Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – s.34 – Equitable mortgage created by respondent Nos. 2 to 4 in respect of the subject flat in favour of appellant-bank – Failure to repay the loan amount – Claim for title over the subject flat by respondent no.5 and 6 (writ petitioners) – DRT and DRAT held that document “MOU” relied upon by respondents no.5 and 6 was created after the equitable mortgage and it was unregistered document which would not confer any right, title and interest in their favour in the said flat and on that basis rejected the relief claimed by respondent no.5 and 6 to restrain the bank from proceeding with the auction of the flat – High Court held that issue involved disputed facts and directed respondent no.5 and 6 to contest the matter before proper forum – On Bank’s appeal, held: The mandate of s.13 and in particular s.34 of 2002 Act clearly bars filing of civil suit – For, no civil court can exercise jurisdiction to entertain any suit or proceeding in respect of any matter which a DRT or DRAT is empowered by or under this Act to determine and no injunction can be granted by any Court or authority in respect of any action taken or to be taken in pursuance of any power conferred by or under the Act – The fact that the stated flat is the subject matter of a registered sale deed executed by the respondent Nos. 5 and 6 in favour of respondent Nos. 2 to 4 and sale deed has been deposited with the Bank along with the share certificate and other documents for creating an equitable mortgage and the Bank has initiated action in that behalf under the 2002 Act, is indisputable – It is also not disputed that respondent no.5 is in physical possession of the subject flat – If so, the question of permitting the respondent nos.5 and 6 to approach any other forum for adjudication of issues raised by them concerning the right, title and interest in relation to the said property, cannot be countenanced – High Court did not analyse the efficacy of the concurrent finding of fact recorded by the DRT and DRAT but opined that the same involved factual issues warranting production of evidence and a full-fledged trial – The approach of High Court is not tenable in law – Bank/Banking. Allowing the appeal, the Court
HELD: 1. The mandate of Section 13 and, in particular, Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 clearly bars filing of a civil suit. For, no civil court can exercise jurisdiction to entertain any suit or proceeding in respect of any matter which a DRT or DRAT is empowered by or under this Act to determine and no injunction can be granted by any Court or authority in respect of any action taken or to be taken in pursuance of any power conferred by or under the Act. The fact that the stated flat is the subject matter of a registered sale deed executed by the respondent Nos. 5 and 6 (writ petitioners) in favour of respondent Nos. 2 to 4 and which sale deed has been deposited with the Bank along with the share certificate and other documents for creating an equitable mortgage and the Bank has initiated action in that behalf under the 2002 Act, is indisputable. If so, the question of permitting the respondent Nos.5 and 6 (writ petitioners) to approach any other forum for adjudication of issues raised by them concerning the right, title and interest in relation to the said property, cannot be countenanced. The High Court has not analysed the efficacy of the concurrent finding of fact recorded by the DRT and DRAT but opined that the same involved factual issues warranting production of evidence and a full-fledged trial. [Para 6][481-G-H; 482-A-C]
2. The High Court could not have directed the Bank to deposit Rs.25 Lacs in an interest earning deposit and the profits of the said deposit to enure to the benefit of the successful party. Such a direction was wholly uncalled for. [Para 8][482-F-G]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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