IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:29.10.2010 C O R A M THE HONOURABLE MR. JUSTICE. K. MOHAN RAM C.R.P.PD.No.3777 OF 2009 and M.P.Nos.1 and 2of 2009 and 1 of 2010 The Authorised Officer Indian Overseas Bank Specialised Assets Recovery Management Branch, Coimbatore. .....Petitioner Vs 1. Nandini 2.Naren 3.Karpagam 4.Venkatapathy ..Respondents Petition is filed under Article 227 of the Constitution of India against the order, dated 20.11.2009 passed in I.A.No.546 of 2009 in O.S.No.106 of 2009 on the file of the Sub Court, Udumalpet. For Petitioner : Mr.V.T. Gopalan, Senior Counsel for Mr.F.B. Benjamin George For Respondent No.1 : Mr.G. Ethirajulu For Respondent No.2 & 3: Mr.Govi Ganesan O R D E R
The fourth respondent in I.A.No.546 of 2009 in O.S.No.106 of 2009 on the file of the Sub Court, Udumalpet, who is also the fourth defendant in the suit is the petitioner in the above C.R.P. 2. The brief facts which are necessary for the disposal of the above C.R.P. are set out below:-
a. The petitioner is a nationalised bank, which is having one of its branches at Karamadai, Coimbatore District. M/s. V.N.K. Textiles and Papers Mills P. Ltd., availed cash credit and term loans for the purchase of machinery, construction of building etc. The total limit sanctioned was Rs.10.71 Crores, out of which they availed loans to the extent of Rs.6.50 Crores.
b. According to the petitioner, after availing the loan, the said company did not adhere to the terms and conditions of sanction with regard to payment and consequently the accounts became NPAs. As on 18.12.2006 a total sum of Rs.6,17,61,308/- was due. Therefore, the petitioner issued a demand notice dated 18.12.2006 under Section 13(2) of the SARFAESI Act calling upon the borrower company and the parties concerned to repay the dues with interest. The demand notice was not complied with. Hence, the petitioner took physical possession of the secured assets on 19.3.2008.
c. The petitioner herein brought the secured assets for sale by issuing a sale notice on 5.5.2009 fixing the date of auction on 6.6.2009. The first respondent herein filed a suit in O.S.No.1243 of 2009 on the file of the Principal District Munsif at Coimbatore for permanent injunction contending that the secured assets were purchased by the sale of joint family properties and hence, she is entitled to a share in the said properties.
d. The first respondent also filed an interim application for injunction restraining the petitioner from alienating or encumbering the suit properties which are the secured assets. The Principal District Munsif granted an order of interim injunction on 5.6.2009. The petitioner filed C.R.P.No.2739 of 2009 before this Court against the said order of interim injunction and the C.R.P. was disposed of with a direction to the Court below to dispose of the I.A.No.1106 of 2009 on or before 9.10.2009. Thereafter, the District Munsif dismissed the said application on 12.10.2009.
e. Thereafter, the petitioner herein again brought the secured assets for sale by issuing sale notice on 19.10.2009 and fixing the auction date on 21.11.2009. While so, the first respondent filed another civil suit in O.S.No.106 of 2009 on the file of the Sub Court, Udumalpet. In that suit, the petitioner herein has been arrayed as fourth defendant.
f. In the suit the case of the first respondent is that the first defendant is her brother, the second defendant is her mother and the third defendant is her father’s brother. Item No.I described in the schedule of property stands in the name of the first defendant. Item Nos.2 to 6 described in the schedule of property stands in the name of M/s.VNK Textile Mill and M/s VNK Paper Mill, which are the partnership firms. In the said VNK Textile Mill and Paper Mills, the partners are Mr. Ramadoss, who is the father of the plaintiff, who had expired, the first defendant and the third defendant. The property described as Item No.7 belongs to the father of the plaintiff, namely, Ramadoss by virtue of a settlement deed dated 24.2.1959.
g. The family of the plaintiff and the family of the third defendant are all undivided families and all the properties of the families remain as Hindu Undivided Family Properties till date. There is no separate partition of all the properties till date. The two families originally had several ancestral properties jointly and commonly. Thereafter, certain ancestral properties were sold by both the parties and the joint family decided to do business and to develop the welfare of the joint family. Hence, after selling certain ancestral properties Item No.1 of the schedule property was purchased out of the ancestral nuclei in the name of the first defendant and Item Nos.2 to 6 of the schedule property was purchased in the name of the partnership firms.
h. It is the further case of the plaintiff that the first defendant has executed a settlement deed in favour of the second defendant in order to defeat the rights of the 1st respondent regarding Item No.1 of the schedule property.
i. It is the further case of the plaintiff that father of the plaintiff Mr. Ramadoss, the first defendant and the third defendant by suppressing the fact that the suit properties are purchased out of ancestral nuclei and that the suit property is ancestral in nature, had mortgaged the properties to the fourth defendant bank and availed certain loan facilities. But after having availed the loan, the father of the plaintiff died leaving behind the plaintiff and the defendants 1 and 2 as his legal heirs.
j. The plaintiff came to know about the mortgage only on 1.6.2006. Thereafter, the plaintiff immediately informed the fourth defendant bank that the suit properties are ancestral in nature and that she is entitled for a share in the property. It is the case of the plaintiff that she has got < th share in the suit properties and her request for partition and handing over of her share was not conceded by the defendants 1 to 3. The defendants 1 to 3 have colluded with the fourth defendant to bring the properties for sale and the fourth defendant bank had published auction notice dated 19.10.2009 and hence, the plaintiff was constrained to file the suit for partition for her < share and for consequential injunction restraining the defendants 1 to 4 from in any manner of auctioning, alienating and encumbering the suit properties.
k. Along with the suit, the first respondent filed I.A.No.546 of 2009 seeking interim injunction pending the suit. By an order, dated 20.11.2009, the learned Subordinate Judge, passed the following order:-
“Perused the Affidavit. Heard the petitioner side. Perused the documents. The suit is filed claiming partition in the suit property. L.R. Certificate shows that the prima facie relationship of the property if as alleged any alienation is made by the 4th respondent then the petitioner right will be prejudiced. Hence, to maintain the status quo as on date, it is necessary to grant injunction. Hence, Ad. Interim injunction is granted till 27.11.2009. Notice to Respondent by then O 39 R 3 CPC to be complied with failing which the petition stand dismissed. Call on 27.11.2009.”
3. Being aggrieved by that the petitioner has filed the above C.R.P.
4. In the grounds of revision, it is contended that Section 34 of the SARFEASI Act, ousts the jurisdiction of the civil court and hence, the Court below ought not to have entertained the suit and rejected the same. It is further contended that Section 34 of the SARFEASI Act restrains the courts and authorities from granting any sort of injunction order against the action or proposed action of the secured creditors under the Act and therefore, the order, dated 20.11.2009 granting interim injunction is liable to be vacated. 5. It is further contended that while granting ex parte order of injunction, the mandatory provisions stipulated under Order 39 Rule 3 C.P.C. have not been complied with. It is also contended that in O.S.No.106 of 2009 the pendency of the earlier suit in O.S.No.1243 of 2009 on the file of the Principal District Munsif, Coimbatore and the dismissal of the injunction application therein has been suppressed. It is further contended that the process of the Court has been abused by the first respondent. The C.R.P. had been admitted and notice was ordered on 26.11.2009 and on the same day interim stay for four weeks has also been granted. Thereafter, the first respondent had filed M.P.No.2 of 2009 to vacate the interim stay granted in M.P.No.1 of 2009. In M.P.No. 2 of 2009 in M.P.No.1 of 2009 in C.R.P.No.3777 of 2009, the following order came to be passed by Mr. Justice P.P.S. Janarthana Raja, on 17.12.2009.
