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Judgment
MANMEET PRITAM SINGH ARORA, J (ORAL):
The present suit has been filed seeking partition by metes and bounds of the property bearing no. A-20, 2nd floor, Northern Side, Naraina Vihar, New Delhi-28, measuring 398.275 Sq. yards (‘suit property’) in favour of the plaintiff and against the defendant herein. It needs to be clarified that the partition is sought with respect to the constructed 2nd floor flat.
It is stated that initially the plaintiff and his brother Sh. Pushp Anand were joint owners of the freehold residential property bearing No. 20, Block-A, measuring 796.55 Sq. yards situated at Naraina Vihar, New Delhi qua conveyance deed dated 06.04.2000. It is stated that the said property was partitioned between the brothers vide registered partition deed dated 25.06.2004. The partition was effected by metes and bounds with respect to the land and the superstructure standing thereon.
It is stated that in the pursuance to said partition, plaintiff became the owner of the [old constructed] ground floor, first floor, second floor with entire terrace over second floor, falling on the Northern Side part of the said property, on the plot of land admeasuring 398.275 Sq. yards (‘Northern side plot’).
It is stated that this Northern side plot was re-constructed by the plaintiff and a new residential building was constructed comprising of basement, stilt, ground floor, first floor, second floor, third floor with a terrace.
It is stated that the plaintiff agreed to sell the 2nd floor flat in the newly constructed building to the defendant herein albeit 39.275 sq. yds. only. It is stated the plaintiff vide registered sale deed dated 09.07.2019, sold 39.275 sq. yds. of the 2nd floor flat to the defendant for a sale consideration of Rs. 2.37 Crores. It is stated, however, that the actual physical possession of the 2nd floor flat was not handed over to the defendant, as it was agreed between the parties that it will be handed over after carrying out partition by metes and bounds of the 2nd floor flat.
Learned counsel for the plaintiff states that consequent to the said sale deed dated 09.07.2019, though the plaintiff and the defendant became joint owners of the 2nd floor flat; the plaintiff is the owner to the extent of 359 Sq. yards and defendant is the owner to the extent of 39.275 Sq. yards of the 2nd floor flat constructed on the Northern side plot. He states that the present suit has been filed for partition of the 2nd floor flat.
He states that the defendant’s ownership share in the 2nd floor flat has been mortgaged by the defendant in favour of TATA Capital Housing Finance Ltd. (‘TATA Capital’), and since the defendant defaulted in repayment of the loan money, TATA Capital initiated proceedings under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) against the defendant. He states that a Possession Notice dated 19.09.2023 under Section 13(4) of the SARFAESI Act was pasted on the suit property by the Court Receiver for taking possession of the suit property, wherein incorrectly the entire area of 398.275 was mentioned.
He states that it is the grievance of the plaintiff that since the defendant mortgaged only his portion of 2nd floor flat purchased vide sale deed dated 09.07.2019 admeasuring 39.275 sq. yards, therefore, TATA Capital can initiate enforcement proceedings against portion of the property owned by the defendant only and accordingly, TATA Capital cannot take possession of the property [measuring 359 sq. yards] owned by the plaintiff.
Aggrieved by the Possession Notice dated 19.09.2023, the plaintiff has filed the present suit, thereby, seeking a decree of partition by metes and bound of the 2nd floor flat, so as to demarcate the shares in the said flat owned by the plaintiff and the defendant herein.
In pursuance to the order dated 21.08.2024, learned counsel for the plaintiff has handed over a copy of the judgment dated 29.04.2024 passed in W.P.(C) 5900/2024 titled Yashpal Anand v. Tata Capital Housing Finance Ltd. and Ors., wherein the challenge laid by the plaintiff herein to the interim orders in the enforcement proceedings filed by the plaintiff before the DRT-II has been dismissed.
This Court has heard the submissions of the plaintiff’s counsel and has perused the record. This Court has also called for the file of W.P.(C) 5900/2024 and perused the same. The registry is directed to place the record of W.P.(C) 5900/2024 in this suit file.
The present suit though filed with the registry on 31.08.2023 was not pursued for listing until 07.10.2023. The plaintiff cleared the defects on 17.10.2023 and thereafter suit was cleared by registry for listing on 18.10.2023. The suit was first listed on 19.10.2023 and simplicitor adjourned at the request of the plaintiff. Similarly, the matter was thereafter listed on 16.11.2023, 19.01.2024, 07.05.2024 and 21.08.2024; however, on each of these dates the matter was simply adjourned at the request of the plaintiff. Consequently, the suit has not been registered till date.
