Karnataka High Court
The Mahila Co-Operative Bank Ltd vs Sri Venugopal N on 29 August, 2023
Author: H.P. Sandesh
Bench: H.P. Sandesh
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 29TH DAY OF AUGUST, 2023
BEFORE
THE HON'BLE MR. JUSTICE H.P. SANDESH
M.F.A. NO.3157/2022 (CPC)
BETWEEN:
1. THE MAHILA CO-OPERATIVE BANK LTD.,
MATHIKERE BRANCH
NO.11, MITRALAYA
M.S. RAMAIAH ROAD
MATHIKERE
BENGALURU - 560 054.
HEAD OFFICE AT NO.13 AND 14
SOUTH END ROAD
SHESHADRIPURAM
BENGALURU - 560 020
REPRESENTED BY ITS
GENERAL MANAGER/
AUTHORISED OFFICER
SMT. YAMUNA P., ... APPELLANT
(BY SRI RAMA BHAT K., ADVOCATE)
AND:
1. SRI VENUGOPAL N.,
AGED ABOUT 22 YEARS
S/O. NAGESH J.,
2. SRI NAGESH J.,
AGED ABOUT 56 YEARS
S/O. LATE JAVARAIAH
2
3. KUM. HEMAVARNA N.,
AGED ABOUT 19 YEARS
D/O. NAGESH J.,
RESPONDENT NOS.1 TO 3 ARE
RESIDING AT NO.709/18-1,
'SAPTHAGIRI', 15TH MAIN ROAD
NEAR ST. ANTHONY HIGH SCHOOL
GOKULA, 1ST STAGE, 1ST PHASE
MATHIKERE LAYOUT
BENGALURU NORTH - 560 054. ... RESPONDENTS
(BY SRI RAMESH BABU B.A., ADVOCATE FOR R1;
R2 AND R3 ARE SERVED)
THIS M.F.A. IS FILED U/O.43, RULE 1(r) R/W. SEC. 104 OF
CPC, 1908, AGAINST THE ORDER DT: 19.03.2022 PASSED ON
I.A.NO.2 IN O.S.NO.870/2020 ON THE FILE OF THE VI
ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU
CITY, C/C. IX ADDITIONAL CITY CIVIL AND SESSIONS JUDGE,
BENGALURU CITY, (CCH-5), ALLOWING I.A.NO.2 FILED U/O.39
RULE 1 AND 2 R/W. SECTION 151 OF CPC.
THIS M.F.A. HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 22.08.2023 THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:
JUDGMENT
Heard the learned counsel for the appellant and learned counsel for the respondent No.1-plaintiff.
2. This appeal is filed challenging the order dated 19.03.2022 passed on I.A.No.2 in O.S.No.870/2020 on the file of the VI Additional City Civil and Sessions Judge and C/C. IX 3 Additional City Civil and Sessions Judge, Bengaluru City, (CCH-
5), allowing I.A.No.2 filed under Order 39, Rule 1 and 2 read with Section 151 of CPC.
3. The appellant is the Mahila Co-operative Bank Limited represented by its Manager and defendant No.3 in the suit. The plaintiff had filed the suit before the Trial Court contending that the suit schedule property is an ancestral property belonging to his grand-father Javaraiah, who acquired the same under registered sale deed and during his life time, he was enjoying the suit schedule property. The said grand-father died leaving behind three children and all of them have executed relinquishment deed dated 22.01.2009 in favour of the father of the plaintiff and by virtue of the said relinquishment deed, the name of the defendant No.1 was mutated in BBMP records. It is the claim of the plaintiff before the Trial Court that he has got share in the said property and on seeing the paper publication in 'Kannada Prabha' newspaper dated 05.01.2020, wherein a publication was made to take possession of the suit schedule property, he came to know that defendant No.1 had mortgaged 4 the suit schedule property in favour of defendant No.3 i.e., the appellant-bank for the purpose of availing loan by his friends. It is contended that defendant No.1 without the knowledge and consent of the plaintiff, mortgaged the suit schedule property to deprive the legitimate right of the plaintiff in the suit schedule property. Hence, filed the suit for the relief of partition.
