Kerala High Court
Sankaranarayanan vs Major Mathew on 11 August, 2025
RFA. No.530/2019
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'CR'
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE C.PRATHEEP KUMAR
MONDAY, THE 11TH DAY OF AUGUST 2025 / 20TH SRAVANA, 1947
RFA NO. 530 OF 2019
AGAINST THE JUDGMENT AND DECREE DATED 08.11.2019 IN OS
NO.56 OF 2015 OF ADDITIONAL SUB COURT, IRINJALAKUDA
APPELLANT/PLAINTIFF:
SANKARANARAYANAN,
AGED 60 YEARS, S/O. VILLUMANGALATH RAMAN,
VELLANGALLUR DESOM, THEKKUMKARA VILLAGE,
MUKUNDAPURAM TALUK, THRISSUR DISTRICT,
NOW RESIDING AT VILLWAMANGALATH,
PAKARAPPILLY, PUTHENCHIRA, THRISSUR,
PIN - 680 682.
BY ADVS.
SRI.VINOD RAVINDRANATH
SMT.MEENA.A.
SMT.M.R.MINI
RESPONDENTS/DEFENDANTS1 TO 3:
1 MAJOR MATHEW
KRANAMBURATH ABRAHAM, NO.39,
GORKKA, GORKKA TRAINING CENTRE,
VARANASI, CANITT, UTHERPRADESH
PIN - 221002.
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2 ALICE VAZHAKKAL
D/O. VAZHAKKAL AUGUSTHI,
MUPLIPADI, KODAKARA,
MUKUNDAPURAM TALUK,
THRISSUR DISTRICT.
3 AUTHORISED OFFICER
IDBI BANK LTD., RETAIL ASSET CENTRE,
PANAMPILLY NAGAR, NEAR PASSPORT OFFICE,
KOCHI - 36.
BY ADVS.
SHRI.SYED MUHAMMED SALIH A.N.- FOR R1 & 2
SRI.SHASHANK DEVAN-FOR R3
SRI.K.SANTHOSH KUMAR (KALIYANAM)- FOR R3
THIS REGULAR FIRST APPEAL HAVING BEEN FINALLY HEARD ON
04.08.2025, THE COURT ON 11.08.2025, DELIVERED THE
FOLLOWING:
RFA. No.530/2019
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C.R.
JUDGMENT
Dated this the 11th day of August, 2025
The plaintiff in O.S. No.56 of 2015 on the file of the Additional Sub
Court, Irinjalakuda is the appellant. (For the purpose of convenience, the
parties are hereafter referred to as per their rank before the trial court).
2. The plaintiff filed the above suit for cancellation of a sale deed
and also for injunction. According to the plaintiff, he is the absolute
owner in possession of the plaint schedule property, which he obtained
as per sale deed No.62/2007 of SRO Vadakkumkara. The defendants 1
and 2, who are his family friends, approached the plaintiff and requested
to assign the plaint schedule property in their favour for availing a loan
to purchase a flat at Vyttila. Accordingly, the plaintiff executed sale
deed No.2357 of 2010 of SRO Vadakkumkara on 6.10.2010 in favour of
the defendants. They undertook to purchase a flat in the name of the 1 st
defendant and then to sell it for a sum of Rs.1.5 Crores within a year and
thereafter to re-convey the property in favour of the plaintiff. They also
agreed to discharge the loan liability to the Bank and release the plaint
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schedule property from the liabilities. According to the plaintiff, it was a
sham document, without any consideration never intended to be acted
upon and hence it is liable to be set aside. It is further alleged that on
9.11.2012, 3rd defendant along with the police party came to the plaint
scheduled property and threatened to evict the plaintiff from there.
Therefore, the plaintiff filed the suit praying for setting aside the sale
deed No.2357 of 2010 and for an injunction restraining the defendants
from trespassing into the plaint schedule property and from interfering
with the peaceful possession of that property.
3. The defendants 1 and 2 remained ex-parte. The 3rd defendant
bank contended that the suit was filed by the plaintiff in collusion with
defendants 1 and 2. It was also contended that the suit is barred under
Section 34 of the Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest (SARFAESI) Act and Section 18
of the Recovery of Debt due to the Bank and Financial Institutions Act,
1993.
4. The trial court raised a preliminary issue regarding the
maintainability of the suit in the light of Section 34 of the SARFAESI
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Act, held that the suit is barred under Section 34 of the SARFAESI Act
and accordingly dismissed the suit summarily. Being aggrieved by the
above judgment and decree of the trial court, the plaintiff preferred this
appeal.
