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2015 (4) TMI 984 - BOMBAY HIGH COURT

2015 (4) TMI 984 - BOMBAY HIGH COURT - TMI - Re-auction of property - default committed by the Plaintiff in payment of the balance sale consideration/bid amount - Defendant Bank proceeded to forfeit the Earnest Money Deposit made - permanent injunction - whether a suit against the measures taken under Section 13 of the SARFAESI Act is maintainable has once again attracted the attention of this Court - Held that:- Defendant in the auction notice and in terms of the conditions of the auction has n .....

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to make necessary inquiries if one can say so having regard to the general practice adopted at the time of auction. In fact in the instant matter the Plaintiff in Paragraph 6 of the plaint accepts the position that the attachment of the Income-Tax Department does not mean that there is a bar for the sale of the said property which is under attachment.

In so far as the conduct of the auction is concerned, Rule 8 applies and in terms of clause (f) thereof the authorized officer is requ .....

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case (2004 (4) TMI 294 - SUPREME COURT OF INDIA).

Rules of 2002 are mandatory in nature and if the requirements of the Rules have not been waived by the borrower, the consequences would have to follow. As indicated above, in the instant case though it has been alleged against the Defendant that the sale was carried out without disclosing the attachment of the IncomeČTax Department, the Plaintiff has thereafter alleged that the reČauction is sought to be carried out by deceit and in cr .....

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The Debts Recovery Tribunal is therefore vested with the jurisdiction to adjudicate whether the measures taken are in accordance with the Act and Rules. Hence apart from the fact that in the light of the averments made in the plaint of the instant suit, they cannot be said to fall in the exception carved out in Mardia Chemicals Ltd.'s case (2004 (4) TMI 294 - SUPREME COURT OF INDIA). It would also have to be held that in the instant case the suit is not maintainable in view of the fact tha .....

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ake recourse to Section 17 of the SARFAESI Act and adopt appropriate proceedings before the concerned Debts Recovery Tribunal, Pune. - Appeal not maintainable. - CIVIL REVISION APPLICATION NO.34 OF 2015 - Dated:- 16-4-2015 - R. M. Savant J. For The Appellant : Dr. Birendra Saraf with Shri Nikhil Rajani I/by M/s. V Deshpande & Co. For the Respondent : Mrs. Chandana Salgaoncar Judgment :­ 1 Admit, with the consent of the learned counsel for the parties heard forthwith. 2 The revisionary ju .....

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ng Regular Civil Suit No.1756 of 2014 seeking a permanent injunction for restraining the Applicant herein i.e. the Defendant­Bank from reauctioning the property. The property in contention is CTS No.1194/27­A admeasuring 552 sq.mtrs. situated at Shivajinagar, Pune which was mortgaged to the Defendant Bank as a security against the loan amount of one M/s. Pratam Motors. The Defendant Bank was pleased to sanction a loan of ₹ 2,50,00,000/­ with interest @ 18% p.a. and repayable in .....

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the said property known as Yashomala . On default being committed by the said M/s. Pratham Motors in repayment of the said loan amounts, the account maintained by the Defendant Bank was classified as a Non Performing Asset. The Authorized Officer of the Defendant Bank thereafter issued notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for brevity's sake herein after referred to as the SARFAESI Act ) callin .....

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with the Security Interest (Enforcement) Rules, 2002 (for short the Rules of 2002 ). The said property was thereafter put up for auction on 14/11/2013. In view of the fact that no offer was received pursuant to the said auction, fresh auction was again held by again issuing public notice on 28/11/2013. The Plaintiff participated in the said auction proceeding which was conducted on as is where is basis and also on as is what is basis . The Plaintiff was declared as the successful bidder who had .....

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aintiff aggrieved by the said act on the part of the Defendant Bank of re­auctioning the property, has filed the suit in question seeking permanent injunction. It is the case of the Plaintiff that at the time of payment of further amount, the Plaintiff came to know that the said property has been under the statutory attachment of the Income Tax Department. The Plaintiff therefore immediately asked for a explanation regarding the said attachment levied by the Income Tax Department. It is furt .....

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or the necessary explanation from the Defendant. It is further the case of the Plaintiff that a substantial interest is created in its favour in the said property, and despite the same and with the deliberate intention of deceit, the Defendant has re­advertised the said property for auction, on account of which the Plaintiff was constrained to file the suit in question. 5 The Applicant herein i.e. the original Defendant filed an Application under Section 9A of the Civil Procedure Code. After .....

