1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE, BENCH AT AURANGABAD CIVIL REVISION APPLICATION NO. 212 OF 2004 Rajlakshmi Nagari Sahakari Bank Limited ...Petitioner Versus Sonali d/o Shrichand Jain and another ...Respondents ..... None for the petitioner Mr. A.K. Tiwari, advocate for respondent No.2. ..... CORAM: S. S. SHINDE, J. DATED: 28TH OCTOBER, 2010 PER COURT:- 1 This Civil Revision Application is filed being aggrieved by the judgment and order dated 18.6.2004, passed below Exh.5, 16 and 30 in Special Civil Suit No. 52 of 2004, by the learned Civil Judge, S.D. Dhule. The trial court held that the civil court is having jurisdiction to entertain the civil suit. It appears that the petitioner is original defendant No.1 and the petitioner is doing the banking business. The respondent No.1 is original plaintiff. Respondent No.2 is original defendant No.1. Respondent No.2 executed a mortgage deed in favour of the petitioner bank. The suit property is City survey No. 7019 2 admeasuring 76.8 q. meter. situated at Dhule. Respondent No.2 herein became owner of the suit property. His name got mutated as owner of the suit property in city survey office. 2 One Shri Rais Kazi secured a loan of an amount of Rs.12.00 lacs from the petitioner bank. Respondent No.2 is owner of the suit property and is one of the guarantors to the loan transaction of said Mr. Kazi. On 17.10.2001, respondent No.2 executed mortgage deed of suit property in favour of the petitioner Bank towards security of loan amount advanced to Shri Rais Kazi. The said mortgage deed was duly registered with the office of the Registrar. 3 Said Mr. Rais Kazi, the borrower was unable to pay the loan amount to the petitioner Bank. As the security interest is credited in favour of the petitioner Bank i.e. secured creditor, the petitioner bank issued demand notice as per Section 13(2) of the Securitization Act to the borrower Rais Kazi and the guarantor respondent No.2. After service of demand notice, the borrower Rais Kazi and respondent No. 2 were unable to discharge the liabilities of the bank within stipulated period. For the purpose of enforcement of security interest, the petitioner bank issued possession notice under Section 13(4) of the Securitization Act in the local newspaper on 12.2.2004. Thereafter, the respondent No.1 herein plaintiff instituted the Special Civil Suit against the petitioner bank as well as against respondent No.2. 3 4 In the said civil suit it is contended by the plaintiff that as per the agreement to sale dated 17.5.1997, executed by respondent No.2 in favour of respondent No.1 plaintiff, the respondent plaintiff is in possession of the suit property. It is further contended in the said suit that the plaintiff is carrying on business on the first floor of the building and is residing in the suit premises on the ground floor. It was the case of the petitioner that there is agreement to sale dated 17.5.1997 is unregistered and not properly stamped. The respondent plaintiff prayed for various relief in the civil suit, which are as under:- i) The decree for specific performance in pursuance to the agreement to sale dated 17.5.1997; ii) The declaration that the mortgage deed executed by the respondent No.2 in favour of petitioner Bank is illegal. Iii) Alternatively, praying for direction to pay the amount of compensation of Rs.5,54,540/- alongwith interest. iv) The respondent No.2 and the petitioner Bank (secured creditor) may be restrained from obstructing the possession of the respondent-plaintiff and it may be declared that notice dated 12.2.2004 published in news 4 paper is not binding upon the respondent plaintiff. 5 Alongwith the plaint, an application for temporary inunction was filed by the respondent-plaintiff against the petitioner bank and respondent No.2. The guarantor and owner of the suit property resisted the claim by way of filing written statement. Respondent No.2 specifically stated in his written statement that there was no agreement to sale executed by respondent No.2 in favour of the plaintiff on 17.5.1997. Respondent No.2 has specifically admitted in his written statement that mortgage deed was executed by him in favour of the petitioner Bank. It is further contended that by taking benefit of old age, respondent No.1 plaintiff obtained signature of respondent No.2 and prepared forged documents. Respondent No.2 prayed for dismissal of the suit. 6 The petitioner herein has also filed written statement and resisted the claim of the plaintiff. The petitioner bank raised preliminary objection on various grounds regarding maintainability of the suit firstly on the ground that the suit is not properly valued and no court fees was paid as per the provisions of law. The suit is not valued for cancellation of mortgage deed and for the purpose of relief in respect of declaration and injunction. Secondly, the petitioner bank is registered under the provisions of Maharashtra Co-operative Societies Act, a notice under section 164 of the Societies Act is necessary prior 5 to the institution of the Civil Suit. Thirdly, the suit instituted by the plaintiff is barred by limitation. Fourthly, it was objected that