MADRAS HIGH COURT

Debts Recovery Tribunal has the authority to nullify any action taken wrongfully u/s 17 of the SRFAESI Act.

MADRAS HIGH COURT

SINGLE BENCH

( Before : M. Jeyapaul, J )

SUMATHI — Appellant

Vs.

SENGOTTAIYAN AND OTHERS — Respondent

C.R.P. (PD) No. 1591 of 2009 and M.P. No. 1 of 2009

Decided on : 05-02-2010

Hindu Succession Act, 1956 – Section 6
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) – Section 14, Section 17, Section 34

Counsel for Appearing Parties

R. Marudhachalamurthy, for the Appellant; G. Ramadoss, for Respondent Nos. 1 and 2 and S. Arunkumar, for the Respondent

JUDGMENT

M. Jeyapaul, J.—Heard the submissions made on either side.

2. The plaintiff filed a Suit for permanent injunction restraining defendants 4 and 5, the Punjab Nationalized Bank, who being the secured creditor, initiated recovery proceedings under the Securitisation and Reconstruction of Financial Assests and Enforcement of Security Interest Act, 2002 (hereinafter referred to as SRFAESI Act) not to auction the Suit properties till the rights of the parties are finally decided. The Suit is also filed by the plaintiff for the relief of partition as against his father, brother and sister who have been arrayed as D1 to D3.

3. The application filed by the plaintiff, seeking a prayer for interim injunction restraining the Punjab National Bank from auctioning the suit properties was negatived by the Trial Court. The Appeal preferred by the plaintiff as against the said order passed by the Trial Court also met the same fate.

4. The fourth and fifth defendants got the suit properties mortgaged in their favour by the first and second defendants, after verifying the fact that the properties were purchased by the first defendant way back in the year 1966 and 1974 and the remaining portion of the property purchased by the second defendant in the year 1994. The Punjab National Bank initiated proceedings under SRFAESI Act. The Appeal preferred by the, first defendant before the Debts Recovery Tribunal, Coimbatore was dismissed. The further Appeal preferred by the first defendant before the Debts Recovery Appellate Tribunal came to be dismissed as the conditional order was not complied with by the first defendant. Writ proceedings initiated by the first defendant was also dismissed by this Court. At the time when the Punjab National Bank, who is the secured creditor in this case initiated proceedings u/s 14 of the SRFAESI Act to get physical possession through the District Magistrate and District Collector, Salem, the daughter of the first defendant, who is the plaintiff in this case initiated the present Suit seeking for partition of the very same properties which are the subject matter of the SRFAESI proceedings.

5. The plaintiff having contended that the suit properties are the joint family properties of the family consisting of the plaintiff and defendants 1 to 3 and that therefore, she has got a share in the said property, filed the Suit for partition.

6. The Trial Court as well as the Appellate Court having found that there was no prima facie case and that therefore the plaintiff cannot stall the SRFAESI proceedings initiated by the fourth and fifth defendants, who are the secured creditors, rejected the plea for interim relief sought for by the plaintiff.

7. The learned Counsel appearing for the revision petitioner/plaintiff would submit that the Civil Court has got jurisdiction to entertain not only the Suit but the application filed for interim relief as against the fourth and fifth defendants, who have of course proceeded under the SRFAESI Act. It is his further submission that unless the imminent auction proceedings, initiated by the fourth and fifth defendants are not stalled atleast till the termination of the trial of the partition Suit, the plaintiff will encounter multiplicity of proceedings and her lawful rights also will be knocked away by the Bank.

8. Per contra, the learned Counsel appearing for the fourth and fifth defendants would vehemently contend invoking provisions u/s 34 of the SRFAESI Act that the Civil Court is barred from granting any relief to a party who questions the proceedings initiated under the SRFAESI Act. It is his further submission that if at all the plaintiff had got any grievance as against the measures taken under the SRFAESI Act at the instance of the fourth and fifth defendants, she should have knocked at the doors of the Debts Recovery Tribunal, invoking the provisions u/s 17 of the SRFAESI Act. Coming to the merit of the case, it is submitted by the learned Counsel appearing for the fourth and fifth defendants that the plaintiff has not established a prima facie case that she has got any semblance of right in the suit properties as those suit properties are the self-acquired properties of the first and second defendants. Therefore, he would submit that the Revision deserves to be dismissed.

9. Here is a very pathetic case where the fourth and fifth defendants, who are the secured creditors having got the suit properties mortgaged in their favour by the first and second defendants, were not in a position to take possession of these properties under the SRFAESI Act on account of the present Suit ingeniously filed by the daughter of the first defendant for partition against defendants 1 to 3 and also for permanent injunction as against the fourth and fifth defendants.

10. The first defendant has of course got a portion of the suit properties under the partition that took place between himself, his mother and his brother as on 11.9.1974. Even as per the showing of the plaintiff she was born on 11.9.1994 when the partition took place in the year 1974. A Proviso to Section 6 of the Hindu Succession Act, 1956 which was subjected to amendment in the year, 2005 would read that the coparcenary status conferred under the Amendment Act, would not affect or invalidate any partition that took place prior to 20th day of December, 2004. It is not the case of the plaintiff that a family partition took place on or after 20th day of December, 2004. As already set out, the family partition took place on 11.9.1974. The fourth and fifth defendants have demonstrated before this Court referring to the aforesaid Proviso to Section 6 of the Hindu Succession Act, 1956 that the plaintiff has no prima facie case even for partition as the scope of Section 6 of the Hindu Succession Act, 1956, does not in any way come to the rescue of the plaintiff.

11. True that the plaintiff may institute a Suit for partition before the competent Civil Court but she cannot lawfully challenge the proceedings initiated by the secured creditor under the SRFAESI Act, before the Civil Court as there is a clear bar u/s 34 of the SRFAESI Act. Section 34 of the SRFAESI Act imposes a bar on the Civil Court to grant any relief of injunction with respect to any action taken in pursuance of the power conferred under the SRFAESI Act. Therefore, the Trial Court has no authority to entertain the prayer for injunction sought for by the plaintiff as against the secured creditors who had already initiated proceedings under the SRFAESI Act.

12. It is not as if the plaintiff is remediless. In fact, the first respondent took up the matter both before the Debts Recovery Tribunal as well as Debts Recovery Appellate Tribunal but miserably failed in his attempts. Even if the revision petitioner has got any grievance as against the measures taken under the SRFAESI Act, she can very well knock at the doors of the Debts Recovery Tribunal invoking the provisions u/s 17 of the SRFAESI Act.

13.The Debts Recovery Tribunal has an authority even to invalidate or nullify any action already taken if it is established that any error or wrongful use of the powers has been established before it, invoking u/s 17 of the SRFAESI Act. 

14. In view of the above facts and circumstances, the Court finds that the revision petitioner fails to establish prima facie case for grant of permanent injunction as against the fourth and fifth defendants who are the secured creditors. The Nationalized Bank could not realise the debt on account of the partition Suit initiated by the plaintiff, questioning the initiation of proceedings by the fourth and fifth defendants under the SRFAESI Act also.

15. In view of the above, the Court finds that there is virtually no merit in the Civil Revision Petition preferred by the revision petitioner/plaintiff. Therefore, the Civil Revision Petition stands dismissed. There is no order as to costs. Consequently, the connected Miscellaneous Petition is also closed.

C.R.P. dismissed.


(2010) 90 AIC 913 : (2010) AIR(Madras) 115 : (2010) 3 BankJ 258 : (2010) 3 BC 157 : (2010) 3 CTC 53 : (2010) 2 DRTC 148 : (2010) 30 RCR(Civil) 756

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Categories: MADRAS HIGH COURT, SARFAESI ACT

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