“Learned counsel stated that the auction was completed. The sale certificate was issued on 12.12.2009 . Taking into consideration of the same, the sale is subject to the Court confirmation and also the learned counsel appearing for the respondent undertakes to deposit two crores (Rupess two crores only) on or before 4.1.2010. Call on 4.1.2010.”
6. Thereafter, M/s. Sree Anandhakumar Mills Ltd., represented by its Managing Director Mr.M.R.Rathindran, the auction purchaser has filed M.P.No.1 of 2010 to implead the auction purchaser as 5th respondent in the C.R.P.
7. In the affidavit filed in support of the petition in M.P.No.1 of 2010, it is stated that the petitioner is the successful bidder in the tender cum auction originally slated to be held by the first respondent on 21.11.2009. The tender was submitted on 20.11.2009 along with 10% EMD. The petitioner received a communication on 21.11.2009 stating that the tender will not be opened on that date as the first respondent was awaiting some administrativ clearance for opening the tender and the date of opening of the tender will be informed later. Ultimately, the tender was opened on 1.12.2009. In the tender, as the petitioner was the highest bidder, his bid was accepted but the bid of the other tenderer was rejected as he was interested only in purchasing a portion of the plant and machineries.
8. The revision petitioner by letter dated 1.12.2009 directed the petitioner to deposit 25% of the bid amount and accordingly 25% of the bid amount was paid for plant and machineries and land and building on 1.12.2009. The bid was confirmed by the first respondent by a communication dated 2.12.2009. The petitioner paid the balance amount of 75% on 8.12.2009 fro plant and machineries in all a sum of Rs.1,44,60,000/- and a sale certificate under Rule 7(2) of the Securtisation Act was issued by the first respondent for the sale of plant and machineries. The petitioner also paid the balance 75% representing the bid amount for land and building on 11.12.2009 and the sale certificate was issued to the petitioner on 12.12.2009 and the petitioner took possession of the entire premises on 12.12.2009.
9. It is the further case of the petitioner that the petitioner was not aware of any of the pending proceedings regarding the properties purchased by him.
10. By letter dated 17.12.2009, the revision petitioner informed the petitioner that the first respondent in the C.R.P. has field the above said suit and that the auction sale by the revision petitioner will be subject to the outcome of the revision petition and directed the petitioner to maintain the status quo of the property. According to the petitioner, the petitioner is the proper and necessary party to the C.R.P.
11. The second respondent in M.P.No.1 of 2010, who is the first respondent in the C.R.P. has filed a counter affidavit in M.P.No.1 of 2010, inter alia contending as follows:-
12. The petitioner is not a bona fide purchaser for valid consideration and the purchase made by him is hit by the principles of lis pendens. The petitioner has no locus standi to implead in a proceedings connected with partition suit between the co-sharers. It is for the petitioner to file a separate suit to establish its title if any in the properties which are the subject matter of the partition suit. The alleged tender-cum-auction is not valid and no notice was issued to the third respondent herein and therefore, the auction conducted by the bank is non-est in law. The order of injunction dated 20.11.2009 was granted by the court below in favour of this respondent by the trial court restraining the first respondent herein from conducting the tender and therefore, no tender or auction was conducted.
13. It is further contended that the bank has filed the C.R.P. and obtained an order of stay on 26.11.2009 by stating that already the date of tender was cancelled. This respondent filed a vacate stay petition on 8.12.2009 after serving the copy of the same on the counsel for the bank. However, the bank has hurriedly after receipt of vacate stay petition opened the tender cover. The vacate stay petition was listed for hearing on 10.12.2009 but the respondent bank took an adjournment of the vacate stay petition on 15.12.2009 and proceeded with the tender knowing the consequences. Therefore, the entire proceedings on the part of the bank and the petitioners are illegal and not binding on this respondent.
14. The market value of the properties will be around Rs.15 crores but the same was purchased only for a sum of Rs.4,56,60,000/-, which speaks volume about the collusion between the parties. It is further contended that the petitioner has no locus standi to question the averments and the merits of the partition suit filed by this respondent against the co-sharers. The suit in O.S.No.1243 of 2009 on the file of the District Munsif, Coimbatore was filed only for permanent injunction, whereas O.S.No.106 of 2009 on the file of the Sub Court, Udumalpet for partition and therefore, the cause of action for both the suits are different and there is no question of of abuse of process of court as alleged by the petitioner.
15. It is further contended by the second respondent that the first respondent herein agreed to receive a sum of Rs.5.00 Crores before this Court and pursuant to the same, this Court directed this respondent to deposit to deposit a sum of Rs.2.00 Crores on or before 4.1.2010 and this respondent had already deposited the amount and she is ready and willing to deposit a further sum of Rs.3 Crores within the date to be fixed by this Court.
16. On the aforesaid contentions, the implead petition is sought to be dismissed.
17. Heard.
18. Mr. Yasoth Vardan, the learned Senior Counsel for the petitioner in M.P.NO.1 of 2010 submitted that the petitioner being a bona fide purchaser in the auction conducted by the bank is a proper and necessary party to the above C.R.P., since any adverse order that may be passed will affect the interest of the petitioner.
19. In support of the aforesaid contentions, the learned Senior Counsel based reliance on the decision of this Court reported in AIR 2008 MADRAS 108 (K. Chidambara Manickam vs. Shakeena and others) and JT 2008 (6) SC 653 (Janatha Textiles and others vs. Tax Recovery Officer and another).
20. Mr.V.T. Gopalan, the learned Senior counsel appearing for the revision petitioner supported the contention of the learned Senior Counsel, whereas, Mr.G. Ethirajulu, learned counsel for the second respondent in this petition opposed the impleading of the petitioner.
21. I have considered the submissions made on either side and perused the materials available on record.
22. In the decision reported in AIR 2008 MADRAS 108, cited supra, the Division Bench of this Court, in paragraph 8, has formulated the points that arose for consideration, which reads as follows:-
“8. The core and primal points that arise and require to be answered in these appeals are that:-
(i) Whether the sale of the secured asset in public auction as per Section 13(4) of SARFAESI Act, which ended in issuance of a sale certificate as per Rule 9(7) of the Security Interest (Enforcement) Rules, 2002 (in short “the Rules”) is a complete and absolute sale for the purpose of SARFAESI Act or whether the sale would become final only on the registration of the sale certificate ?
(ii) Whether the action of the second respondent in not accepting the amounts paid by the borrowers and not cancelling the sale certificate before the registration of the sale is in derogation of Section 60 of the Transfer of Property Act, in view of the Section 37 of SARFAESI Act ? And
(iii) Whether Section 35 of the SARFAESI Act has the effect of overriding Section 37 of the SARFAESI Act ?.
23. The passage extracted above makes it clear that in the said decision, the question as to whether the auction purchaser is a proper or necessary party to the proceedings in the revisional court was not an issue that arose for consideration in the writ petition and therefore, the said decision is not of any use to decide the issue that arose for consideration in this revision.
24. In JT 2008 (6) SC 653 , cited supra, the issue that has been formulated by the Supreme Court is as follows:-
“The short question which arises for consideration in this appeal is whether the Income Tax Department is justified in auctioning the attached property for recovery of debt.”
