TARNIKANTI SRINIVAS Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) The only substantial question of law which is sought to be raised by the appellant/defendant in this second appeal is on maintainability of the suit in view of Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short, SARFAESI Act).

(2.) The plaintiff/respondent-State Bank of India lent money to the defendant under house building loan after obtaining necessary security. When the defendant committed default in repayment of the said debt, the plaintiff- Bank invoked provisions of SARFAESI Act and brought the security property to sale, conducted auction and realised part of the loan amount. Even after the said exercise under the SARFAESI Act, the plaintiff could not realise the total loan amount from the property given as security. Therefore, the plaintiff filed the suit in the trial Court for recovery of Rs.3,03,797/- with interest at 12% p.a. of Rs.2,21,035/- from the date of suit till the date of decree and with future interest at 6% p.a. from the date of decree till realisation, being the balance due under the loan account. After trial, the trial Court granted the decree and it was confirmed by the lower appellate Court on appeal by the defendant.

(3.) The appellant's counsel in this second appeal contended that Section 34 of SARFAESI Act stands as a bar for entertaining the suit by the civil Court. Section 34 of the SARFAESI Act reads as follows: