Case Note & Summary
The appellants, Smt. Savita Bhagwantrao Patil and Chaitanya Bhagwantrao Patil, were the original plaintiffs in a suit filed before the 6th Joint Civil Judge (Jr.Dn.), Amravati, being Regular Civil Suit No.404 of 2005. The suit was filed against Shyam Pukhraj Asopa (defendant No.1) and the Manager/Managing Director of Abhinandan Cooperative Bank Ltd. (defendant No.2). The plaintiffs claimed that appellant No.1's husband, Bhagwantrao Patil, had purchased an open plot and constructed a house, but abandoned her in July 1995. Defendant No.1, a friend of her husband, allegedly took advantage of her situation and persuaded her to execute a nominal sale deed of the property in his favor in December 1997, so that he could obtain a loan from the bank. The plaintiffs contended that the sale deed was nominal and void. The bank had initiated proceedings for loan recovery and issued a notice of attachment under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) on 6.8.2003. The plaintiffs sought a declaration that the sale deed was nominal and void and for injunction against the bank. The trial court framed a preliminary issue under Section 9A of the Code of Civil Procedure, 1908 (CPC) regarding jurisdiction and held that the civil court had no jurisdiction to entertain the suit in view of Section 34 of the SARFAESI Act, which bars civil court jurisdiction in matters relating to securitization. The suit was dismissed. The plaintiffs appealed to the District Judge, Amravati, in Regular Civil Appeal No.135 of 2006, which was dismissed on 2.2.2013. The present second appeal was filed against that dismissal. The High Court, after hearing counsel for the appellants and respondent No.2, found that the courts below had concurrently held that the sale deed was not nominal and that the civil court lacked jurisdiction. The High Court held that no substantial question of law arose and dismissed the appeal, confirming the dismissal of the suit.
Headnote
A) Civil Procedure - Jurisdiction - Preliminary Issue under Section 9A CPC - Civil Court's jurisdiction is barred under Section 34 of SARFAESI Act, 2002, for matters relating to securitization and reconstruction of financial assets - The suit challenging a notice under Section 13(2) of SARFAESI Act is not maintainable in civil court - Held that the trial court correctly dismissed the suit for want of jurisdiction (Paras 1-5). B) Property Law - Nominal Sale Deed - Burden of Proof - The plaintiffs alleged that the sale deed executed in favor of defendant No.1 was nominal and void, but failed to prove the same - The courts below concurrently found that the sale deed was not nominal - Held that no substantial question of law arises (Paras 2-5).
Issue of Consideration
Whether the civil court has jurisdiction to entertain a suit challenging a notice of attachment issued under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), and whether the sale deed executed by the plaintiff in favor of defendant No.1 was nominal and void.
Final Decision
The High Court dismissed the second appeal, confirming the dismissal of the suit by the trial court and the dismissal of the appeal by the District Judge. The court held that no substantial question of law arose.
Law Points
- Civil Court jurisdiction barred under Section 34 of SARFAESI Act
- 2002
- for matters relating to securitization and reconstruction of financial assets
- Section 9A CPC preliminary issue on jurisdiction
- Nominal sale deed not proved
- Bank's notice under Section 13(2) SARFAESI Act cannot be challenged in civil court
