Monday, 24 August 2015

Whether jurisdiction of civil court is ousted in dispute relating Securitisation Act?

In view of above, the sum and substance of the decision is that :
(i) The jurisdiction of the Civil Court to entertain, try and decide any suit or proceeding in respect of the property, which is the subject matter of security interest created in favour of a secured creditor, is barred only to the extent of the matters, which the Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under the Act to determine.
(Para 18)
(ii) The jurisdiction of the Civil Court in respect of the matters, which do not fall within the jurisdiction of the Debts Recovery Tribunal or its Appellate Tribunal under Sections 17 and 18 of the said Act, is not ousted or barred under the provision of Section 34 of the said Act and the Civil Court continues to exercise such jurisdiction. (Para 18)
(iii) In order to decide the question as to whether the jurisdiction of the Civil Court under Section 9 of the Civil Procedure Code is ousted or not, the real test would be to find out whether the Debts Recovery Tribunal under Section 17, is empowered to hold an enquiry on a particular question and to grant relief in respect thereof. The extent of jurisdiction of the Debts Recovery Tribunal under Section 17 shall decide the extent of exclusion of jurisdiction of Civil Court to decide the dispute in respect of the suit property. (Para 18)
(iv) The jurisdiction of the Civil Court to entertain, try and decide a civil suit challenging the action of the defendant no.3-Bank to take possession of the suit property and to sell the same to recover its debts by enforcing security interest in the suit property in accordance with the provisions of Section 13 of the said Act, is completely barred by Section 34 of the said Act. (Paras 19, 20 and 23)
(v) The jurisdiction of the Civil Court to entertain, try and decide the suit for partition and separate possession of the property in respect of which security interest is created in favour of secured creditor, is not barred under Section 34 of the Act.
(Para 21)
(vi) The jurisdiction of Civil Court to entertain, try and decide the Civil Suit claiming relief of declaration that the action of the secured creditor to take possession of the property and to sell the same, is fraudulent and void, as has been held by the Apex Court in Mardia Chemical's case, is not barred by Section 34 of the said Act. (Para 23)
(vii) The jurisdiction of the Civil Court to entertain, try and decide Civil Suit simpliciter for permanent injunction to permanently restrain the defendant No.3-Bank from taking possession of the suit property and selling the same or to create any third-party interest without any substantive relief of declaration that the creation of security interest in favour of a secured creditor was fraudulent and void ab initio, is completely barred under the second part of Section 34 and hence consequentially, the jurisdiction of Civil Court to pass an order of temporary injunction in such suit, restraining the defendant No.3-Bank from alienating the suit property or creating any third-party interest therein, is also barred. (Para 25)
(viii) Once it is held that the jurisdiction of Civil Court is not ousted under Section 34, to grant substantive relief of declaration that creation of security interest in favour of a secured creditor, was fraudulent and void, its jurisdiction to grant consequential relief of permanent injunction and the relief of temporary injunction in such suit, is not ousted. (Para 26)
(ix) Once it is held that the jurisdiction of the Civil Court to entertain, try and decide the civil suit for partition and separate possession of the suit property is not barred by Section 34 of the said Act, then it follows that the jurisdiction of the Civil Court to grant permanent and temporary injunction restraining the defendants from dealing with the suit property or creating third party interest therein is also not ousted by Section 34 of the said Act.
(x) It is open for the plaintiffs or any other person having any right, title, share or interest in the suit property to lodge their/his objection under Section 17 of the said Act before the Debts Recovery Tribunal, which is competent to deal with it in accordance with law and to pass such orders as are necessary to protect the interest of the plaintiffs/such person vis-a-vis the suit property and also to balance the equities. (Para 30)
(xi) The question as to what shall be the effect of a decree passed in the suit for partition and separate possession of the suit property or for declaration that the action of secured creditor is fraudulent and void ab initio by the Civil Court, on the enforcement of security interest by the defendant No.3-Bank, i.e. the secured creditor, can be determined only after culmination of both the proceedings and not before.
Bombay High Court
state bank of india  vs Shri Sagar pramod deshmukh on 11 February, 2011
Bench: Ravi K. Deshpande
Citation;2011 (2) ALLMR520
1. Both these matters are admitted and since the same arise out of the proceedings of Special Civil Suit No.52 of 2010, they are heard together finally - though both the matters challenge different orders.
2. Civil Revision Application No.33 of 2010 challenges the order dated 23-2-2010 passed by the learned 2nd Joint Civil Judge, Senior Division, Amravati, rejecting the application Exhibit 17 filed under Order 7, Rule 11 of the Civil Procedure Code in Special Civil Suit No.52 of 2010 for rejection of the plaint on the ground that it is barred by the provisions of Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, hereinafter referred to as "the said Act"). Appeal against Order No.38 of 2010 challenges the order passed below Exhibit 5 in Special Civil Suit No.52 of 2010 by the learned 2nd Joint Civil Judge, Senior Division, Amravati, allowing the application for grant of temporary injunction restraining the appellant/defendant No.3 Bank temporarily from taking possession of the suit property or auctioning the same during the pendency of the suit.
3. The respondent Nos.1 and 2 are the original plaintiffs, who have filed Special Civil Suit No.52 of 2010 for declaration, partition, separate possession and permanent injunction in respect of the suit property described in the schedule of the suit property attached to the plaint. The plaintiffs joined their father as the defendant No.1, since he had mortgaged the suit property with the respondent No.3-Bank, and the mother of the plaintiffs was joined as the defendant No.3. The applicant-State Bank of India was joined as the defendant No.3 in the said suit, for the reason that it had issued notice under Section 13(2) of the said Act to the plaintiffs on 28-1-2010. The application for grant of temporary injunction restraining the applicant/defendant No.3 Bank fromtaking possession of the suit property or any portion thereof and from selling the same in any manner, in the process under Section 13 of the said Act, during the pendency of the suit was also filed. The parties shall hereinafter referred to as per their original status in civil suit.
4. The claim of the plaintiffs in the suit is that the suit property is the ancestral Joint Hindu Family property and they are the coparceners of it, having 1/4th undivided share each in the said property. It is claimed in the plaint that the suit property has been purchased by the defendant Nos.1 and 2 from out of the income from the ancestral property, including the income from the agricultural fields and other immovable properties.
