Delhi District Court
Inder Singh vs Branch Manager on 6 August, 2022
1
IN THE COURT OF SH. DIVYANG THAKUR,
ADDITIONAL DISTRICT JUDGE- 03 (SOUTH-
WEST), DWARKA, DELHI.
CS No. 15676/16
CNR No. DLSW01-000762-2016
INDER SINGH
S/O SHRI ATTAR SINGH
R/O C-3/184,
MAHAVIR ENCLAVE, PART-I
NEW DELHI
....PLAINTIFF
VERSUS
BRANCH MANAGER
INDIAN BANK, TILAK NAGAR
NAJAFGARH BRANCH
A-30-31 GANESH NAGAR
NAJAFGARH BRANCH
NEW DELHI
....DEFENDANT
Date of institution of the suit : 27.05.2013
Date on which order was reserved : 06.08.2022
Date of decision : 06.08.2022
CS No. 15676/16
Inder Singh Vs. Branch Manager, Indian Bank
2
ORDER
1. Vide present order, I would decide the preliminary issue that was framed in this suit vide order dated 09.08.2016 i.e. "whether the suit of the plaintiff is barred by Section 34 of SARFAESI Act? (OPD)" No evidence was required to be led for reasons that would become apparent in the course of this order. Ld. Counsels for both the parties addressed arguments and matter was reserved for orders on the preliminary issue.
2. Before adverting to the contentions of the parties, a brief background would be necessary. The present plaint has been filed against the defendant bank praying for the following reliefs:
(I) A decree of declaration against the defendant and in favour of the plaintiff that the auction dated 03.09.2012 done by the defendant of the property bearing C-2/12, measuring 120 sq. yds. falling in Khasra No. 10/25/1 situated in Mahavir Enclave, Village Mirjapur, New Delhi as null and void. (II) A decree of possession in favour of the plaintiff and against the defendant with respect to the property as mentioned above.
No other relief has been prayed for.
3. The plaintiff claims to be the absolute owner of property bearing no. C-2/12, measuring 120 sq. yds. falling in Khasra No. 10/25/1 situated in Mahavir Enclave, Village Mirjapur, New Delhi and avers that he bought the property in 1991 from one Rati Bhan S/o Khem Singh. It is further averred that on 17.05.2010, he was informed vide a notice dated 17.05.2010 sent to him by the defendant bank that a receiver has CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 3 been appointed by Ld. ACMM, New Delhi for taking possession of the aforesaid property and that the same property had been mortgaged with Indian Bank by one Sanjay Kumar. The plaintiff has claimed that the property over which such receiver was appointed was distinct from the property that had actually been mortgaged and the property mortgaged by Sanjay Kumar fell in Khasra No. 13/9/1. The plaintiff further states that he filed SA No. 200/2010 before Hon'ble DRT-III and also approached the Hon'ble DRAT and was again constrained to file SA No. 333/12 challenging the actions of the bank as the defendant bank had taken possession of the entire property and sealed the same. The plaintiff also states that on coming to know that the property was being auctioned, he also filed IA No. 940/2012 in SA No. 333/12 praying that the bank be restrained from auctioning the property and praying further that the concerned SDM carry out proper demarcation/identification of the property. The plaintiff also states that he approached the Hon'ble High Court of Delhi vide WP(C) 7278/2012.
4. Along with the plaint, a number of documents were annexed by the plaintiff, including the agreement to sell on the basis of which he claims that he had purchased the property. It would be pertinent to note that neither in the plaint nor in the list of documents did the plaintiff apprise the Court about the pleadings made in SA No. 333/12 before the Hon'ble DRT. It is also notable that the present suit was filed and summons to the defendant issued on 27.05.2013.
5. As already noted, the issue which is being decided CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 4 by the present order was framed on 09.08.2016. Issue no. 4 was also treated as preliminary issue and was framed as "whether the suit of the plaintiff is barred by principle of res judicata u/s 10 of CPC since this issue involve in the present suit between the parties already been heard and finally decided by Ld. DRT-III vide disposing SA No. 333/12? (OPD)" For reasons that would be apparent in the following paras of this order, I find that the aforesaid issue need not be decided, and in fact has become infructuous.
