1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD /unreported/ WRIT PETITION NO.6958 of 2009 Date of decision:28/7/2010 For approval and signature HON'BLE MR. JUSTICE R.K.DESHPANDE 1. Whether the Reporters of Local Papers Yes may be allowed to see the Judgment ? 2. To be referred to the Reporter or not ? No 3. Whether Their Lordships wish to see No. the fair copy of the Judgment ? 4. Whether this case involves a substantial? No. question of law as to the interpretation of the Constitution of India, 1950, or any order made thereunder ? 5. Whether it is to be circulated to the No. Civil Judges ? 6. Whether the case involves an important No question of law and whether a copy of the Order should be sent to Bombay, Goa and Nagpur Office ? (A.G. PARALIKAR) Private Secretary agp/office/6958-09wp 2 IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD WRIT PETITION NO.6958 OF 2009 Tarachand s/o Mulchand Bedmutha, Age 55 years, Occu: Business, r/o Vidyut Nagar, Nanded. Through his G.P.A. Holder Surendra s/o Shivajirao Jawalkar, Age: 45 years, Occu.Service, R/o. Ambedkar Nagar, Nanded. ...PETITIONER (Orig.Plaintiff) VERSUS Housing Development Finance Corporation Ltd. (HDFC) Office at HDFC House, Sharanpur, Link Road, Nashik, Through its authorized person. ...RESPONDENT (Orig.Defendant) ... Mr. B.S.Deshmukh, Adv., for the petitioner. Mr. S.V.Adwant, Adv., for the respondent. ... CORAM: R.K.DESHPANDE, J. DATE :28/7/2010 *** ORAL JUDGMENT: 1. This Writ Petition challenges order dt. 12.8.2009 passed by the learned District Judge-2, Nanded, dismissing Miscellaneous Civil Appeal No. 3 68/2009, filed by the petitioner herein and confirming order dt.29.4.2009 passed by the 5th Joint Civil Judge, Junior Division, Nanded, in Regular Civil Suit No.49/2009. The learned Judge of the trial Court, by his order dt.29th April, 2009, has returned the plaint to the plaintiff for presentation to the Court in which the suit should have been instituted. 2. Notice of this Writ Petition was issued. Shri S.V.Adwant, learned Counsel appears for the sole respondent/caveator. Learned Counsel for the parties agree that the matter can be finally disposed of at the stage of admission. Hence, Rule, made returnable forthwith. Heard by consent of the parties. 3. Regular Civil Suit No.49/2009 was filed by the plaintiff against the respondent i.e. Housing Development Finance Corporation Ltd. for grant of perpetual injunction restraining it from causing any sort of interference and obstruction in peaceful possession and enjoyment of the plaintiff over the suit property. Upon receipt of suit summons, the respondent/defendant filed an application under Section 9A of Code of Civil Procedure, raising a preliminary objection as to jurisdiction of the Civil Court to entertain, try and decide the suit. Accordingly, issue was framed as to whether Civil Court has jurisdiction 4 to entertain and try the suit. The trial Court allowed the said application holding that the jurisdiction of Civil Court is barred under Section 34 of the said Act and passed an order directing that the plaint be returned to the plaintiff, to be presented to the Court in which the suit should have been instituted. 4. Miscellaneous Civil Appeal No.68/2009 was preferred by the petitioner/plaintiff in the District Court at Nanded. Said appeal was dismissed by the learned District Judge-II, Nanded, by his judgment and order dt.12.8.2009, confirming the finding of the trial Court that the Civil Court has no jurisdiction to entertain and try the suit filed by the plaintiff. 5. In view of above, the present petition challenges the order dt.29.4.2009, passed below Exh.22 in RCS No.49/2009 by the learned 5th Joint Civil Judge, Junior Division, Nanded, and the judgment and order dt.12th August, 2009, passed by the learned District Judge-II, Nanded, dismissing the Miscellaneous Civil Appeal No. 68/2009. 6. The case of the petitioner/plaintiff is that he has purchased the suit property by registered sale deed dt.23.8.2005 from one Dhananjaya Prabhakar Bedade for valuable 5 consideration of Rs.6,82,000/-. According to him, he was a bona fide purchaser for valuable consideration without notice of any charge, if at all was created on the suit property, by his vendor said Dhananjay Prabhakar Bedade. 7. The respondent Bank had issued notice dt.26.12.2006 under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, "said Act"), calling upon said Dhananjay Bedade to repay the dues of the Bank within 60 days. Apprehending dispossession of the suit property by the respondent/defendant, in view of notice under Section 13(2) of the said Act, the petitioner/plaintiff appears to have filed Regular Civil Suit No.49/2009 on or about 21st Jan.,2009, simplicitor for permanent injunction against the respondent Bank from disturbing his peaceful possession over the suit property. 8. The stand of the respondent Bank was that such a suit is barred under Section 34 read with Sections 13 and 17 of the said Act. According to the respondent, charge was created on the suit property on 4.2.2002 at the instance of said Dhananjay Bedade, while advancing loan of Rs.4,50,000/- to him. According to the respondent/defendant Bank, it was a secured loan 6 advanced to Dhananjay Bedade, on the suit property being kept by way of security, the defendant Bank was entitled to proceed with its auction under Section 13 of the said Act without any intervention of the Court. According to the defendant, the jurisdiction of the Civil Court is completely barred under Section 34 of the said Act when the notice is issued under Section 13(2). 9. The contention of the learned Counsel that the defendant Bank did not possess any security interest in respect of the suit property has been negatived by the findings of facts recorded by the Courts below. It has been specifically held that the suit property was kept by way of security with the defendant Bank, who was "Secured Creditor" in terms of Section 2(zd) of the said Act. Said finding is confirmed in appeal also. Therefore, it is apparent that "Security Interest" was created in favour of the defendant Bank. 10. The plaintiff has claimed relief in the suit as under: "(1) Perpetual injunction restraining defendant, their subordinates, and agents from causing any sort of interference and obstruction in peaceful possession and enjoyment of plaintiff and his persons over the 7 property as described in claim clause of the plaint. (2) Cost of the suit may be awarded to the plaintiff from the defendant. (3) Any other relief for which the plaintiff is entitled and defendants and their agents are liable to granted in favour of plaintiff and against defendant with costs and oblige." 