It is alleged that the plaintiff Nos.1 and 2 together are carrying on the ancestral business of selling of books on the ground floor of the suit property and the first floor of the suit property is being used as the residential house of the Joint Hindu Family. It is claimed that the suit property has not been partitioned and hence a decree for partition and separate possession of their share in the suit property has been claimed by the plaintiff to the extent of their share.
5. It is the further averment in the plaint that the defendant No.1 has taken a loan from the defendant No.3-Bank to satisfy his vices, by mortgaging the suit property with the defendant No.3-Bank. The defendant No.3-Bank has issued a notice under Section 13(2) of the said Act to the plaintiffs and the defendant Nos.1 and 2 to discharge the liabilities due and owing to the defendant No.3-Bank in the sum of Rs.31,79,484.91 as on 31-12-2007 along with future interest. It is alleged that the defendant Nos.1 and 2 were not the absolute owners of the entire suit property and had, therefore, no authority to mortgage the same with the defendant No.3-Bank. It is averred that the creation of mortgage was not for the benefit of the family, but was for the purposes of satisfying the vices of the defendant No.1. Hence, it is alleged that the creation of mortgage was in collusion with the defendant No.3-Bank and the third parties, which are interested in purchasing the property at throw-away price, and the same was fraudulent. Hence, the relief is claimed for declaration that the notice dated 8-2-2010 issued by the defendant No.3-
Bank was fraudulent and void ab initio and hence a permanent injunction was claimed against the defendant No.3-Bank from proceeding to deal with the property in accordance with the provisions of the said Act.
6. The defendant No.3-Bank filed an application Exhibit 17, under Order 7, Rule 11 of the Civil Procedure Code for rejection of the plaint on the ground that the suit as framed was barred bySection 34 of the said Act. The plaintiffs filed their reply opposing the said application.
By an order dated 23-2-2010 passed below Exhibit 17 impugned in Civil Revision Application No.33 of 2010, the application under order 7, Rule 11 of the Civil Procedure Code has been rejected. By a separate order dated 23-2-2010, the application Exhibit 5 filed by the plaintiffs has been allowed and the applicant/defendant No.3 Bank is temporarily restrained from taking possession of the suit property or auctioning the same till the decision of the suit.
7. While rejecting the application under Order 7, Rule 11 of the Civil Procedure Code, the Trial Court has observed that the documents placed on record clearly show that the plaintiffs and the defendant Nos.1 and 2 were forming the joint family and the defendant No.1 mortgaged the suit property for loan with the Bank and he is absconding. Hence, the argument that there is a collusion between the plaintiffs and the defendant No.1 to defeat the proposed action of the Bank, has been rejected. The contention of the applicant that the jurisdiction of the Civil Court is barred in view of Section 34 of the said Act, has also been rejected by holding that the plaintiffs are the sons of the defendant Nos.1 and 2 and they have share in the suit property and hence the statutory provisions of Section 34 of the said Act will not take away the jurisdiction of the Civil Court to deal with the suit for partition and separate possession. While deciding the application Exhibit 5, the finding is recorded that the Debts Recovery Tribunal under Section 17 of the said Act, will not have jurisdiction to try legal right, title or interest of the plaintiffs in the property mortgaged by their parents with the Bank. It has been held that the question whether the suit property is self-acquired property or joint family property, will have to be decided in the suit and till then the auction of the property cannot be permitted to go on. With these findings, the application under Order 7, Rule 11 has been rejected and the application Exhibit 5 under Order 39, Rules 1 and 2 of the Civil Procedure Code has been allowed.
8. In order to consider the question of rejection of the plaint under Order 7, Rule 11(d) of the Civil Procedure Code, the facts as are appearing from bare reading of the plaint are required to be considered and not the facts stated in the defence by the defendants. If upon consideration of such admitted facts a question of law arises for consideration, then it can be decided under Order 7, Rule 11(d) of the Civil Procedure Code. In the present case, the material fact, which is admitted in the plaint, is that the suit property has in fact been mortgaged with the defendant No.3-Bank for obtaining the loan by the defendant Nos.1 and 2. The question is whether the suit for partition and separate possession, challenge to the action of the secured creditor, i.e. the defendant No.3-Bank, initiated under Section 13 of the said Act, or the claim for injunction restraining the defendant No.3-Bank from taking possession of property or selling it or any portion thereof, is barred by the provision of Section 34 of the said Act. The questions whether the plaintiffs are entitled to partition and separate possession, whether creation of mortgage is legal valid, proper, without authority or fraudulent, whether the action initiated by the defendant No.3-Bank under Section 13 of the said Act is valid, legal, proper and in accordance with the provisions of the said Act, and whether the plaintiffs are entitled to get an order of injunction - permanent or temporary - restraining the defendant No.3-Bank, can be gone into by the Civil Court only if it is held that the jurisdiction of the Civil Court to grant such reliefs is not ousted by the provision of Section 34 of the said Act.
9. Two questions arise in both these matters - (i) Whether the jurisdiction of the Civil Court to entertain, try and decide such a suit, is barred by the provisions of Section 34 of the said Act, and (ii) Even if there is no such bar of jurisdiction of the Civil Court to entertain, try and decide such a suit, whether its jurisdiction to grant or pass an order of injunction is barred under Section 34 of the said Act.
10. In order to consider the question as to whether the jurisdiction of the Civil Court to entertain, try and decide the suit for partition and separate possession of the suit property, the provisions of Section 9 of the Civil Procedure Code will have to be seen. Section 9 of the Code of Civil Procedure deals with the Courts to try all civil suits unless barred. It states that the Courts (subject to the provisions herein contained) have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred. There is a strong presumption that Civil Courts have jurisdiction to decide all questions of civil nature. The rule that the exclusion of jurisdiction of Civil Courts is not to be readily inferred, is based on the theory that Civil Courts are the Courts of general jurisdiction and the people have a right, unless expressly or impliedly debarred, to insist for free access to the Courts of general jurisdiction of the State. As a necessary corollary of this rule, provisions excluding jurisdiction of Civil Courts and provisions conferring jurisdiction on authorities and Tribunals other than Civil Courts are required to be strictly construed. The extent of exclusion will largely depend upon construction of the provision enacted for that purpose.