25. In this decision also, the question as to whether the auction purchaser is a proper and necessary party to the proceedings in the revisional court was not at issue and therefore, the said decision is not of any assistance to decide the issue that arose for consideration in this revision.
26. In this case, the trial Court granted the order of ex parte injunction on 20.11.2009 and the same has been communicated to the revision petitioner on the same day and therefore, as is admitted by the revision petitioner itself , the tenders were not opened and the participants in the tender-cum-auction were informed about the same and thereafter, the revision petitioner/bank has filed the C.R.P. and only after obtaining the stay from this Court on 26.11.2009 the tender has been opened and the auction purchaser had deposited 25% of the bid amount on 1.12.2009. Thus, it is clear that the auction purchaser had known about the suit filed by the second respondent in this petition. Therefore, the auction purchaser having knowledge of the pendency of the litigation in the civil court has taken the risk of purchasing the property in the tender-cum-auction.
27. The sale of the suit properties as rightly contended by the learned counsel for the second respondent is hit by the Section 52 of the Transfer of Property Act. In a decree that may be passed in the suit will be binding on the petitioner in this petition. In this context it will be useful to refer to a decision reported in (2001) 1 M.L.J. 101 (Bakthavatsalam vs. Anjapuli and others). In the said decision, His Lordship Mr. Justice P. Sathasivam, (as His Lordship then was) while considering the scope of Order 1 Rule 10 C.P.C., after referring to various decisions of the Apex Court and this Court has laid down, in paragraph 10 of the said decision, as follows:-
“10. It is clear that a person is not to be added as a defendant merely because he or she would be incidentally affected by the judgment. The main consideration is whether or not the presence of such a person is necessary to enable the court to effectually and completely adjudicative upon and settle and questions involved in the suit. If the question at issue between the parties can be worked out without anyone else being brought in, the stranger should be added as a party. In the light of the language used in O.1, Rule 10(2) of C.P.C., as well as various decisions and in the light of factual position in our case that preliminary decree has already been passed and application for passing of final decree is pending before the court below, I am of the view that purchasers of properties during the pendency of the suit are neither necessary nor proper parties inasmuch as they would be bound by the decree in the suit in view of the principle enunciated in Sec.52 of the Transfer of Property Act. I hold that the parties sought to be impleaded as defendants in the suit and respondents in the final decree application are neither necessary nor proper parties.”
28. In this case on hand, the tender has been submitted after the grant of injunction by the trial court and the tender has been opened after the injunction was stayed by this Court in the C.R.P. Therefore, the sale is hit by Section 52 of the Transfer of Property Act.
29. In such circumstances, the auction purchaser cannot be considered to be either necessary or property party to the C.R.P. At this juncture, the decision reported in (1996) 3 SCC 539 (Sarvinder Singh vs. Dalip Singh) is relevant to be referred to:-
“In that case, the appellant therein filed a suit before the Sub Court, Ferozepur for declaration that he is the owner of the property on the basis of a registered Will, dated 26.5.1952, executed by his and that a declaration to that effect was already given by the civil court in another decree, dated 29.3.1974. In the application that he filed under O.39, Rule 1 C.P.C., an ad interim injunction was granted on 14.6.1991, which subsequently came to be vacated on 2.12.1991. Thereafter, the defendants alienated the self same lands by registered sale deeds, dated 2.12.1991 and 12.12.1991 in favour of the respondents before the Supreme Court. On that basis, they sought to come on record as defendants under O.1, Rule 10 C.P.C. The Trial Court dismissed the application holding that they were neither necessary nor property parties to the suit. On revision, the High Court in the order impugned therein passed in C.R.No.323 of 1993, dated 13.5.1993, directed impleadment of the respondents as party defendants to the suit. Hence, the appeal before the Supreme Court by special leave. After considering the above factual position as well as Sec.52 of the Transfer of Property Act, their Lordships have said:
“It would therefore be clear that the defendants in the suit were prohibited by operation of Sec.52 to deal with the property and could not transfer or otherwise deal with it in any way affecting the rights of teh appellant even with the order or authority of the Court. Admittedly, the authority or order of the court had not been obtained for alienation of those properties. Therefore, the alienation obviously would be hit by the doctrine of lis pendens by operation of Sec.52. Under these circumstances, the respondents cannot be considered to be either necessary or proper parties to the suit.”
30. The aforesaid decision of the Apex Court squarely applies to the facts of the case. Therefore, this court is of the considered view that the petitioner in M.P.No.1 of 2010/auction purchaser has no locus standi to get impleaded in the C.R.P. as he is neither a necessary nor a property party to the proceedings.
31. It has to be further pointed out that the mere fact that fresh litigation can be avoided as no ground to invoke the power under Order 1 Rule 10 C.P.C.
32. For the aforesaid reasons, M.P.NO.1 of 2010 is dismissed.
33. Heard.
34. Mr.V.T.Gopalan, learned Senior Counsel appearing on behalf of Mr. F.B. Benjamin George for the revision petitioner made the following submissions.
35. The borrowers from the bank are not before this Court. The first respondent claiming to be the daughter of the deceased partner of the guarntor firm has filed the suit for partition and consequential injunction.
36. The learned Senior Counsel submitted that in view of the provisions contained in Section 34 of the SARFAESI Act, the suit filed by the first respondent in O.S.No.106 of 2009 before the Sub Court, Udumalpet is not maintainable and in view of the bar contained in Section 34 of the SARFAESI Act, the Sub Court has no jurisdiction to grant interim injunction and therefore, the ex parte injunction granted by the Court below has to be set aside.
37. The learned Senior Counsel submitted that the order, dated 20.11.2009 granting ex parte injunction does not contain valid reasons as contemplated under Order 39 Rule 3 C.P.C.
38. It was further contended that the first respondent had already filed O.S.NO.1243 of 2009 before the Principal District Munsif, Coimbatore seeking a decree for permanent injunction and also filed an interim application seeking interim injunction and interim injunction was granted at the initial stage and the same was vacated and the interim application was dismissed and suppressing the same the present O.S.No.106 of 2009 has been filed in a different Court.
39. The first respondent has not approached the Court with clean hands and abused the process of the Court and therefore, the interim injunction is liable to be vacated.
40. The learned Senior Counsel further contended that there are other properties available for partition but the same have not been included in the suit and therefore, the suit is bad for seeking partial partition.
41. In support of the said contention, the learned Senior Counsel based reliance on the following decisions.
42. Basing reliance on the decisions reported in (2009) 9 SCC 52 (R. Mahalakshmi vs. A.V. Anantharaman and others) and (1994) 4 SCC 294 (Kenchegowda (since deceased) by legal representatives vs. Siddegowda alias Moetgowda), the learned Senior Counsel submitted that the suit for partial partition when all the family properties are not made the subject matter of the suit is not maintainable.
43. In support of the contention that the civil court’s jurisdiction is barred under Section 34 of the SARFAESI Act and the Civil Court has no jurisdiction to grant injunction, the decision reported in CDJ 2007 (MHC) 4500 (Dadha Estates Pvt. Ltd., represented by its Managing Director, Chennai vs. C. Ravindran) has been relied upon.
44. In the said decision, the learned Single Judge of this Court, has laid down as follows:-
“8. ….. Regarding the rights of the secured creditor and the remedy available for the borrower or anybody else, who is an aggrieved person, Section 34 of the SARFAESI Act, 2002 clearly puts a bar on the civil court to entertain any suit or proceedings in respect of any matter which the Debts Recovery Tribunal or the appellate Tribunal is empowered under the said Act to determine. The grant of injunction to stall the action taken by the secured creditors under the provisions of the SURFAEST Act, 2002 has also been completely barred under section 34 of the said Act.”