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he SARFAESI Act and therefore in terms of Section 17 r/w Section 34, the Civil Court has no jurisdiction to entertain the suit as the Plaintiff has an alternate remedy by way of an Appeal/Application to be filed under Section 17 of the SARFAESI Act before the concerned Debts Recovery Tribunal. 6 The said Application was considered by the Trial Court, and as indicated above, by the impugned order dated 27/11/2014 the Trial Court has held that it has the jurisdiction to try and entertain the prese .....

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arned Single Judge of this Court in State Bank of India v/s. Shri Sagar s/o Pramod Deshmukh and ors 2011 (2) ALL MR 520. The Trial Court observed that in the said judgment the action of the secured creditor to take possession of the property and to sell the same being fraudulent and void, it was held that the suit filed challenging such action is not barred by Section 34 of the SARFAESI Act in view of the judgment of the Apex Court in the case of Mardia Chemicals Limited and ors. v/s. Union of I .....

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aken exception to by way of the above Civil Revision Application. 7 SUBMISSIONS ON BEHALF OF THE APPLICANT - ORIGINAL DEFENDANT BY THE LEARNED COUNSEL DR.BIRENDERA SARAF. A] That the Trial Court has erred in relying on the judgment rendered in State Bank of India's case (supra) as the facts in the said case stand apart from the facts of the present case as in the said case the mortgage created in favour of the bank by the father was called in question by his sons on the ground that mortgaged .....

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Plaintiff as the expression any person appearing in Section 17 is held to be having a wide amplitude in view of the judgments of this Court as well as the judgments of the Apex Court. C] That the judgment in Mardia Chemicals Ltd.'s case (supra) carves out a very restricted exception, it is only when a fraud is alleged in respect of the mortgage which is created, that a suit would lie and merely because in the instant case it is alleged by the Plaintiff that a fraud has been committed would n .....

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nt, that at the highest can be said to be a breach of Rule 8(f) of the Rules of 2002 in the matter of conducting auction and that the said case can very well be tried before the Debts Recovery Tribunal by filing an Appeal/Application under Section 17 of the SARFAESI Act. E] That it is well settled that if the alternative remedy is available under the statute in question, the Civil Court would not exercise its jurisdiction. In support of the said contention the learned counsel for the Applicant/D .....

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r of making full disclosure, the Defendant has suppressed vital facts and thereby has played a fraud on the Plaintiff, and therefore, the Plaintiff is entitled to file a suit for seeking the relief which has been sought and the Plaintiff's case is therefore covered by the exception in Mardia Chemicals Ltd.'s case (supra) ii] That the judgment in Mardia Chemicals Ltd.'s case (supra) cannot be construed so as to mean that only a restricted exception is carved out and would also cover t .....

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ited v/s. Hong Kong Shanghai Banking Corporation (2009) 8 SCC 646 and the judgment of a learned Single Judge of this Court in the case of State Bank of India's case (supra). iii] That the Rules in question are mandatory and any infringement thereof would amount to violation of the rights of the Plaintiff, and would therefore entitle the Plaintiff to file a suit and seek appropriate reliefs in the said suit. In support of the said contention, the learned counsel for the Respondent/Plaintiff h .....

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maintainable. Hence the vexed issue whether a suit against the measures taken under Section 13 of the SARFAESI Act is maintainable has once again attracted the attention of this Court. 10 In the context of the said issue a few facts are required to be noted. As indicated above the Plaintiff is an auction purchaser in the auction held under Section 13(4) of the SARFAESI Act. It is an undisputed position that the auction was held on as is where is basis and as is what is basis of the property in .....

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Income Tax Department, the Defendant had carried out the auction. It is further the case of the Plaintiff that the action of the Defendant of re­advertising the property for auction is totally ultra vires, unlawful and illegal, and further amounts to criminal breach of trust. The relevant paragraphs of the plaint which are material in the context of the challenge raised in the above Civil Revision Application are paragraphs 6, 11 and 12 which for the sake of ready reference are reproduced he .....

