Case: AUTHORISED OFFICER, STATE BANK OF INDIA Vs. M/S ALLWYN ALLOYS PVT. LT

pleadings and for full and complete adjudication of the matters in issue, it is apposite to give liberty to the writ petitioners to contest the matter before a proper forum where all the issues could be agitated. For, indisputably, respondent No.5 (writ petitioner No.1) is in physical possession of the stated flat. The High Court proceeded to pass the following operative order in the said writ petition: 6] Accordingly, we dispose of the writ petition with the following directions: a] Period of 8 weeks is granted for the writ petitioners to approach proper forum to get adjudication of the rights of the writ petitioners as contended in the writ petition and within the said period of 8 weeks, they shall file and seek proper interim relief in their favour. Till expiry of 8 weeks, the 1 st respondent bank shall not proceed with the matter in terms of the order obtained by them before Debts Recovery Tribunal so far as the property in question; b] Amount of Rs.25 Lacs shall be deposited in an interest earning deposit, by the respondent No.1 bank and profits of the said deposit shall enure to the benefits of the parties, who become successful in the litigation; and c] No order as to costs. 4. The Bank has assailed the aforesaid decision of the High Court primarily on the ground that all issues concerning the mortgaged/secured property are required to be decided only by the DRT; and not in any civil proceedings as has been observed by the High Court in the impugned judgment. For, filing of a civil suit in respect of secured assets is barred by law. Secondly, the DRT as well as DRAT have examined the merits of the controversy and justly answered the same against the writ petitioners. The concurrent finding of fact recorded by the said Tribunals is that the writ petitioners have failed to establish any right, title or interest in the subject flat. That finding has neither been disturbed nor is it assailable. According to the Bank, the High Court judgment under appeal is untenable and deserves to be set aside. 5. The contesting respondent Nos.5 and 6 (writ petitioners), however, supported the view taken by the High Court and would contend that it is indisputable that respondent No.5 (writ petitioner No.1) is in physical possession of the subject flat and was entitled to pursue his claim about the right, title and interest in the subject flat in view of the Memorandum of Understanding dated 13 th March, 2011, executed between the writ petitioners and respondent Nos.2 to 4 regarding re-sale of the subject flat in their (writ petitioners) favour. The respondent Nos.5 and 6 would also contend that the original share certificate and few receipts of payments made to the Society were still in their possession and that the entries effected in the Societys record to transfer the share certificate in favour of respondent Nos. 2 to 4 are fabricated. 6. After having considered the rival submissions of the parities, we have no hesitation in acceding to the argument urged on behalf of the Bank that the mandate of Section 13 and, in particular, Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the 2002 Act), clearly bars filing of a civil suit. For, no civil court can exercise jurisdiction to entertain any suit or proceeding in respect of any matter which a DRT or DRAT is empowered by or under this Act to determine and no injunction can be granted by any Court or authority in respect of any action taken or to be taken in pursuance of any power conferred by or under the Act. The fact that the stated flat is the subject matter of a registered sale deed executed by the respondent Nos. 5 and 6 (writ petitioners) in favour of respondent Nos. 2 to 4 and which sale deed has been deposited with the Bank along with the share certificate and other documents for creating an equitable mortgage and the Bank has initiated action in that behalf under the 2002 Act, is indisputable. If so, the question of permitting the respondent Nos.5 and 6 (writ petitioners) to approach any other forum for adjudication of issues raised by them concerning the right, title and interest in relation to the said property, cannot be countenanced. The High Court has not analysed the efficacy of the concurrent finding of fact recorded by the DRT and DRAT but opined that the same involved factual issues warranting production of evidence and a full-fledged trial. The approach of the High Court as already noted hitherto is completely fallacious and untenable in law. 7. The learned counsel appearing on behalf of the Bank persuaded us to decide the merits of the controversy between the parties but as noted earlier, the High Court has not analysed the same at all but chose to dispose of the writ petition by giving liberty to the writ petitioners to pursue their remedy before a proper forum. The respondent Nos.5 and 6 (writ petitioners) would, however, contend that crucial aspects have been glossed over by the DRT and DRAT including the effect of admitted position that respondent No.5 (writ petitioner No.1) is in possession of the subject property and also having custody of the original share certificate and few receipts issued by the Society. In these circumstances, we deem it appropriate to relegate the parties before the High Court by setting aside the impugned judgment and leaving all questions open, to be decided by the High Court on its own merits and in accordance with law. 8. We find force in the submission made on behalf of the Bank that the High Court could not have directed the Bank to deposit Rs.25 Lacs in an interest earning deposit and the profits of the said deposit to enure to the benefit of the successful party. Such a direction, in our view, was wholly uncalled for.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]6. After having considered the rival submissions of the parities, we have no hesitation in acceding to the argument urged on behalf of the Bank that the mandate of Section 13 and, in particular, Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the 2002 Act), clearly bars filing of a civil suit. For, no civil court can exercise jurisdiction to entertain any suit or proceeding in respect of any matter which a DRT or DRAT is empowered by or under this Act to determine and no injunction can be granted by any Court or authority in respect of any action taken or to be taken in pursuance of any power conferred by or under the Act. The fact that the stated flat is the subject matter of a registered sale deed executed by the respondent Nos. 5 and 6 (writ petitioners) in favour of respondent Nos. 2 to 4 and which sale deed has been deposited with the Bank along with the share certificate and other documents for creating an equitable mortgage and the Bank has initiated action in that behalf under the 2002 Act, is indisputable. If so, the question of permitting the respondent Nos.5 and 6 (writ petitioners) to approach any other forum for adjudication of issues raised by them concerning the right, title and interest in relation to the said property, cannot be countenanced. The High Court has not analysed the efficacy of the concurrent finding of fact recorded by the DRT and DRAT but opined that the same involved factual issues warranting production of evidence and ad trial. The approach of the High Court as already noted hitherto is completely fallacious and untenable in law7. The learned counsel appearing on behalf of the Bank persuaded us to decide the merits of the controversy between the parties but as noted earlier, the High Court has not analysed the same at all but chose to dispose of the writ petition by giving liberty to the writ petitioners to pursue their remedy before a proper forumIn these circumstances, we deem it appropriate to relegate the parties before the High Court by setting aside the impugned judgment and leaving all questions open, to be decided by the High Court on its own merits and in accordance with law8. We find force in the submission made on behalf of the Bank that the High Court could not have directed the Bank to deposit Rs.25 Lacs in an interest earning deposit and the profits of the said deposit to enure to the benefit of the successful party. Such a direction, in our view, was wholly uncalled for.