K.JAYAMMA Vs. SYNDICATE BANK

JUDGEMENT

(1.) Challenge in this appeal is to the order dtd. 3/11/2022 in I.A.No.771/2018 in O.S.No.75/2017 passed by the VI Additional District Judge, Kadapa allowing the petition filed by the respondents/defendants No.1 and 2 under Order 7 Rule 11 (d) of C.P.C. r/w Sec. 34 of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short SARFAESI Act") and rejecting the plaint.

(2.) The factual matrix of the case is thus:

(3.) Pending the suit, the defendant bank filed I.A.No.771/2018 under Order VII Rule 11 (d) of CPC r/w Sec. 34 of SARFAESI Act to reject the plaint on the main ground that the 3rd defendant has mortgaged the subject property and obtained loan and he committed default and thereby the bank initiated recovery proceedings under SARFAESI Act and complied all the necessary proceedings according to the Act and at this juncture the borrower and his henchmen hatched a plan to stall the auction proceedings and filed a collusive suit. It is strongly contended that this suit is barred by Sec. 34 of the SARFAESI Act and if the plaintiffs have any grievance, they have to approach the DRT under Sec. 17 of the SARFAESI Act. The plaintiffs opposed the said petition contending that the defendants 3 and 4 colluded together and created bogus sale deed to usurp the property of the plaintiffs and thus they committed fraud on plaintiffs as well as bank and therefore, the bank cannot proceed with the sale proceedings under SARFAESI Act and the plaintiffs are entitled to avail common law remedy before a civil court to seek declaration of plaintiffs" title over the plaint schedule property and for injunction. The trial Court considering the ambit of Sec. 34 of SARFAESI Act held that the civil court has no jurisdiction to entertain a suit of this nature in view of the embargo created under Sec. 34 of the said Act and accordingly rejected the plaint. Hence, the instant appeal by the plaintiffs.