When, with the object of speedy adjudication of certain matters, which are widely defined, the jurisdiction of the normal Courts in respect of such defined matters is excluded. The existence of jurisdiction in Civil Courts to decide the questions of civil nature being the general rule and exclusion being an exception, the burden of proof to show that jurisdiction is excluded in any particular case is on the party raising such a contention.
11. Now coming to the provisions of the said Act, Section 13 in Chapter III of the said Act provides that a secured creditor may enforce any security interest without intervention of the court of tribunal irrespective of Section 69 or Section 69-A of the Transfer of Property Act where according to sub-section (2) of Section 13, the borrower is a defaulter in repayment of the secured debt or any instalment of repayment and further the debt standing against him has been classified as a non-performing asset by the secured creditor.
Sub-section (2) of Section 13 further provides that before taking any steps in the direction of realizing the dues, the secured creditor must serve a notice in writing to the borrower requiring him to discharge the liabilities within a period of 60 days failing which the secured creditor would be entitled to take any of the measures as provided in sub-section (4) of Section 13. It may also be noted that as per sub-section (3) of Section 13 a notice given to the borrower must contain the details of the amounts payable and the secured assets against which the secured creditor proposes to proceed in the event of non-compliance with the notice given under sub-section (2) of Section 13.
12. Sub-section (4) provides for four measures which can be taken by the secured creditor in case of non-compliance with the notice served upon the borrower. Under clause (a) of sub-section (4) the secured creditor may take possession of the secured assets including the right to transfer the secured assets by way of lease, assignment or sale;
may take over the management of the secured assets under clause (b) including right to transfer; under clause (c) of sub-section (4) a manager may be appointed to manage the secured assets which have been taken possession of by the secured creditor and may require any person who has acquired any secured assets from the borrower or from whom any money is due to the borrower to pay the same to him as it may be sufficient to pay the secured debtor as provided under clause (d) of Section 3(4) of the Act. Sub-section (8) of Section 13, however, provides that if all the dues of the secured creditor including all costs, charges and expenses, etc. as may be incurred are tendered to the secured creditor before sale or transfer, no further steps be taken in that direction.
13. Section 17 of the said Act deals with the right of appeal before the Debts Recovery Tribunal and it states that any person (including borrower) aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by the secured 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 measures had been taken. The Apex Court in its judgment in Mardia Chemicals Ltd. and others v. Union of India and others, reported in (2004) 4 SCC 311, has considered this provision and it has been held that the proceedings under Section 17 of the said Act, in fact, are not appellate proceedings. It seems to be a misnomer. In fact, it is the initial action which is brought before a forum as prescribed under the Act, raising grievance against the action or measures taken by one of the parties to the contract. It has been held that it is the stage of initial proceeding like filing a suit in civil court and as a matter of fact proceedings under Section 17 of the Act are in lieu of a civil suit which remedy is ordinarily available but for the bar under Section 34 of the said Act.
14. Section 34 of the said Act deals with the ouster of the jurisdiction of the Civil Court and it is titled as "Civil court not to have jurisdiction". It states that 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 the said Act to determine. The Apex Court in Mardia Chemical's case, cited supra, has considered the provisions of the said Act in para 50 of its judgment, which are reproduced below :
"50. ............... A full reading of Section 34 shows that the jurisdiction of the civil court is barred in respect of matters which a Debts Recovery Tribunal or an 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, the prohibition covers even matters which can be taken cognizance of by the Debts Recovery Tribunal though no measure in that direction has so far been taken under sub-section (4) of Section 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 matter in respect of which an action may be taken even later on, the civil court shall have no jurisdiction to entertain any proceedings thereof. The bar of civil court thus applies to all such matters which may be taken cognizance of by the Debts Recovery Tribunal, apart from those matters in which measures have already been taken under sub-section (4) of Section 13."
Thus, the contention that the jurisdiction of Debts Recovery Tribunal is available only when measures under sub-section (4) of Section 13 of the said Act are taken and therefore, the jurisdiction of civil court to take cognizance before such measures are taken is available, has been rejected. It has been held that the prohibition covers even matters which can be taken cognizance of by the Debts Recovery Tribunal, though no measure in that direction has so far been taken under sub-section (4) of Section 13 of the said Act. The bar of the civil court thus applies to all such matters which may be taken cognizance of by the Debts Recovery Tribunal, apart from those matters in which measures have already been taken under sub-section (4) ofSection 13. In para 51 of the judgment in the Mardia Chemical's case, the Apex Court has held that to a very limited extent the 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 entertainable which may not require any probe whatsoever or to say precisely, to the extent the scope is permissible to bring an action in the Civil Court in the case of English mortgages.
15. The matters in respect of which the Debts Recovery Tribunal is empowered to take cognizance under Section 17 of the said Act, was not the question before the Apex Court in Mardia Chemical's case.
Similarly, to what extent the relief can be granted by the Debts Recovery Tribunal in exercise of its jurisdiction under Section 17 of the said Act has also not been considered in the said judgment. The observations in para 51 of the said judgment in respect of the jurisdiction of the civil court are general in nature. Hence, the extent of jurisdiction of the Debts Recovery Tribunal under Section 17 of the said Act and the bar created under Section 34 of the said Act in respect of the jurisdiction of the Civil Court to entertain any suit or proceeding in respect of the matters which the Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under the said Act to determine, will have to be considered.
16. Section 17 of the said Act being relevant is reproduced below:
"Right to appeal.-- (1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured 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 measures had been taken :
Provided that different fees may be prescribed for making the application by the borrower and the person other than the borrower.
Explanation.-- For the removal of doubts it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under sub-section (1) of section 17.
(2) The Debts Recovery Tribunal shall consider whether any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor for enforcement of security are in accordance with the provisions of this Act and the rules made thereunder.
(3) If, the Debts Recovery Tribunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that any of the measures referred to in sub-section (4) of section 13, taken by the secured creditor are not in accordance with the provisions of this Act and the rules made thereunder, and require restoration of the management of the secured assets to the borrower or restoration of possession of the secured assets to the borrower, it may by order, declare the recourse to any one or more measures referred to in sub-section (4) of section 13 taken by the secured assets as invalid and restore the possession of the secured assets to the borrower or restore the management of the secured assets to the borrower, as the case may be and pass such order as it may consider appropriate and necessary in relation to any of the recourse taken by the secured creditor under sub-section (4) of section 13.