6. As noticed, the present suit was filed in May of 2013 and during the course of proceedings, the defendant filed additional documents which were the certified copies of the final order dated 07.09.2015 passed in SA No. 333/12 by Hon'ble DRT-III, New Delhi, and also copy of the order dated 25.01.2016 of the Hon'ble DRAT, New Delhi in Appeal No. 428/15 and also copies of title documents of the mortgaged property and sale certificate dated 05.10.2012 favouring the auction purchasers. It is notable that the application of the defendant for bringing on record these additional documents was allowed vide order of the Court dated 12.07.2017 as the said application was not opposed by the Ld. Counsel for plaintiff. It is also notable to note that vide order of the Court dated 20.03.2018, the submissions of the Ld. Counsel for defendant have been recorded wherein he had submitted that suit property had been auctioned and title of property had passed vide certificate of sale dated 05.10.2012 to the purchaser Vikas Bajaj. This is also apparent from the certificate of sale dated 05.10.2012 which has been placed on CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 5 record by the defendant which records that the property had been sold jointly in favour of Vikas Bajaj and Manmohan Makhija.
7. Here it would be pertinent to extract the order of the Hon'ble DRT-III, New Delhi, in SA no. 333/2012 wherein the present plaintiff was the applicant, the certified copy of which has been placed on record by the defendant as already noted above.
"The present Securitization Application has been filed by the applicant against the notice dated 17.05.2010 under Section 13(4) against the property bearing no. C- 2/12, admeasuring 120 sq. yds., falling in Khasra No. 10/25/1, situated in Village Mirzapur, colony known as Mahavir Enclave, New Delhi.
2. The brief facts of the case are that one Shri Gokal has transferred all his rights, interest and title of the property in question in favour of Shri Mool Chand by way of GPA, affidavit and agreement to sell all dated 17.01.1984. Shri Mool Chand further transferred the same in favour of Shri Jadu Chaudhary. Thereafter, Shri Jadu Chaudhary has transferred his right in favour of Shri Rati Bhan on 26.10.1990 and Shri Rati Bhan sold this property to Shri Inder Singh, the applicant herein vide General Power of Attorney, affidavit and Agreement to sell and receipts all dated 05.12.1991.
3. It is further submitted that the applicant has received notice dated 17.05.2010 wherein additional CMM vide CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 6 order dated 28.04.2010 has appointed Receiver for taking the possession of the property bearing no. C- 2/12, admeasuring 140 sq. yds., Khasra No. 13/9/1 situated at Village Mahavir Enclave, Block C-2, Palam, New Delhi which was mortgaged by one Shri Sanjay Kumar in the account of Tanaya Traders.
4. It is alleged by the applicant that applicant is the absolute owner of the property in question as he is having the original title documents in respect of the property bearing no. C-2/12, admeasuring 120 sq. yds., falling in Khasra No. 10/25/1, situated in Village Mirzapur, colony known as Mahavir Enclave, New Delhi whereas the respondent bank is claiming charge over the property bearing no. C-2/12, admeasuring 140 sq. yds., Khasra No. 13/9/1 situated at Village Mahavir Enclave, Block C-2, Palam, New Delhi.
5. It is further submitted that the aforesaid two properties are distinct and different which is apparent from the fact that the property on which the respondent bank is claiming charge falls in Khasra no. 13/9/1 whereas the property of applicant falls in Khasra No. 10/25/1.
6. Notice was issued on this application. Respondent bank filed its reply. The matter went upto the Hon'ble DRAT whereby directions issued to the SDM of the area to appoint Patwari to find out the exact location of the mortgage property.CS No. 15676/16
Inder Singh Vs. Branch Manager, Indian Bank 7
7. It is submitted that the property in question has been mortgaged by one Shri Sanjay Kumar with the bank by deposit of original sale deed dated 31.12.2004 and the Hon'ble DRAT has ordered for demarcation of the property in question. As per Patwari report on 11.11.2011, Shri Om Prakash was recorded owner of land measuring 3 Bigha bearing Khasra No. 13/9/1, Village Mirzapur, Delhi. It is further clarified that ownership of land measuring 1 Bigha being part of Khasra No. 10/25/1 belongs to Gram Sabha. It is also clarified that land measuring 16 Biswa being part of Khasra No. 10/25/1 belongs to Sarkar Daulat Madar.......
