Madhya Pradesh High Court
Au Small Finance Bank Ltd Through ... vs Deepak Sharma on 20 February, 2025
Author: Pranay Verma
Bench: Pranay Verma
NEUTRAL CITATION NO. 2025:MPHC-IND:4817
1 CR-949-2024
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE PRANAY VERMA
ON THE 20th OF FEBRUARY, 2025
CIVIL REVISION No. 949 of 2024
AU SMALL FINANCE BANK LTD THROUGH AUTHORISED
SIGNATORY MR. MADHUR GUPTA
Versus
DEEPAK SHARMA AND OTHERS
Appearance:
Shri Rohit Saboo - Advocate for the petitioner.
None for the respondents, though reported to be served.
ORDER
This revision under Section 115 of the CPC has been preferred by
defendant No.2/petitioner being aggrieved by the order dated 22.07.2024
passed in RCSA 26 of 2024 by the Civil Judge, Class-II, Barwani whereby
its application under Order 7 Rule 11 of the CPC has been rejected.
02. The plaintiffs/respondents No.1 to 3 have instituted an action
before the trial Court for declaration of their title over the suit property, for
partition of the same, for permanent injunction and for declaration that the
order dated 19.02.2024 passed by the Additional Collector, District Barwani
is not binding upon them.
03. As per the plaintiffs, the suit property is their joint family property.
Their Father, Ramesh Chandra Sharma was angry with them hence for
affecting their interests, he executed a deed on 07.03.2006 in favor of his
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wife Smt. Krishna with respect to the disputed property. He expired on
15.03.2019 and Smt. Krishna Sharma expired on 20.01.2022. After death of
Ramesh Chandra Sharma, defendant No.1 in collusion with his mother, Smt.
Krishna Sharma obtained a loan from defendant No.2 on 07.08.2019 in the
sum of Rs.10,00,000/-. The disputed property was mortgaged by way of
security for the loan raised. Defendant No.1 deliberately did not repay the
loan for destroying the interests of the plaintiffs. Defendant No.2 hence
instituted proceedings under the Securitization and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002 in respect
of the disputed property. Therein plaintiff No.1 preferred objection which
were however not considered and eventually an order was passed on
19.02.2024 directing for dispossession from the suit premises and handing
over its possession to defendant No.2.
04. It has been pleaded that since plaintiffs have 1/4 th share each in the
disputed property, the same could not have been mortgaged by Smt. Krishna
Sharma and defendant No.1 in favor of defendant No.2. The proceedings
have been taken by the Additional District Magistrate without issuance of
notices to the legal representatives of Smt. Krishna Sharma hence are not
binding upon them.
05. On service of summons upon it, defendant No.2 filed an
application under Order 7 Rule 11 of the CPC for rejection of the plaint on
the ground that the suit is barred by virtue of provisions of Section 34 of the
Act, 2002. The application was contested by the plaintiffs and has been
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rejected by the trial Court by the impugned order by observing that since
plaintiff's claim is for declaration of title and partition, the said relief can be
granted only by the Civil Court and not by the Debt Recovery Tribunal.
06. Learned counsel for defendant No.2 has submitted that the claim
of plaintiffs is for challenging the measures taken by defendant No.2 under
the provisions of Section 13 of the Act, 2002. If the plaintiffs contend that
they also have a share in the disputed property, then they would also fall
within the meaning of aggrieved person as defined thereunder and have the
right to approach the Debt Recovery Tribunal. The suit which has been filed
by them is clearly barred by virtue of Section 34 of the Act, 2002 even
though relief for declaration of title and partition has been sought for in the
plaint. It is hence submitted that the impugned order deserves to be set aside
and the plaint deserves to be rejected. Reliance has been placed on the
decision of the Apex Court in Jagdish Singh vs. Heeralal and others, 2014
(1) SCC 479.
07. Despite service of summons upon them, none has appeared on
behalf of the plaintiffs to contest the revision.
08. I have heard the learned counsel for defendant No.2 and have
perused the record.
09. In the case of Jagdish Singh (supra), the fact situation was identical
to the fact situation as is in the present case. Therein also a suit for
declaration of title, partition and declaration that the order passed under the
provisions of Section 13 of the Act, 2002 is illegal had been filed on the
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contention that the plaintiffs have title to the disputed property. In such
circumstances, the Apex Court held that the remedy of the plaintiffs is to
approach the Debt Recovery Tribunal against the measures taken by the
secured creditor under Section 13 of the Act, 2002 and that the jurisdiction
of the Civil Court is completely barred in that respect. For ready reference
the relevant para of the said judgment are reproduced hereunder:-
"13. We find that the Bank had advanced loans on the strength of the
abovementioned documents which stood in the names of Respondents 6 to 9. Due to
non-repayment of the loan amount, the Bank can always proceed against the secured
assets.