4. It is contended that defendant No.3, suppressing the pendency of the suit, filed Crl.Misc.No.3212/2021 under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('the SARFAESI Act' for short) and obtained the order dated 03.02.2022 for taking physical possession of the suit schedule property and if the plaintiff, his mother and sister are dispossessed from the suit schedule property, they will be put to great hardship and injustice. In the said suit, an application is also filed under Order 39, Rule 1 and 2 read with Section 151 of CPC reiterating the averments of the plaint and the same is numbered as I.A.No.2, wherein prayed the Court to grant an order of temporary injunction restraining the defendant No.3 from taking 5 physical possession of the suit schedule property pursuant to order dated 03.02.2022.
5. The defendant No.3 appeared and filed the objection statement contending that loan was borrowed by defendant No.1 and the same was declared as NPA and defendant No.3 instituted the proceedings i.e., the appellant herein under SARFAESI Act and obtained an order from the Jurisdictional Magistrate to take possession of the property which is the secured asset. If the plaintiff is aggrieved by the initiation of proceedings under SARFAESI Act, he should have approached the Debt Recovery Tribunal ('the DRT' for short) as provided in Section 17 of the SARFAESI Act and the Civil Court has no jurisdiction to entertain the present application. It is contended that no notice was served under Section 125 of the Karnataka Co-operative Societies Act, 1959, before institution of the suit. It is also contended that SARFAESI Act bars the Civil Court from entertaining the suit in respect of the matter in which the DRT is having jurisdiction.
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6. The Trial Court having considered the pleadings of the parties, formulated the points whether the plaintiff makes out a prima facie case, balance of convenience and irreparable hardship and injury to grant an order of temporary injunction. The Trial Court having considered the material on record, granted an order of injunction as sought in the application. Hence, the present appeal is filed before this Court by the appellant-bank.
7. The main contention of the learned counsel for the appellant before this Court in the appeal is that the Trial Court committed an error in entertaining an application for granting temporary injunction. It is contended that defendant No.1 being the absolute owner of the suit schedule property had mortgaged the property by executing registered mortgaged deed dated 23.12.2014 and 23.01.2017 in favour of the appellant-bank. The plaintiff filed the suit for partition and separate possession of the plaint schedule property in the year 2020, when the defendant No.3 had already declared the loan account as NPA and initiated recovery proceedings, so as to recover the due 7 amount, the same itself shows that the plaintiff and defendant Nos.1 and 2 colluding with each other, have filed the present suit, so as to stall the recovery proceedings. Under the circumstances, the Trial Court ought not to have entertained the application filed under Order 39, Rule 1 and 2 read with Section 151 of CPC.
8. Learned counsel for the appellant also contend that the defendant No.1 obtained mortgage loan of Rs.36,00,000/- (i.e., Rs.24,00,000/- and Rs.12,00,000/-, totally Rs.36,00,000/-) when the plaintiff and defendant No.2 were minors. The defendant No.1 being the father has all the family responsibilities and being the absolute owner of the plaint schedule property obtained mortgage loan by creating charge over the plaint schedule property, for which all the family members i.e., the plaintiff, defendant Nos.1 and 2 are jointly liable to repay the same. The plaintiff has no independent right to stall the recovery proceedings by filing suit for partition.
9. It is also contended that originally the plaint schedule property was allotted by BDA to the father of the 8 defendant No.1. After the death of Javaraiah, the remaining LRs executed relinquishment deed. As a result, the defendant No.1 acquired full right, title and the same has been mortgaged. Since the plaint schedule property is not an ancestral property, the plaintiff has no right over the said property by birth. The succession is not opened to the plaintiff to claim partition and separate possession when his father is alive. The Trial Court committed an error in coming to the conclusion that the said property is an ancestral property.
10. The counsel also would vehemently contend that no notice was issued under Section 125 of the Karnataka Co- operative Societies Act, 1959 and the bank has initiated recovery proceedings and if the plaintiff has any right, he can approach the DRT under Section 17 of the SARFAESI Act and earlier, the plaintiff had also filed objection to the proceedings in Crl.Misc.No.3212/2021 and the same was overturned by the Court and instead of challenging the same, an interim order is sought before this Court. It is contended that the appellant is a Co-operative Bank and huge public money is involved in the 9 transaction and there is a bar under Section 34 of the SARFAESI Act. Under the circumstances, the Trial Court ought not to have allowed the application granting an order of temporary injunction.