(4) If, the Debts Recovery Tribunal declares the recourse taken by a secured creditor under sub-section (4) of section 13, is in accordance with the provisions of this Act and the rules made thereunder, then, notwithstanding anything contained in any other law for the time being in force, the secured creditor shall be entitled to take recourse to one or more of the measures specified under sub-section (4) of section 13 to recover his secured debt.
(5) Any application made under sub-section (1) shall be dealt with by the Debts Recovery Tribunal as expeditiously as possible and disposed of within sixty days from the date of such application :
Provided that the Debts Recovery Tribunal may, from time to time, extend the said period for reasons to be recorded in writing, so, however, that the total period of pendency of the application with the Debts Recovery Tribunal, shall not exceed four months from the date of making such application made under sub-section (1).
(6) If the application is not disposed of by the Debts Recovery Tribunal within the period of four months as specified in sub-section (5), any party to the application may make an application, in such form as may be prescribed, to the Appellate Tribunal for directing the Debts Recovery Tribunal for expeditious disposal of the application pending before the Debts Recovery Tribunal and the Appellate Tribunal may, on such application, make an order for expeditious disposal of the pending application by the Debts Recovery Tribunal.
(7) Save as otherwise provided in this Act, the Debts Recovery Tribunal shall as far as may be, dispose of application in accordance with the provisions of the Recovery of Debts Due to Bank and Financial institutions ct, 1993 (51 of 1993) and the rules made thereunder."
Perusal of sub-section (1) of Section 17 of the said Act shows that the right of appeal is available to any person including borrower, who is aggrieved by the measures referred to in sub-section (4) of Section 13, taken by the secured creditor or his authorised officer under the said Chapter. Sub-section (2) of Section 17 confers a jurisdiction upon the Debts Recovery Tribunal to consider whether any of the measures referred to in sub-section (4) of Section 13 are taken by the secured creditor for enforcement of the security interest in accordance with the provisions of the said Act and the rules made thereunder.
17. Section 34 of the said Act deals with the ouster of the jurisdiction of the Civil Court, the same being relevant is reproduced below :
"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 to 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 Bank and Financial Institutions Act, 1993 (51 of 1993)."
Bare perusal of Section 34 shows that the jurisdiction of the Civil Court is specifically barred to entertain any suit or proceeding only to the extent of the matters, which the Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under the said Act, to determine.
18. Once it is admitted that the suit property has in fact been mortgaged with the Bank or Financial Institution, then it cannot be disputed that the "security interest" is created, as defined under Section 2(z-f) of the said Act in favour of a "secured creditor", as defined under Section 2(z-d) of the said Act in respect of the suit property. The secured creditor thereupon, becomes entitled to enforce its secured interest without intervention of the Courts or the Tribunals, in accordance with the provisions of the said Act and the Rules framed thereunder, as stipulated under sub-section (1) of Section 13 of the said Act and the jurisdiction of the Debts Recovery Tribunal under Section 17 of the said Act, springs in. However, even if the property in respect of which security interest is found to be created in favour of a secured creditor, that by itself will not be enough to oust the jurisdiction of the Civil Court to decide other disputes in respect of such secured assets. The jurisdiction of Civil Court to decide the suit involving such other disputes in respect of secured assets, is barred only to the extent of the matters, which the Debts Recovery Tribunal or its Appellate Tribunal is empowered by or under the said Act, to determine. The Debts Recovery Tribunal is a Court of limited jurisdiction, which cannot be enlarged beyond the examination of validity of the action of a secured creditor under Section 13. All other disputes in respect of secured assets, which do not fall within the jurisdiction of the Debts Recovery Tribunal under Section 17 or its Appellate Tribunal under Section 18, the Civil Court continues to exercise its jurisdiction. Similarly, even if the jurisdiction of the Civil Court is not barred under Section 9 of the Civil Procedure Code to decide other disputes in respect of secured assets, that cannot encroach upon the right of a secured creditor under Section 13 of the said Act, to enforce his security interest in respect of such property and the jurisdiction of the Debts Recovery Tribunal under Section 17 of the said Act, to protect such security interest of a secured creditor remains exclusive to the extent of the matters provided for under Sections 17 and 18 of the said Act.
Hence, a line of demarcation in this respect is required to be drawn to define the compact area of jurisdiction of the Debts Recovery Tribunal under Section 17 of the said Act. In order to decide the question as to whether the jurisdiction of the Civil Court under Section 9 of the Civil Procedure Code is ousted or not, the real test would be to find out whether the Debts Recovery Tribunal under Section 17 of the said Act is empowered to hold an enquiry on a particular question and to grant the relief in respect thereof. The extent of jurisdiction of the Debts Recovery Tribunal under Section 17 of the said Act shall decide the extent of exclusion of the jurisdiction of the Civil Court to decide the dispute in respect of the suit property.
19. Any person, including the borrower, aggrieved by any such action taken by the secured creditor under Section 13, can file an objection before the Debts Recovery Tribunal underSection 17 of the said Act. If it is found by the Debts Recovery Tribunal that the recourse taken by the secured creditors under sub-section (4) of Section 13 is in accordance with the provisions of the said Act and the Rules framed thereunder, then it has jurisdiction under sub-section (4) ofSection 17 to see that the secured creditor is entitled to take recourse to one or more of the measures specified under sub-section (4) of Section 13 to recover its secured debts, notwithstanding anything contained in any other law for the time being in force. In such situation, the normal jurisdiction of Civil Court cannot be invoked to defeat the rights of secured creditor under Section 13 and to arrest the jurisdiction exercised by the Debts Recovery Tribunal underSection 17, in view of bar of its jurisdiction created under Section 34 of the said Act.
