[Cites 14, Cited by 0]
Madras High Court
M.S.K. Rameshraj vs The Indian Overseas Bank Rep By on 21 January, 2026
OA No. 1101 of 2025
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 21-01-2026
CORAM
THE HON'BLE MR.JUSTICE P. DHANABAL
OA No. 1101 of 2025 in
C.S.No.282 of 2025
1. M.S.K. Rameshraj
S/o.Kumaraswamy,
188, Dr.Ambedkar Street,
Vallur Village and Post,
Ponneri Taluk, Thiruvallur District
2. R.Kokila
W/o.M.S.K.Rameshraj,
188, Dr.Ambedkar Street,
Vallur Village and Post, Ponneri Taluk,
Thiruvallur District
3. K.Srinivasan
S/o.Kumaraswamy,
188, Dr.Ambedkar Street,
Vallur Village and Post, Ponneri Taluk,
Thiruvallur District
..Applicant(s)
Vs
1. The Indian Overseas Bank rep by
Mr.Ravi, Authorised Officer/ Chief Manager,
Asset Recovery Management Branch,
1st Floor, Central Office Building,
763, Anna Salai, Chennai-600002
2. Float Glass Center ,130-477, Mint Street,
Sowcarpet, Chennai-600079
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OA No. 1101 of 2025
3. Bernard Sahaya Mary
139-71, East Madha Church Street
Chennai-600013
..Respondent(s)
Prayer:
Original Application filed under Order XIV Rule 8 of O.S.Rules R/w
Under Order XXXIX Rules 1 and 2 CPC to grant an Ad Interim Injunction
restraining the Respondents, their men, agents, servants, subordinates or
anybody acting on their behalf from in any way interfering with the Plaintiffs
Right, Title, interest and enjoyment and possession in the suit schedule
property pending disposal of the above suit.
For Applicant(s): Mr.S.R.Rajagopal
Sr.Counsel for
Ms.Selvi George
For Respondent(s): Mr.P.V.Muralidhar for R1
Mr.R.Srinivasan for R2
Mr.M.Nirmal Kumar for R3
ORDER
This application has been filed by the applicants to grant an Interim
Injunction restraining the respondents in any way from interfering with the
applicants / plaintiffs’ right, title, interest, possession and enjoyment of the suit
property, pending disposal of the suit.
2. The brief case of the applicants / plaintiffs are as follows:-
(i) The applicants are the plaintiffs in the main suit, which was filed for
relief of declaration and for permanent injunction. The applicants are the
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owners of the agricultural lands mentioned in the petition, in the year 2007,
with an intention of generating additional revenue for the family, they decided
to construct agricultural godowns on their agricultural lands to store
agricultural produces. Therefore, the applicants approached the 1 st
respondent / Bank for loan and also they obtained loan to the tune of Rs.7.35
Crores. For that, the applicants executed Memorandum of Deposit of Title
Deeds in favour of the bank. At the time of sanctioning the loan, the 1 st
respondent / Bank has deducted a sum of Rs.2,22,98,265/-, as interest to the
said loan and only credited a sum of Rs.5,12,01,735/-. The scheme Grameen
Bhandran Yojana was formulated with the object to create scientific storage
capacity with allied facilities in rural areas to meet the requirements of farmers
for storing farm produce. As per the said scheme, the individuals can take up
project for construction of rural godowns and subsidy is also linked to the
institutional credit. The applicants were assured that they would be
sanctioned with subsidy and was asked to pay their share for the construction
of the godown.
(ii) Further, under the Nabard Rural Godown Scheme, the plaintiffs are
legally entitled to a government subsidy aimed at promoting capital investment
and enhancing income generation in the agriculture. The Nabard, in
accordance with the scheme provisions released subsidy of Rs.18,68,500/-
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towards the loan of the 1st applicant’s account and Rs.20,91,500/- towards 2nd
applicant’s loan account on 27.02.2008, in total a sum of Rs.39,60,000/-.
