IN THE HIGH COURT OF JUDICATURE AT MADRAS Date:- 15.02.2010 Coram The Honourable Mr. Justice M. CHOCKALINGAM and The Honourable Mr. Justice T. RAJA O.S.A. No.14 of 2010 and M.P. No.1 of 2010 GIC Housing Finance Limited, rep. by its Senior Vice President ... Appellant ..Vs.. M/s. Crescent Housing Pvt. Ltd., rep. by its Director Sharath Kakamanu ... Respondent Original Side Appeal filed against the order dated 2.12.2009 passed in O.A. No.374 of 2008 in C.S. No.670 of 1997 on the file of this Court. Original Application has been filed to pass an order of interim injunction restraining the respondents their agents, servants or men from in any manner initiating any proceedings against the schedule mentioned property pursuant to their notice dated 8.2.2008. For Appellant : Mr. P.L. Narayanan Sr. counsel For Respondent : Mr. G.R. Lakshmanan JUDGMENT (Judgment was delivered by M. CHOCKALINGAM, J.) This intra-Court appeal challenges the order dated 2.12.2009 passed by the learned Single Judge of this Court, granting interim injunction in favour of the first defendant in pending suit in C.S. No.670 of 1997. https://hcservices.ecourts.gov.in/hcservices/ 2. The Court heard the learned senior counsel appearing for the appellant and also learned counsel appearing for the respondent. 3. The appeal has arisen under the following manner:- (i) The plaintiff filed a suit in C.S. No.670 of 1997, seeking following reliefs:- " (i) for a preliminary decree for a sum of Rs.4,47,94,037/- with future interest thereon at 22% per annum with quarterly rests with penal interest at 2% from 31.7.1997 till the date of realisation making the defendants 2 and 3 jointly and severally liable along with the first defendant and calling upon the defendants to pay the sum of Rs.4,47,94,037/- within a date to be fixed by this Hon'ble Court failing which, order sale of the mortgaged property, more fully described in the schedule A & B hereunder and to appropriate the sale proceeds after defraying the expenses thereof and in the event of shortfall in the satisfaction of the decreetal dues, to permit the plaintiff to proceed against the defendants personally also; (ii) For the above purpose all proper directions may graciously be given by this Hon'ble Court (iii) for the cost of the suit." (ii) After filing of the suit, a written statement has been filed and issues have also been framed. It was a stage where the trial was to be commenced and number of applications were filed by the parties. One of those application is O.A. No.374 of 2008, whereby the first defendant/respondent herein sought for an injunction to restrain the plaintiff from in any manner initiating any proceedings against the schedule mentioned property pursuant to the notice dated 8.2.2008 pending disposal of the suit. (iii) What was contended by the plaintiff before the Trial Court and equally here also is that in the instant application filed by the first defendant under Section 34 of the SARFAESI Act and Section 70 of Transfer of Property Act, the Civil Court cannot entertain the jurisdiction over the same and hence the application itself is not maintainable. https://hcservices.ecourts.gov.in/hcservices/ (iv) Apart from that when the defendants received loan from the plaintiff, in respect of which the suit has been laid, out of five blocks, block Nos.4 and 5 i.e.60,000/2,00,000 shares in the land along with construction to be made thereon were mortgaged and out of this construction, 25 flats have been mentioned in respect of which a lien has been created and thus total construction as on that date, when that application was filed, was 88 in respect of which proceedings were initiated under SARFAESI Act and notice has been issued and hence there could not be any impediment for bringing the entire property viz. 88 flats along with the share of land mentioned in the document. (v) Contrarily, it was contended on the respondent's side that what was mortgaged was only 25 specified flats in the total area of 60,000/2,00,000 sq.ft. to be constructed in Block Nos.4 and 5. Even the mortgaged document was very clear. Now the proceedings initiated by the plaintiff/appellant to bring the property of the entire 88 flats was against the agreement and also against law and it is a case where fraud has been played as if entire property of five blocks was mortgaged and a publication was made. Apart from that, it is a case where it is not a proper application of the provisions of the SARFAESI Act. Under such circumstances, the jurisdiction of the Civil Court is not ousted. Hence the application could be entertained. (vi) Learned Judge, on enquiry of the application, took the view that it is a fit case where the injunction has got to be granted in favour of the first defendant restraining the plaintiff from bringing the 63 flats which is for sale and granted interim injunction in that regard, but it is not a fit case to grant injunction in respect of 25 flats as found in the mortgage deed. Under such circumstances, this appeal has arisen before this Court. 