20. So far as the action of secured creditor is concerned, the Debts Recovery Tribunal exercises the jurisdiction of superintendence under sub-section (3) of Section 17, to see that the secured creditor acts only in accordance with the provisions of the said Act and the rules framed thereunder, to enforce its security interest and that it neither does exceed its jurisdiction nor acts in breach or non-compliance with the provisions of the said Act and the rules thereunder. The jurisdiction of the Debts Recovery Tribunal under sub-section (3) of Section 17 is akin to the jurisdiction of Civil Court, as has been held by the Apex Court, in Mardia Chemical's case and it also extends to protecting the interest of borrowers or any other person against any such illegal acts of secured creditor, by directing such secured creditor to restore the management or possession of secured assets to the borrower and to pass such order as it may consider appropriate and necessary in relation to any of the recourse taken by the secured creditor under sub-section (4) of Section 13. While exercising such jurisdiction, the Debts Recovery Tribunal can also adjudicate upon the questions whether security interest was in fact created in respect of any property or part thereof in favour of a secured creditor, or whether creation of such security interest in favour of secured creditor was legal, valid and proper, or that the measures taken by the secured creditor under sub-section (4) of Section 13 of the said Act are in accordance with the provisions of the said Act and the Rules framed thereunder, or even the question whether any bank or financial institution or any consortium or group of banks or financial institutions claiming itself or themselves to be secured creditor/s, are in fact the secured creditors in respect of any property or part thereof. The jurisdiction of Civil Court to decide all such questions is barred by Section 34 of the said Act.
21. Now coming to the facts of the present case, the plaintiffs have filed Special Civil Suit No.52 of 2010 for declaration, partition, separate possession and injunction. The reliefs claimed in the suit are as under :
"i) It be declared that the suit property is ancestral, joint hindu family property coparcenery property and the plaintiffs together have ½ undivided joint share in the suit property.
ii) It be declared that the proposed action of the defendant No.3 bank to take possession of the suit property on 8.2.2010 or any other date and thereafter to sell the same is arbitrary, illegal, capricious, malafide, collusive, clandestine, secret, fraudulent, void ab initio and is not in pursuance of the provisions of the said Act and said Rules and the same is without jurisdiction.
iii) By grant of permanent injunction, defendant No.3 be restrained from taking possession of the suit property or any portion thereof and be further restrained from selling the suit property or any portion thereof in any manner whatsoever.
iv) By passing preliminary decree for partition of suit property and commissioner be appointed to effect the partition of the suit property by metes and bounds and plaintiffs be put in separate possession of their 50% share while the defendant nos.1 and 2 be put in separate possession of her 25% share each.
v) The plaintiffs' costs of the suit and any other suitable reliefs be decreed against the defendants."
The plaintiffs are asking for a declaration that the suit property is ancestral joint Hindu family property and they have 50% undivided share in the property. On that basis, a preliminary decree for partition of the suit property and for appointment of Commissioner to effect such partition by metes and bounds and for putting the plaintiffs in separate possession of their 50% share, has been asked for. These are the reliefs, which are covered by prayer clauses (i) and (iv) of the plaint, reproduced above. There is no provision in the said Act conferring upon the Debts Recovery Tribunal or its Appellate Authority, the jurisdiction to pass a decree for partition and separate possession of the suit property. Neither the Debts Recovery Tribunal under Section 17or its Appellate Authority under Section 18 of the said Act, is conferred with the power to grant declaration that the suit property is ancestral joint Hindu family property and that the plaintiffs have an undivided share and interest in the said property. Similarly, there is no jurisdiction vested under Section 17 or Section 18 of the said Act to pass a decree for partition and separate possession in respect of the joint Hindu family property. Hence, it cannot be said that the jurisdiction of Civil Court to entertain, try and decide the suit claiming the reliefs in terms of prayer clauses (i) and (iv) reproduced above, is barred by the provision of Section 34 of the said Act.
22. Bare reading of prayer clause (ii) reproduced above, shows that it is in two parts - the first one is for a declaration that the proposed action of the defendant No.3-Bank to take possession of the suit property on 8-2-2010 or any other date and thereafter to sell the same is arbitrary, illegal, capricious, mala fide, collusive, clandestine, secret, fraudulent, and void ab initio, and the second one is for a declaration that such action of the defendant No.3-Bank is not in pursuance of the provisions of the said Act and the Rules framed thereunder and the same is, therefore, without jurisdiction. The averment in the plaint in support of the first part of the relief claimed in prayer clause (ii) is that the defendant Nos.1 and 2 were not the absolute owners of the entire suit property and, therefore, they had no authority to mortgage the suit property with the defendant No.3-Bank. The further averment is that the creation of mortgage was not for the benefit of the family, but was for the purposes of satisfying the vices of the defendant No.1. It is the further averment that the creation of mortgage was in collusion with the defendant No.3-Bank and the third parties, which are interested in purchasing the property at throw-away price and the same was, therefore, fraudulent. So far as the second part of the relief claimed in the said prayer clause (ii) is concerned, except a bald statement in the plaint that the action is not in accordance with the said Act and the Rules framed thereunder, there is no other averment in support of it in the plaint.
23. In Mardia Chemical's case, the Apex Court has held in para 51 of its judgment that to a very limited extent the jurisdiction of the Civil Court can be invoked, where for example, the action of the secured creditor is alleged to be fraudulent or his claim may be so absurd and entertainable, which may not require any probe whatsoever.
ig The question whether the cause of action is made out for filing such suit on the basis of pleading of material facts to find out whether any probe is required or not, can be gone into by the Civil Court. The Debts Recovery Tribunal under Section 17 of the said Act cannot adjudicate upon the question as to whether the defendant Nos.1 and 2 were not the exclusive owners of the entire property and that they had no authority to mortgage the suit property with the defendant No.3-Bank. It also cannot adjudicate upon the question that the creation of mortgage was not for the benefit of the family, but was for the purposes of satisfying the vices of the defendant No.1. It also cannot adjudicate upon the question as to whether the creation of mortgage was in collusion with the defendant No.3-Bank and the third parties, which are interested in purchasing the suit property at throw-away price and the same was, therefore, fraudulent. The Debts Recovery Tribunal has no jurisdiction to grant the first part of the relief claimed in prayer clause (ii), viz. that the action of the defendant No.3-Bank to take possession of the property on 8-2-2010 and to sell the same, is fraudulent and void ab initio. Hence, it has to be held that the jurisdiction of the Civil Court to entertain, try and decide Special Civil Suit No.52 of 2010 for a declaration that the creation of mortgage in respect of the suit property was fraudulent, is not barred by Section 34 of the said Act. However, the second part of prayer clause (ii), wherein a declaration is claimed that the action of the defendant No.3-
Bank was not in accordance with the provisions of the said Act and the Rules framed thereunder, can be gone into by the Debts Recovery Tribunal under sub-sections (2), (3) and (4) of Section 17 of the said Act.
