Delhi District Court
(3) Anil Kumar vs (1) Punjab National Bank on 21 August, 2017
IN THE COURT OF SH. ANIL KUMAR SISODIA:
ADDITIONAL DISTRICT JUDGE-05:WEST:
TIS HAZARI COURTS: DELHI.
CIVDJ/607864/2016
(1)DARSHAN KUMAR
Son of Late Shri Paras Dass
Resident of 233, Priti Nagar,
Hissar, Haryana
(2) PAWAN KUMAR
Son of Late Shri Paras Dass
Resident of 233, Priti Nagar,
Hissar, Haryana
(3) ANIL KUMAR
Son of Late Shri Paras Dass
Resident of 233, Priti Nagar,
Hissar, Haryana ............Plaintiffs
Versus
(1) PUNJAB NATIONAL BANK
having its registered office at:
7, Bhikaji Cama Place,
New Delhi
amongst others a branch office at
Nangloi, New Delhi
(2) M/S VISION PIPES PVT. LTD.
A company incorporated under
the Companies Act
Darshan Kumar & Ors. Vs. Punjab National Bank & Ors. Page No. 1/8
having its registered office at
710, Ring Road Mall,
Sector 3, Rohini, Delhi
(3) SHRI PRADEEP KUMAR MITTAL
Son of Shri Krishan Dass Mittal
R/o 157, Third Floor,
Harsh Vihar, Pitam Pura,
Delhi-110034. .............Defendants
Date of institution :- 14.11.2014
Order Reserved On:- 10.08.2017
Date of Decision:- 21.08.2017
For the plaintiffs:-Sh. Madhur Arora, Advocate
For defendant no.-1(PNB):-Sh. Chanchal Kumar, Advocate
For defendant no.-2 to 3:- Sh. Arun Kumar Tewari, Advocate
SUIT FOR DECLARATION AND PERMANENT AND
MANDATORY INJUNCTION
JUDGMENT
1. Vide this judgment, I shall dispose off a preliminary issue framed on 05.05.2017 as under:-
"Whether the suit of the plaintiff is not maintainable being barred by Section 34 of SARFAESI Act, 2002?"
2. The facts necessary for disposal of the issue are that the plaintiffs Darshan Kumar & Ors. Vs. Punjab National Bank & Ors. Page No. 2/8 have filed the present suit for declaration, mandatory injunction and permanent injunction against the defendants. It has been stated in the plaint that the defendant no.-3 is one of the directors of defendant no.-2 company which had availed credit facility from defendant no.-1 bank. Defendant no.-3 is brother-in-law of plaintiff no.-1 and plaintiff no.-2 and 3 are brothers of plaintiff no.-1. Defendant no.-3 approached plaintiff no.-1 and 3 and requested them to become the directors of defendant no.- 2 company. On much persuations of defendant no.-2 and 3, plaintiffs agreed to be on the board of directors of defendant no.-2 company only formally and the day to day affairs of defendant no.-2 company would be looked after by defendant no.-3. In August 2011, defendant no.-3 disclosed to the plaintiffs that defendant no.-2 was already availing credit facilities from defendant no.-1 and was in the need of more funds and had requested defendant no.-1 for enhancement of credit facilities. Defendant no.-3 further represented the plaintiffs that defendant no.-1 had agreed to enhance the credit facilities subject to providing additional security of immovable properties. On the request of defendant no.-3, plaintiffs agreed to extend two properties i.e.1) land and building Khasra no.1682/26/1/2/1/2/3, Balsamand Road, Hisar, Haryana; and 2) Shop No.166, Auto Market, Hissar, Haryana, as security with defendant no.-1 bank for enhancement of credit facilities. Defendant no.-1 vide letter dated 02.08.2011 sanctioned and granted the credit facilities to defendant no.2 and 3 as detailed in para 12 of the plaint. Accordingly, in August 2011, plaintiffs agreed and created charge with respect to the aforesaid properties and also extended their personal guarantees for repayment of the said financial facilities and executed necessary documents. It was Darshan Kumar & Ors. Vs. Punjab National Bank & Ors. Page No. 3/8 further stated that the defendant no.-2 failed to make payment and plaintiffs several times requested defendant no.-3 for getting their properties released from the charge of defendant no.-1 and return of original documents and also release of personal guarantees. In or about November 2013, plaintiffs again requested defendant no.-3 and it was informed by defendant no.-3 that they had already approached defendant no.-1 for this purpose and had already offered some other properties for security to defendant no.-1 and had requested defendant no.-1 to release two properties of plaintiffs. In December 2013, defendant no.-3 handed over a letter dated 16.12.2013 issued by defendant no.-1 enhancing the credit facilities of defendant no.-2 and also agreed to release the two properties of the plaintiffs in lieu of properties bearing no.82, Sector 5, HUDA, Hissar and Plot at 501, Sector 5, HUDA, Haryana. The letter dated 16.12.2013 was duly acted upon by the defendants as credit facilities were enhanced by defendant no.-1 and subsequent thereto defendant no.1 also claimed charge on the two subsequent properties of defendant no.2 & 3. However, defendant no.-1 did not release the two properties of the plaintiffs and also personal guarantees of plaintiffs. It was stated that the plaintiffs even visited the branch office of defendant no.-1 for release of the personal guarantees as well as properties but defendant no.-1 asked the plaintiffs to contact to defendant no. 2 and 3. It was further stated that the plaintiffs have offered the security for limited purpose vide sanction letter dated 02.08.2011 and subsequent enhancement of loan facilities by defendant no.-1 was not secured by the properties of the plaintiffs. The plaintiffs came to know that the some amounts have become due and payable by defendant no.2 and 3 and Darshan Kumar & Ors. Vs. Punjab National Bank & Ors. Page No. 4/8 defendant no.-1 has issued notice dated 13.09.2014 recalling the amounts and defendant no.-1 in the said notice has malafidely claimed charge over the aforesaid two properties of plaintiffs.