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intiff. (11) Plaintiff submits that thus the substantial interest has been created in the said property and despite the same and with the deliberate intention of the deceit, the Defendant has re­advertised the auction of the said property to be held on 29th October, 2014; and, therefore, the Plaintiff has been constrained to file the present suit against the defendant. (12) Plaintiff submits that the action of the defendant of re­advertising the auction of the said property is totally ul .....

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on. It would be necessary to refer to Sections 13, 17 and 34 of the SARFAESI Act which for the sake of ready reference are reproduced herein under :­ 13. Enforcement of security interest (1) Notwithstanding anything contained in section 69 or section 69A of the Transfer of Property Act, 1882 (4 of 1882), any security interest created in favour of any secured creditor may be enforced, without the intervention of court or tribunal, by such creditor in accordance with the provisions of this Act .....

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e entitled to exercise all or any of the rights under subsection (4). (3) The notice referred to in sub­section (2) shall give details of the amount payable by the borrower and the secured assets intended to be enforced by the secured creditor in the event of non­payment of secured debts by the borrower. (3A) If, on receipt of the notice under sub­section (2), the borrower makes any representation or raises any objection, the secured creditor shall consider such representation or obj .....

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bts Recovery Tribunal under section 17 or the Court of District Judge under section 17­A. (4) In case the borrower fails to discharge his liability in full within the period specified in sub­section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:­­ (a) 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; (b .....

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gement of such business of the borrower which is relatable to the security for the debt. (c) appoint any person (hereafter referred to as the manager), to manage the secured assets the possession of which has been taken over by the secured creditor; (d) require at any time by notice in writing, any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient .....

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in this behalf, to bid for the immovable property on behalf of the secured creditor at any subsequent sale. (5­B) Where the secured creditor, referred to in subsection (5­A), is declared to be the purchaser of the immovable property at any subsequent sale, the amount of the purchase price shall be adjusted towards the amount of the claim of the secured creditor for which the auction of enforcement of security interest is taken by the secured creditor, under sub­section (4) of section .....

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as if the transfer had been made by the owner of such secured asset. (7) Where any action has been taken against a borrower under the provisions of sub­section (4), all costs, charges and expenses which, in the opinion of the secured creditor, have been properly incurred by him or any expenses incidental thereto, shall be recoverable from the borrower and the money which is received by the secured creditor shall, in the absence of any contract to the contrary, be held by him in trust, to be .....

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rred by the secured creditor, and no further step shall be taken by him for transfer or sale of that secured asset. (9) In the case of financing of a financial asset by more than one secured creditors or joint financing of a financial asset by secured creditors, no secured creditor shall be entitled to exercise any or all of the rights conferred on him under or pursuant to sub­section (4) unless exercise of such right is agreed upon by the secured creditors representing not less than threefo .....

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se his security instead of relinquishing his security and proving his debt under proviso to sub­section (1) of section 529 of the Companies Act, 1956 (1 of 1956), may retain the sale proceeds of his secured assets after depositing the workmen's dues with the liquidator in accordance with the provisions of section 529­A of that Act: Provided also that the liquidator referred to in the second proviso shall intimate the secured creditors the workmen's dues in accordance with the pro .....

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such creditor shall be liable to pay the balance of the workmen's dues or entitled to receive the excess amount, if any, deposited by the secured creditor with the liquidator: Provided also that the secured creditor shall furnish an undertaking to the liquidator to pay the balance of the workmen's dues, if any. Explanation : For the purposes of this sub­section,­­ (a) "record date" means the date agreed upon by the secured creditors representing not less than threef .....

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l having jurisdiction or a competent court, as the case may be, for recovery of the balance amount from the borrower. (11) Without prejudice to the rights conferred on the secured creditor under or by this section, the secured creditor shall be entitled to proceed against the guarantors or sell the pledged assets without first taking any of the measures specified in clauses (a) to (d) of sub­section (4) in relation to the secured assets under this Act. (12) The rights of a secured creditor u .....

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the measures referred to in sub­section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, may make an application alongwith such fee, as may be prescribed to the Debts Recovery Tribunal having jurisdiction in the matter within forty­five days from the date on which such measure 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 r .....

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b­section (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 sub­section(4) of section 13, taken by the secured creditor are not in accordance with the provisions of this Act and the rules ma .....

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ropriate and necessary in relation to any of the recourse taken by the secured creditor under sub­section (4) of section 13. (4) If, the Debts Recovery Tribunal declares the recourse taken by a secured creditor under sub­section (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 .....

