ADITYA BIRLA HOUSING FINANCE LIMITED Vs. RAJEEV

JUDGEMENT

(1.) Challenging the order passed by learned 8th Joint Civil Judge Senior Division, Nagpur in SCS No.1040/2023 below Exh.15 by which application for rejection of plaint under Order VII Rule 11 of the CPC which is rejected by order dtd. 1/11/2023, the present revision application is preferred.

(2.) The applicant is original defendant No.4, a Financial Institution registered as the Securitization and Reconstruction Company pursuant to Sec. 3 of the The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act ). The non-applicant No.1 is the original plaintiff who filed the suit for declaration, permanent injunction, and cancellation of sale deed. As per the contention of the plaintiff, he is owner of structure comprising apartment/flat No.401, situated at 4th floor of the building to be known as "Shraawan Apartment" admeasuring 820 square feet and part and parcel of land khasra No.49/4 of mauza Wathoda. Original defendant No.1 Durwas Vaidya has purchased land bearing plot No.46 from Kailash Sahakari Gruh Nirman Sanstha vide sale deed dtd. 6/9/1985. Defendant No.1 who was owner of the said plot developed the said plot by constructing building. The plaintiff approached the defendant No.1 to purchase a flat and entered into registered agreement of sale for consideration of Rs.30.00 lacs on 15/11/2019. Since the construction work was in progress, it was agreed between the plaintiff and defendant No.1 that the sale deed would be executed on completion of remaining work. Defendant No.1 also executed power of attorney in favour of the plaintiff for executing sale deed on 15/11/2019. As per the plaintiff, though the sale deed was not executed in his favour, possession was handed over to him on 15/11/2019. The sale deed was executed in his favour on 8/7/2021. It is alleged by the plaintiff that on 7/2/2023 he came to know that the applicant who is original defendant No.4 issued possession notice. On enquiry, it revealed that defendant No.1 fraudulently executed power of attorney in favour of defendant No.2 dtd. 6/7/2020 authorizing defendant No.2 to sale the suit property. The defendant No.2 executed sale deed of suit property in favour of defendant No.3 on 20/5/2021. Defendant No.3 mortgaged the suit flat availing loan of Rs.27,42,291.00 from defendant No.4 that is the present applicant. As the defendant No.3 committed defaults in repayments, the present applicant had classified the loan account as non performing assets (NPA) and consequently took the recourse of provisions of the SARFAESI Act against the defendant No.3. The applicant issued possession letter on 7/2/2023. It is alleged by the plaintiff that defendant No.3 had availed the loan facility by mortgaging the said flat on 20/5/2021 although plaintiff was legal and absolute owner of the said flat and was in possession since 15/11/2019. It is further alleged that applicant who is defendant No.4 governed by the RBI and was under legal obligation to verity or scrutinize or proper verification before sanctioning the loan which is not followed by the applicant and, therefore, the plaintiff issued notice to the applicant on 9/6/2023. As per the contention of the plaintiff, the said flat cannot be subject- matter of possession under the SARFAESI Act . The plaintiff already approached to the Debt Recovery Tribunal and challenged the notice under Sec. 17 of the SARFAESI Act and the present suit is filed for declaration and injunction.

(3.) On service of the notice, the present applicant appeared and filed an application under Order VII Rule 11 of the CPC on the ground that in view of Sec. 34 of the SARFAESI Act, the civil court has no jurisdiction to try and entertain the suit. The further ground raised is that the plaintiff has already initiated the action under Sec. 17 of the SARFAESI Act and on the similar cause of action, the suit is not maintainable. It is further contended that in fact no cause of action arose against the applicant as the suit property is lawfully mortgaged by the owner. Defendant No.4 has taken the possession of the property on 7/2/2023 pursuant to the provisions of the SARFAESI Act . Learned CJSD by observing that civil court has jurisdiction to decide the civil rights of the plaintiff who is neither borrower nor guarantor to the loan advanced by the applicant to the defendant No.3 and, therefore, the suit is not maintainable and rejected the application.