.......10. Heard both the parties, perused the records and this Tribunal is of the view that there is another aspect of the matter has not been raised by the respondent bank that claim of the applicant is also hit by the recent judgment of Hon'ble Supreme Court in the matter of Suraj Lamp case wherein Hon'ble Supreme Court has held that unless sale deed is executed the Agreement to Sell is not valid document for the purpose of transfer of title of immovable property........ .......12. Thus, this Tribunal holds that the respondent bank's mortgage is valid, perfect and in accordance with law whereas the applicants documents are hit by recent judgment of Hon'ble Supreme Court in the matter of "Suraj Lamp & Industries Pvt. Ltd. Vs. State CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 8 of Haryana" 2011 (11) SC 438, wherein the Hon'ble Supreme Court has held that 'Unless sale deed is executed, agreement to sell is not a valid document for the purpose of transfer of title of immovable property. Thus the applicant can not claim interest over the property on the basis of agreement to sell, GPA along in the absence of sale deed.'........ ......15. In view of the above judgments passed by the Hon'ble Apex Court, I am of this view that the agreement to sell and GPA does not give any right, title and interest in the immovable property, hence the present Securitisation Application fails to convince this Tribunal and thus hereby dismissed on merit."
(emphasis supplied) Here it would be pertinent to extract the order of the Hon'ble DRAT, New Delhi in IA No. 1052/2015, Appeal no. 428/2015 in SA No. 333/2012 (Delhi-III) the certified copy of which has been placed on record by the defendant.
"Inder Singh Vs. Indian Bank & Ors.
25.01.2016 Mr. Justice Ranjit Singh Present: None for the appellant.
The appellant was directed to deposit 25% of the notice amount to maintain the present appeal. On request, one week time was allowed to do the needful.CS No. 15676/16
Inder Singh Vs. Branch Manager, Indian Bank 9 Case called second time. None appears on behalf of the appellant. The appeal is accordingly dismissed for non- prosecution as well as not maintainable."
8. It is further pertinent to note that the passing of the aforesaid orders in SA No. 333/2012 and Appeal No. 428/2015 has not been disputed by the plaintiff even during the course of arguments when I had brought the attention of the Ld. Counsel for plaintiff to the aforesaid orders.
9. In so far as the other documents are concerned which have been filed by the plaintiff, it would be pertinent to note that the plaintiff has filed GPA, Agreement to sell, affidavit, receipt all dated 05.12.1991 which as per the pleadings form the basis of his suit. However, it is pertinent to note that the plaintiff did not file on record the Memorandum of Application u/s 17 of the SARFAESI Act which was numbered as SA 333/2012 and the certified copy of the application moved by the plaintiff has been placed on record by the defendants.
CONTENTION OF PARTIES
10. Ld. Counsel for the defendants has relied on the judgment of the Hon'ble Supreme Court in Jagjeet Singh Vs. Hira Lal 2014 1 SCC 479. He has submitted that the suit is clearly barred under the SARFAESI Act. He has further submitted that the plaintiff has already pleaded his complete case before the DRT in SA no. 333/12 in which final decision has been given. He has further submitted that the plaintiff also approached DRAT in CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 10 appeal. However, the said appeal was dismissed for non prosecution. Therefore, the auction proceedings having been challenged and adjudicated, the same cannot be challenged vide a separate suit before the civil court. Per contra Ld. Counsel for the plaintiff has contended that a suit for declaration would always be maintainable and that the present auction of the suit property was a result of conspiracy between bank officials and the mortgagor. He submits that such suits would always be maintainable not withstanding the provisions of SARFAESI Act. He has relied on Section 9 of the CPC to bolster his contention.