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covery Tribunal, shall not exceed four months from the date of making of such application made under subsection (1). (6) If the application is not disposed of by the Debts Recovery Tribunal within the period of four months as specified in sub­section (5), any part 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 Tribun .....

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have jurisdiction to entertain any suit or proceeding in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993). It would also be necessary to refer to Rule 8 of th .....

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notice on the outer door or at such conspicuous place of the property. (2) The possession notice as referred to in sub­rule (1) shall also be published in two leading newspapers, one in vernacular language having sufficient circulation in that locality, by the authorised officer. (3) In the event of possession of immovable property is actually taken by the authorised officer, such property shall be kept in his own custody or in the custody of any person authorised or appointed by him, who sh .....

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and in consultation with the secured creditor, fix the reserve price of the property and may sell the whole or any part of such immovable secured asset by any of the following methods:­­ (a) by obtaining quotations from the persons dealing with similar secured assets or otherwise interested in buying the such assets; or (b) by inviting tenders from the public; (c) by holding public auction; or (d) by private treaty. Provided that in case of sale of immovable property in the State of Jamm .....

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spapers; one in vernacular language having sufficient circulation in the locality by setting out the terms of sale, which shall include,­­ (a) the description of the immovable property to be sold, including the details of the encumbrances known to the secured creditor; (b) the secured debt for recovery of which the property is to be sold; (c) reserve price, below which the property may not be sold; (d) time and place of public auction or the time after which sale by any other mode shall .....

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ic tender, shall be on such terms as may be settled between the parties in writing. A reading of section 13 of the SARFAESI Act makes it clear that any security interest created in favour of any secured creditor may be enforced, without the intervention of the Court or Tribunal. In the event the borrower fails to discharge his liability in full within the period specified, the secured creditor is entitled to take recourse to transfer by way of lease assignment or sale for realizing the secured a .....

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FAESI Act and the Rules made thereunder. Hence whether there is a compliance of the provisions of the SARFAESI Act and Rules thereunder can be gone into by the Debts Recovery Tribunal. 12 The bar to a Civil Court exercising jurisdiction to entertain any suit or proceeding in respect of any matter which a Debts Recovery Tribunal or Appellate Tribunal is empowered by or under the SARFAESI Act to determine is imposed by Section 34. The bar is therefore to a matter being brought before the Civil Cou .....

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raph 51 of the said Judgment is material and is reproduced herein 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 their claim may be so absurd and untenable 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 cases of English mortgages. We find such a scope havin .....

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n 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 (1859) 7 WR (Eng) 213 (249). 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 cir .....

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s alleged to be fraudulent or their claim may be so absurd and untenable which may not require any probe. In the said context a useful reference could be made to the judgment of the Division Bench of this Court in Jigishaben B Sanghavi's case (supra). Paragraphs 21 and 21A of the said judgment are material and are reproduced herein under :­ 21. The case, however, which has been sought to be established in these proceedings on behalf of the original Plaintiffs is that the Plaintiffs have .....

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rt held that "to a very limited extent, the jurisdiction of the Civil Court can also be invoked" (at para 51, page 2392). The limited exception which is carved out by the Supreme Court is where the action of the secured creditor is alleged to be fraudulent or where the claim of the secured creditor is so absurd and untenable that it would not require any probe whatsoever. Similarly, the Supreme Court held that an exception would be carved out to the extent the scope is permissible to b .....

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tgagee must "clearly disclose" a fraud or irregularity on the basis of which the relief is sought. 21­A These observations of the Supreme Court emphasize that the exception which is carved out is a limited exception. Like all exceptions, this exception must be strictly construed. A borrower or a third party cannot be permitted to defeat or to render nugatory the provisions of the Act merely by a stray reference to an allegation of fraud or, as in the present case, by an averment in .....

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taken by the Bank; (iv) The Bank had taken recourse to its remedy under the Securitization Act without awaiting the result of the objection raised by the Plaintiffs; (v) The action under Section 13(2) was initiated in disregard to the provisions of the Securitization Act; (vi) The mortgage executed by the Second, Third and Fourth Defendants was defective because the original Share Certificates were not with the Bank; (vii) The First Defendant had no security interest and no secured assets and, t .....