While so, the bank officials by playing fraud and committing criminal breach of
trust, fraudulently returned the entire advance subsidy of Rs.39,60,000/- to
Nabard on 11.11.2009 without the applicants / plaintiffs’ knowledge. The
applicants also applied for plan approval to the panchayat and the same was
also granted on 25.09.2008. The respondent / bank officials unreasonably
and maliciously rejected the applicants / plaintiffs legitimate request for loan
re-schedulement. The agricultural land was exempted under the SARFAESI
Act, only to grab the suit property, the bank, repeatedly issued notices for the
agricultural properties. When the applicants were making sincere efforts to
resolve the matter, the bank officials proceeded illegally to auction the
agricultural properties in complete violation of law. The properties worth about
80 crores and there is no legally enforceable debt after dismissal of their own
case before Debt Recovery Tribunal. The Bank officials also created auction
transactions and forged sale documents to defeat the applicants/ plaintiffs
ownership legitimate rights. Now, taking advantage of the order passed under
Section 14 of the SARFAESI Act, the respondents are trying to take
possession of the subject property, through Police Officials. Since there is a
threat of illegal dispossession of the applicants / plaintiffs, having no other
alternative, filed the suit and a bar under Section 34 under the SARFAESI Act
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is not applicable to this case. The applicants made out a prima facie case,
balance of convenience also lies in favour of the applicants and if injunction is
not granted, the applicants will put to heavy loss and irreparable damages,
therefore prayed to grant interim injunction.
3. The brief facts of the counter filed by the 1 st respondent / Bank are as
follows:-
(i) The subject mentioned property is not an agricultural land and the
loan was sanctioned for establishment of rural godown. As per Memorandum
of Deposit of Title Deed dated 04.01.2008. On 22.03.2007, the
Commissioner, Minjur Panchayat, granted permission to the applicants to
construct a godown in the property. Therefore, the character of the
agricultural property has been converted into commercial activity for
construction of a godown and Section 31(i) of SARFAESI Act is not
applicable. Further, the applicants themselves admitted that loan was availed
for construction of godown, therefore, the question of agricultural land does
not arise. Since the construction was not completed, the subsidy will not be
released. The applicants have not complied with the terms and conditions of
the sanctioned ticket which resulted in classifying account as ‘NPA’ and the
bank initiated recovery proceedings under the SARFAESI Act and issued
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demand notice under Section 13(2) of SARFAESI Act and after completing
formalities, the bank issued first sale notice on 12.02.2016, right from the year
2016, the bank has brought the property for sale on 14 times and 13 auctions
were not concluded and 14th auction was concluded on 29.07.2024 and the
properties were sold to the successful bidders, respondents 2 and 3. At every
stage, the applicants have stalled the recovery proceedings, by way of filing
Writ Petitions.
(ii) The bank also filed O.A.No.457 of 2016, though the same was
dismissed for default, the Bank filed an application to restore the same. The
applicants have also for the past 9 years, approached for One Time
Settlement, though it was sanctioned, they have not complied with the same.
Before sale of the property, bank has obtained valuation report and the
property was sold for Rs.10 Crores after obtaining proper valuation report. The
averments in respect of criminal breach of trust are totally incorrect. The
applicants have to approach the Debt Recovery Tribunal and has to challenge
the same in the manner known to law. The loan was sanctioned in the year
2002 and for the past 23 years, the banks are not in a position to recover
public money. Now, only to delay the proceedings, the suit has been filed and
the main suit itself is not maintainable. Therefore, there is no prima facie case
made out and the balance of convenience is lying in favour of the 1 st
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respondent and if the interim injunction is granted, the 1 st respondent will be
put to heavy loss and damages. Therefore, the application is liable to be
dismissed.