“14. The present suit has been filed completely ignoring the bar under section 34 of the SURFAEST Act, 2002. The applicant has to approach the Debts Recovery Tribunal under section 17 of the Act to establish his charge over the property. This court has no jurisdiction to deal with such a lis.”
45. The learned Senior Counsel also based reliance on the decision of the learned Single Judge reported in CDJ 2007 MHC 3767 (The Authorised Officer, Corporation Bank v. Koottu Road, Sheep Farm Post, Attur Taluk, Salem District) wherein, in para 16, it has been laid down as follows:-
“16. A comparative reading of all the decisions cited above would make it clear that as per Section 34 of the SARFAEST Act, the Civil Court has no jurisdiction to entertain any suit challenging the proceedings initiated in pursuance of the powers conferred under the said Act and the plaint filed in such suits are liable to be rejected straight away. However, such bar under Section 34 of the SARFAESI shall not come in the way of adjudication of the civil rights, like declaration of title of the suit properties, partition rights in the ancestral properties etc., which are mortgaged, because such claims/rights made are outside the jurisdiction and adjudication of the Debt Recovery Tribunal or Appellate Tribunal under the said Debt Recovery Acts. However, in such suits the civil courts have no jurisdiction to grant either interim stay or interim injunction restraining the secured creditor/bank which is at liberty to proceed with the mortgaged properties for realisation of the amounts in view of the express bar contained under Section 34 of the SARFAESI Act, constitutional validity of such provision has been upheld by the Hon’ble Apex Court.
46. In AIR 2006 Karnataka 21 (Krishna vs. Kedarnath and others), in para 7 and 8, it has been laid down as follows:-
“7. Whether all the suits schedule properties are joint family properties and all the properties are mortgaged to the Bank and plaintiffs are entitled to partition etc. after the first charge upon the same is cleared, are all the aspects required to be decided by the Civil Court as the plaintiffs rights are traceable to the provisions of S.9 of C.P.C., S. 34 of the Act is a bar for the Civil Court to entertain the suits in respect of the matters which are empowered to be determined by the Debts Recovery Tribunal or Appellate Tribunal. But adjudication or determination of rights or claims of the parties for partition of the properties which are in the nature of civil rights, cannot be stopped. Partition suits that would be instituted by a party claiming civil rights in respect of either ancestral joint family properties or co-ownership properties will have to be exclusively dealt with by the Civil Court. That is the view taken by the Madras High Court in the decision referred to above. Of course the said decision is rendered prior to Marida Chemical’s Ltd., case. The Supreme Court has upheld the constitutional validity of the provisions of the Act. , at paragraph 51 in the above referred case. It is held that jurisdiction of the Civil Court also can be invoked for limited purposes. While the Bank can enforce its security interest for realisation of its amount, right of the plaintiffs to claim partition in the suit schedule properties if they prove they are ancestral joint family properties cannot be deprived off as contended by the Bank, which contention was erroneously accepted by the trial Court. For adjudication of such claim, the Bar under S.34 of the Act shall not come in the way.
“8. For the reasons stated above, these appeals are allowed. The orders/judgments and decrees under appeals are set aside. The status quo order passed in the suits shall stand dissolved as there is express bar under S.34 of the Act. The Bank is at liberty to proceed for the recovery of its amount by taking necessary steps in respect of the mortgaged properties by the debtors under the provisions of the Act, as the same are mortgaged for collateral security of the loan amount borrowed by them.”
47. In CDJ 2007 (DHC) 916 (Allahabad Bank vs. Sh. Randhir Singh and Others), the learned Single Judge of the Delhi High Court, in Para 14, has laid down as follows:-
“14. Ex facie, there is a complete bar on the jurisdiction of civil court to entertain suits or proceedings in respect whereof the Debt Recovery Tribunal is empowered to determine issues raised and no injunction can be granted by a civil court.”
48. In (2003) 6 SCC 675 (Surya Dev Rai vs. Ram Chander Rai and others) in paragraph 38 the Apex Court has laid down the guidelines for exercise of the jurisdiction under Articles 226 and 227 of the Constitution of India, which reads as follows:-
“37. Such like matters frequently arise before the High Courts. We sum up our conclusions in a nutshell, even at the risk of repetition and state the same as hereunder:-
(1) Amendment by Act No. 46 of 1999 with effect from 01.07.2002 in Section 115 of Code of Civil Procedure cannot and doest no affect in any manner the jurisdiction of the High Court under Articles 226 and 227 of the Constitution.
(2) Interlocutory orders, passed by the courts subordinate to the High Court, against which remedy of revision has been excluded by the CPC Amendment Act No. 46 of 1999 are nevertheless open to challenge in, and continue to be subject to, certiorari and supervisory jurisdiction of the High Court.
(3) Certiorari, under Article 226 of the Constitution, is issued for correcting gross errors of jurisdiction, i.e., when a subordinate court is found to have acted (i) without jurisdiction – by assuming jurisdiction where there exists none, or (ii) in excess of its jurisdiction – by overstepping or crossing the limits of jurisdiction, or (iii) acting in flagrant disregard of law or the rules or procedure or acting in violation of principles of natural justice where there is no procedure specified, and thereby occasioning failure of justice.
(4) Supervisory jurisdiction under Article 227 of the Constitution is exercised for keeping the subordinate courts within the bounds of their jurisdiction. When the subordinate Court has assumed a jurisdiction which it does not have or has failed to exercise a jurisdiction which it does have or the jurisdiction though available is being exercised by the Court in a manner not permitted by law and failure of justice or grave injustice has occasioned thereby, the High Court may step in to exercise its supervisory jurisdiction.
(5) Be it a writ of certiorari or the exercise of supervisory jurisdiction, none is available to correct mere errors of fact or of law unless the following requirements are satisfied: (i) the error is manifest and apparent on the face of the proceedings such as when it is based on clear ignorance or utter disregard of the provisions of law, and (iii( a grave injustice or gross failure of justice has occasioned thereby.
(6) A patent error is an error which is self-evident, i.e., which can be perceived or demonstrated without involving into any lengthy or complicated argument or a long-drawn process of reasoning. Where two inferences are reasonably possible and the subordinate court has chosen to take one view the error cannot be called gross or patent.
(7) The power to issue a writ of certiorari and the supervisory jurisdiction are to be exercised sparingly and only in appropriate cases where the judicial conscience of the High Court dictates it to act lest a gross failure of justice or grave injustice should occasion. Care, caution and circumspection need to be exercised, when any of the abovesaid two jurisdictions is sought to be invoked during the pendency of any suit or proceedings in a subordinate court and the error though calling for correction is yet capable of being corrected at the conclusion of the proceedings in an appeal or revision preferred there against and entertaining a petition invoking certiorari or supervisory jurisdiction of High Court would obstruct the smooth flow and/or early disposal of the suit or proceedings. The High Court may feel inclined to intervene where the error is such, as, if not corrected at that very moment, may become incapable of correction at a later stage and refusal to intervene would result in travesty of justice or where such refusal itself would result in prolonging of the lis.
(8) The High Court in exercise of certiorari or supervisory jurisdiction will not covert itself into a Court of Appeal and indulge in re-appreciation or evaluation of evidence or correct errors in drawing inferences or correct errors of mere formal or technical character.