Hence, the jurisdiction of the Civil Court to grant the relief of declaration that the action of the defendant No.3-Bank is not in accordance with the provisions of the said Act and the Rules framed thereunder, is barred by the provision of Section 34 of the said Act.
24. Now, coming to the reliefs claimed in terms of prayer clause (iii) of the plaint reproduced above regarding permanent injunction restraining the defendant No.3-Bank from taking possession of the suit property or any portion thereof and further restraining from selling the suit property or any portion thereof in any manner whatsoever, the provision of Section 34 is required to be seen.
Section 34 of the said Act reproduced in earlier para is in two parts. The first part states that no Civil Court shall have jurisdiction to entertain the suit or proceeding in respect of any matter, which the Debts 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 Banks and Financial Institutions Act, 1993.
Once it is held that the suit in question to the extent it claims the reliefs in prayer clauses (I), (iv) and the first part of prayer clause (ii), is maintainable and the jurisdiction of the Civil Court to entertain, try and decide the same, is not barred by Section 34 read with Section 17 of the said Act, then the question is whether the jurisdiction of the Civil Court to grant permanent injunction in terms of prayer clause (iii) is ousted.
25. The learned counsel for the applicant/appellant-Bank has relied upon the judgment, which I have delivered in Punjab National Bank Ballarpur v. Shaikh Jumman Shaikh Guljar, and which is reported in 2010(4) Mh.L.J. 133. It was a case arising out of the order passed by the Trial Court dismissing the suit filed by the plaintiff, in exercise of its jurisdiction under Order 7, Rule 11(d) read with Section 9A of the Civil Procedure Code on the ground that there was no case of fraud made out either in the pleadings or by placing any material on record. The Appellate Court set aside the said order and directed the Trial Court to restore the suit and to proceed further in accordance with law. It was held that the question raised in the plaint as to whether there was a fraud played or not, could not be gone into by the Debts Recovery Tribunal under Section 17 of the said Act, but the Civil Court can go into this aspect. This was the subject matter of the Civil Revision Application filed before this Court. This Court noticed that it was the suit simpliciter claiming decree for permanent injunction restraining the defendant No.3-
Bank and its officers from taking possession of the property on the basis of the notice issued under Section 13(2) of the said Act. Thus, it was a decision rendered on the preliminary issue, which was framed, as to whether the jurisdiction of the Civil Court to entertain, try and decide thesuit claiming permanent injunction, was barred by Section 34 of the said Act. In para 11 of the said judgment, it is made clear that there was no relief of declaration claimed in the suit, that the defendant-Bank is an unsecured creditor or that the creation of security interest in favour of the Bank in respect of the suit property of the father of the plaintiff is fraudulent and, therefore, null and void. Hence, simpliciter suit for permanent injunction restraining the defendant No.3-Bank from taking possession of the suit property and selling the same or to create third-
party interest, without substantive relief of declaration that the creation of security interest in favour of secured creditor was fraudulent and void ab initio, is completely barred by Section 34 of the said Act.
Consequently, it was held that the jurisdiction of Civil Court to grant temporary injunction in such situation is also barred by Section 34 of the said Act.
26. Here, in the present case, it is the suit claiming partition and separate possession of the suit property with further declaration that the proposed action of the defendant no.3-Bank is fraudulent and void ab initio. Along with these main reliefs, a relief of permanent injunction is claimed. Once it is held that the Civil Court has jurisdiction to entertain, try and decide such a suit claiming reliefs under prayer clauses (i), (iv) and first part of prayer clause (ii) and the bar underSection 34 of the said Act does not apply, then the power of the Civil Court to grant permanent injunction in terms of prayer clause (iii) on its own merits, on the touchstone of the provisions ofSection 38 of the Specific Relief Act, cannot be ousted. Similarly, if the Civil Court has jurisdiction to grant permanent injunction, then its jurisdiction to grant temporary injunction under Order 39, Rules 1 and 2 read with Section 151 of the Civil Procedure Code also cannot be held to be barred by Section 34 of the said Act. It is only in cases where the suit simpliciter is for grant of permanent injunction restraining the Bank or Financial Institution from enforcing security interest under sub-section (1) of Section 13, the jurisdiction of the Civil Court is held to be barred underSection 34 of the said Act, in the aforesaid judgment. Hence, the said judgment does not apply to the facts of this case.
27. The learned counsel for the applicant/appellant relied upon the judgment of this Court in Khamgaon Urban Co-op. Bank Ltd., Amravati v. Karunashankar Ramkishore Tiwari and others, reported in 2007(2) Mh.L.J. 641, in support of his submission that a suit for specific performance of contract filed after completion of action under Section 13(4) of the said Act is held to be barred by Section 34 of the said Act. The reliance is placed on paras 25 and 26 of the said judgment.
This Court has decided in the said judgment, the point as to whether the plaintiff's suit for specific performance is maintainable. It was held that the prayer for specific performance of agreement to sell would get frustrated once the action under sub-section (4) of Section 13 of the said Act is complete and reaches the finality. It was held that the prayer for decree for specific performance was frustrated much before the date when the suit was filed. It was further held that the plaint does not disclose any cause of action against the Bank and the secured creditor was, therefore, not a necessary party to such suit. It was held that prima facie the plaintiff's suit is not maintainable. This decision, in my view, does not help the applicant/appellant to urge that the present suit be dismissed in its entirety as not maintainable. It was not a case arising out of an order passed under Order 7, Rule 11(a) and (d) or Section 9A of the Civil Procedure Code. The case arose out of an order passed by the Trial Court granting an injunction in favour of the plaintiff. The Court has held that the order of injunction passed by the Trial Court was wholly unjustified. The observation made by the Court on the question whether the plaintiff's suit for specific performance was maintainable or not, cannot constitute a binding precedent in such a situation for the reason that it was only on prima facie assessment of case that such observations were made. Hence, prima facie observations on merits of the matter made while deciding the application for grant of temporary injunction would not bind the Court, either while deciding the application under order 7, Rule 11(a) and (d) or under Section 9A of the Civil Procedure Code, or while deciding the suit on merits. In the said judgment, the suit was not dismissed, but it was merely an application for temporary injunction, which was rejected.