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eir entirety, would reveal that the grievance which the Plaintiffs have in the suit is in respect of the validity of the mortgage which is alleged to have been executed by the Second Defendant as Karta of the HUF and of the tenability of the action adopted by the Bank under the Securitization Act, so as to meet the interest of the HUF claimed in the residential flat. The Plaintiffs as third parties have sufficient recourse to challenge the lawfulness of the action of the Bank by invoking their r .....

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rt has held that the exception which is carved out is a limited exception and like all exceptions would have to be strictly construed and that a borrower or a third party cannot be permitted to defeat or to render nugatory the provisions of the Act merely by a stray reference to an allegation of fraud. Meaning thereby the Division Bench has held that just because allegations of fraud are made, the suit cannot be held to be maintainable. It would also be apposite to refer to the judgment of the D .....

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hat the transaction is fraudulent or claim of secured creditor is so absurd so as to attract the jurisdiction of the Civil Court. 29. By clever and astute drafting, the plaintiff might create an illusion of cause of action by trying to bring civil suit within the parameters laid down by the Supreme Court in Mardia Chemicals case, (2004) 4 SCC 311. Pointing that Court has duty to see if such allegations of fraud are thrown just for the purpose of maintaining a suit, in Punjab National Bank v. J. .....

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out if it is just a case of clever drafting, the Court has to read the plaint, not formally, but in a meaningful manner. So is the dictum of the Apex Court in T.Arivandandam vs. T.V.Satyapal [1977 (4) SCC 467]. It was again reiterated by the Court in I.T.C. Ltd vs. Debts Recovery Appellate Tribunal [1998 (2) SCC 70], by holding that clever drafting, creating illusions of cause of action are not permitted in law. The ritual of repeating a word or creation of an illusion in the plaint can certain .....

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Financial Institutions, either under the 1993 Act or under the SARFAESI Act, 2002. All these cases fall under 3 or 4 categories viz., (i) cases filed by strangers claiming that their properties are brought to sale on the basis of forged documents or certified copies of documents submitted by borrowers to Banks (ii) cases filed by guarantors claiming that they never signed letters of guarantee or offered their properties as securities (iii) cases filed by close relatives of borrowers such as spou .....

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a seasoned litigant or an intelligent lawyer to draft the Plaint in such a manner as to make a secured asset, come within anyone of the above 4 categories, by a clever drafting of the Plaint, thereby creating an illusion of fraud, collusion, misrepresentation and the like. Today, with the advancement of technology, the creation of an illusion and the creation of a virtual world are both possible. The moment the Civil Suit is taken on file, the proceedings before the Debts Recovery Tribunal or un .....

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views of the learned single Judge. The Division Bench of Madras High Court has therefore held that the Court which is dealing with the suit questioning the measure taken under Section 13 is required to consider whether by clever drafting an illusion of cause of action is created and the suit is sought to be brought within the ambit of the exception carved out by the Apex Court in Mardia Chemicals Ltd.'s case (supra). 14 In the instant case, as indicated above, the relevant averments in the .....

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hich are to be tried. It would have to be borne in mind that the auction was on as is where is basis and as is what is basis . The intending participant in the said auction is therefore expected to make necessary inquiries if one can say so having regard to the general practice adopted at the time of auction. In fact in the instant matter the Plaintiff in Paragraph 6 of the plaint accepts the position that the attachment of the Income­Tax Department does not mean that there is a bar for the .....

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all within the exception carved out in Mardia Chemicals Ltd.'s case (supra). 15 In so far as the conduct of the auction is concerned, Rule 8 applies and in terms of clause (f) thereof the authorized officer is required to disclose any other thing which the authorized officer considers it material for a purchaser to know. Hence assuming that there was a non­disclosure by the Defendant of the attachment of the Income­Tax Department at the time of auctioning the secured assets, the same .....

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levant paragraphs of the Apex Court judgments are reproduced herein under along with their citations :­ A] Paragraphs 42 and 43 of the judgment in Mathew Varghese's case (supra) :­ 42. In Ram Kishun (supra), paragraphs 13, 14 and 28 are relevant for our purpose, which are as under: 13. Undoubtedly, public money should be recovered and recovery should be made expeditiously. But it does not mean that the financial institutions which are concerned only with the recovery of their loans, .....

