with the application under Order 1 Rule 10 CPC. 26. In another case reported in Bibi Zubaida Khatoon vs. Nabi Hassan Saheb and another, AIR 2004 Supreme Court 173, wherein the Hon'ble Supreme Court held that there is no absolute rule that the transferee pendent lite in all cases without eave of court should be allowed to join and contest pending suits. 27. This court already dealt with the contentions in this regard and held that in the light of the relief mould in the main suit and in the light of the substance of Sec. 53(A) of the Transfer of Property Act the subsequent transferee cannot automatically joined as a party. 28. In view of the foregoing discussion, this Court found that the trial Court has rightly dismissed the application filed by the petitioner and found no illegality in the said order and warrants no inference by this Court. Finding no merit in the instant revision petition and devoid of merits and the same is liable to be dismissed. 29. Accordingly, the Civil Revision Petition is dismissed. There shall be no order as to costs. 30. As a sequel, all the pending miscellaneous applications shall stand closed.