28. The another judgment relied upon by the learned counsel for the applicant/appellant is delivered by this Court in Khamgaon Urban Co-operative Bank Ltd., Khamgaon and another v. Prashant Bhagwantrao Raikwar and others, reported in 2010(1) Mh.L.J. 875. It was also a case arising out of the order passed by the Trial Court restraining the Bank from enforcing liability of repayment of loan against the plaintiff. It was not a judgment rendered either on the application under Order 7, Rule 11(a) and (d) or under Section 9A of the Civil Procedure Code or while deciding the suit on merits. In the said judgment, the earlier judgment in the case of Khamgaon Urban Co-op. Bank Ltd., Amravati, cited supra, was relied upon. In view of this, any observation on the question whether the jurisdiction of the Civil Court to try the suit was barred by Section 34of the said Act on prima facie assessment of the case, would not constitute a ratio, which will be binding, while deciding the application under Order 7, Rule 11(a) and (d) or under Section 9A of the Civil Procedure Code, or while deciding the suit on merits. The said judgment is also of no help to the applicant/appellant.
29. The third judgment relied upon by the learned counsel for the applicant/appellant is rendered by this Court in Yuth Development Co-operative Bank Ltd., Kolhapur v. Balasaheb Dinkarrao Salokhe and others, reported in 2008(5) Mh.L.J. 326. It was, however, a case where an application under Section 9A of the Civil Procedure Code was made before the Trial Court raising a preliminary issue about the jurisdiction and tenability of the suit. The issue framed by the Trial Court was as under :
"Whether this Court has jurisdiction to entertain, try and decide the suit in view of the contentions regarding sections 91 and 164 of the M.C.S. Act and Securitisation Act ?"
The Trial Court has held that the suit was not barred under Section 91 of the Maharashtra Co-operative Societies Act, 1960. It has further held that the Civil Court had jurisdiction to entertain the suit. This Court did not decide the question as to whether the jurisdiction of the Civil Court to entertain, try and decide the suit was barred by Sections 91 and 164 of the Maharashtra Co-operative Societies Act. However, on the basis of the provisions of Section 1317 and 34 of the said Act, it was held that the Civil Court had no jurisdiction to entertain the suit in view of the bar of Section 34 of the said Act. Thus, a suit seeking declaration that the notice issued underSection 13 of the said Act was illegal, unauthorized, without jurisdiction and null and void, was held to be barred by Section 34 of the said Act. The view, which I have taken in earlier paras (19, 20 and 23), is in conformity with the view taken in this judgment.
30. Where any property is the subject matter of suit for partition and separate possession filed in the Civil Court and where security interest is created in favour of secured creditor in respect of the very same property and the secured creditor proceeds to deal with such property underSection 13 under the protection provided by the Debts Recovery Tribunal under Section 17 of the said Act, the question may arise as to what shall be the effect of a decree for partition if passed by the Civil Court, on the measures adopted by the secured creditor under the protection of the Debts Recovery Tribunal. In such situation, the provision of Section 35 of the said Act shall pay a vital role in determination. It states that the provisions of the said Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. Such a question will have to be determined with reference to this provision, only upon occurrence of such eventuality and not before. To consider such question and to decide it at any time before the final decision of suit or proceedings under Section 17 of the said Act will be premature. It would amount to pre-empting the issue. If such suit is dismissed on merits, it shall clear the way of secured creditor. If it is decreed, the question would arise as to whether such a decree is executable and if it is, then against whom and to what extent. As pointed out earlier, even if such suit is pending in a Civil Court on the date when notice under sub-section (2) of Section 13 is issued, in respect of the property, over which security interest is created, an objection can be raised before the Debts Recovery Tribunal under Section 17 of the said Act by any person including a person claiming to be a coparcener of ancestral joint Hindu family property. It is always open for the Debts Recovery Tribunal either to pass an order of injunction restraining the Bank or the Financial Institution from selling the property or creating any third party interest or to pass such orders as may be deemed fit or proper to protect or secure the interest of such person approaching the Debts Recovery Tribunal. If suit is filed subsequent to initiation of action under Section 13 of the said Act by a secured creditor and the application is filed for temporary injunction, the Civil Court can either pass an order of injunction on well settled principles of law or can, without granting injunction, put the parties to certain terms, to protect the interest of plaintiffs or other parties to such suit, under order 39, Rules 1 and 2 of the Civil Procedure Code. The fact that such suit is filed before or after initiation of action under Section 13(2) of the said Act is not relevant to decide the question as to whether the jurisdiction of Civil Court to decide any other dispute in respect of the secured assets, is barred by Section 34 of the said Act. The factors relevant to decide such questions are already pointed out in para 18 of this judgment.
31. Prima facie, after going through the averments made in the plaint, it seems that the suit property has been mortgaged with the defendant No.3-Bank by the defendant Nos.1 and 2, much prior to filing of suit. It is also not in dispute that the loan was obtained for carrying on the ancestral business of selling of books on the ground floor of the suit property. It is not the loan obtained for the purposes of satisfying the vices of the defendant No.1, as alleged. It is altogether a different question whether the defendant No.1, the father of the plaintiffs, has utilized the amount of loan for satisfying his vices. The suit has been filed after receipt of notice underSection 13(2) of the said Act calling upon the plaintiffs and the defendants to discharge the liabilities due and owing to the defendant No.3-Bank in the sum of Rs.31,79,484.91 as on 31-12-2007 along with future interest.
32. In view of the provision of Section 13(1) of the said Act and the factual background, the secured creditor is entitled to enforce his security interest without intervention by any court or tribunal. The suit to the extent it claims relief in second part of prayer clause (ii) of the plaint, has been held to be barred by Section 34 of the said Act. The question whether the defendant No.3-Bank is acting in accordance with the provisions of the said Act and the Rules framed thereunder, can be gone into by the Debts Recovery Tribunal under Section 17 of the said Act.