RELEVANT JUDGMENTS WITH RESPECT TO THE BAR UNDER SECTION 34 OF THE SARFAESI ACT
11. Before coming to the reasons of the present judgment, it would be relevant to cite certain judgments of the Hon'ble High Court of Delhi with respect to the bar created on the jurisdiction of the civil court via Section 34 of the SARFAESI Act. In Neha Aggarwal V. Pnb Housing Finance Ltd. & Ors 2016 SCC OnLine Del 3765 : (2016) 158 DRJ 286, the relevant extracts of the fact situation and the observations of the Hon'ble High Court are extracted herein:
".......That the appellant/plaintiff on making inquiries learnt that the respondents/defendants no.4 & 5 Shri Joginder Pal Gupta and Shri Tarun Guputa had taken loan from the respondent no.1 PNBHFL on 9th April, 2007 by giving alleged title deeds of the said flat to the CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 11 respondent no. 1 PNBHFL; that the said title deeds are forged and fabricated; that the said loan was granted owing to conspiracy of senior officials of the respondent no.1 PNBHFL; that the appellant/plaintiff challenged the notices dated 18th February, 2009 of the respondent no.1 PNBHFL of sale of the subject flat by filing SA No. 107/2009 before the Debt Recovery Tribunal (DRT)-III, Delhi; that the respondent/defendant no.2 Allahabad Bank also issued notice dated 5th July, 2010 alleging that the respondents/defendants no. 5 & 7 namely Shri Tarun Gupta and Shri Sita Ram had got loan from the said Bank by depositing the title deeds of the said flat. That the appellant/plaintiff filed SA No. 442/2010 before the DRT-III, New Delhi impugning the said notice dated 5 th July, 2010 of the respondent/defendant no. 2 Allahabad Bank; that the appellant/plaintiff learnt that the respondent/defendant no.2 Allahabad Bank had filed O.A. No. 246/2012 before the DRT against the respondents/defendants no. 5 & 7 Shri Tarun Gupta and Shri Sita Ram; that the appellant/plaintiff further learnt that the respondent/defendant no.3 SIBL has filed O.A. No. 35/2011 against the respondents/defendants no. 4 & 6 Shri Joginder Pal Gupta and Smt. Neelam Gupta before DRT-III for recovery of housing loan secured by title deeds of the subject flat; the appellant/plaintiff got herself CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 12 impleaded in the said proceedings; that it is evident from the above that the respondents/defendants no. 4 to 7 by entering into criminal conspiracy with the officials of the respondents/defendants no. 1 to 3 PNBHFL, Allahabad Bank and SIBL have forged and fabricated title documents of the subject flat (detailed averments of the forgery/fabrication of documents are contained in the plaint but reference whereto for the purposes of this appeal is not deemed necessary); that title documents of the subject flat in possession of the respondents/defendants no. 1 to 3 PNBHFL, Allahabad Bank and ISBL being forged and fabricated they acquired no rights in the subject flat; and, that the appellant/plaintiff also learnt that the alleged loan given by respondent/defendant no.1 PNBHFL has become time barred and the respondent/defendant no.1 PNBHFL for this reason also is not entitled to continue with the sale of the subject flat......
........Appellant/plaintiff claimed the reliefs of (i) declaration that she is the owner in possession of the subject flat and entitled to enjoy the possession thereof; (ii) declaration that the proceedings initiated by the respondents/defendantss no.1 to 3 PNBHFL, Allahabad Bank and SIBL before the DRT or any other authority other than Civil Court with respect to the said flat are not lawful; (iii) mandatory injunction directing the respondents/defendants no. 1 to 3 CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 13 PNBHFL, Allahabad Bank and SIBL to remove their alleged seal, lock and notices from the subject flat; (iv) permanent injunction restraining the respondents/defendants from interfering with the appellant's/plaintiff's peaceful possession of the property..........
.........The learned ADJ, after hearing arguments on the preliminary issue, vide thhe impugned judgment held the suit to be not maintainable, reasoning (i) that the appellant/plaintiff had not sought any relief of declaration that the defendants had played any fraud on her or of declaration of the other title deeds as forged and fabricated; (ii) that Section 34 of the SARFAESI Act bars the jurisdiction of Civil Court to entertain any suit or proceedings in respect of any matter which a Debt Recovery Tribunal or the Appellate Tribunal is empowered by or under the Act to determine and from granting injunction in respect of any action taken in pursuance to the SARFAESI Act or the Recovery of Debts due to Banks and financial Institutions Act, 1993 (DRT Act); (iii) that Section 14(b) of the Specific Relief Act, 1963 also bars the grant of any injunction restraining institution or prosecuting any proceeding in a Court not subordinate to that from which the injunction is sought; (iv) DRT is not subordinate to the Court of Additional District Judge; (v) DRT has the jurisdiction to entertain the CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 14 disputes as claimed in the suit and to grant reliefs as claimed in the suit; (vi) judgment dated 19th November, 2013 of this Court in Ritu Gupta V. Usha Dhand (2013) 205 DLT 218 cited by appellant/plaintiff was on different facts and not applicable; (vii) that the sale deed in favour of the appellant/plaintiff is subsequent to the initiation of proceedings before the DRT; (viii) if the appellant/plaintiff at the time of having the sale deed executed in her favour had no knowledge of the facts as pleaded in the plaint then she had been defrauded but which was not pleaded by her; conversely if the appellant/plaintiff was having knowledge of the facts she shall in any case be not entitled to any relief having not acted bona fide; (ix) reliance was placed on (a) Mardia Chemicals V. UOI (2004) 4 SCC 311, (b) Nahar Industrial Enterprises Ltd. V. Hongkong Shanghai Banking Corp. (2009) 8 SCC 646; and, (c) Jagdish Singh V. Heeralal (2004) 1 SCC 479; and, (x) that the jurisdiction of the Civil Court to entertain the suit was barred by Section 34 of the SARFAESI Act read with Section 9 of the CPC.......
