Madhya Pradesh High Court
Sardar Kuldeep Singh vs Surendra Singh on 28 February, 2024
Author: Anil Verma
Bench: Anil Verma
1
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE ANIL VERMA
ON THE 28 th OF FEBRUARY, 2024
SECOND APPEAL No. 1975 of 2022
BETWEEN:-
SARDAR KULDEEP SINGH S/O LATE SHRI JODH SINGH,
AGED ABOUT 72 YEARS, TEHSIL SANWER DISTRICT
INDORE (MADHYA PRADESH)
.....APPELLANT
( BY SHRI PRAMOD C. NAIR - ADVOCATE)
AND
1. SURENDRA SINGH S/O CHARAN SINGH ARORA
404-A DURGA PLAZA, FREEGANJ DISTRICT
UJJAIN (MADHYA PRADESH)
2. SMT. CHANDRAMANI W/O RAJENDRA SHARMA
ALAKHDHAM COLONY, UJJAIN (MADHYA
PRADESH)
3. SMT. USHA JOSHI W/O CHANDRASHEKHAR 12,
PARWANA NAGAR, SANWER ROAD, (MADHYA
PRADESH)
4. AVTAR SINGH ARORA S/O HANSRAJ ARORA
MAHESH NAGAR, MANGALNATH ROAD, UJJAIN
(MADHYA PRADESH)
5. JASVEER SINGH S/O HARBHAJAN SALUJA 21,
BHOJMARG, UJJAIN (MADHYA PRADESH)
6. BALVEER SINGH S/O MANOHAR SINGH 1/6
BAIRATHI COLONY, NUMBER 03, INDORE
(MADHYA PRADESH)
7. STATE OF M.P. THROUGH COLLECTOR
COLLECTORATE OFFICE, MOTI TABELA, INDORE
(MADHYA PRADESH)
8. NAIB TEHSILDAR VILLAGE SANWER (MADHYA
Signature Not Verified
Signed by: AMOL
NIVRUTTIRAO MAHANAG
Signing time: 29-02-2024
18:26:31
2
PRADESH)
9. PUNJAB AND SINDH BANK BRANCH
DAULATGANJ, UJJAIN (MADHYA PRADESH)
.....RESPONDENTS
( STATE BY MS NISHA TANWAR PL)
This appeal coming on for admission this day, th e court passed the
following:
ORDER
The appellant has filed present second appeal under section 100 of
Code of Civil Procedure, 1908 (hereinafter referred to"CPC") being aggrieved
by impugned judgment and decree dated 07.03.2022 passed by 27" District
Judge, Indore in Civil Appeal no. 41/2019, thereby affirming the
judgment/decree dated 19.02.2019 passed by 2™ Civil Judge Class-I, Sanwer
in Civil Case No. 3A/2015, whereby the trial Court has dismissed the suit under
Order 7 Rule 11 of C.PC
2/ Facts of the case in brief are that the suit property belonged to M/s
Achal Alliance Ltd. situated at Industrial Area Maksi Road, Ujjain and there was
a liability of Commercial Tax Department of Rs. 26,14,277.18/- The
Commercial Tax Department published a notice regarding public auction of the
suit property and realized the said amount of tax by auctioning the said property
on 05.01.2002 and the suit property was auctioned in favor of Santosh Kumar.
Then Santosh Kumar got mutated the suit property vide order dated
28.08.2004. The appellant purchased the land bearing Survey No. 419/1 ) from
Santosh Kumar vide registered sale deed dated 23.07.2007. Subsequently a part
of the land bearing survey no. 419/1 admeasuring 0.134 hectare was acquired
by the State Government for construction of Indore-Ujjain Highway. 1n lieu of
said acquisition, the Government paid a compensation amounting to Rs.
96,665/- to the appellant. Thereafter,the appellant came to know that the suit
land was hypothecated by M/s Tinnie Processors and Fabricators Pvt. Ltd.
Company with Respondent No. 9/ Bank and the bank has filed an application
under Section 19 of Recovery of Debts due to Banks and Financial Institutions
Act, 1993 for recovery of loan of Rs. 24, 96, 648/-The Debt Recovery Tribunal
has passed the order that Respondent No. 9/ Bank is entitled to recover the
amount with interest and also entitled to sell the mortgaged property. Thereafter,
recovery certificate has been issued. Appellant filed civil suit before the trial
Court.