A perusal of the record of W.P.(C) 5900/2024 reveals that simultaneously on 25.09.2023, the plaintiff herein filed an application under Section 17 (1) of the SARFAESI Act which was numbered as SA/345/2023. The said application was filed for seeking quashing of the Possession Notice dated 19.09.2023 issued by the Court Receiver and as an interim measure the plaintiff herein sought stay of the Possession Notice and all consequential proceedings including stay of auction. The reliefs sought in the said application read as under:
“6. RELIEF SOUGHT: -
In view of the facts mentioned above, the Applicant prays for the following relief(s):
(i)To set aside/quash the impugned Possession Notice dated 19.09.2023 issued by the Ld. Receiver qua the Subject property and all steps if taken subsequent to the said notice; and
(ii)To set aside notice issued under 13(2), possession notice dated and all subsequent proceedings initiated by Respondent No.1 under Securitization Act, 2002;
(iii)Cost of the application may also be awarded in favour of the applicant; and
(iv)Any other order or further relief which this Hon'ble Tribunal deems fit, just and proper in the facts and circumstances of the case, may be granted in favour of the applicant and against the respondents; and
7. INTERIM RELIEF: -
That vide impugned possession notice dated 19.09.2023, the right of the applicant qua the subject property is under threat as the possession of the subject property is scheduled to be taken on 04.10.2023 at 12.00 PM. The said Possession Notice as well as the entire proceedings of the Respondent No.1 having been initiated under the provisions of the Securitization Act, are liable to be quashed/set aside for the reasons as aforementioned.
That the Applicant has a prima facie case in its/his favour and has all chances of success in the present application. The balance of convenience also lies in favour of the Applicant and against the Respondent.
That in case the possession of the subject property which is slated to be taken on 04.10.2023 is not stayed, the Applicant shall suffer irreparable loss and injury which cannot be compensated in monetary terms.
It is therefore most respectfully prayed that till the final disposal of the present Securitization Application; this Hon'ble Tribunal may graciously be pleased to pass an ex-parte ad-interim order as prayed: -
(i)Stay the Possession Notice dated 04.10.2023 issued by the Ld. Receiver qua the Subject property;
(ii)Restrain/stay the action under SARFASI Act sought to be acted upon by the Respondent and Respondent be restrained to give effect to the said letters/notices or otherwise to take any step or to take steps for any coercive action such as sale by bid/tender or by public auction or otherwise qua the Subject property.
(iii)To grant any other relief/s as this Ld. Tribunal deems fit and proper in the facts and circumstances of the case.”
The grounds on which the plaintiff filed SA/345/2023, are substantially the same averments as set out in the present suit i.e., that the subject matter of the sale deed dated 09.07.2019 is 39.275 sq. yards and therefore, the entire 2nd floor flat cannot be sold in auction.
The Debt Recovery Tribunal-II, Delhi (‘DRT-II’) returned a finding that since the sale deed records that the possession of the 2nd floor flat has been handed over to the vendee i.e., the defendant herein, the plea of the plaintiff that he is in possession of any portion of the 2nd floor flat is contrary to the recorded terms of the sale deed. The DRT-II therefore, rejected the prayer of interim relief and declined to stay the operation of Possession Notice dated 19.09.2023, whereby, the Court Receiver was scheduled to take over the physical possession on 04.10.2023. The order passed by DRT-II is dated 03.10.2023.
The plaintiff herein assailed the said order 03.10.2023 before the Debt Recovery Appellate Tribunal (‘DRAT’) by filing Misc. Appeal No. 254/2023. The DRAT dismissed the appeal after returning prima facie finding that upon perusal of the terms of the sale deed dated 09.07.2019, it appears that mention of the land area as 39.275 sq. yards in the sale deed is a mere typographical error and the intended area to be sold with the sale of the 2nd floor flat was 398.275 sq. yards. DRAT accordingly, vide order dated 28.02.2024 upheld the order of DRT-II and dismissed the appeal.
In the interregnum, due to the non-grant of stay orders, the Court Receiver has admittedly taken over possession of the 2nd floor flat in furtherance of Possession Notice dated 19.09.2023.