.........Significantly, the appellant/plaintiff in the Memorandum of Appeal also has not controverted the reasoning of the learned ADJ of the appellant/plaintiff in the suit having not claimed any relief of declaration of having been defrauded or of the title documents on the basis whereof the respondents/defendants no. 1 to 3 CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 15 PNBHFL, Allahabad Bank and SIBL are claiming title to the property being forged and fabricated.......... ........The appellant/plaintiff, in the suit from which this appeal arises is claiming the reliefs as aforesaid (a) of declaration of the proceedings initiated by the respondents/defendants no. 1 to 3 PNBHFL, Allahabad Bank and SIBL before the DRT, as not lawful; (b) of restraining the respondents/defendants from enforcing their rights if any under the SARFAESI Act; and, (c) of mandatory injunction directing the respondents/defendants no. 1 to 3 PNBHFL, Allahabad Bank and SIBL to undo what they have already done under the SARFAESI Act. The said reliefs are found by me to bein the teeth of Section 18 of the DRT Act which bars the Civil Court from exercising any jurisdiction or power 'in relation to' the matters specified in Section 17 thereof (i.e. to entertain and decide applications for recovery of debts due to banks and financial institutions) and Section 34 of the SARFAESI Act which bars the jurisdiction of the Civil Court to entertain any suit or proceeding in respect of any matter which DRT is empowered by or under the said Act to determine and bars grant of injunction in respect of any action takne or to be taken in pursuance of any power conferred under the said Act or under the DRT Act. Section 35 of the SARFAESI Act makes the provisions thereof override other laws.......
CS No. 15676/16Inder Singh Vs. Branch Manager, Indian Bank 16 ........Supreme Court in Jagdish Singh supra was concerned with a suit for reliefs (i) of declaration that the defendants therein had no right to mortgage or attach or auction the property and that the mortgage or auction or sale was not binding on the plaintiff's share; (ii) of partition of the plaintiff's share; and (iii) of permanent injunction restraining the defendants from transferring, auctioning or interfering with the plaintiff's share over the property. It was the claim of the plaintiff therein also that he was a bona fide purchaser of the property. It was held (a) thta the words 'any person' used in Section 17 of the SARFAESI Act interpreted in Satyavati Tondon supra take within its fold not only the borrower but also the guarantor or any other person who may be affected by the action taken under Section 13(4) of the SARFAESI Act and would take a person such as the plaintiff therein also within its ambit; (b) therefore irrespective of the question whether the civil suit was maintainable or not, under the SARFAESI Act itself remedy was provided to such person claiming interest in the property; (c) the words "in respect of any matter" in Section 34 of the SARFAESI Act would take in the measures provided under Section 13(4) thereof; consequently if any person has got any grievance against 'any measures' taken by the borrower under Section 13(4), the remedy open to him CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 17 is to approach DRT or the Appellate Tribunal and not Civil Court; (d) Civil Court in such circumstances has no jurisdiction to entertain any suit or proceedings in respect of those matters which fall under Section 13(4) because those matters fell within the jurisdiction of DRT and the DRAT; (e) vide Section 35, SARFAESI Act overrides other laws if they are inconsistent with the provisions of the Act and which takes in Section 9 CPC as well; (f) civil court's jurisdiction is completely barred, so far as the "measure" taken by a secured creditor under Section 13(4), against which an aggrieved person has a right of appeal before the DRT or DRAT to determine as to whether there has been any illegality in the "measure" taken; and, (g) once the Bank or financial institution is found to have proceeded only against the secured asset, Civil Court has no jurisdiction to examine whether the measures taken by the secured creditor under Section 13(4) were legal or not........ (emphasis supplied) ........The aforesaid exception carved out by the Supreme Court has led to persons interested in defeating the actions of the banks and financial institutions under the SARFAESI Act inundating the civil courts with pleadings to bring their cases within the exception aforesaid. Unless the civil courts, before entertaining any such sits, scrutinize the pleadings in CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 18 the plaint carefully, the same will result in Section 34 of the SARFAESI Act being rendered illusory and thereby also frustrating the very objective of enactment of SARFAESI Act. Supreme Court in Mardia Chemicals supra carved out an exception, if I may humbly so opine, only in respect of claims by a mortgagor of the action of the secured creditor to be fraudulent. Though the Supreme Court chose not to expand as to what facts may qualify for an action of the mortgagee to be called fraudulent, an inkling thereof is evident from the reference therein to the two decisions supra of the Madras High Court. The claim of the mortgagor therein was of the power to sell under Section 69 of the Transfer of Property Act, 1882 being exercised by the mortgageee contrary to the terms of the mortgage i.e. a mortgagee seeking to do what it was not entitled to do under the terms of mortgage. However are are herein concerned with a claim of the appellant/plaintiff to title to the mortgaged property adversely to the title professing which the mortgagor had created the mortgage. Such a claim, in my view would not qualify within the exception carved out by the Surpeme Court and would be within the jurisdiction of the DRT under Section 17 of the SARFAESI Act and hence the jurisdiction of the civil court would be barred with respect thereto. It has been held by the Division Bench of this Court in CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 19 Onil Sadh V. Federal Bank Ltd. (2015) 224 DLT 556 that the claimto the mortgage property adversel to the mortgagor or the mortgagee can bej made only before the DRT under Section 17 and not before the civil court. The exception carved out by the Supreme Court in Mardia Chemicals supra is available in my humble opinion only when the bank or financial institution is perpetuating a fraud in the enforcement of the mortgage like as before the Madras High Court i.e. of exercising the rights as mortgagee contrary to the terms of the mortgage.........
(emphasis supplied) .........In this respect, the claim of the appellant/plaintiff herein is similar to that of the plaintiff in Jagdish Singh supra. The claim of the appellant/plaintiff therein also was of the mortgagor having no right to mortgage and thus the auction thereof being bad and which claim was held by the Supreme Court to lie before the DRT only and the jurisdiction of the civil court barred with respect thereto. Merely because in making such a claim fraud is alleged in the creation of the mortgage would not oust the jurisdiction of the DRT or come within the exceptions carved out in Mardia Chemicals supra (emphasis supplied)."
12. In Utpala Mukherjee Vs. Aeromarine Logistics Pvt. Ltd. and Others 2022 SCC OnLine Del 1647 : (2022) 290 DLT CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 20 706, the relevant extracts of the fact situation and the observations of the Hon'ble High Court are extracted herein:
".......On the other hand, the counsel for the defendant no.5 Bank has placed reliance on the judgment of the Supreme Court in Industrial Credit and Investment Corporation of India Ltd. V. Grapco Industries Ltd., (1999) 4 SCC 710, to contend that sufficient powers have been vested on the DRT under Section 22 of the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) and therefore, the matters which fall under the jurisdiction of the DRT cannot be entertained by the civil court. Section 22 of the RDB Act is set out below:
"22. Procedure and powers of the Tribunal and the Appellate Tribunal -
(1) The Tribunal and the Appellate Tribunal shall not be bound the procedure laid down by the Civil Procedure Code, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act and of any rules, the Tribunal and the Appellate Tribunal shall have powers to regulate their own procedure including the places at which they shall have their sittings.
(2) The Tribunal and the Appellate Tribunal shall have, for the purposes of discharging their functions under this Act, the same powers as are vested in a civil court under the Civil Procedure Code, 1908 (5 of 1908), while trying a suit, in respect of the CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 21 following matters, namely:-
(a) summoning and enforcing the attendance of any person and examining him on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavits;
(d) issuing commissions for the examination of witnesses or documents;
(e) reviewing its decisions;
(f) dismissing an application for default or deciding it ex parte;
(g) setting aside any order of dismissal of any application for default or any order passed by it ex parte;
(h) any other matter which may be prescribed. (3) Any proceeding before the Tribunal or the Appellate Tribunal shall be deemed to be a judicial proceeding within the meeting of sections 193 and 228, and for the purposes of section 196, of the Penal Code, 1860 (45 of 1860) and the Tribunal or the Appellate Tribunal shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXVI of the Criminal Procedure Code, 1973 (2 of 1974)........