3/ Respondent nos. 1 to 6 filed an application under Order 7 Rule 11
of C.P.C. Thereafter, the trial Court dismissed the suit by allowing the
application on the ground that the suit is hit by section 34 of the Securitisation
and Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002 ( hereinafter referred to "SARFAESI Act") and is not maintainable.
Being aggrieved by the aforesaid order, the appellant preferred first appeal, but
same was dismissed. Being aggrieved by impugned judgment/decree, the
appellant has preferred this second appeal before this Court.
4/ Learned counsel for the appellant submits that the appellant arose
the dispute before the trial Court for determination of ownership of the
property. He did not challenge the procedure of the SARFAESI Act, but both
the Courts below have not appreciated the law and facts in its due perspective
that fraud has been played by respondent nos. 1 to 6 and 9 with the appellant.
As per section 48 of the Transfer of Property Act, the appellant has right to
sue. The Tribunal had no power to set aside the sale certificate issued by the
Commercial Tax Department. The suit regarding title and possession can be
decided by Civil Court only. Hence, the impugned judgment and decree passed
by both the Courts below be set aside
5/ I have gone through the impugned judgment and decree passed by
both the Courts below and also perused the record with due care.
6/ It is an admitted fact that the appellant/plaintiff has filed a civil suit
for declaration of title and possession of the suit property and the matter has
been adjudicated by the Debt Recovery Tribunal regarding the land in question.
7/ Section 34 of the SARFAESI ACT, 2002 which postulates as
follows:
Section 34 of SARFAESI ACT, 2002
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)
8/ Hon'ble Supreme Court in the case of Mardia Chemicals Ltd and
others VS. Union of India and others reported in (2004) 4 SCC 311 has
held as 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.
9/ Hon'ble Supreme Court in the case of Union of India and
another Vs. Delhi High Court Bar Association and others reported in
(2002) 4 SCC 275 has held as under :
"2 4 . The manner in which a dispute is to be adjudicated
upon is decided by the procedural laws which are enacted from
time to time. It is because of the enactment of the Code of Civil
Procedure that normally all disputes between the parties of a civil
nature would be adjudicated upon by the civil courts. There is no
absolute right in anyone to demand that his dispute is to be
adjudicated upon only by a civil court. The decision of the Delhi
High Court proceeds on the assumption that there is such a right.
As we have already observed, it is by reason of the provisions of the
Code of Civil Procedure that the civil courts had the right, prior to
the enactment of the Debt Recovery Act, to decide the suits for
recovery filed by the banks and financial institutions. This forum,
namely, that of a civil court, now stands replaced by a banking
tribunal in respect of the debts due to the bank. When in the
Constitution Articles 323A and 323B contemplate establishment of
a tribunal and that does not erode the independence of the
judiciary, there is no reason to presume that the banking tribunals
and the appellate tribunals so constituted would not be
independent, or that justice would be denied to the defendants or
that the independence of the judiciary would stand eroded."
10/ Hon'ble Supreme Court in the case of Electrosteel Castings
limitted Vs.UV Asset Reconstruction Company Limited Company and
others reported in (2022) 2 SCC 573 has held as under.
9. Having considered the pleadings and averments in the suit
more particularly the use of word 'fraud' even considering the
case on behalf of the plaintiff, we find that the allegations of
'fraud' are made without any particulars and only with a view
to get out of the bar under Section 34 of the SARFAESI Act
and by such a clever drafting the plaintiff intends to bring
the suit maintainable despite the bar under Section 34 of the
SARFAESI Act, which is not permissible at all and which
cannot be approved. Even otherwise it is required to be noted
that it is the case on behalf of the plaintiff - appellant herein
that in view of the approved resolution plan under IBC and thereafter
the original corporate debtor being discharged there shall not be any
debt so far as the plaintiff-appellant herein is concerned and
therefore the assignment deed can be said to be 'fraudulent'."
10/ It is required to be noted that in the instant case, no application
under section 17 of the SARFAESI Act has been filed before the Debt
Recovery Tribunal, Jabalpur, therefore, this Court is of the considered opinion
that the suit filed by the appellant/plaintiff was absolutely not maintainable in
view of the power under section 34 of the SARFAESI Act, therefore, the
Courts below have not committed any error in rejecting the suit in view of the
power under section 34 of the SARFAESI Act,.
11/ In view of the reasons as cited above, present Second Appeal fails
and deserves to be dismissed and is accordingly dismissed at motion stage.
However, in the facts and circumstances of the case, there shall be no order as
to costs.
CC as per rules.
(ANIL VERMA)
JUDGE
amol
