Karnataka High Court
Sri D Ramesh vs Smt D Jayalashmi on 11 December, 2023
Author: V. Srishananda
Bench: V. Srishananda
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NC: 2023:KHC:44952
RFA No. 1702 of 2014
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 11TH DAY OF DECEMBER, 2023
BEFORE
THE HON'BLE MR. JUSTICE V. SRISHANANDA
REGULAR FIRST APPEAL NO.1702 OF 2014 (DEC)
BETWEEN:
1. SRI. D. RAMESH
AGED 59 YEARS
SON OF LATE DORESWAMY MUDALIAR
RESIDING AT NO.64, 11TH CROSS
17TH MAIN RAOD, FREEDOM FIGHTERS NAGAR
NEAR LAGGERE RING ROAD
BANGALORE-560 058.
...APPELLANT
Digitally signed
by R (BY SRI. JAGADISH BALIGA N, ADV., &
MANJUNATHA SRI. SHASHIKANTH AND
Location: HIGH SRI. S. VINAYKUMAR, ADVS.,)
COURT OF
KARNATAKA
AND:
1. SMT. D. JAYALAKSHMI
AGED ABOUT 75 YEARS
WIFE OF LATE DORESWAMY MUDALIAR
RESIDING AT NO.146, I MAIN ROAD
SHANKARANAGAR, BANGALORE-560 086.
2. SMT. M. VASANTHA
AGED ABOUT 56 YEARS
D/O LATE DORESWAMY MUDALIAR
RESIDING AT D.NO.9/2, 3RD MAIN
8TH CROSS, I STAGE, BEML LAYOUT
KAMALANAGAR, BANGALORE-560 079.
3. SMT. K. KALAVATHI
AGED ABOUT 53 YEARS
D/O LATE DORESWAMY MUDALIAR
RESIDING AT NO.4/1, OLD NO.27
11TH MAIN ROAD, BANDAPPA GARDEN
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RFA No. 1702 of 2014
MUTHIANAGAR, BANGALORE-560 054.
4. SMT. B. SHASHI DEVI
AGED ABOUT 47 YEARS
D/O LATE DORESWAMY MUDALIAR
RESIDING AT NO.84, ERAPPA LAYOUT
II CROSS, BEHIND SYNDICATE BANK
CHIKKABANASWADI, BANGALORE-560 043.
5. SMT. J. BHARATHI
AGED ABOUT 42 YEARS
D/O LATE DORESWAMY MUDALIAR
RESIDING AT NO.303, 6TH MAIN ROAD
KALYANANAGARA, H R B R LAYOUT
BANGALORE -560 043.
6. SRI. D. SURESH DHANURJAN
AGED ABOUT 55 YEARS
D/O LATE DORESWAMY MUDALIAR
RESIDING AT NO.146, 1ST MAIN ROAD
SHANKARNAGAR, BANGALORE -560 086.
7. THE BANGALORE CITY CO-OPERATIVE
BANK LIMITED
REPRESENTED BY ITS MANAGER
NO.3, PAMPA MAHAKAVI ROAD
CHAMARAJPET, BANGALORE-560 018.
...RESPONDENTS
(BY SRI. JAY KISHAN SHARMA, ADV., FOR
SRI. GOPAL SINGH, ADV., FOR R2
SMT. H.R. UMADEVI, ADV., FOR R7
R1 TO R6 SERVED)
THIS RFA IS FIELD U/SEC.96 OF CPC, AGAINST THE
ORDER DATED 17.06.2014 PASSED IN OS 8598/2012 ON THE
FILE OF THE XX-ADDL. CITY CIVIL AND SESSIONS JUDGE,
BENGALURU CITY, REJECTING THE I.A.NO.6 FILED U/O-VII,
RULE-11(a) R/W SEC.151 OF CPC.