.........Relevant observations of the Supreme Court in paragraph 11 of the aforesaid judgment is set out below:
'1.1. We, however, do not agree with the reasoning CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 22 adopted by the High Court. When Section 22 of the Act says that the Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, it does not mean that it will not have jurisdiction to exercise powers of a court as contained in the Code of Civil Procedure. Rather, the Tribunal can travel beyond the Code of Civil Procedure and the only fetter that is put on its powers is to observe the principles of natural justice ......... (emphasis supplied by the Hon'ble High Court) .........Next, reliance has been placed on behalf of the defendant no.5 Bank on the judgment of the Supreme Court in Jagdish Singh V. Heeralal, (2014) 1 SCC 479, to contend that any matters in respect of which, the remedy to appeal to DRT has been provided under Section 17 of the SARFAESI Act, the jurisdiction of the Civil Court is barred in terms of Sections 34 and 35 of the SARFAESI Act. Observations of the Supreme Court in paragraph 22 of the said judgment in set out below:
'22. Statutory interest is being created in favour of the 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 realizing the secured assets. Any person aggrieved by an of the CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 23 "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 that no civil court shall have jurisdiction to entertain any suit or proceeding "in respect of any matter" which a DRT or an Appellate Tribunal is empowere 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. 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 Code of Civil Procedures as well.'...........
(emphasis supplied by the Hon'ble High Court) Further, in Utpala (supra), it has been noted specifically by the CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 24 Hon'ble High Court of Delhi that:
.........It is an admitted position that the plaintiff has filed an application under Section 17 of the SARFAESI Act, before the DRT claiming similar reliefs and in fact, an ad interim stay had also been granted in favour of the plaintiff by the DRT. Yet, the plaintiff has chosen to continue with the proceedings in the present suit. Clearly, the plaintiff cannot be entitled to invoke two parallel remedies simultaneously for the same set of reliefs. I do not agree with the submission made on behalf of the plaintiff that the scope of two proceedings is different and therefore, the proceedings before the DRT and this court, can continue simultaneously. This view is fortified by the observations of the Supreme Court in Jagdish Singh (supra). The judgment of the Calcutta High Court in Kaaiser Oils (supra) was in a totally different context, where the borrower had also filed recovery proceedings against the bank......... ........Filing of the proceedings before the DRT show that the plaintiff was well aware of her legal remedies and therefore, she had approached the DRT under Section 17 of the SARFAESI Act. As noted by the Supreme Court in Industrial Credit (supra), sufficient powers have been vested with the DRT to decide all issues including the defence taken by the plaintiff, of not having signed the loan documents. Therefore, the jurisdiction of DRT is wider than that of a civil court."CS No. 15676/16
Inder Singh Vs. Branch Manager, Indian Bank 25 Finally, in Utpala (supra), Hon'ble High Court of Delhi concluded with the observation that:
"29. In light of the above, I am of the prima facie view that the present suit filed on behalf of the plaintiff, is not covered under the exception provided in Mardia Chemicals (supra) and is therefore, not maintainable. I am also of the prima facie view that in the facts and circumstances of the present case, the plaintiff cannot simultaneously pursue the present suit as well as the remedy under Section 17 of the SARFAESI Act. The DRT is already seized of the proceedings filed on behalf of the plaintiff under Section 17 of the SARFAESI Act. Therefore, no irreparable harm or injury would be caused to the plaintiff." (emphasis supplied) FINDINGS
13. I find that the suit is barred by law due to the operation of Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (herein after SARFAESI Act) for the following reasons: (I) The prayer clause of the plaintiff in his plaint explicitly prays for a decree of declaration that the auction conducted by the defendant bank be declared as null and void.
There is not an iota of doubt that the auction of the property was conducted as one of the measures taken under Section 13 of the CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 26 SARFAESI Act. Therefore, such prayer cannot be granted by the civil court, the jurisdiction of which has been barred with respect to any of the measures taken under the Act. This is even more so when the plaintiff has invoked the jurisdiction of the DRT under Section 17 of the SARFAESI Act. I find that in SA No. 333/12, all the pleadings of the plaintiff were identical to the pleadings made in the plaint which is the genesis of the present suit. The facts of Neha Aggarwal (supra) are similar to the facts of the present case where the plaintiff had sought a declaration that the proceedings initiated by the defendant's banks were not lawful. The Hon'ble High Court in that case while noting the reliefs claimed by the plaintiff explicitly found that the said reliefs were barred by the virtue of the SARFAESI Act. The Hon'ble High Court in Neha Aggarwal (supra) also observed that a claim of the plaintiff to title to the mortgaged property adversely to the title professing which the mortgagor had created the mortgage would be within the jurisdiction of DRT and would not qualify within the exception carved out by the Hon'ble Supreme Court in the seminal Mardia Chemicals case. The Hon'ble High Court in Neha Aggarwal (supra) also relied upon the judgment of the Hon'ble High Court of Delhi in Onil Sadh v. Federal Bank Ltd. 2015 224 DLT 556 wherein it was held that the claim to the mortgaged property adversely to the mortgagor or the mortgagee can be made only before the DRT and not before the civil court. The plaintiff had argued before the Hon'ble DRT that the suit property was distinct from the property mortgaged. The said submissions were considered and dismissed on merits by the CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 27 Hon'ble DRT. Therefore, I find that in light of the law laid down by the Hon'ble High Court of Delhi, the present civil suit is completely barred.
