PUNJAB NATIONAL BANK Vs. BALAKRISHNAN

JUDGEMENT

(1.) 82 cents of land in Survey No. 290/4 belongs to one Haneefa who stood as a guarantor to the loan availed by one P.V. Muhammed. The loan was availed in the capacity of the Proprietor of M/s. Anamalai Stores from the Bank. The plaintiffs in the suit are said to have entered into an agreement for sale dated 3.3.2006 with the said Haneefa. This is followed by the suit in O.S. No. 231/2008 for specific performance of the agreement for sale impleading Haneefa as the first defendant and the Bank as the second defendant. The Bank contends that proceedings under the SARFAESI Act commenced by the notice dated 2.11.2007 issued under S. 13(2) thereof. Subsequently notice under S. 13(4) of the SARFAESI Act was issued on 18.9.2008 and symbolic possession of the property also taken. The property of extent 82 cents is one of the secured asset given to the Bank for the loan availed by M/s. Anamalai Stores. The Bank asserts that the suit for specific performance is barred under S. 34 of the SARFAESI Act. Reliance is placed on the decision in Jagdish Singh v. Heeralal & Ors., 2014 1 SCC 479 to drive home the point. The court below has however by the order impugned held that the suit is maintainable by rendering a finding on the additional issue framed.

(2.) It is true that the alleged sale agreement dated 3.3.2006 is much after the agreement of guarantee dated 6.11.2000 executed by Haneefa in respect of 82 cents. Any right under the agreement for sale can therefore be subject to the mortgage in favour of the Bank only. The right of the Bank to bring such mortgaged property to sale under the SARFAESI Act cannot therefore be doubted. A reference to the decision in Madhan v. Sub Registrar, 2014 1 KerLT 406 rendered under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 is apposite.

(3.) The plaintiff in the instant case does not challenge the proceedings initiated under the SARFAESI Act by the Bank in the suit. The second plaintiff has infact filed S.A. No. 199/2008 on the file of the Debts Recovery Tribunal invoking S. 17 of the SARFAESI Act. The suit in O.S. No. 231/2008 is pure and simple and is only for the relief of Specific Performance against the first defendant Haneefa. Such a suit cannot therefore be held to be barred under S. 34 of the SARFAESI Act as contended by the Bank. The right of the Bank to proceed under the SARFAESI Act remains unhindered and the right if any of the plaintiff under the agreement for sale dated 3.3.2006 is subservient. Whether a decree for specific performance could be granted at all in the circumstances are matters to be considered in the suit under S. 20 of the Specific Relief Act. It is not possible to nip the proceedings in O.S. No. 231/2008 on the file of the court of the Subordinate Judge of Ottappalam in the bud. The court below is directed to dispose of the suit in O.S. No. 231/2008 within a period of six months from today. The Bank is also free to proceed further against the property offered as security interest in the proceedings under the SARFAESI Act.