(9) In practice, the parameters for exercising jurisdiction to issue a writ of certiorari and those calling for exercise of supervisory jurisdiction are almost similar and the width of jurisdiction exercised by the High Courts in India unlike English courts has almost obliterated the distinction between the two jurisdictions. While exercising jurisdiction to issue a writ of certiorari the High Court may annual or set aside the at, order or proceedings of the subordinate courts but cannot substitute its own decision in place thereof. In exercise of supervisory jurisdiction the High Court may not only give suitable directions so as to guide the subordinate court as to the manner in which it would act or proceed thereafter or afresh, the High Court may in appropriate cases itself make an order in supersession or substitution of the order of the subordinate court as the court should have made in the facts and circumstances of the case.
49. The learned Senior Counsel further contended that since the auction sale has been confirmed and sale certificate was issued only after the interim injunction granted by the lower court was stayed by this Court, the auction cannot be challenged.
50. Countering the aforesaid submissions, Mr.G.Ethirajulu, the learned counsel for the first respondent submitted that while O.S.NO.1243 of 2009 on the file of the Principal District Munsif has been filed by the first respondent for permanent injunction, O.S.No.106 of 2009 on the file of the Sub Court, Udumalpet has been filed seeking partition of the joint family properties and consequential injunction.
51. The learned counsel submitted that the cause of action for filing the suit in O.S.No.1243 of 2009 and the cause of action for filing the suit in O.S.No.106 of 2009 are totally different.
52. The learned counsel submitted that since the relief of partition sought for in the suit cannot be granted by DRT, the civil court’s jurisdiction is not barred and since the relief of injunction is sought for only as a consequential prayer in the suit for partition, the same is not barred under Section 34 of the SARFAESI Act.
53. The learned counsel submitted that unless the interim injunction is granted by the trial court pending the partition suit, the subject matter of the suit, which is also the subject matter of the proceedings before the DRT, which will be brought for auction, and in the event of the plaintiff succeeding the suit, she will be deprived of her share of the property which is the subject matter of the suit and therefore, the trial court is right in granting injunction. The learned counsel submitted that the Court below has recorded its prima facie satisfaction for granting interim injunction. It has also considered the balance of convenience and therefore, the order satisfies the requirements under Order 39 Rule 3 C.P.C., and therefore, the above C.R.P. is not maintainable.
54. The learned counsel submitted that without approaching the trial court to vacate the ex parte order of injunction, the petitioner is not entitled to approach this Court straight away under Article 227 of the Constitution of India. In support of the said contention, the learned counsel relied on the decision reported in 2000 (IV) CTC 358 (A. Venkatasubbiah Naidu vs. S. Challappan and others)
55. The learned counsel submitted that the trial court granted interim injunction on 20.11.2009 and the same was communicated by the revision petitioner immediately and the date of auction was only on 21.11.2009.
56. The learned counsel submitted that in the affidavit filed in support of M.P.NO.1 of 2009, which is sworn to by AL. Ramanathan, it is stated as follows:-
“I state that pursuant to the sale notice, dated 19.10.2009, the petitioner has received three sealed tenders. The last date for receiving sealed tenders is 20.11.2009 till 5 p.m. However at about on 20.11.2009 the petitioner herein received a fax message conveying the injunction order granted by the Court below. Therefore, the petitioner herein deferred the opening of the sealed tenders cum auction which was scheduled on 21.11.2009 at 11.30 a.m. and put a public notice. The participants in the tender were informed that the next day of auction will be notified later. However, the participants in the auction may not be willing to keep the money blocked for a long time. It is, therefore, necessary to stay the order, dt. 20.11.2009.”
57. In the additional affidavit filed in M.P.No.1 of 2009, which was sworn to by one A.K. Udayashankar, it is stated as follows:-
“However before opening the said tenders, the 1st respondent herein filed the Civil Suit bearing No.106 of 2009 and obtained an order of interim injunction on 20.11.2009 itself in I.A.No.546 of 2009. Therefore, the opening of the sealed tenders was deferred.”
58. In the very same affidavit, it is further stated that after the interim stay was granted by this Court on 26.11.2009, the petitioner rescheduled the opening of the tender to 1.12.2009 and on opening it was found only two tenders are valid and other tenders are invalid as the offer for the same was for select machineries.
59. In the additional affidavit, which was sworn on 11.12.2009 in paragraph 4 and 5, it is stated as follows:-
“4. I state that M/s Sree Ananda Kumar Mills Ltd., having their office at Saravanapatty, Coimbatore – 35 has furnished both the said tenders for the purchase of machinery and Land & Building. Its offer of Rs.3,12,00,000/- against the upset price of Rs.3,11,00,000/- for the land and building, and Rs.1,44,60,000/- as against the upset price of Rs.1,44,55,000/- was accepted and the said purchaser was declared as successful bidder. The said purchaser has paid the 25% of the amount on the same day and the sale was confirmed in its favour on 2.12.2009. The balance 75% sale consideration for the sale of the machineries was paid on 8.12.2009 and the sale certificate for the sale of the machineries was issued on 8.12.2009 itself.
“5. The purchaser has paid the entire balance sale consideration for the sale of the immovable property on 11.12.2009. The respondent is in the process of issuing sale certificate to the purchaser in respect of the immovable property. ”
60. The learned counsel submitted that the first respondent filed M.P.No.2 of 2009 to vacate the interim stay granted by this Court on 8.12.2009 after serving the same on the counsel for the bank and the matter was listed before the court on 10.12.2009. But at the request of the revision petitioner, time was granted till 15.12.2009 to file counter affidavit.
61. According to the learned counsel, on 10.12.2009, nothing was stated about the issue of sale certificate by the bank. Counter affidavit of the bank sworn on 11.12.2009 was served on the counsel for the first respondent on 14.12.2009.
62. As per the order of the learned Judge, dated 17.12.2009 the first respondent had deposited a sum of Rs.2 crores on 2.1.2010 itself. The learned counsel submitted that in the affidavit sworn to by AL. Ramanathan dated 12.4.2010 filed in the C.R.P. In paragraph 5, it is stated as follows:-
“5. I state that later when the above CRP was listed before this Hon’ble Cuort for hearing, in view of the oral undertaking of the 1st respondent herein to deposit Rs.5 Crores, this Hon’ble Court was pleased to observe that the sale held in favour of the auction purchaser is subject to the result of the above Civil Revision Petition. However though the 1st respondent deposited Rs.2 Crores she had failed to deposit the remaining Rs.3 Crores.”
63. The aforesaid submissions, according to the learned counsel makes it clear that the sale in favour of the auction purchaser is subject to the result of the above C.R.P. But in spite of the same, and in spite of the order, dated 17.12.2009 the bank in collusion with the auction purchaser has hurriedly issued the sale certificate and put the auction purchaser in possession of the same.
64. The learned counsel in support of his contention that the civil court jurisdiction is not completely ousted relied upon the decision of the Division Bench of this Court reported in 2008 (1) CTC 471 (S.V.Subramanian vs. Cypress Semiconductor Technology India Private Limited, Bangalore and others).
65. In the said decision while considering Sections 17 and 18 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (51 of 1993), the Division Bench of this Court has held as follows:-
“From the aforesaid provisions, it would be evident that there is no total ouster of jurisdiction of the civil Court. The ouster is by virtue of Section 18 of the 1993 Act, which sets out that no Court or other authority can try matters of recovery of debts. Insofar as the reliefs which do not pertain to debts, on a plain reading of Section 17 of the 1993 Act, are concerned, there can be no doubt that the Civil Court will still retain the jurisdiction Centurion Bank Ltd., v. Indian Lead Ltd., 2000 (100) Comp. Cas.537.”