11. This Court has taken a view in a judgment reported in 20010(4) Mh.L.J. 133 ( Punjab National Bank Ballarpur Vs. Shaikh Jumman Shaikh Guljar) that the jurisdiction of the Civil Court in respect of the "Security Interest" created in favour of the "Secured Creditor" is barred by the provisions of Section 34 of the said Act. Paragraph nos. 12 and 13 of the said judgment, which are relevant, are reproduced below: "12. The matter can be looked at from different angle. The plaintiff has filed a suit for simplicitor permanent injunction, restraining the defendant Bank or its officers from taking over the possession of M/s. Janta Plastic Industries, Ballarsha till decision of the suit. The entire relief claimed is already reproduced. Except this, there is no other relief claimed in the suit. In this respect, Section 13(1) of the said Act, which is relevant, is reproduced below: 8 "13. Enforcement of security interest (1) Notwithstanding anything contained in section 69 or section 69A of the Transfer of Property Act, 1882, (4 of 1882), any security interest created in favour of any secured creditor may be enforced, without the intervention of the Court or tribunal, by such creditor in accordance with the provisions of this Act." The bank has initiated action as contemplated by provisions Section 13(2) of the said Act, to enforce the security interest created in favour of the defendant Bank, by the plaintiff. Hence, the defendant Bank, under Section 13(1) of the said Act is entitled to enforce its security interest, as a matter of right in accordance with Section 13 of the said Act that too, without intervention of the Court or Tribunal. The issuance of notice under Section 13(2) of the said Act, is the initial step to enforce the security interest of the bank, which will ultimately culminate in the sale of property as contemplated by Section 13(4) of the said Act, to realise the outstanding dues. Thus, the intervention of Civil Court at the stage of notice under Section 13(2) of the said Act, is not contemplated. 13. Apart from above, Section 34 of the said Act pertaining to jurisdiction is relevant and the same is reproduced below: 9 "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 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 Acts, 1993" Bare perusal of the aforesaid provision reveals that it is in two parts to be read disjunctively. The first part states that no civil court shall have jurisdiction to entertain the suit or proceeding in respect of any matter which a Debt Recovery Tribunal or the appellate Tribunal is empowered by or under this Act to determine. The second part of the provision, prohibits the Court from granting injunction in respect of any action taken or to be taken in pursuance of any power conferred by or under the said Act or under the Recovery of Debts Due to the Banks and Financial Institutions Act, 1993. As pointed out earlier, the suit filed by plaintiff being simplicitor for injunction, the same is, therefore, covered by the second part of Section 34, which prohibits the Court or other authority from granting injunction in respect of any action taken or to be 10 taken in pursuance of the power conferred by or under the Act. The issuance of notice is the exercise of power conferred upon the defendant/Bank under Section 13 (2) of the said Act and hence the jurisdiction of the Civil Court is barred. Further, it is the action to be taken by the defendant Bank in pursuance of power conferred upon the secured creditor under Section 13(4) of the said Act and hence the jurisdiction of Civil Court, to grant injunction sought for, restraining the defendant Bank from taking measures against the plaintiff, is barred under Section 34 of the said Act. Anyway the suit as framed is barred by law as contemplated under Order VII Rule 11 (d) of the Code of Civil Procedure and hence the plaint is liable to be rejected. The trial Court was right in its view." 12. The Courts below have recorded finding of fact that respondent Bank is a "Secured Creditor" as defined under Section 2(zd) of he said Act. The learned Counsel could not point out any perversity in recording such finding. Whether charge created on property was legal and valid cannot be gone into. Once it is accepted as a fact that respondent Bank is a "Secured Creditor", the jurisdiction of Civil Court is barred. The prayer clauses reproduced above in the suit filed by the plaintiff herein makes it clear that the suit is covered by second part of Section 34 of the said Act, regarding injunction. The suit is simplicitor for grant of perpetual injunction and there is no prayer for 11 grant of declaration that respondent Bank is an "unsecured creditor" or that creation of charge on suit property was illegal, without authority. Hence, the jurisdiction of the Civil Court is completely barred. The trial Court ought to have, therefore, dismissed the suit, instead of returning the plaint, for presentation to the proper Court. The appellate Court ought to have modified the order of the trial Court and should have dismissed the suit as barred by Section 34 of the said Act. 13. In the result, there is no substance in this petition. The same is dismissed. Rule is discharged without any order as to costs, with modification that the Regular Civil Suit No. 49/209 filed by the plaintiff stands dismissed. It will be open for the plaintiff to approach the forum created under the said Act for redressal of his grievances in accordance with law and the observations made by this Court or by lower Court that the charge was created in respect of suit property, shall not come in the way of plaintiff to urge that creation of such charge was in any manner illegal. (R.K.DESHPANDE) JUDGE ... agp/6958-09wp