ELSAMMA Vs. KADUTHURUTHY URBAN CO OPERATIVE BANK LTD

JUDGEMENT

(1.) The regular second appeal comes before us on a reference made by the learned single Judge doubting the correctness of the decision in KHDFC Bank Ltd. and others v. Prestige Educational Trust, 2015 4 ILR(Ker) 938.

(2.) The suit in O.S.No.262/2016 is one for a decree of permanent prohibitory injunction restraining the defendants from trespassing or otherwise taking possession of the plaint A schedule property. The plaintiffs assert that the secured asset under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ['SARFAESI Act'] is the plaint B schedule. An attempt to take possession of the plaint A schedule property over which no security interest has been created is the cause of action alleged. It is averred that the plaintiffs are the owners in possession of the plaint A schedule property which lies adjacent to the plaint B schedule property. The defendants are the Bank who is the secured creditor, its General Manager and its authorised officer who have taken measures under the provisions of the SARFAESI Act.

(3.) A preliminary objection was raised by the defendants as regards the maintainability of the suit by filing I.A.No.2344/2016 on the ground that the suit is barred under Section 34 of the SARFAESI Act. The trial court allowed I.A.No.2344/2016 and dismissed the suit as not maintainable thereby also dismissing I.A.No.2305/2016 filed for injunction. The lower appellate court in A.S.No.16/2017 has concurred with the view of the trial court about the maintainability of the suit and dismissed the appeal. The plaintiffs are in regular second appeal contending that the suit is very much maintainable since relief is sought not in respect of a secured asset. The appellants rely on the decision in KHDFC Bank Ltd.'s case (supra) to contend that the bar under Section 34 of the SARFAESI Act does not apply. The respondents on the other hand point out that the aforecited decision is no longer good law in view of Jagdish Singh v. Heeralal and others, 2014 AIR(SC) 371.