“(f) Section 17 of the 1993 Act, again fell consideration before the Supreme Court in the decision Indian Bank v. ABS Marine Products (P) Ltd., 2006 (5) SCC 72, wherein, the Supreme Court made the following observation:-
“15. It is evident from Sections 17 and 18 of the Debts Recovery Act that Civil Court’s jurisdiction is barred only in regard to applications by a bank or a financial institution for recovery of its debts. The jurisdiction of Civil Court is not barred in regard to any suit filed by a borrower or any other person against a bank for any relief……..”
“(g) while dealing with the question of grant of injunction restraining the enforcement of the orders passed by the Tribunal, in the case of Industrial Investment Bank of India Ltd., vs. Marshal’s Power & Telecom (I) Ltd., 2007 (1) SCC 106, the Supreme Court observed as follows:-
“8. ……… That apart, to grant an injunction restraining the enforcement of orders passed by the Tribunal having jurisdiction to pass such orders cannot normally be granted unless it is a case of fraud or the existence of some such vitiating factors is established or prima facie made out. Even then, the order of injunction as now granted could be granted only in exceptional cases.”
“(h) In the present case, as the plaintiff is neither the Bank/financial institution nor the borrower, the provisions of Section 17 of of the 1993 Act are not attracted. It is not the case of the Bank that they filed an Application for recovery of its debt from the plaintiff. The plaintiff who is not a party before the DRT, has only alleged fraud played by the parties to obtain order from the DRT and therefore, in view of the decisions of the Supreme Court, as referred to above, we hold that the present suit is not barred by the provisions of Section 18 of the 1993 Act.”
66. The learned counsel also based reliance on the decision of the learned Single Judge reported in 2004 (4) CTC 261 (Arasa Kumar and another vs. Nallammal and others).
67. In the said decision, the learned Single Judge of this Court after referring to several other decisions as laid down in paragraphs 30 and 31 as follows:-
“30. Section 9, C.P.C., and bar of jurisdiction created under relevant Sections in respect of the Co-operative Societies Act, Arbitration and Conciliation Act, 1996 and also Section 29 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 and under Rule 40 of the Income Tax ( Certificate Proceedings) Rules, 1962 an also the bar under the Tamil Nadu Hindu Religious and Charitable Endowments Act, 1959 were all considered by this Court and the Apex Court as referred supra and now, it is manifestly clear that the power under Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act is not absolute and the same is subject to certain restrictions, they are;
(1) that the parties, who filed the suit must be a party to the liabilities created in favour of the secured creditor,
(2) the disputes between the parties could be resolved under the provisions of the Act itself,
(3) that if the claim made by the parties is outside the jurisdiction of the Debts Recovery Tribunal or the appellate tribunal or any action taken or to be taken under this Act and also under the Recovery of Debt due to Banks and Financial Institutions Act, 1993 and the dispute raised by the parties cannot be adjudicated by any of the tribunal or authority, created under the act or under any other act, the right of the parties to approach the Civil Court for appropriate relief cannot be deprived and taken away.
“31. 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 and 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 and Financial Assets and Enforcement of Security Interest Act or the bar under Section 13 of the Act. The Court below has taken into consideration of these aspects and as a matter of fact, these salient features were not brought to the notice of teh Court below, which resulted in passing of erroneous order, which is liable to be set aside.”
68. The learned counsel also submitted that the above decision squarely applies to the facts of the case.
69. In AIR 2010 Madras 68 (M/s. Consolidated Construction Consortium Ltd., v. M/s. Indian Bank) another learned Single Judge of this Court on a consideration of Section 34 of the SARFAESI Act, in paragraph 30, has held as follows:-
“30. Regarding the maintainability of the suit is concerned, I would like to point out that since the plaintiff pleads that fraud was practised on the authority and there are precedents to the effect that if the suit is instituted challenging certain proceedings on the ground of fraud, then such a suit cannot simply be thrown away by invoking Section 34 of the SARFAESI Act.”
70. In the very same decision, in paragraph 43, the learned Single Judge of this Court has observed as follows:-
“43. The tour d’horizon of the learned counsel for the plaintiff would be to the effect that the bank being in an advantageous position, as per the The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 as well as SARFAESI Act cannot be allowed to erode the right of innocent person, by resorting to the draconian provisions of the Act and necessarily the Bank should be injuncted and a fair opportunity should be accorded to the plaintiff to put forth his case during trial.”
71. In that case, accepting the contention of the plaintiff, the learned Judge has granted injunction in the suit as seen from paragraph 43 of the judgment.
72. In 2009 (4) CTC 663 (G.V. Films Limited vs. Indian Bank, Assets Recovery Management Branch-II, 55, Wellington Estate, Ethiraj Salai, Chennai-8), K. Chandru, J., in paragraph 15 has laid down as follows:-
“15. If it is seen in the light of the above precedents, it can still be held that there is some scope for moving the Civil Court notwithstanding the fact that the financial institutions have invoked the provisions of SARFAESI Act.”
73. In the very same decision, the learned Judge has taken a view that injunction can also be granted in appropriate cases. But in that case, taking into consideration the facts of that case refused to grant injunction.
74. In support of the contention that the action of the revision petitioner in issuing the sale certificate and handing over possession pending the civil revision petition and after taking time to file counter in the vacate stay petition amounts to overstepping to frustrate the court proceedings, the learned counsel based reliance on the decision reported in 2009 (2) CTC 68 (Sivagangai Municipality vs. C. Meenakshisundaram and another).
75. In paragraph 13 of the said judgment, it is stated as follows:-
“13. It is also on record that without filing counter affidavits before the learned District Munsif, Sivagangai, and after seeking time to file counter affidavit, the Municipality passed resolution to cancel the licences on 10.11.2008, which is to be treated as overstepping to frustrate the Court proceedings and to non-suit the respondents, who are plaintiffs in the original suits. The Chairman of the Sivagangai Municipality has filed an affidavit stating that the Municipality sought for legal opinion and no prohibitory order of injunction having been passed, the Municipality proceeded with the proposed Municipal Council Meeting and cancelled the licences granted to the petitioners. The said affidavit also discloses the fact that during pendency of the Injunction Applications, resolution was passed cancelling the grant of licences. The said action of the Municipality cannot be condoned and if such kind of over-reaching the Court proceedings are allowed, the litigants may tend to ignore the Court proceedings and act according to their whims and fancies. Such kind of action of the petitioners cannot be condoned as rightly held by the learned District Munsif.”