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ay someone s property or disposing of the secured assets, is that the authority must ensure compliance with the statutory provisions. 28. In view of the above, the law can be 44ummarized to the effect that the recovery of the public dues must be made strictly in accordance with the procedure prescribed by law. The liability of a surety is coextensive with that of the principal debtor. In case there are more than one surety the liability is to be divided equally 43. The above principles laid down .....

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also examined Rules 8 and 9 of the Rules, 2002. On a detailed analysis of Rules 8 and 9(1), it has been held that any sale effected without complying with the same would be unconstitutional and, therefore, null and void. C] Paragraph 25 of the judgment in Vasu P Shetty's case (supra) :­ 25 The moment we find that the mandatory requirement of the Rules had not been waived by the borrower, consequences in law have to follow. As held in Mathew Varghese s case, when there is a breach of the .....

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nstant case though it has been alleged against the Defendant that the sale was carried out without disclosing the attachment of the Income­Tax Department, the Plaintiff has thereafter alleged that the re­auction is sought to be carried out by deceit and in criminal breach of trust as a right has already been created in favour of the Plaintiff by virtue of the acceptance of the offer of the Plaintiff in the first auction. As observed in the earlier part of this order, non­disclosure o .....

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Debts Recover Tribunal to consider, whether any of the measures referred to in sub­section (4) of Section 13 taken by the secured creditor for enforcement of security are in accordance with the provisions of the said Act and Rules made thereunder. The Debts Recovery Tribunal is therefore vested with the jurisdiction to adjudicate whether the measures taken are in accordance with the Act and Rules. Hence apart from the fact that in the light of the averments made in the plaint of the instant .....

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x Court cited on behalf of the Defendant on the point of efficacy of the remedy available under Section 17 of the SARFAESI Act as also the exhaustion of the said remedy by the borrower or the aggrieved person, though in the context of exercise of the writ jurisdiction under Article 226 of the Constitution of India. The said judgments have relevance in the context of the limited exception carved out in Mardia Chemical Ltd.'s case (supra). In United Bank of India's case (supra) the Apex Co .....

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r Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that the said Rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institution. The Apex Court concluded that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed .....

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ggrieved person. In the said context, a reference is also required to be made to an order dated 24/03/2014 passed by a learned Single Judge of the Delhi High Court in Writ Petition (C) No.1901 of 201. The facts in the said case before the learned Single Judge of the Delhi High Court can be said to be identical to the facts of the present case, as the person whose bid has been accepted was informed that his bid has been treated as cancelled and 25% of the amount deposited was forfeited. Against t .....

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ex Court has held that irrespective of the question whether the civil suit is maintainable or not, under the Securitisation Act itself, a remedy is provided to such persons so that they can invoke the provisions of section 17 of the Securitisation Act, in case the bank (secured creditor) adopts any measure including the sale of the secured assets, on which the Plaintiffs claim interest. Relying upon the said judgment, the learned Single Judge of the Delhi High Court held that the Plaintiff would .....

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fore be necessary to advert to the facts of the said case. The Plaintiffs therein had filed a suit being Special Civil Suit No.52 of 2010 for declaration, partition, separate possession and permanent injunction in respect of the suit property. In the said suit, the Plaintiffs had file an application for temporary injunction restraining the Applicant/Defendant No.3 Bank for taking possession of the suit property or any portion thereof and from selling the same in any manner under Section 13 of th .....

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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 was claimed 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 was the case of the Plaintiffs that .....

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t for the benefit of the family, but was for the purposes of satisfying the vices of the Defendant No.1. It was further 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. The Plaintiffs' claim was based on the said averments and had sought the relief for declaration that the notice dated 8/2/2010 issued by the Defendant No.3 Bank was fraudul .....

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upra) was relied upon to contend that where 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. The learned Single Judge whilst adjudicating the preliminary issue of the maintainability of the suit has observed that the Debts Recovery Tribunal under Section 17 of the SARFAESI Act cannot adjudicate upon the question as to whether the Defendant Nos. 1 and 2 were not the exclusive owners of the e .....

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ndant No.3 Bank and the third parties, which are interested in purchasing the suit property at throw­away price and the same was, therefore, fraudulent. In the said context it is held that the jurisdiction of the Civil Court to entertain, try and decide the said Special Civil Suit No.52 of 2010 is not barred by Section 34 of the said Act. However, the facts of the present case stand apart from the facts in State Bank of India's case (supra). As indicated above the allegation of the Plain .....

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