4. Advancing arguments on behalf of the appellant, learned senior counsel took the Court to the averments made in the plaint and also the documents whereby the mortgage deed was created by depositing title deeds. Learned senior counsel pointed out that insofar as 25 flats are concerned, a lien has been created. The property what was mortgaged was 60,000/2,00,000 in block Nos.4 and 5 and future construction made therein was also mentioned therein. Under such circumstances, the property what was mortgaged was whole 88 flats and not 25 flats, which was not adverted to by the learned Single Judge. In the instant case, neither non-application of mind nor any fraud has been committed. Hence this application has got to be dismissed as not maintainable. https://hcservices.ecourts.gov.in/hcservices/ 5. Learned counsel appearing for the respondent has made his sincere attempt for sustaining the order under challenge. 6. The Court paid its anxious consideration on the submissions made by the learned counsel appearing on either side. As could be seen from the materials available, it was a suit for recovery of money where it has been specifically stated that the plaintiff has sought for a preliminary decree for a sum of Rs.4,47,94,037/-, which is to be payable by the defendants jointly and severally along with interest within a fixed time and if not paid, "to order sale of the mortgaged property, more fully described in the schedule A & B here under". It could also be seen from the particulars made available in the plaint that the property subject to mortgage described in Schedule A and B is as follows:- " SCHEDULE 'A' All that piece and parcel of all the lands being vacant building sites, bearing Plot Nos.1 to 12 situated at Nelson Manickam Mudaliar Road, Vada Agaram, Chennai – 600 029, comprised in Old survey Nos.6 and 7 R.S. No.11/1-D, in T.S. No.11/3, in Block No.11, measuring 26 grounds and 1510 sq.ft. or thereabouts bounded on the North by : Nelson Manickam Mudaliar Road, South by Metal Factory Road, East by : Medidant and West by : Property belonging to Anna Trust within the registration sub District of Kodambakkam and registration district of Madras Central SCHEDULE B Undivided 60,000/2,00,000 shares in the land more fully described in schedule A above." 7. A very reading of the above would clearly indicate that the property mortgaged was undivided 60,000/2,00,000 shares and specified 25 flats in the proportionate land in block Nos.4 and 5. This would clearly mean and indicate that what was actually mortgaged is only specified 25 flats in the said proportionate land. No where in the entire plaint, it is averred by the plaintiff that what was to be constructed in future in block Nos.4 and 5 would become part and parcel of the mortgaged property. Under such circumstances, the contention put forth by the learned counsel for the appellant that entire 88 flats would be covered under the mortgage and entire property might be https://hcservices.ecourts.gov.in/hcservices/ constructed in future which would fall under the mortgage clause cannot be countenanced. 8. In the instant case, while the plaintiff himself brought forth the suit for recovery of money, he has stated that if not paid the entire property to be sold and it will only refer to mortgaged property. It would not be worthwhile for the plaintiff to contend that for the property mortgaged, entire 88 flats has to be brought under SARFAESI Act. Learned counsel took the Court to the exchange of notices. It is an interlocutory application seeking for interim injunction. Now issues have been framed in the suit. Insofar as the merits of the contention as to the quantum whether the plaintiff could get or the defendant has to pay, the same would be on appreciation of evidence and not at this stage. 9. Insofar as the question as to the jurisdiction of the Court is concerned, this Court agrees with the contention put forth by the learned counsel for the respondent. Earlier publication was in respect of entire block of property and it was not mortgaged property. In a given case like this, where specified 25 flats are mortgaged along with particular share of the land and 88 flats now available are brought to sale, the defendants can bring to the notice of the Court and maintain an application like this. It is a case where the provisions of SARFAESI Act have been put into mis application. Under such circumstances, learned Single Judge is perfectly correct in taking such a view. 10. In the instant case, once the entire property of 88 flats is not the subject matter of the mortgaged property and only 25 flats was specifically mentioned in the mortgage deed, initiation of the proceedings at the instance of the plaintiff cannot be allowed. The learned Single Judge was perfectly correct in taking the view that insofar as 25 flats are concerned, there may not be any injunction and in respect of the remaining 63 flats, it is a fit case to grant interim injunction. This Court is not inclined to interfere with the order of the learned Single Judge. Accordingly, the Original Side Appeal is dismissed. 11. It is brought to the notice of the Court that an application for amendment has been filed by the plaintiff and the same is pending before the learned Single Judge. It is made clear that any of the observations made above will not stand in the way of the learned Single Judge in taking a decision in accordance with law. Consequently, the connected M.P. is also dismissed. No costs. https://hcservices.ecourts.gov.in/hcservices/ Sd/- Asst.Registrar. /true copy/ Sub Asst.Registrar. ssa. To The Sub Assistant Registrar (Original Side), High Court, Madras. 1 cc to Mr.P.L. Narayanan, Advocate, Sr. 9991 1 cc to Mr.G.R. Lakshmanan, Advocate, SR. 9824 O.S.A. No.14 of 2010 and connected M.P. MDR (CO) kk 24/2 https://hcservices.ecourts.gov.in/hcservices/