11. The learned counsel for the appellant in his argument would vehemently contend that there is a bar under Section 34 of the SARFAESI Act and when the recovery proceeding was initiated since the loan account is treated as NPA, the plaintiff, who is none other than the son of defendant No.1 joined together and hand in glow with defendant No.2, filed a collusive suit. It is also contended that the property is an ancestral property and hence, it requires interference of this Court.
12. Per contra, learned counsel for the respondent No.1- plaintiff would vehemently contend that the property is pledged with the bank and plaintiff is not the signatory to the said mortgage and he has got right in the said property and the defendant No.1 was not having any absolute right to create any mortgage in favour of the bank. The counsel also would 10 vehemently contend that the Trial Court having considered Sections 13(4) and 17(3) of the SARFAESI Act and also Section 34 of the SARFAESI Act, comes to the conclusion that DRT can entertain any issues involved between the parties only with regard to Section 13(4) of the SARFAESI Act and Civil Court has jurisdiction to deal with the suit for partition and such other suits of similar nature is entertainable by the Civil Court and the Civil Court can decide the right of the parties in such suits and the same cannot be dealt with by DRT. The counsel also would contend that, in the case on hand, the suit is filed in respect of the ancestral property of the plaintiff claiming share. In that view of the matter, there is no reason to contend that no separate notice is issued as required under Section 125 of the Karnataka Co-operative Societies Act, 1959. Hence, the Trial Court comes to the conclusion that the plaintiff has made out a prima facie case for claiming his legitimate share in the suit schedule property and comes to the conclusion that if the order of temporary injunction is not granted, it would defeat the right of the plaintiff and the Trial Court has given the reasoning while 11 entertaining the application filed under Order 39, Rule 1 and 2 read with Section 151 of CPC.
13. Learned counsel for the respondent No.1-plaintiff, in support of his argument, he relied upon the judgment of the Apex Court in ROHIT CHAUHAN VS. SURINDER SINGH AND OTHERS reported in (2013) 9 SCC 419 and the said judgment was also relied upon before the Trial Court, wherein the Apex Court held that coparcenary property means the property which consists of ancestral property and a coparcener would mean a person who shares equally with others in inheritance in the estate of common ancestor. "Coparcenary" is a narrower body than the joint Hindu family and before the commencement of the Hindu Succession (Amendment) Act, 2005, only male members of the family used to acquire by birth an interest in the coparcenary property. A coparcener has no definite share in the coparcenary property but he has an undivided interest in it and it enlarges by deaths and diminishes by births in the family. It is not static. The Apex Court also held that if a son is subsequently born, the alienation made before the birth cannot be questioned. 12 But, the moment a son is born, the property becomes a coparcenary property and the son would acquire an interest in that and become a coparcener.
14. The counsel also relied upon the judgment of the High Court of Judicature at Bombay in CIVIL REVISION APPLICATION NO.29/2011 dated 25.03.2021, wherein the Division Bench answered the questions referred to the Court and brought to notice of this Court that Para No.28(D), wherein it is held that where civil rights of persons other than the borrower(s) or guarantor(s) are involved, the Civil Court would have jurisdiction, that too, when it is prima facie apparent from the face of record that the relief claimed, is incapable of being decided by the DRT, under Section 17 of the DRT Act, 1993 read with Sections 13 and 17 of the SARFAESI Act. Hence, the civil right has to be decided in Civil Court only.