5. Now, the point that arises for consideration is the following:
Whether a suit for setting aside a document is barred
under Section 34 of the SARFAESI Act?
6. Heard Smt. Meena A., the learned counsel for the
appellant/plaintiff and Sri.Shashank Devan, the learned counsel for the
3rd defendant. There was no representation for defendants 1 and 2.
7. The learned counsel for the appellant would argue that the trial
court was not justified in dismissing the suit as the issue involved in this
case can be decided only by a civil court. The learned counsel has also
relied upon the decision of the Hon'ble Supreme Court in Central Bank
of India v. Prabha Jain [2025 (4) SCC 38].
8. On the other hand, the learned counsel for the 3 rd respondent
would argue that this is a collusive suit filed between the plaintiff and
defendants 1 and 2 and as such the trial court was justified in dismissing
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the suit on the ground that it is barred under Section 34 of the
SARFAESI Act.
9. Section 34 of the SARFAESI Act reads as follows:
"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."
10. The case of the plaintiff is that he happened to execute sale
deed No.2357 of 2010 in favour of the defendants 1 and 2 in order to
facilitate them to avail a loan to purchase a flat and that it was never
intended to be acted upon. Further, according to him, it was executed
on condition that after purchasing the flat at Vyttila, in the name of the
1st defendant, it will be sold for a sum of Rs.1.5 Crores within one year
and thereafter the property will be released and re-conveyed in favour of
the plaintiff. However, when the defendants 1 and 2 defaulted
repayment of the loan, the 3rd defendant is attempting to take forceful
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possession of the plaint schedule property.
11. At the time of arguments, the learned counsel for the 3 rd
respondent would fairly concede that even now, the plaintiff is in
possession and enjoyment of the plaint schedule property and as such
the bank could take only symbolic possession of the same. Admittedly,
there is a residential building in the said property and even now the
plaintiff has been residing in the residential building situated therein.
12. The trial court dismissed the suit summarily without going
into the merits. At this stage, there is no reliable material to ascertain
whether there is any collusion between the plaintiff and defendants 1
and 2. The merits of the allegations in the plaint can be ascertained
only after taking evidence in the suit. The probable issue that arises in
this case is whether the sale deed No.2357/2010 of SRO Vadakkumkara
is a sham document as alleged by the plaintiff? If the answer is found to
be in the affirmative, the document is liable to be set aside.
13. In the decision in Prabha Jain (supra) relied upon by the
learned counsel for the plaintiffs, the Apex Court held that the
jurisdiction to declare a sale deed or mortgage deed being illegal is
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vested with the civil court under Section 9 of the Code of Civil
Procedure and such an issue cannot be decided by a Debt Recovery
Tribunal.
14. The learned counsel for the 3rd respondent would argue that
mere allegations of fraud in the plaint alone is not sufficient to overcome
the bar under Section 34 of the SARFAESI Act. It is true that mere
allegation of fraud in the plaint is not sufficient to overcome the bar
under Section 34 of the SARFAESI Act. In the instant case, the plaintiff
has a specific case that the sale deed executed in favour of defendants 1
and 2 was not intended to be acted upon and it was executed only to
enable the defendants to avail a loan for purchasing a flat as they are his
family friends and that they agreed to re-convey the property after the
purpose is served. It is also to be noted that, even after the execution of
the sale deed the plaintiff continues to be in possession of the scheduled
property. The question whether the above sale deed is a sham document,
liable to be set aside or not, can be decided only by a civil court and not
by the Debt Recovery Tribunal. Therefore, the finding of the trial court
that the suit is not maintainable in the light of Section 34 of the
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SARFAESI Act, in the facts of this case, is not correct. In the above
circumstance, the matter requires reconsideration by the trial court and
as such this appeal is liable to be allowed. Point answered accordingly.
15. In the result, the appeal is allowed. The impugned judgment
and decree of the trial court is set aside. The matter is remanded back to
the trial court for disposal on merits. Considering the fact that this is an
old suit of 2015, the trial court is directed to dispose of the same at the
earliest, at any rate within a period of six months from the date of receipt
of a copy of this judgment. Considering the facts, I order no costs.
All pending interlocutory applications shall stand dismissed.
Sd/-
C. PRATHEEP KUMAR,
JUDGE
sou.