76. In response to the submissions made by the learned counsel for the first respondent, Mr.V.T. Gopalan, learned Senior Counsel referred to the decision of the Apex Court reported in (1996) 7 SCC 205 (N. Rathinasabapathy and others vs. K.S. Palaniappa Kandar and others), wherein, in paragraph 3, it has been laid down as follows:-
“3. With respect to the High Court we find it difficult to comprehend how the blame could be laid at the doors of the appellants. There is no doubt that the operation of the injunction was limited to three weeks. It is nobody’s case that it was extended thereafter. The appellants showed respect to the order of the Court by stopping the construction as soon as the injunction order was received. After the expiry of three weeks when they did not receive any order continuing the injunction, they proceeded with the construction. As such it is difficult to understand how it can be said that the appellants had shown disrespect tot he order passed by the Court. On the contrary, they showed respect by not proceeding with the construction as soon as the injunction order was received and they continued with the construction only after its period expired. Therefore, the High Court was wrong in stating that the appellants committed gross violation of the spirit and intention of the order “as if it had been effective only for a period of three weeks from the date of pronouncement of the order”. There is no question of the order being in existence after the expiry of three weeks. The expression ‘as if’ used in the abstracted part of the order is totally unwarranted because indisputably, it was effective only for a period of three weeks. There was, therefore, absolutely no violation of the Court’s order. We, therefore, fail to understand how the appellants can be hauled up for contempt under Section 12 of the Contempt of Courts Act. We are clearly of the opinion that there was no disrespect intended or shown and there was no contempt whatsoever. The impugned order of the High Court cannot, therefore, be allowed to stand. ”
77. Basing reliance on the same, the learned Senior Counsel submitted that it cannot be said that the revision petitioner has overstepped to frustrate the Court proceedings.
78. I have considered the aforesaid submissions made on either side and perused the materials available on record.
79. As far as the contention of Mr.V.T. Gopalan, the learned Senior Counsel that the suit is bad for seeking partial partition is concerned, it is the question to be decided by the trial court on the basis of the pleadings and evidence to be let in before it and the same cannot be decided in the C.R.P.
80. The contention of the learned Senior Counsel is that the civil court’s jurisdiction is barred under Section 34 of the SARFAESI Act and the civil court has no jurisdiction to grant injunction and the said submissions is supported by the decision reported in CDJ 2007 MHC 3767 Mr. Justice. S. Ashok Kumar has laid down that the bar under Section 34 of the SARFAESI Act shall not come in the way of adjudication of the civil rights, like declaration of title of the suit properties, partition rights in the ancestral properties etc., which are mortgaged, because such claims/rights made are outside the jurisdiction and adjudication of the Debt Recovery Tribunal or Appellate Tribunal under the said Debt Recovery Acts. However, the learned Judge has held that in such suits the civil court has no jurisdiction to grant either interim stay or interim injunction restraining the secured creditors/bank which is at liberty to proceed with the mortgaged properties for realisation of the amounts. But the learned Judge has not discussed at length or given reasons as to why injunction cannot be granted pending such suits.
81. A similar view has been taken by the Karnataka High Court in the decision reported in AIR 2006 Karnataka 21.
82. The Delhi High Court in CDJ 2007 (DHC) 916 has held that there is a complete bar on the jurisdiction of the civil court to entertain suits or proceedings in respect whereof the Debt Recovery Tribunal is empowered to determine issues raised and no injunction can be granted by a civil court . But the Delhi High Court has not considered as to whether the suits like declaration of title or partition in respect of secured assets are maintainable or not.
83. On the other hand, Mr. G.Ethirajalu the learned counsel for the first respondent based reliance on the following decisions:-
84. In 2008 (1) CTC 471, the Division Bench of this Court, while considering the similar provision contained in Sections 17 and 18 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (51 of 1993), has laid down that there is no total ouster of the jurisdiction of the civil court. The ouster is by virtue of Section 18 of the 1993 Act, which sets out that no Court or other authority can try matters of recovery of debts. Insofar as the reliefs which do not pertain to debts, on a plain reading of Section 17 of the 1993 Act, there can be no doubt that the Civil Court will still retain the jurisdiction.
85. In 2006 (5) SCC 72 (Indian Bank vs. ABS Marine Products (P) Ltd.) , the Apex Court has made the following observation:-
“15. It is evident from Sections 17 and 18 of the Debts Recovery Act that Civil Court’s jurisdiction is barred only in regard to applications by a bank or a financial institution for recovery of its debts. The jurisdiction of Civil Court is not barred in regard to any suit filed by a borrower or any other person against a bank for any relief……..”
86. In 2007 (1) SCC 106 (Industrial Investment Bank of India Ltd., vs. Marshal’s Power & Telecom (I) Ltd.), the Apex Court while considering the scope of Section 34 of the SARFAESI Act has held that the order of injunction could be granted in exceptional cases.
87. In 2004 (4) CTC 261, the learned Single Judge of this Court has elaborately considered the similar question that arose for consideration and has held as follows:-
“It is manifestly clear that the power under Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act is not absolute and the same is subject to certain restrictions, they are;
(1) that the parties, who filed the suit must be a party to the liabilities created in favour of the secured creditor,
(2) the disputes between the parties could be resolved under the provisions of the Act itself,
(3) that if the claim made by the parties is outside the jurisdiction of the Debts Recovery Tribunal or the appellate tribunal or any action taken or to be taken under this Act and also under the Recovery of Debt due to Banks and Financial Institutions Act, 1993 and the dispute raised by the parties cannot be adjudicated by any of the tribunal or authority, created under the act or under any other act, the right of the parties to approach the Civil Court for appropriate relief cannot be deprived and taken away.”
and in that decision, the learned Judge has further held that in such suits, injunction can be granted. Similar view has been taken in AIR 2010 Madras 68 by Mr. Justice G. Rajasuria
88. In the decision reported in 2009 (4) CTC 663 , Mr. Justice K.Chandru, has held that the civil court has got jurisdiction to entertain the suits claiming common law rights, partition suits, declaration of title etc. In the very same decision, the learned Judge has held that the injunction can also be granted in all appropriate cases. Therefore, this Court is of the considered view that the contention of Mr.V.T.Gopalan, the learned Senior Counsel cannot be countenanced.
89. In the light of the aforesaid decisions, the civil Court’s jurisdiction is not totally ousted by Section 34 of the SARFAESI Act and the power to grant interim injunction in such suits which are maintainable is also not taken away by Section 34 of the SARFAESI Act.
90. From the aforesaid decisions, it is clear that the civil court jurisdiction is barred only in regard to the applications filed by a bank/financial institutions for recovery of debts.
91. In the present case, as the plaintiff is neither the borrower nor the guarantor Section 34 of the SARFAESI Act is not attracted. When majority of the decisions have held that the partition suit filed by a person who is not a borrower or guarantor is maintainable in a civil court. That should be taken into consideration while interpreting Section 34 of the SARFAESI Act as a whole.
92. Section 34 reads as follows:-
“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 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 (51 of 1993).”
93. A reading of Section 34 of the SARFAESI Act makes it clear that no civil court shall have jurisdiction to entertain any suit or proceedings in respect of which a DRT or 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 under the said Act or under Act 51 of 1993. But in a suit otherwise maintainable which does not relate to recovery of debts, like the suit for partition, unless interim injunction sought for by the plaintiff restraining the bank from alienating the property is granted and if ultimately if a decree is passed in favour of the plaintiff the subject matter of the suit will not be available for partition and therefore, to preserve the subject matter of the partition suit, the civil court will definitely have jurisdiction to grant interim orders or interim injunction, as the case may be, pending the suit.
94. At the risk of repetition, it has to be pointed out that only in respect of the suits of the nature referred to in the first limb of Section 34 of the SARFAESI Act, the civil court’s jurisdiction to grant injunction is barred but there is no bar in respect of other suits which are maintainable before the civil court, and therefore, the aforesaid submission made by Mr.V.T.Gopalan, the learned Senior Counsel cannot be countenanced.
