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TMI Blog2010 (4) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... uit No. 142/2005 claiming relief of injunction, restraining the defendant and its officers permanently from taking over the possession of Janata Plastic Industries, Ballarpur till the decision of the suit. The plaintiff alleged that he is the proprietor of Janata Plastic Industries and has obtained the financial assistance of Rs. 4,91,622 by way of term loan and Rs. 2,50,000 by way of cash credit facility from the defendant-bank. The plaintiff averred that he has received notice dated 20th December, 2004, under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('the Act') from the defendant, alleging that the plaintiff is liable to pay Rs. 7,46,729. Though, the plaintiff alleged this claim to be false, he stated that he has paid an amount of Rs. 5,00,000 and has requested the defendant-bank, to provide him rehabilitation scheme, so that he can repay the loan amount. He further alleges that he never intended to avoid the payment. What is disputed by the plaintiff in the plaint is that he is the secured creditor and the allegation of the defendant-bank, contained in the notice under section 13(2) of the Act, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epend upon the defence taken in the written statement. The averments made in the plaint regarding fraudulent claim can be gone into by the civil court and the jurisdiction of the civil court is not ousted. The appeal is allowed. The judgment and order dated 15th October, 2005 passed below Exh.13 by the trial court dismissing the Regular Civil Suit No.142/2005, has been set aside and the trial court is directed to restore the suit and to proceed further as per law and to decide the same on its own merits. 6. Being aggrieved by this judgment and order of the appellate court, the defendant-bank has filed the present civil revision application. Mr. Anilkumar, the learned counsel for the appellant/defendant has referred to the provisions of section 13(1) of the Act, to urge that any security interest, created in favour of the secured creditors, is required to be enforced without intervention of the court or tribunal, by such creditors, in accordance with the provisions of the Act. According to him, it is the question of security interest created in favour of the appellant-bank, by plaintiff, which is sought to be enforced by issuing notices under section 13(2) of the Act, on 20th Decem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that the plaintiff is the borrower and also a defaulter, has to be accepted. 9. The plaintiff has filed Regular Civil Suit No. 142/2005 immediately upon the receipt of notice under section 13(2) of the Act calling upon the plaintiff to repay the outstanding amount of Rs. 7,46,721 and failure to pay the same within the stipulated time, the defendant-bank intends to exercise any or all of the powers as provided under section 13(4) of the Act, including enforcement of security, of immovable property, belonging to the father of the plaintiff and kept with the bank as security. The plaint allegations show that the plaintiff has raised a dispute about the immovable property belonging to his father, being kept with the bank by way of security. Such dispute is raised in para 8 of the plaint, which is reproduced below. "8. Surprisingly on 20th December, 2004 plaintiff received notice purportedly under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 falsely alleging that plaintiff is liable to pay Rs. 7,46,721. It is also alleged that plot No.73, sheet No.42, Survey No.978, 1 and survey No.273/area 648 sq. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lated by section 13(4) of the Act. It is his contention that such a situation cannot be dealt with under section 17 of the Act and, hence, the jurisdiction of civil court is not barred. In my opinion, the point urged, is no more res integra and it has been dealt with in para 50 of the Apex Court's judgment Mardia Chemical's case (supra) , which is reproduced below : '50. It has also been submitted that an appeal is entertainable before the Debts Recovery Tribunal only after such measures as provided in subsection (4) of section 13 are taken and section 34 bars to entertain any proceeding in respect of a matter which the Debts Recovery Tribunal or the appellate tribunal is empowered to determine. Thus, before any action or measure is taken under sub-section (4) of section 13, it is submitted by Mr. Salve, one of the counsel for the respondents that there would be no bar to approach the civil court. Therefore, it cannot be said that no remedy is available to the borrowers. We, however, find that this contention as advanced by Shri Salve is not correct. A full reading of section 34 shows that the jurisdiction of the civil court is barred in respect of matters which a Debts Recovery T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned Attorney General as well as appearing for the Union of India, namely, V Narasimhachariar, AIR at pp. 141 and 144, a judgment of the learned 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 two-fold in character. The mortgagor can come to the court before the 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 manner 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 willbe 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 Mortga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant-bank, under section 13(1) of the Act is entitled to enforce its security interest, as a matter of right in accordance with section 13 of the 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 Act, to realise the outstanding dues. Thus, the intervention of civil court at the stage of notice under section 13(2) of the Act, is not contemplated. 13. Apart from above, section 34 of the Act pertaining to jurisdiction is relevant and the same is reproduced below : "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 DRT 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 Debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 13(4) on the ground that the objection, pursuant to notice under section 13(2) of the said Act has not been decided. The question of bar to the jurisdiction of the civil court to entertain, try and decide the suit was not involved. At any rate, it was writ petition under article 226 of the Constitution of India and the bar under section 34 of the Act does not apply to the said proceedings. The High Court could exercise powers under article 226, in a given case, even if there is an alternate statutory remedy available. Hence, the ratio laid down in the said judgment cannot apply in the present case, which involves the question of bar of the jurisdiction of the civil court as contemplated under section 34 of the said Act. The said judgment is of no help to the petitioner. 15. Mr. Deopujari, the learned counsel for the respondent, further relied upon decision of the Division Bench of this court in Nishit M Prabhu Verlekar v. Chandranath Vinayak Dhume AIR 1986 Bom. 46 in support of his proposition that the application under order VII, rule 11 of the Code cannot be entertained unless written statement is filed, raising such objection. Now, it is well settled that the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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