as the plaintiff is challenging the action taken by the secured creditor for enforcement of security interest as per Section 13(4) of the Securitization Act, therefore, as per Section 34 of the Securitization Act, Civil Court has no jurisdiction to entertain any suit or proceedings in respect of any matter which the Debt Recovery Tribunal or Appellate Tribunal is empowered under the Securitization Act and no injunction shall be granted by the Civil Court in respect of any action taken or to be taken in pursuance of the powers conferred under the Securitization Act. In the present suit, the plaintiff is praying for declaration that, notice issued under Section 13(4) of the Securitization Act is not binding upon the plaintiff and also prayed for injunction against the guarantor and the petitioner Bank and therefore, the suit is not maintainable. It is further stated that one Rais Kazi has secured a loan of Rs.12,00 lacs. The respondent No.1 is one of the guarantor to the said transaction and also executed a mortgage deed in favour of the petitioner Bank and the same is also registered. 7 The partitioner herein filed an application below Exh.30 for framing preliminary issue about maintainability of the suit. The plaintiff resisted the said application. The trial court was pleased to allow the application and thereby framed preliminary issue whether the suit is tenable and the said court has jurisdiction to try the suit. The trial court 6 held that the suit is maintainable. Against the said order this Civil Revision Application is filed. 8 When the matter is called out for hearing none appears for the petitioner. Counsel for the respondent No. 1 prays for adjournment on the ground that a senior advocate is engaged on behalf of the respondent No.1 to conduct matter. However, request is refused. 9 At this stage, it would be relevant to reproduce here the 34 of the Securitization Act, which reads thus:- “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. Since notice which was issued under the provisions of Section 13 (2) and (4) of Securitization Act, the respondent were aggrieved by the said notice, and therefore, there was remedy provided under the said Act in the light of Section 34 of the Securitization Act, which is quoted herein above. In my opinion, jurisdiction of the civil court is 7 specifically barred. The Hon’ble Supreme Court in the case of Mardia Chemicals Ltd. Etc. Vs. Union of India and others et. Reported in AIR 2004 SC 2371 held thus:- “A full reading of S. 34 shows that the jurisdiction of the Civil court is barred in respect of matters which a Debt Recovery Tribunal or Appellate Tribunal is empowered to determine in respect of any action taken ‘or to be taken in pursuance of any power conferred under this Act’. That is to say prohibition covers even matters which can be taken cognizance of by the Debt Recovery Tribunal though no measure in that direction has so far been taken under sub section (4) of S. 13. It is further to be noted that the bar of jurisdiction is in respect of a proceeding which matter may be taken to the Tribunal. Therefore, any mater in respect of which an action may be taken even later, the civil court shall have no jurisdiction to entertain any proceeding thereof. The bar of Civil Court thus applies to all such matters which may be taken cognizance of by the Debt Recovery Tribunal, apart from those matters in which measures have already been taken under sub-Sec. (4) of Section 13. Therefore, it is incorrect to say that before any action or measure is taken under sub-sec. (4) of S. 13 there would be no bar to approach the Civil Court.” This Court in the case of Sarswat Co-operative bank Limited, Mumbai Vs. Mandan S. Jha and another, reported in 2010 (4) Mh.L.J. 981, in para 12, held thus;- 8 “12. In the case of clear provisions of section 34 of the Securitization Act, 2002, jurisdiction of the civil Court is ousted and therefore, Civil Court could not have entertained the suit, which questions a notice issued under section 13(4) of the Securitization Act, 2002 on the specious plea that the Act itself is not applicable. If the respondent-plaintiff did have any grievance, section 17 of the Act sufficiently provides for the remedy and any person aggrieved by action under section 13 of the Securitization Act, 2002 could approach the Debts Recovery Tribunal. In view of this, it cannot be said that the Civil Court could assume jurisdiction to decide a question which squarely fell for the decision of the Debts Recovery Tribunal and in respect of which the jurisdiction of Civil Court was expressly barred under section 34 of the Securitization Act, 2002.” 9 In the light of the above, this civil Revision Application deserves to be allowed and the same is accordingly allowed. The impugned judgment and order dated 18.6.2004, passed by the learned Civil Judge, Senior Division, Dhule below Exh.5,16 and 30 in Special Civil Suit No. 52 of 2004 is quashed and set aside and substituted by directing that the plaint as against the petitioner is rejected, leaving to the plaintiff such remedies, as may be open to him under the Securitization Act, 2002. ( S. S. SHINDE. J.) rlj/ 9