The plaintiff herein challenged the order(s) dated 28.02.2024 passed by DRAT and 03.10.2023 passed by the DRT-II before the Division Bench of this Court in W.P.(C) 5900/2024. The Division Bench as well vide judgment dated 29.04.2024 dismissed the writ petition and upheld the orders passed by the DRAT and DRT-II as regards the physical possession of the property resting with defendant herein in accordance with the contents of the sale deed dated 09.07.2019.
The Division Bench of this Court in W.P.(C) 5900/2024, DRAT and DRT-II have all thus, returned prima facie finding that the entire 2nd floor flat stood sold to the defendant herein vide sale deed dated 09.07.2019.
However, both DRAT and the Division Bench clarified that the rights of the plaintiff which are pending adjudication in SA/345/2023 will be decided on its own merits. The SA/345/2023 is pending adjudication before DRT-II and is next listed on 18.12.2024. The principal contention of the plaintiff herein, as to whether the subject matter of the sale deed dated 09.07.2019 is the sale of entire 2nd floor flat constructed on the Northern side plot or only 39.275 sq. yards of the 2nd floor flat, is the issue arising for adjudication in the said application SA/345/2023, which is pending adjudication before the DRT-II. The subsequent purchaser of the 2nd floor flat will also be a party in those proceedings before the DRT-II.
The plaintiff is agitating the identical issue of joint ownership of 2nd floor flat in the present suit and the relief of partition is the consequential relief being sought in the suit. The relief of partition cannot be granted without first deciding the issue as to whether plaintiff retained any ownership rights in the constructed 2nd floor flat after execution of the sale deed 09.07.2019 in favour of the defendant. The adjudication of the fundamental issue being agitated by the plaintiff in the present suit falls within the jurisdiction of DRT-II under Section 17 of the SARFAESI Act and therefore, the present suit is barred under Section 34 of the SARFAESI Act. In this regard, it would be relevant to refer to the judgment(s) of the Supreme Court in Jagdish Singh v. Heeralal and Ors.1 and Punjab and Sind Bank v. Frontline Corporation Ltd.2
In the case of Jagdish Singh (supra), it was opined that a suit for partition would not be maintainable in a situation where proceedings under SARFAESI Act had been initiated. The said judgment has also been referred to by the Supreme Court in Sree Anandhakumar Mills Ltd. v. Indian Overseas Bank3, The relevant paragraphs of Jagdish Singh (supra) are reproduced as under:
“19.The expression “any person” used in Section 17 is of wide import and takes within its fold not only the borrower but also the guarantor or any other person who may be affected by action taken under Section 13(4) of the Securitisation Act. Reference may be made to the judgment of this Court in Satyawati Tondon case.
20.Therefore, the expression “any person” referred to in Section 17 would take in the plaintiffs in the suit as well. Therefore, irrespective of the question whether the civil suit is maintainable or not, under the Securitisation Act itself, a remedy is provided to such persons so that they can invoke the provisions of Section 17 of the Securitisation Act, in case the Bank (secured creditor) adopt any measure including the sale of the secured assets, on which the plaintiffs claim interest.
21.Section 34 of the Securitisation Act ousts the civil court jurisdiction. For easy reference, we may extract Section 34 of the Securitisation Act, which is as follows:
“34.Civil court not to have jurisdiction.—No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993).”
22.The scope of Section 34 came up for consideration before this Court in Mardia Chemicals Ltd. and this Court held as follows: (SCC p. 349, para 50)
“50.It has also been submitted that an appeal is entertainable before the Debts Recovery Tribunal only after such measures as provided in sub-section (4) of Section 13 are taken and Section 34 bars to entertain any proceeding in respect of a matter which the Debts Recovery Tribunal or the Appellate Tribunal is empowered to determine. Thus before any action or measure is taken under sub-section (4) of Section 13, it is submitted by Mr Salve, one of the counsel for the respondents that there would be no bar to approach the civil court. Therefore, it cannot be said that no remedy is available to the borrowers. We, however, find that this contention as advanced by Shri Salve is not correct. A full reading of Section 34 shows that the jurisdiction of the civil court is barred in respect of matters which a Debts Recovery Tribunal or an Appellate Tribunal is empowered to determine in respect of any action taken ‘or to be taken in pursuance of any power conferred under this Act’. That is to say, the prohibition covers even matters which can be taken cognizance of by the Debts Recovery Tribunal though no measure in that direction has so far been taken under sub-section (4) of Section 13. It is further to be noted that the bar of jurisdiction is in respect of a proceeding which matter may be taken to the Tribunal. Therefore, any matter in respect of which an action may be taken even later on, the civil court shall have no jurisdiction to entertain any proceeding thereof. The bar of civil court thus applies to all such matters which may be taken cognizance of by the Debts Recovery Tribunal, apart from those matters in which measures have already been taken under sub-section (4) of Section 13.”
