In a petition filed before the Himachal Pradesh High Court to challenge an order dated 06-04-2022 by the Civil Judge, Solan, whereby an application filed by the petitioners under Order VII Rule 11 of the Civil Procedure Code, 1908 (CPC) seeking rejection of the claim was dismissed, a Single Judge Bench of Justice Ajay Mohan Goel concurred with the Civil Court and held that the issues being asserted would be better decided by way of trial before the Civil Court and dismissed the petition.
The respondent instituted a suit for a declaration, a permanent prohibitory injunction, and a mandatory injunction against UCO Bank and another person, asserting that the respondent was the lawful owner and in possession of the subject property, as per a sale deed executed on 11-12-2019.
The respondent contended that she was under the bona fide impression that the subject property was free from all charges, but the petitioners proceeded to take possession of the property based on certain mortgage documents executed by the previous owner. Hence, the suit was filed alleging that the bank officials, along with the previous owner, had defrauded the respondent.
The Civil Judge had rejected the application of the petitioners to reject the plaint on the ground that the Civil Court had no jurisdiction to entertain the same in light of the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), and for lack of an enforceable cause of action against the respondent.
The Court perused Sections 17, 34, and 35 of the SARFAESI Act, along with various decisions of the Supreme Court, and noted that the respondent was a stranger to the bank as she had neither raised a loan nor was a guarantor in the issue which led to the initiation of the action by the bank.
The Court opined that the first relief prayed for by the petitioners under Section 17 could not be granted by any stretch of imagination since the Civil Court is the appropriate forum for the same. The Court clarified that it was not suggesting that the facts mentioned by the respondent in the civil suit were true, but only that the suit, as well as its maintainability, would be better decided by a trial.
The Court concurred with the findings of the Civil Court and found no reason to interfere under Article 227 of the Constitution. It was stated that the petitioners had the right to agitate the issues they asserted under Sections 17 and 34 of the SARFAESI Act, but the facts of the case warranted a trial before a Civil Court. The Court said that since the bank was taking coercive steps against the respondent, there was a cause of action in her favour against the bank.
Thus, the petition was dismissed.
Appearances:
For Petitioner(s) – Mr. Jitender Pal Ranote
For Respondent(s) – Mr. Bimal Gupta, Mr. Varun Thakur