4. The brief facts of the counter filed by the 2nd respondent is as follows:-
(i) The applicants availed loan from the 1 st respondent, due to non
payment, the said account was classified as ‘Non Performing Asset’,
therefore, the 1st respondent initiated SARFAESI proceedings for recovery of
dues. The 1st respondent issued demand notices dated 07.01.2012 and
possession notices dated 11.05.2012 under Section 13(2) and 13(4) of the
SARFACIE Act. Based on the advertisement dated 13.07.2024 published in
the New Indian Express, the 2nd respondent, participated in the auction
proceedings and he was a successful bidder for the sum of Rs.6,31,16,000/-
and the sale was confirmed in his favour through confirmation letter dated
30.07.2024. The sale certificate was issued in favour of the 2 nd respondent by
the 1st respondent / bank on 07.08.2024 after acknowledging the payment
effected by the 2nd respondent, the said sale certificate was also registered.
The applicants also filed Writ petition in W.P.No.21019 of 2024 challenging
the sale notice dated 09.07.2024 before this Court and thereafter, the auction
purchaser was also impleaded in that Writ Petition and the same is pending.
The applicants also filed application under SARFAESI Act in S.A.507 of 2024
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on the file of the DRT-III, Chennai on 03.08.2024 and also they sought for
interim protection in I.A.No.1409 of 2024 and the same was dismissed.
Having failed in their attempt, now filed this suit with false allegations. The 2 nd
respondent is the bonafide auction purchaser and the present Civil Suit and
the Original Application are not maintainable, as there is statutory bar under
Section 34 of the SARFAESI Act therefore, the applicants are not entitled to
any reliefs. Therefore, the Original Application is liable to be dismissed.
5. Heard the learned counsels appearing on both sides and perused the
entire documents placed on record. Upon hearing both sides and perusing
the entire records, the point for determination in the present Original
Application is, “Whether this applicants are entitled for Interim Injunction as
prayed for?”
6. In this case, the applicants, being plaintiffs, have filed the main suit
for relief of declaration to declare that auction made by the 1 st respondent by
exercising provision of the SARFAESI Act in respect of the agricultural
property, as null and void, non-est and invalid in the eye law and also for
permanent injunction restraining the respondents / defendants from interfering
with the applicants / plaintiffs possession and enjoyment of the property.
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7. According to the applicants, it is an admitted fact that the applicants
obtained loan from the 1st respondent / Bank by mortgaging the suit properties
and in the suit property, they constructed a godown and due to non-payment
of the loan amount, it was declared as ‘Non Performing Asset’ by the 1 st
respondent/Bank herein and thereafter, the property was brought for auction
through SARFAESI proceedings. The applicants also approached the Debt
Recovery Tribunal and also filed some Writ Petitions and the same are
pending for adjudication. During the pendency of those proceedings, the
applicants / plaintiffs have filed this suit alleging that the suit property is
agricultural property and there is an exemption under Section 31(i) of
SARFACIE Act, therefore, the auction of the 1st respondent / bank in initiating
proceedings under SARFAESI Act and the subsequent sale in favour of the
2nd respondent are null and void.
8. Further, the learned counsel for the applicants relied on the following
judgments to substantiate his contention:-
(i) Judgment of Hon’ble Supreme Court reported in (2003) 6 Supreme
Court Cases 220 [Dwarka Prasad Agarwal (D) by Lrs., and Another Vs.