15. The counsel also relied upon the judgment of the Madras High Court in C.R.P. (PD) NO.1061 OF 2003 AND C.M.P.NO.7091 OF 2003 dated 19.03.2004 and brought to notice of this Court the observation made in the order that, 13 admittedly, in our case, the petitioners have filed the suit for partition including the item, in respect of which the 3rd respondent taken out proceedings to bring the same for sale without the intervention of the Court till the rights of the parties are determined by the Civil Court, and the Civil Court alone could decide and determine the rights of the parties in respect of their respective claims in the suit for partition, the 3rd defendant, though a secured creditor, cannot bring the property for sale by invoking the bar under Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act or the bar under Section 13 of the Act. The Court below has not taken into consideration of these aspects and as a matter of fact, these salient features were not brought to the notice of the Court below, which resulted in passing of an erroneous order, which is liable to be set aside. Learned counsel for the respondent No.1-plaintiff referring these judgments would vehemently contend that this Court cannot interfere with the findings of the Trial Court. Hence, prayed the Court to dismiss the same.
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16. Having heard the learned counsel for the appellant- defendant No.3 and learned counsel for the respondent No.1- plaintiff and also the principles laid down in the judgments referred (supra), the points that would arise for consideration of this Court are:
(1) Whether the Trial Court committed an error in entertaining the application filed under Order 39, Rule 1 and 2 read with Section 151 of CPC?
(2) What order?
Point No.(1)
17. Having heard the respective counsel and also the grounds urged in the appeal memo, it is not in dispute that defendant No.1, who is the father of the plaintiff had mortgaged the property in favour of the appellant-bank. It is also not in dispute that twice the property was mortgaged i.e., in the year 2014 and 2017 and the same is also admitted. Having perused the plaint also, it is not in dispute that, in the plaint it is contended that the defendant No.1 would guarantee for availing the loan by his friends. But, the fact is that the said loan is treated as NPA is also not in dispute. It is also not in dispute 15 that subsequent to filing of the suit, the appellant has also approached the Jurisdictional Magistrate seeking permission to take possession of the property and order was passed in 2022.
18. The main contention of the respondent No.1-plaintiff before the Trial Court is that suit schedule property is an ancestral joint family property of plaintiff and defendant Nos.1 and 2 and the same constitutes a joint family and contend that the defendant No.1 being an irresponsible person has spent the entire loan amount on his personnel whims and fancies and has not spent even a single rupee of the loan amount obtained from defendant No.3 for his family welfare and also he did not provide basic needs like food, clothes and education expenses of the plaintiff since from plaintiff's childhood, the defendant No.1 completely neglected the plaintiff and his family members and hence, the mother of the plaintiff namely, Smt. Manjula although an uneducated, in order to take care of the family and for providing the basic needs, had to look out for a tailoring job and is taking care and providing all the basic needs of the plaintiff and defendant No.2 even since the childhood. It is also alleged 16 that the plaintiff, his mother and minor ward defendant No.2 are now residing at the suit schedule property only. It is further contended that the defendant No.1 fraudulently executed the document in favour of the bank. On perusal of the averments of the plaint, it is seen that the plaintiff has mentioned that he is residing at No.709/18-1 and the address given by the defendant Nos.1 and 2 is also the same. Hence, it is clear that all of them are residing together. It is also not in dispute that when the property was mortgaged, both the plaintiff and defendant No.2 were minors.
19. It is also important to note that plaintiff also not disputes the fact that property was mortgaged in favour of the appellant-bank and there is no dispute with regard to the availment of loan by the defendant No.1 from the appellant- bank. It is also important to note that property originally belongs to one Javaraiah and he had purchased the same from BDA and he died leaving behind his children and also no dispute with regard to the fact that the children have executed the relinquishment deed in favour of the father of the plaintiff and as 17 a result, he became the absolute owner and the said property becomes the separate property of the father of the plaintiff. No doubt, the Trial Court comes to the conclusion that, when the grand-father was alive, the plaintiff was born and hence, it becomes an ancestral property. The very approach of the Trial Court is erroneous and there is no dispute with regard to the fact that property of Javaraiah is a self-acquired property and no doubt, he died intestate, immediately Section 8 of the Hindu Succession Act attracts and when the property is left by a male member, the same devolves upon his children. Accordingly, under Section 8 of the Hindu Succession Act, the property devolves upon the children and the other children have executed a relinquishment deed. As a result, it becomes separate property and there must be existence of three generation to constitute a property as an ancestral property and merely because he was born to his father, he will not become the coparcener when the grand-father was alive.
