•f/ y. a <<s'-li^ t'^;a^ IN THE HIGH COUIRT OF JUDICATURE OF CHHATTISGARH BILASPUR FIRSTGVI^APPEAL N0 5 O /2011 APPELLANT Emanuel Tairas Beck son of Birad Beck aged 45 years resident of Ameri Tahsil Takhatpur District Bilaspur through special attorney Paikas Beck son of Birad Beck aged 56 years occupation service resident of Ayodhya Nager Bilaspur. Plaintiff -^ /-^' .sP' ^-' .-f €/y ^-s^ /-^- VERSUS RESPONDENTS 1. Kshetriya Karyalaya C.G. Rajya Sahkari Awas /'^^ Sangh Ltd Bilaspur through Kshetriya Adhikari Brihaspati Bazar Jail Road Bilaspur. 2 Cent bank home finance Ltd Bilaspur through branch Manager Surya Bhawan Juna Bilaspur Tahsil District Bilaspur C.G..Cft\/£ATOR, ^..^/ <ryx\ Y^ '<v 3 Deep Kumar Sharma son of Shri Laxmi Sharma member_Awas Hin Grih Nirman Sahkari Samittee Ltd Bilaspur C.G. 4 Prakash Ekka -resident Shailendra Nager Ameri Tahsil Tal^hatpur District Bitaspur C.G. 5 Ishwarial Rajak son of Motilal Rajak aged 38 years resident of Ameri Tahsil Takhatpur District BilaspurCC'G;-^ ^ 6 State of Chhattisgarh through CoHector Biiaspur^Ofa^ ' Defendents Wf"!'? FIRST CIVIL APPEAL UNDER SECTION 96 _OF THE CIVIL PROCEDURE CQDE^9Q8 1 t m ^i IS^ aa'' lo'i s- II IIBi Sts' N 1W w. l^ IBK llt-^i' JKJ' l®i 1 saBii p f^<^\ iii.t -.r •^t» ?:.^» 3. the house after dispossessing the tenant. The house of the plaintiff situates at Plot No. 54 Khasra No. 346/6 area 1500 sq.ft. whereas in the auction notice, it is mentioned as plot No. 54 of Khasra No. 346/5 which is different from plot No. 54 of Khasra No. 346/6. Now the defendants No. 1 8s 2 want to auction the plot No. 54 of Khasra No. 346/6 in place of Khasra No. 346/5. The plaintiff has not taken any loan from the defendant No. 1 86 2. If the defendant No. 3 8s 4 have taken any loan from the defendant No. 1 85 2, then the plaintiff is not responsible fro repayment of loan. Therefore, the plaintiff has filed the instant suit for declaration of title and permanent injunction. Defendant No. 2 assailed the maintainability of the suit by filing application under Order 7 Rule 11(D) of CPC inter-alia on the grounds: suit property was mortgaged by Prakash Ekka in bank's favour, defendants are proceeding against him under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Seeurity Interest Act, 2002 (for short, 'the Acf) and also obtained its possession under Section 13 (4) of the Act on 18.01.2007, plaintiff's remedy lies under Section 17 of the Act and civil suit filed is barred under Section 34 of the Act, and therefore, suit is liable to be dismissed. @ The trial court, vide order impugned, allowed thesaid application filed by defendant No. 2 and dismissed the suit holding it as barred by Section 34 of the Act. Hence this appeal. Shri Baraik, learned counsel appearing for the appellant would submit : suit property is not the same as is said to be mortgaged by one Prakash Ekka in favour of defendant No. 2.^ Neither the property in question is mortgaged by said Prakash EKka nor defendant No. 2 is secured creditor in relation to fhe suit property, therefore, without entering into the factual dispute, dismissal of suit at threshold is on the face not sustainable in law and the appeal deserves to be allowed and the matter requires remand for deciding the question whether or not defendant No. 2 is secured creditor in relation to suit property. On the other hand, Shri Shukla, leamed counsel appearing for defendant No. 2, relying upon the judgment of Supreme Court in cases of Mardia Cliemicals Ltd. v. Union of India 8s others1 and United Bank of India v. -Satyawati Tondon 8s others2, would submit: suit is expressly barred under Section 34 of the Act and the plaintiffs remedy lies to file appeal/application under Section 17 of the Act before the Debts Recovery Tribunal, and therefore, suit has ' 2004(4)8cc 311 2AJR2010SC3413 ^•i^'-S'RSRSKtrSC^^ r -:3^ ^; 1 i-«%• 1 rightly been dismissed by the trial court as not maintainable. 7. I have heard the counsel appearing for the parties and perused the order impugned. 8. Sections 2 (zc), (zd), (ze) and 2(zf) defines the "secured asset", "secured creditor", "secured debt" and "security interest" which reads as under : '2(zc) "secured asset" means the property on which security interest is created; (zd) "secured creditor" means any bank or financial institution or any consortium or group of banks or financial institutions and includes— (i) debenture trustee appointed by any bank or financial institution; or (n) securitisation company or reconstruction compahy, whether acting as such or managing a trust set up by such se^curitisation company or reconstruction company for the securitisation or reconstruction, as the case inay be; or.] fiii) any other trustee holding securities on behalf of a bank or financial institution, in whose favour security interest is created for due repayment by any borrower of any financial assistance; (ze) "secured debt" means a debt which is secured by any security interest; (z/) "security interest" means right, title and interest .of any kind whatsoever upon property, created in favour of any secured creditor and includes any mortgage, charge, hypothecation, assignment other than those specified in Section 31." 9. As per Section 13 (1) of the Act, notwithstanding anything contained in Section 69 or Section 69-A of the 's^'s- 10. 