23.Section 13, as already indicated, deals with the enforcement of the security interest without the intervention of the court or tribunal but in accordance with the provisions of the Securitisation Act.
24.Statutory interest is being created in favour of the secured creditor on the secured assets and when the secured creditor proposes to proceed against the secured assets, sub-section (4) of Section 13 envisages various measures to secure the borrower's debt. One of the measures provided by the statute is to take possession of secured assets of the borrowers, including the right to transfer by way of lease, assignment or realising the secured assets. Any person aggrieved by any of the “measures” referred to in sub-section (4) of Section 13 has got a statutory right of appeal to the DRT under Section 17. The opening portion of Section 34 clearly states that no civil court shall have the jurisdiction to entertain any suit or proceeding “in respect of any matter” which a DRT or an Appellate Tribunal is empowered by or under the Securitisation Act to determine. The expression “in respect of any matter” referred to in Section 34 would take in the “measures” provided under sub-section (4) of Section 13 of the Securitisation Act. Consequently, if any aggrieved person has got any grievance against any “measures” taken by the borrower under sub-section (4) of Section 13, the remedy open to him is to approach the DRT or the Appellate Tribunal and not the civil court. The civil court in such circumstances has no jurisdiction to entertain any suit or proceedings in respect of those matters which fall under sub-section (4) of Section 13 of the Securitisation Act because those matters fell within the jurisdiction of the DRT and the Appellate Tribunal. Further, Section 35 says, the Securitisation Act overrides other laws, if they are inconsistent with the provisions of that Act, which takes in Section 9 CPC as well.
25.We are of the view that the civil court jurisdiction is completely barred, so far as the “measures” taken by a secured creditor under sub-section (4) of Section 13 of the Securitisation Act, against which an aggrieved person has a right of appeal before the DRT or the Appellate Tribunal, to determine as to whether there has been any illegality in the “measures” taken. ....” (Emphasis Supplied)
The relevant paragraph of Punjab and Sind Bank (supra) are reproduced hereinbelow:
“23.It could thus be seen that this Court has held that the jurisdiction of the civil court is barred in respect of matters which a DRT or an Appellate Tribunal is empowered to determine in respect of any action taken “or to be taken in pursuance of any power conferred under this Act”. The Court has held that the prohibition covers even matters which may be taken cognizance of by the DRT though no measure in that direction has so far been taken under subsection (4) of Section 13 of the SARFAESI Act. It has been held that the bar of jurisdiction is in respect of a proceeding which matter may be taken to the Tribunal. It has categorically been held that any matter in respect of which an action may be taken even later on, the civil court shall have no jurisdiction to entertain any proceeding thereof. The Court held that the bar of civil court thus applies to all such matters which may be taken cognizance of by the DRT, apart from those matters in which measures have already been taken under sub-section (4) of Section 13 of the SARFAESI Act.” (Emphasis Supplied)
Since the property sold vide sale deed dated 09.07.2019 to the defendant has been mortgaged with TATA Capital and the claim made by the plaintiff is adverse to the interests of TATA Capital, it is a necessary party and it is already opposing the claims of the plaintiff in SA/345/2023. Similarly, the subsequent purchaser of the 2nd floor flat will also be a necessary party and he/she would also be represented in DRT-II. Therefore, the issues being agitated by the plaintiff in the present suit cannot be adjudicated since the same issues are being decided in DRT-II. The plaintiff as well was aware of this fact and after filing the suit has not taken any steps till date to prosecute the suit as noted hereinabove. The plaintiff having already availed its appropriate statutory remedy by approaching DRT-II is estopped from pursuing the present suit.
The present suit is accordingly rejected as being barred in law as per Order VII Rule 11(d) of the Code of Civil Procedure, 1908.
Pending applications are disposed of.