20. No doubt, the Trial Court relied upon the judgment of the Apex Court in ROHIT CHAUHAN's case, the same is not 18 applicable to the facts of the case on hand since, Javaraiah was not having any ancestral property and the same was his self- acquired property and the property which the father of the plaintiff has got becomes his separate property and he had executed the mortgage deed in favour of the bank and as rightly pointed out by the learned counsel for the appellant-bank, the same does not become an ancestral property and the same has not been considered by the Trial Court.
21. It is also important to note that the appellant has initiated recovery proceedings under Section 13(4) of SARFAESI Act and also no dispute that the loan account is treated as NPA. It is also important to note that, at the time of executing the mortgage deed in favour of the appellant-bank, the plaintiff as well as the defendant No.2 were minors and the defendant No.2 is the sister of the plaintiff and the defendant No.1 is none other than the father of the plaintiff and defendant No.2.
22. Now, this Court would like to refer Section 13 of the SARFAESI Act, wherein provision is made for enforcement of security interest i.e., in respect of security interest created in 19 favour of any secured creditor may be enforced, without the intervention of the Court or Tribunal, by such creditor in accordance with the provisions of this Act. This Court also would like to refer Section 17 of the SARFAESI Act, wherein provision is made that any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor or his authorized officer under this Chapter, (may make an application along with such fee, as may be prescribed) to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken.
23. This Court also would like to refer Section 34 of the SARFAESI Act, wherein there is a bar as to the jurisdiction of the Civil Court. Section 34 of the SARFAESI Act is very clear that 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 20 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.
24. Having perused the provisions of the SARFAESI Act, Section 13 of the Act provides a right to enforce security interest, Section 17 contemplates as to the application against measures to recover secured debts, Section 19 contemplates right of borrower to receive compensation and costs in certain cases and so also, Section 34 contemplates with regard to bar of jurisdiction of the Civil Court while enforcing the security interest and no injunction can be granted.
25. In the case on hand, relief is sought to restrain the appellant-bank from taking possession of the property. It is the claim of the plaintiff that the suit schedule property is an ancestral property and I have already pointed out that the property is not an ancestral property and it is a separate property of the defendant No.1. The plaintiff also filed an objection before the Jurisdictional Magistrate when an order was sought for taking possession and the same was rejected and the 21 same has not been challenged. The loan obtained is also a secured loan and I have already pointed out that the address given in the plaint by the plaintiff and the address given by the defendant Nos.1 and 2 are one and the same. Hence, it is clear that all of them are residing together and there is a collusion between the plaintiff and defendant Nos.1 and 2 and the same is apparent on record. It is also clear that the suit is filed as offshoot of recovery proceedings initiated by the appellant-bank herein. Though in the plaint, the plaintiff has contended that the defendant No.1 was an irresponsible person and misused the funds, but the fact that all of them are living together is not in dispute and also no specific instances of bad wises of the defendant No.1 is stated in the plaint, except stating that he did not take care of the plaintiff and his family members.
26. The Apex Court also in the judgment in JAGDISH SINGH's case categorically held that no suit can be initiated against the bank institution curtailing their right and it is also specific that any person aggrieved by any order made by the DRT under Section 17 may also prefer appeal to the Appellate 22 Court under Section 18 of the Act. Hence, it is clear that the expression 'any person' under Section 17 of the SARFAESI Act 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 SARFAESI Act. Therefore, irrespective of the question whether the civil suit is maintainable or not, under the SARFAESI Act itself a remedy is provided to such persons so that they can invoke the provisions of Section 17 of the SARFAESI Act, in case the bank (secured creditor) adopt any measure including the sale of the secured assets, on which the plaintiffs claim interest. The Apex Court also discussed the very scope of Sections 13(4) and 34 of the SARFAESI Act.