Any action of the secured creditor under Section 13 or any order of the Debts Recovery Tribunal can be made subject to the result of the suit.
This will, however, not prevent the Debts Recovery Tribunal or its Appellate Tribunal to pass such further orders as it may deem fit and proper to protect the interest of the borrower or the plaintiffs herein in terms of the provisions of sub-sections (2), (3) and (4) of Section 17 of the Act. Hence, no prima facie case is made out for grant of temporary injunction, though the plaintiffs may be held entitled to grant of partition and separate possession of the suit property. The balance of convenience does not lie in favour of the plaintiffs, as they are carrying on the ancestral business, for which loan is obtained from the defendant No.3-Bank. The plaintiffs must have reaped the fruits of borrowings to some extent. Hence, if the order of injunction is refused, then the plaintiffs are not likely to suffer any irreparable loss. The application Exhibit 5 is, therefore, liable to be rejected with the condition that the outcome of the proceedings under Sections 13and 17 of the said Act would be subject to the decision of this Special Civil Suit.
33. In view of above, the sum and substance of the decision is that :
(i) The jurisdiction of the Civil Court to entertain, try and decide any suit or proceeding in respect of the property, which is the subject matter of security interest created in favour of a secured creditor, is barred only to the extent of the matters, which the Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under the Act to determine.
(Para 18)
(ii) The jurisdiction of the Civil Court in respect of the matters, which do not fall within the jurisdiction of the Debts Recovery Tribunal or its Appellate Tribunal under Sections 17 and 18 of the said Act, is not ousted or barred under the provision of Section 34 of the said Act and the Civil Court continues to exercise such jurisdiction. (Para 18)
(iii) In order to decide the question as to whether the jurisdiction of the Civil Court under Section 9 of the Civil Procedure Code is ousted or not, the real test would be to find out whether the Debts Recovery Tribunal under Section 17, is empowered to hold an enquiry on a particular question and to grant relief in respect thereof. The extent of jurisdiction of the Debts Recovery Tribunal under Section 17 shall decide the extent of exclusion of jurisdiction of Civil Court to decide the dispute in respect of the suit property. (Para 18)
(iv) The jurisdiction of the Civil Court to entertain, try and decide a civil suit challenging the action of the defendant no.3-Bank to take possession of the suit property and to sell the same to recover its debts by enforcing security interest in the suit property in accordance with the provisions of Section 13 of the said Act, is completely barred by Section 34 of the said Act. (Paras 19, 20 and 23)
(v) The jurisdiction of the Civil Court to entertain, try and decide the suit for partition and separate possession of the property in respect of which security interest is created in favour of secured creditor, is not barred under Section 34 of the Act.
(Para 21)
(vi) The jurisdiction of Civil Court to entertain, try and decide the Civil Suit claiming relief of declaration that the action of the secured creditor to take possession of the property and to sell the same, is fraudulent and void, as has been held by the Apex Court in Mardia Chemical's case, is not barred by Section 34 of the said Act. (Para 23)
(vii) The jurisdiction of the Civil Court to entertain, try and decide Civil Suit simpliciter for permanent injunction to permanently restrain the defendant No.3-Bank from taking possession of the suit property and selling the same or to create any third-party interest without any substantive relief of declaration that the creation of security interest in favour of a secured creditor was fraudulent and void ab initio, is completely barred under the second part of Section 34 and hence consequentially, the jurisdiction of Civil Court to pass an order of temporary injunction in such suit, restraining the defendant No.3-Bank from alienating the suit property or creating any third-party interest therein, is also barred. (Para 25)
(viii) Once it is held that the jurisdiction of Civil Court is not ousted under Section 34, to grant substantive relief of declaration that creation of security interest in favour of a secured creditor, was fraudulent and void, its jurisdiction to grant consequential relief of permanent injunction and the relief of temporary injunction in such suit, is not ousted. (Para 26)
(ix) Once it is held that the jurisdiction of the Civil Court to entertain, try and decide the civil suit for partition and separate possession of the suit property is not barred by Section 34 of the said Act, then it follows that the jurisdiction of the Civil Court to grant permanent and temporary injunction restraining the defendants from dealing with the suit property or creating third party interest therein is also not ousted by Section 34 of the said Act.
(x) It is open for the plaintiffs or any other person having any right, title, share or interest in the suit property to lodge their/his objection under Section 17 of the said Act before the Debts Recovery Tribunal, which is competent to deal with it in accordance with law and to pass such orders as are necessary to protect the interest of the plaintiffs/such person vis-a-vis the suit property and also to balance the equities. (Para 30)
(xi) The question as to what shall be the effect of a decree passed in the suit for partition and separate possession of the suit property or for declaration that the action of secured creditor is fraudulent and void ab initio by the Civil Court, on the enforcement of security interest by the defendant No.3-Bank, i.e. the secured creditor, can be determined only after culmination of both the proceedings and not before.
(Para 30)
34. In view of above, Civil Revision Application No.33 of 2010 challenging the order dated 23-2-2010 passed by the learned 2nd Joint Civil Judge, Senior Division, Amravati, rejecting the application Exhibit 17 filed under Order 7, Rule 11 of the Civil Procedure Code in Special Civil Suit No.52 of 2010, is partly allowed by holding that the jurisdiction of the Civil Court to grant second part of the relief in terms of prayer clause (ii), as observed in para 23 above, of the Special Civil Suit No.52 of 2010, is completely barred by Section 34 of the said Act and hence to that extent, the suit is dismissed.
Appeal against Order No.38 of 2010 is allowed. The order passed below Exhibit 5 in Special Civil Suit no.52 of 2010 by the learned 2nd Joint Civil Judge, Senior Division, Amravati, granting temporary injunction restraining the defendant No.3-Bank from taking possession of the suit property or auctioning the same during the pendency of the suit, is quashed and set aside and the application at Exhibit 5 filed in Special Civil Suit No.52 of 2010 is rejected, subject to the condition that the action of defendant no.3-Bank under Section 13 of the said Act and the decision of the proceedings, if instituted under Section 17 of the said Act, shall be subject to the decision of Special Civil Suit No.52 of 2010.
35. Rule is made absolute in above terms.
                                                           There shall be no

    order as to costs.
                           
   







 

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