(II) The present civil suit is also not maintainable because as would be clear from the record the plaintiff had approached the DRT vide SA No. 333/12, and as would be clear from the paras extracted above from the final order of the Hon'ble DRT-III, the pleadings made by the plaintiff were identical to the pleadings in the plaint and moreover, it is crystal clear that vide the said proceedings before the DRT, the auction proceedings which are the subject of the prayer clause in the present plaint had been challenged. As held in Utpala Mukherjee (supra) by the Hon'ble High Court of Delhi, the plaintiff cannot be allowed to have his feet in two different boats, verily that having approached the DRT under Section 17, the plaintiff cannot then file a civil suit for the same set of reliefs. It is important to note that nowhere has the plaintiff sought a declaration of title, even though there is a cloud over the same. In light of the observations of the Hon'ble High Court of Delhi in Utpala Mukherjee (supra), I find the present suit to be an abuse of the process of law and not maintainable before this Court. (III) Additionally, it is also observed that the subsequent auction purchasers have not been impleaded, even though the plaintiff was well aware by the latest in 2018 when the Court had recorded the submissions of the Ld. Counsel for defendant in this regard. It is also observed that the plaintiff has not impleaded the mortgagor who had mortgaged the property with the defendant CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank 28 bank. Therefore, the present suit is also not maintainable for the non joinder of the necessary parties.
(IV) The Ld. Counsel for plaintiff strenuously argued that this was a case where the property owned by the plaintiff and the one mortgaged were different and that the bank through conspiracy or mistake had wrongly attached and sold the plaintiff's property under SARFAESI Act. He has further submitted that only the civil court can adjudicate the claim of the plaintiff. I find that the aforesaid submission has to be rejected for the reason that as held by the Hon'ble Supreme Court in Industrial Credit and Investment Corporation v. Grapco Industries Limited 1999 4 SCC 710 and also as noted by the Hon'ble High Court of Delhi in Utpala Mukherjee (supra), the DRT has been vested with sufficient powers to decide all the issues arising and in fact, the jurisdiction of DRT is wider than that of the civil court. This would also be clear from the provisions of Section 22 of the Recovery of Debts and Bankruptcy Act, 1993 which deals with the procedures and powers of the DRT and the DRAT. The claim of the plaintiff as noted above could have been and in fact has been adjudicated and finally laid to rest by the DRT vide its order dated 07.09.2015 and the appeal of which filed by the plaintiff before DRAT was dismissed for non prosecution and therefore, has become final in so far as any of the measures taken by the defendant bank. For this reason also, I find that the present suit deserves to be dismissed.
CS No. 15676/16Inder Singh Vs. Branch Manager, Indian Bank 29 FINAL ORDER
14. Therefore, I hold that the preliminary issue that is, whether the suit of the plaintiff is barred by Section 34 of the SARFAESI Act is decided against the plaintiff and in favour of the defendant bank. Therefore, in light of the aforesaid observation, the suit has to be dismissed.
15. No orders as to cost have been passed.
16. Decree sheet be prepared accordingly.
17. File be consigned to Record Room after necessary compliance.
Digitally signed by DIVYANG DIVYANG THAKUR
THAKUR Date:
2022.08.06
16:07:23 +0530
Announced in the open court (Sh. Divyang Thakur)
On 06.08.2022 ADJ-03/South West
Dwarka / New Delhi
Note: This judgment is having 29 pages and each page is bearing my signatures. Digitally signed by DIVYANG DIVYANG THAKUR Date:
THAKUR 2022.08.06 16:07:30 +0530 (Sh. Divyang Thakur) ADJ-03/South West Dwarka / New Delhi CS No. 15676/16 Inder Singh Vs. Branch Manager, Indian Bank