27. Learned counsel for the respondent No.1-plaintiff also relied upon the judgment of the High Court of Judicature at Bombay, wherein also the Court has discussed the scope of Section 9 of CPC and also Sections 13, 17 and 34 of SARFAESI Act, wherein a discussion was made that Civil Court would have jurisdiction, that too, when it is prima facie apparent from the 23 face of record that the relief claimed, is incapable of being decided by the DRT under Section 17 of the DRT Act, 1993 read with Sections 13 and 17 of the SARFAESI Act. The judgment of the Apex Court in JAGDISH SINGH's case does not lay down that DRT is competent to pass declaratory relief or a decree of ownership or partition or separate possession of Hindu Undivided Family property or an ancestral property. Here is also a case of secured creditor and the suit is barred under Section 34 of the SARFAESI Act,
28. This Court would like to rely upon the recent judgment of the Apex Court in MRS.LEELAMMA MATHEW VS. M/S. INDIAN OVERSEAS BANK AND OTHERS reported in 2022 LIVE LAW (SC) 973, wherein the Apex Court has held that Section 34 shall be applicable only in a case where the Debt Recovery Tribunal and/or Appellate Tribunal is empowered to decide the matter under the SARFAESI Act and also held that the jurisdiction of the Civil Court is absolutely barred, except in case the plaintiff is able to show fraud or misrepresentation. 24
29. This Court also would like to refer the judgment of the Madras High Court in SUMATHI VS. SENGOTTAIYAN AND OTHERS reported 2010 (3) CTC 53, wherein it is held that plaintiff may institute a suit for partition before the competent Civil Court but she cannot lawfully challenge the proceedings initiated by the secured creditor under the SARFAESI Act, before the Civil Court as there is a clear bar under Section 34 of the SARFAESI Act. Section 34 of the SARFAESI Act imposes a bar on the Civil Court to grant any relief of injunction with respect to any action taken in pursuance of the power conferred upon the SARFAESI Act. Therefore, the Trial Court has no authority to entertain the prayer for injunction sought for by the plaintiff as against the secured creditors, who had already initiated proceedings under the SARFAESI Act.
30. This Court also would like to rely upon the judgment of the Madras High Court in INDIAN BANK, RAJAPALAYAM, THROUGH ITS CHIEF MANAGER, THENKASI ROAD, RAJAPALAYAM VS. MINOR R. SAJANITHA, REPRESENTED BY NEXT FRIEND AND GRAND FATHER MRS. BHIMRAJA 25 AND OTHERS reported in C.R.P. (NPD)(MD) NO.46 OF 2015 dated 11.01.2019, wherein the Court has discussed with regard to initiation of suit and observed that at the instigation of respondents 1 and 2, the plaintiffs have filed this vexatious suit claiming partition of the schedule properties. Since the petitioner Bank has taken action over the secured assets under the SARFAESI Act the plaintiffs are barred from making any claim in the plaint under Section 17 of the Act before this Court and they have to file only appeal before the Debt Recovery Tribunal under Section 17 of the Act. The Court also further discussed that DRT cannot determine a partition suit and that an injunction order can be granted by the DRT Court and only the Civil Court has jurisdiction to entertain a partition suit and the Civil Courts have no jurisdiction to decide any issues under the SARFAESI Act.
31. This Court also would like to rely upon the judgment in SRI CHANDRU AND ANOTHER VS. K. NAGARAJAN in A.S.NO.277 OF 2008 dated 12.03.2012, wherein an observation is made in Para No.4 of the judgment that the sole intention of the plaintiffs is to defeat the lawful claim of the 5th 26 defendant and an observation is also made in Para No.17 referring the judgment of the Apex Court in DHULABHAI VS. STATE OF MADHYA PRADESH reported in AIR 1969 SC 78, the Civil Court indisputably has the jurisdiction to try a suit. If the suit is vexatious or otherwise not maintainable action can be taken in respect thereof in terms of the Code. In Para Nos.30 and 31 of the judgment, the Apex Court taken note of the similar circumstances that suit is filed by the plaintiffs, who are aged 27 and 32 years and the plaintiffs were born in 1981 and 1975 and they were minors as in the case on hand. The 1st defendant, being the father, has power to deal with the properties by creating security by way of equitable mortgage for business/family necessity. The 1st defendant, being the Manager/kartha of the family, represents all the family members in all transactions.