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. As per Section 13 (3) of the Act, the notice referred to in sub-section (2) shall give details ofthe amount payable by the borrower^and the secured assets intended to be enforced by the secured creditor in the event of non-payment of secured debts by the borrower. Section 13 (4) of the Act envisages, in case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more measures to recover his secured debt, one of them is "take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured asset . As per Section 13 (6) of the Act, any transfer of secured asset after taking possession thereof or take over of management under sub-section (4), by the secured creditor or by the manager on behalf of the secured creditor shall vest in the transferee all rights in, or in relation tq, the secured asset transferred as if the transfer had been made by the owner of such secured asset. As per Section 17 of the Act, any person (including borrower) aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by the secured ,^i^i.l-T.WV^I^UQff^lfit^^- ,,.il-:3'81; //-^^ ^ '% ^ ^^^^t; ^i.. 'i>&«-^ ^?fe.lif' "'••S^Q,^ ss 6 creditor or his authorised officer under this chapter, may make an application along with such fee, as may be prescribed, to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measure h'ad been taken. 11. As per Section 34 of the Act, no civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Debts Recoveiy 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). 12. The Supreme Court in case of Mardia Chemicals Ltd. (Supra) has held in para 51 of its judgment as under: °51. However, to a very limited extent jurisdiction of the civil court can also be invoked, where for example, the action of the secured creditor is alleged to be fraudulent or his claim may be so absurd and untenable which may not require any probe whatsoever or to say precisely to the extent the scope is permissifile to bring an action in the civil court in the cases of English mortgages. We find such a scope having been recognized in the two decisions of the Madras High Court which have been relied upon >" heavily by the leamed Attorney General as well appearing for the Union of India, namely, V. Na-casimhachariar^, AIR at pp. l-41 and 144, a \^> ® 13. judgment of the leamed Single Judge where it is observed as follows in para 22: (AIR p. 143) "22. The remedies of a mortgagor against the mortgagee who is acting in violation of the rights, duties and obligations are twofold in character. The mortgagor can come to the court before sale with an injunction for staying the sale if there are materials to show that the power of sale is being exercised in a fraudulent or improper mianner contrary to the terms of the mortgage. But the pleadings in an action for restraining a sale by mortgagee must clearly disclose a fraud or irregularity on the basis of which relief is sought: Adams v. Scott. I need not point out that this restraint on the exercise of the power of sale will be exercised by courts only under the limited circumstances mentioned above because otherwise to grant such an injunction would be to cancel one of the clauses of the deed to which both the parties had agreed and annul one of the chief securities on which persons advancing moneys on mortgages rely. (See Ghose, Rashbehary: Law of Mortgages, Vol. II, 4th Edn., p. 784.)" A bare reading of above quoted provisions in the Ught of decision of Supreme Court as referred hereinabove, it would be clear, in order to attract Sections 13, 17 & 34 of the Act, it is sine-qua-non to prove, the property in question is "secured assets" within the meaning of Section 2(zc) of the Act and Bank is "secured creditor" within the meEining of Section 2(zd) ofthe Act. ^, I. 1 s. ^ Sa-.S M 14. A bare reading of the plaint averment would reveal that the plaintiff is disputing the suit property as "secured assets" and also the fact that the suit property has been mortgaged by alleged borrower m favour of defendant No. 2 and sought declaration of this title over the suit property, therefore, in order to attract, bar of Section 34 of the Act, it is necessary for the defendant No. 2 to prove the suit property is "secured assets" and Bank is "secured creditor" in relation to suit property within the meaning of Sections 2(zc) and 2(zd) of the Act, and for that purpose, the Bank has to file and prove the mortgage deed, and also has to prove compliance of Section 13 of the Act. Therefore, iss. ^e of bar of jurisdiction under Section 34 of the Act is a mixed question of law and fact in the facts situation of the case. 15. In view of above, the trial court was not right in rejecting the suit under Order 7 Rule 11 (D) of CPC without deciding whether or not the defendant No. 2 is "secured creditor" and suit property is Bank's "secured assets" within the.meaning of Sections 2(zd) suid 2(zc) of the Act respectively. 16. For the reasons mentioned hereinabove, the judgment and decree, being not sustainable in law, deserves to be and is hereby set aside and the matter is remitted back to tj^e trial court to decide the issue of bar of "\ ^^^•twisaA^Si 5t@SL/ise^Sif^-^.' -. I 1% 'TO"~'"i?J "•vy ""n»£!^' v-sSSS^ jurisdiction under Section 34 of the Act after framing issue and recording evidence thereupon in accordance with law without being influenced by any observation made hereinabove. 17. Appeal is accordingly allowed. No order asto costs. 18. Records of court below be sent back forthwith. Sdf'- N.K. Agarwa! Judge Sahu ^\