Ramesh Chander Agarwal and Others]
(ii) Judgment of Hon’ble Supreme Court reported in (2004) 4 Supreme
Court Cases 311 [Mardia Chemicals Ltd., and Others Vs. Union of India and
Others]
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(iii) Judgment of the Hon’ble Supreme Court reported in (2018) 18
Supreme Court Cases 252 [Indian Bank and Another Vs. K.Pappireddiyar and
Another]
(iv) Judgment of the Hon’ble Supreme Court reported in (2025) 4
Supreme Court Cases 38 [Central Bank of India and Another Vs. Prabha Jain
and Others]
(v) Judgment of the Hon’ble Supreme Court reported in (2018) 15
Supreme Court Cases 99 [ITC Ltd., Vs. Blue Coast Hotels Ltd.,)
(vi) Judgment of the Kerala High Court reported in 1986 SCC Online
Ker 41 [Malabar Industrial Co., Ltd., Vs. John Anthraper]
(vii) Judgment of the Bombay High Court reported in 2008 SCC Online
Bom 1086 [Vakrangee Softwares Limited & Ors Vs. Central Bank of India]
(viii) Judgment of the Delhi High Court reported in (2022) High Court
Cass (Del) 154 [Tajunissa and Another Vs. Vishal Sharma and Others]
9. According to the respondents, the loan was obtained for construction
of godown for storage of agricultural goods and produces and building was
constructed after obtaining approval from Panchayat, therefore, after
construction of building, it lost its character of agricultural land and it was used
for commercial purpose. Since the account was declared as Non Performing
Asset, the 1st respondent / Bank initiated proceedings under SARFAESI Act
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and sold the property through public auction and 2 nd respondent is successful
bidder of the auction and sale certificate was also issued in favour of the 2 nd
respondent, therefore, the suit itself is not maintainable under Section 34 of
the SARFAESI Act.
10.The learned counsel for the 1st respondent, in support of his
contention relied on the following judgments:
(i) Judgment of the Hon’ble Supreme Court reported in CDJ 2023 SC
012 [K.Sreedhar Vs. M/s Raus Constructions Pvt., Ltd., & Others]
(ii) Judgment of the Hon’ble Division Bench of Madurai Bench of this
Court in W.A.(MD) No.1442 of 2015 dated 07.01.2016 [R.Flower Vs. Indian
Overseas Bank and Another]
(iii) Judgment of the Hon’ble Division Bench of this Court in
W.P.Nos.31073 and 31082 of 2019 dated 22.01.2020 [Easun Holdings Pvt.,
Ltd., Vs. Standard Chartered Bank]
11. It is pertinent to note that there is no dispute about the loan obtained
by the applicants from the 1st respondent and the 1st respondent also issued
notices under Sections 13(2) and 13(4) of the SARFAESI Act and order was
also passed under Section 14 of the SARFAESI Act by the concerned
jurisdictional Magistrate court and thereafter, the property was sold through
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public auction and the 2nd respondent is the successful bidder and already the
applicants have approached this Court by way of Writ Jurisdiction and the Writ
Petitions are also pending. Earlier, the applicants have also approached Debt
Recovery Tribunal challenging the proceedings and the same is also pending,
therefore, the question arose in this suit is, ‘whether the properties are
agricultural properties or not’ and the same has to be decided in the main suit.
Since various litigations are pending in respect of the same property, at this
stage, this Court cannot decide the nature of the land and statutory notice has
already been issued, therefore, it is not appropriate to grant any relief to the
applicants at this stage and there is no prima facie case made out and the
balance of convenience also not lying in favour of the applicants. If interim
injunction is not granted, no prejudice will be caused to the applicants,
therefore, the Original Application has no merits and deserves to be dismissed
and the claim of the applicants has to be decided in the main suit.
12. Since the nature and character of the property has to be decided
after full trial, the judgments relied upon by both the parties, cannot be
considered at this stage and those judgments can be relied upon at the time of
final adjudication of the case.
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In the result, the present Original Application is dismissed. Post the
main suit on 02.03.2026.
21-01-2026
Index: Yes/No
Speaking/Non-speaking order
Neutral Citation: Yes/No
ssd
To
The Indian Overseas Bank
Rep by Mr.Ravi, Authorised Officer/ Chief Manager,
Asset Recovery Management Branch,
1st Floor, Central Office Building,
763, Anna Salai,
Chennai-600002
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P.DHANABAL, J.
ssd
OA No. 1101 of 2025 in
21-01-2026
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