32. This Court also would like to rely upon the judgment of the Delhi High Court in RAJAT PANGARIA VS. STATE BANK OF BIKANER AND JAIPUR AND OTHERS reported in (2008) 141 COMP CAS 323 (DRAT), wherein also the Delhi High Court 27 held with regard to recovery of loan taken from the bank by the HUF and power of karta to contract debts for benefit of estate, binding both on minors and adults in family, karta mortgaging undivided share of his minor son for family business and for legal necessity, minor after attaining majority cannot challenge mortgage of his undivided share. The appellant could challenge the mortgage with regard to his share only on establishing that the mortgage had been created without legal necessity or that it was tainted with illegality or immorality. The mortgage was binding on the appellant.
33. Having considered the principles laid down in the judgments referred (supra) and also taking into note of the facts of the case on hand, it is not in dispute that the plaintiff and defendant No.2 were minors at the time of availing loan by the defendant No.1. Though, in the plaint, it is pleaded with regard to the fraud played but, no instances are stated with regard to the fraud, except stating that the defendant No.1 was not taking care of the plaintiff and his family members.
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34. The judgment of the Apex Court in ELECTROSTEEL CASTINGS LIMITED VS. UV ASSET RECONSTRUCTION COMPANY LIMITED AND OTHERS reported in (2022) 2 SCC 573 is also very clear that, if the loan transaction is fraudulent, then a person can invoke the jurisdiction of the Civil Court and mere mentioning and using the word "fraud"/"fraudulent", held that it is not sufficient to satisfy the test of "fraud"- a pleading/using the word "fraud"/"fraudulent" without any material particulars as required in terms of Order 6, Rule 4 CPC, would not tantamount to pleading of "fraud" and considering the pleadings and the averments in the suit, held that the allegations of "fraud" were made without any particulars and only with a view to get out of the bar under Section 34.
35. Hence, mere statement that the defendant No.1 was not taking care of the family does not constitute fraudulent act and the same is not enough to come to the conclusion that the defendant No.1 committed fraud on the family and the Court has to take note of the facts of each case while granting the relief and mere filing of the suit and seeking the relief of injunction is 29 not enough to grant the discretionary relief as observed in ELECTROSTEEL CASTINGS LIMITED's case.
36. Having perused the material on record, admittedly the plaintiff and defendant No.2 were minors at the time of availing loan by the defendant No.1 and though he contends that loan is taken for the benefit of his two friends, the fact that he stood as guarantor in respect of the said loan is not in dispute and the property is mortgaged is also not in dispute. The fact that the plaintiff and the defendant Nos.1 and 2 are living together and using common kitchen is also not in dispute, but filed the suit to prevent the appellant-bank from recovering the loan. Hence, there is a bar under Section 34 of the SARFAESI Act and in order to avoid and drag the recovery proceedings initiated by the appellant-bank with regard to the property which was pledged with the appellant-bank by the defendant No.1, the present suit is filed by the plaintiff colluding with defendant Nos.1 and 2 and the same is nothing but offshoot of recovery proceedings. Hence, the Trial Court failed to take note of this fact into consideration while granting an order of injunction and 30 failed to take note of the fact that the plaintiff can invoke the provisions of Section 17 of the SARFAESI Act, if there is any grievance, since the proceedings are initiated under Section 13 of the SARFAESI Act, in order to recover the secured debt.
37. When such being the case, having considered the principles laid down in the judgments referred (supra), it is clear that, with an intention to stall the proceedings initiated by the appellant-bank, an application is filed and the Trial Court erroneously comes to the conclusion that the plaintiff has made out a prima facie case, balance of convenience and hardship in his favour without considering the interest of the appellant-bank which provided loan to the defendant No.1 and the same is a public fund and the said secured debt is protected under the SARFAESI Act and the proceedings are also initiated under Section 13 of the SARFAESI Act. Hence, the Trial Court committed an error in granting an order of temporary injunction and it requires interference of this Court. Accordingly, I answer point No.(1) as 'affirmative'.
31Point No.(2)
38. In view of the discussions made above, I pass the following:
ORDER
(i) The appeal is allowed.
(ii) The impugned order dated 19.03.2022 passed on I.A.No.2 filed under Order 39, Rule 1 and 2 read with Section 151 of CPC in O.S.No.870/2020, allowing I.A.No.2 is hereby set aside.
Sd/-
JUDGE ST