3. Defendant no.-1 bank has filed written statement raising preliminary objections that plaintiffs are borrowers in term of Section 2(f) of SARFAESI Act and the suit is liable to be dismissed. The plaintiffs have not placed on record demand notices dated 01.10.2014 served on all the borrowers including plaintiffs. The notice dated 13.09.2014 inadvertently mentioned about the charge of defendant no.-1 on subsequent properties which has been rectified by initiating proceedings under SARFAESI Act vide notice dated 01.10.2014. Defendant no.-1 had initiated action under Section 13 of SARFAESI prior to the filing of the suit and the suit is barred under Section 34 of SARFAESI Act and this Court has no jurisdiction to try the suit. On merits, the contents of the plaint have been denied except the fact that the defendant no.-1 had advanced credit facilities to the defendant no.-2 and 3 and the plaintiffs had kept their properties as their securities. A prayer was made for dismissal of the suit.
Defendants no.2 and 3 did not file their written statements with in the stipulated period and their right to file W.S. was closed vide order dated 07/08/2015.
4. I have heard Counsel for plaintiffs as well as Counsel for defendant no.-1 on the preliminary issue and have perused the record carefully.
Darshan Kumar & Ors. Vs. Punjab National Bank & Ors. Page No. 5/85. It is undisputed case of the parties that plaintiffs had stood guarantors of defendant no.2 & 3 and had mortgaged their two properties as security with defendant no.-1 bank. Therefore, plaintiffs clearly fall within the definition of "borrower" under Section 2(f) of SARFAESI Act 2002 and the loan advanced to the defendant no.2 & 3 falls within the definition of "financial assistance" in Section 2(k) of the Act. The Counsel for defendant no.-1 has argued that the present suit is barred under Section 34 of the SARFAESI Act and the suit is not maintainable as defendant no.-1 has already initiated proceedings under Section 13(2) of SARFAESI Act by issuing notice dated 01.10.2014 to the borrowers as well as plaintiff. Counsel for the plaintiffs on the other hand has argued that defendant no.-1 had released the properties of plaintiff after taking new properties as security from defendant no.2 and 3 and therefore, defendant no.1 is wrongly claiming charge over the properties of plaintiffs. The subsequent enhancement of the loan facilities by defendant no.-1 was not secured by the properties of plaintiffs and the same were enhanced by creating charge over two subsequent properties of defendant no.2 & 3. It was argued that defendant no.-1 has malafidely claimed charge over the properties of the plaintiff as well.
6. Section 34 of the SARFAESI Act 2002 bars the jurisdiction of Civil Court "in respect of any matter" which DRT or Appellate Tribunal is entitled to determine, while Section 13(4) deals with the measures for enforcement of security interest.
In the present case, defendant no.2 and 3 committed default in Darshan Kumar & Ors. Vs. Punjab National Bank & Ors. Page No. 6/8 repayment of the loan and defendant no.-1 bank issued notice under Section 13(2) SARFAESI Act dated 01.10.2014 and took steps for the recovery of the loan amount. Any action taken under Section 13 of SARFAESI Act is appealable before the DRT under Section 17 of SARFAESI Act. Section 17 is wide enough to include not only the borrower but any person who is aggrieved by any of the measures taken by the Secured Creditor under Section 13(4) of the SARFAESI Act. The plaintiffs being guarantor fall within the definition of "borrower" as noted above and their remedy against the action taken by the defendant no.-1 bank lies under Section 17 of the SARFAESI Act, 2002.
7. In State Bank of Patiala Vs. Mukesh Jain (2017) 1 SCC 53, it was held by the Hon'ble Supreme Court that a remedy lies to debtor to file an appeal before the DRT under Section 17 of the SARFAESI Act against action initiated under Section 13 of the SARFAESI Act. It was further held that perusal of the Section 34 of the SARFAESI Act shows that no Civil Court is having jurisdiction to entertain any suit or proceedings in respect of any matter which a DRT or Appellant Tribunal is empowered by or under the Act to determine the dispute. Section 34 specifically provides the bar of jurisdiction and therefore, the order passed under Section 13 can not be challenged before any Civil Court and in these circumstances, the only remedy available with the debtor is to approach the Tribunal.
In view of the aforesaid judgment by the Hon'ble Supreme Court, I am of the considered opinion that the present suit filed by the plaintiffs is not maintainable in the Civil Court as the jurisdiction of Civil Courts is Darshan Kumar & Ors. Vs. Punjab National Bank & Ors. Page No. 7/8 barred by Section 34 of SARFAESI Act, 2002.
The issue is accordingly decided in favour of defendant no.-1 and against plaintiffs and resultantly the suit filed by plaintiffs stands dismissed.
No order as to costs.
Decree sheet be prepared accordingly.
File be consigned to record room after due compliance.
Announced in the open Court (ANIL KUMAR SISODIA)
Dated :- 21st August, 2017 ADJ-05, WEST DISTRICT
TIS HAZARI COURT, DELHI
Darshan Kumar & Ors. Vs. Punjab National Bank & Ors. Page No. 8/8