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RFA No. 1702 of 2014
THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, THE
COURT DELIVERED THE FOLLOWING:
JUDGMENT
Heard Sri.Jagadish Baliga, learned counsel and
Sri.Jaikishan Sharma, learned counsel for Sri.Gopal Singh.
2. The present appeal is directed against the order
on I.A.No.6 filed under Order VII Rule 11(a) read with
Section 151 of Code of Civil Procedure, 1908 dated
25.04.2014 in O.S.No.8598/2012 on the file of the XX
Addl. City Civil and Sessions Judge, Bangalore.
3. There is a delay of 35 days in filing the appeal.
Accepting the reasons assigned in the affidavit in
support of I.A.No.1/2014, delay of 35 days is condoned.
4. Thereafter, by consent of the parties, matter was
heard on merits.
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5. Plaintiff filed a suit for declaration and partition
against 7 defendants. Among them, defendant Nos.1 to 6
are the family members and defendant No.7 being the
Bangalore City Co-operative Bank Limited. The suit
property was mortgaged to said Bank and on account of
dues, the said Bank initiated the action under the
Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (hereinafter
referred to as 'the SARFAESI Act').
6. The Bank, after receipt of summons, filed an
application under Order VII Rule 11(a) of CPC stating that
suit is not maintainable in view of the bar under Section
34 of the SARFAESI Act.
7. The application was opposed by the plaintiff.
Learned Trial Judge heard the parties on I.A.No.6 which
was filed under Order VI Rule 11(a) of CPC.
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8. After hearing the parties, the learned Trial Judge
found that the suit is not maintainable in view of the clear
bar as is found in Section 34 of the SARFAESI Act and
rejected the plaint by allowing the application.
9. Being aggrieved by the same, the plaintiff has
preferred the present appeal.
10. Reiterating the grounds urged in the appeal
memorandum, Sri.Jagadish Baliga, learned counsel for the
appellant vehemently contended that the Co-operative
Bank could not be treated as a financial institution within
the meaning of SARFAESI Act and therefore, the action of
the Bank proceeding under the SARFAESI Act against the
plaintiff against the property belonging to the joint family
is incorrect and contrary to law.
11. Per contra, learned counsel for the contesting
respondent Sri.Jay Kishan Sharma supports the impugned
order and submits that the only remedy even in case of
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action that has been initiated even if it is to be considered
as a wrong action been initiated by the Bank, is to
approach the Debt Recovery Tribunal and not by filing a
suit before the Civil Court and sought for dismissal of the
appeal.
12. On such perusal of material available on record,
there is no dispute that one of the defendants i.e.
defendant No.6 has obtained the loan from the defendant
No.7 - Bank by mortgaging the suit property.
13. Admittedly, there is a default committed by the
defendant No.6 in clearing the dues. As such, the Bank,
left with no alternative, proceeded under the SARFAESI
Act.
14. Whether the action taken by the Bank is correct
or not, cannot be gone into by the Civil Court as there is a
clear bar under Section 34 of the SARFAESI Act.
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15. For ready reference, Section 34 of the SARFAESI
Act is calved out hereunder:
"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 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)."
16. On bare perusal of the aforesaid provision, it is
crystal clear that the Civil Courts have no jurisdiction with
regard to the action taken by a financial institution against
its own borrower / defaulter under the SARFAESI Act. The
only remedy in such circumstances for the borrower /
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defaulter is to approach the Debt Recovery Tribunal for
redressal of their grievance.
17. Sri.Jagadish Baliga, however, tried to contend
that the plaintiff and other defendants are members of
joint family and therefore, they can very well maintain the
suit.
18. Such a contention also cannot be gone into by
this Court having regard to the scheme of the SARFAESI
Act. If at all the plaintiff and other defendants have not
borrowed the money based on the property as undue
security, it is always open for them to approach the
appropriate forum for redressal of their grievance. In such
circumstances, the following order is passed:
The appeal is meritless and is hereby dismissed.
Sd/-
JUDGE
RV