18. Any person aggrieved by any order made by the DRT under Section 17 may
also prefer an appeal to the Appellate Tribunal under Section 18 of the Act.
19. The expression "any person" used in Section 17 is of wide import and takes
within its fold not only the borrower but also the guarantor or any other person who
may be affected by action taken under Section 13(4) of the Securitisation Act.
Reference may be made to the judgment of this Court in Satyawati Tondon
case [United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110 : (2010) 3 SCC
(Civ) 260] .
20. Therefore, the expression "any person" referred to in Section 17 would take in
the plaintiffs in the suit as well. Therefore, 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) adopt any measure including
the sale of the secured assets, on which the plaintiffs claim interest.
24. Statutory interest is being created in favour of the secured creditor on the
secured assets and when the secured creditor proposes to proceed against the secured
assets, sub-section (4) of Section 13 envisages various measures to secure the
borrower's debt. One of the measures provided by the statute is to take possession of
secured assets of the borrowers, including the right to transfer by way of lease,
assignment or realising the secured assets. Any person aggrieved by any of the
"measures" referred to in sub-section (4) of Section 13 has got a statutory right of
appeal to the DRT under Section 17. The opening portion of Section 34 clearly states
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that no civil court shall have the jurisdiction to entertain any suit or proceeding "in
respect of any matter" which a DRT or an Appellate Tribunal is empowered by or
under the Securitisation Act to determine. The expression "in respect of any matter"
referred to in Section 34 would take in the "measures" provided under sub-section (4)
of Section 13 of the Securitisation Act. Consequently, if any aggrieved person has got
any grievance against any "measures" taken by the borrower under sub-section (4) of
Section 13, the remedy open to him is to approach the DRT or the Appellate Tribunal
and not the civil court. The civil court in such circumstances has no jurisdiction to
entertain any suit or proceedings in respect of those matters which fall under sub-
section (4) of Section 13 of the Securitisation Act because those matters fell within
the jurisdiction of the DRT and the Appellate Tribunal. Further, Section 35 says, the
Securitisation Act overrides other laws, if they are inconsistent with the provisions of
that Act, which takes in Section 9 CPC as well.
25. We are of the view that the civil court jurisdiction is completely barred, so far
as the "measures" taken by a secured creditor under sub-section (4) of Section 13 of
the Securitisation Act, against which an aggrieved person has a right of appeal before
the DRT or the Appellate Tribunal, to determine as to whether there has been any
illegality in the "measures" taken. The Bank, in the instant case, has proceeded only
against secured assets of the borrowers on which no rights of Respondents 6 to 8
(sic Respondents 1 to 5) have been crystallised, before creating security interest in
respect of the secured assets."
10. In the present case also the plaintiffs contend that they have a share
in the disputed property but in respect of the same, an order has been passed
by the Additional District Magistrate under Section 14 of the Act, 2002.
They are hence certainly "aggrieved persons" in respect of the "measures"
taken by defendant No.2. They very much have the right to approach the
Debt Recovery Tribunal under Section 17 of the Act, 2002. In such
circumstances, the jurisdiction of the Civil Court would be certainly barred
even though the suit filed by the plaintiffs may be for declaration of title and
partition as was the situation in the case of Jagdish Singh (supra).
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11. From the facts pleaded in the plaint, it is also observed that
plaintiff No.1 Deepak Sharma had appeared before the Additional District
Magistrate in the proceedings instituted before him under Section 13(4) of
the Act, 2002. It is hence not the case where the plaintiffs were not aware of
the proceedings before the Additional District Magistrate and had in fact
participated in the same. The order was passed by the Additional District
Magistrate on 19.02.2024 but instead of approaching the Debt Recovery
Tribunal, the instant suit has been filed on 28.03.2024 by a clever drafting of
the plaint for projecting the same to be for declaration of title and partition.
In the suit, Mukesh has been impleaded as defendant No.1 which is an
apparent mischief.
12. Consequently, the revision deserves to be and is accordingly
allowed. The impugned order dated 22.07.2024 passed by the trial Court is
hereby set aside. The application under Order 7 Rule 11 of the CPC
preferred by defendant No.2 is allowed and the plaint is rejected.
The revision is accordingly allowed and disposed off.
(PRANAY VERMA)
JUDGE
Shilpa