95. As far as the contention of the learned Senior Counsel that the trial court has not recorded reasons as contemplated under Order 39 Rule 3 C.P.C. , this Court is unable to countenance the said submissions for the following reasons:-
96. A reading of the order, dated 20.11.2009 passed by the Court below shows that it has perused the affidavit and the documents filed along with the petition and has taken note of the fact that the suit for partition. On the basis of the L.R. Certificate filed by the plaintiff, the lower court prima facie satisfied that the plaintiff has got a right in the suit properties. The Court below has also observed that if any alleged alienation is made by the bank (4th respondent in the I.A) then the petitioner’s right will be prejudiced and therefore, it is clear that the Court below has come to the conclusion that prima facie case has been made out and the balance of convenience lies in favour of the first respondent. Having come to such a conclusion to maintain the status quo as on date, the Court below has thought it fit to grant injunction and the Court below has limited it till 27.11.2009. Thus it is clear that the Court below has applied its mind to the facts of the case and has recorded reasons for granting ex parte order of injunction and therefore, there is no violation of Order 39 Rule 3 C.P.C. as sought to be contended by the learned Senior Counsel.
97. Now it has to be seen as to whether in the light of the rejection of the aforesaid two contentions made by the learned Senior Counsel the C.R.P. is maintainable.
98. A catena of the decisions of the Apex Court as well as this Court have held that only if Order 39 Rule 3 C.P.C. has not been complied with and if the Court has exercised the jurisdiction which is not vested in it then this Court can invoke the jurisdiction under Article 227 of the Constitution of India and that is the principle that has been laid down in Sururya Dev Rai’s Case, which is relied upon by Mr.V.T.Gopalan, the learned Senior Counsel.
99. In the decision reported in 2000 (IV) CTC 358 the Apex Court in paragraph 18, it has been laid down as follows:-
“18. Now what remains is the question whether the High Court should have entertained the petition under Article 227 of the Constitution when the party had two other alternative remedies. Though no hurdle can be put against the exercise of the Constitutional powers of the High Court it is a well recognized principle which gained judicial recognition that the High Court should direct the party to avail himself of such remedies one or the other before he resorts to a constitutional remedy. Learned single judge need not have entertained the revision petition at all the party affected by the interim ex pate order should have been directed to resort to one of the other remedies. Be that as if may, now it is idle to embark on the aspect as the High Court had chosen to entertain the revision petition.”
100. It is open to the revision petitioner to approach the Court below to vacate the ex parte order of injunction by filing a counter affidavit in the injunction application. Without approaching the lower court, the revision petitioner has straight away approached this Court under Article 227 of the Constitution of India.
101. For the aforesaid reasons, this Court is not inclined to entertain the above C.R.P.
102. In the affidavit filed in support of the M.P.No.1 of 2009 which is sworn to by one A.L. Ramanathan it is stated that the last date for receiving the sealed tenders is 20.11.2009 till 5.00 p.m. However, on 20.11.2009 the petitioner herein had received a fax message conveying the injunction order granted by the Court below. Therefore, the petitioner deferred the opening of the sealed tenders-cum-auction at 11.30 a.m. and put a public notice. The participants were informed that the next date will be notified later. 103. Conveniently, the time of receipt of the fax message has been omitted to be mentioned in the affidavit. However, the fact remains that on 20.11.2009 itself before 5.00 p.m. the fax message conveying the granting of injunction by the trial court has been received by the revision petitioner. Thereafter, the revision petitioner has filed the above C.R.P. and obtained interim stay on 26.11.2009.
104. According to the petitioner , the reschedule of the opening of the tender to 1.12.2009. In the additional affidavit, which was sworn on 11.12.2009, filed in support of the said petition, it is stated that M/s. Sree Ananda Kumar Mills Ltd., has been declared as successful bidder and they paid 25% of the amount on the same day and the sale was confirmed in their favour i.e. on 2.12.2009. The balance 75% of sale consideration for the sale of machineries is said to have been paid on 8.12.2009 and the sale certificate for the sale of machineries was issued on 8.12.2009 itself.
105. According to the petitioner, the purchaser has paid the entire balance sale consideration for the sale of immovable property on 11.12.2009. In the said affidavit it is further stated that the respondent is in the process of issuing sale certificate to the purchaser in respect of immovable property.
106. Admittedly, the first respondent filed M.P.No.2 of 2009 on 8.12.2009 to vacate the interim stay granted by this Court. After serving papers on the learned counsel for the bank and the matter had been listed before the court on 11.12.2009. But having taken time for filing counter till 15.12.2009 the bank has chosen to receive the entire balance consideration for the immovable property on 11.12.2009 and issued the sale certificate on 12.12.2009 and handed over the possession on 12.12.2009.
107. Thus the aforesaid action of the revision petitioner, as rightly contended by the learned counsel for the first respondent clearly amounts to overstepping to frustrate the court proceedings as has been laid down in 2009 (2) CTC 68.
108. Since the decision reported in (1996) 7 SCC 205 relied upon by Mr.V.T.Gopalan, the learned Senior Counsel relates to a contempt proceedings and the facts are different, the same is not applicable to the facts of this case. In a contempt proceedings the violation of the order passed by the court should be intentional and wilful. A similar yardstick cannot be applied to the facts of the case. Therefore, the said decision is not applicable to the facts of the case.
109. As this Court has held that the C.R.P. is not maintainable, the same is dismissed. Interim stay granted on 26.11.2009 also stands vacated. Once the interim stay granted is vacated, the status quo ante is restored and the injunction granted by the Court below shall automatically come into force and therefore, any auction or confirmation of auction in violation of the injunction granted by the Court below will be nullified.
110. It has to be further pointed out that in the affidavit sworn to by one AL. Ramanathan on 12.4.2010 it is stated as follows:
“5. I state that later when the above CRP was listed before this Hon’ble Court for hearing, in view of the oral undertaking of the 1st respondent herein to deposit Rs.5 Crores, this Hon’ble Court was pleased to observe that the sale held in favour of the auction purchaser is subject to the result of the above Civil Revision Petition. However though the 1st respondent deposited Rs.2 Crores she had failed to deposit the remaining Rs.3 Crores.”
111. Further, Mr. Justice P.P.S. Janarthana Raja, in the order dated 17.12.2009 has observed that in the light of the submission made by the learned counsel for the revision petitioner that the auction was completed and the sale certificate was issued on 12.12.2009 observed as follows:-
“Taking into consideration of the same, the sale is subject to the court confirmation and also the learned counsel appearing for the respondent undertakes to deposit Rs.2.00 crores (Rupees Two crores only) on or before 4.1.2010. Call on 4.1.2010.”
112. Admittedly, pursuant to the said order, the first respondent has deposited a sum of Rs.2 crores on 2.1.2010. In the light of the aforesaid facts of the case and the reasons stated above and in view of the C.R.P. being dismissed, the sale in favour of M/s. Sree Anandkumar Mills will automatically go.
113. Since, pending the C.R.P., the first respondent has deposited a sum of Rs.2.00 crores, she is at liberty to withdraw the same. It is open to the revision petitioner to approach the trial court and seek vacation of the interim injunction granted by it.
With the above directions, the C.R.P. is dismissed. No costs. Connected M.Ps. are also dismissed.
rnb 29.10.2010 Index: Yes/No Internet : Yes/No To The Sub Court, Udumalpet. K. MOHAN RAM, J. RNB C.R.P.PD.No.3777 OF 2009 and M.P.Nos.1 and 2of 2009 and 1 of 2010 DATED:29.10.2010 Pre Delivery Order in C.R.P.No.3777 of 2009 THE HON'BLE MR. JUSTICE K. MOHAN RAM MOST RESPECTFULLY SUBMITTED N. BASKAR, PA.