Smt. Noushad Begam vs Punjab National Bank and 4 Others

A.F.R.

Judgment Reserved on- 20.11.2025 Judgment Delivered on- 25.11.2025 Neutral Citation No. - 2025:AHC:210827

Court No. - 38

Case :- FIRST APPEAL No. - 819 of 2025 Appellant :- Smt. Noushad Begam Respondent :- Punjab National Bank & 4 Others Counsel for Appellant :- Shishir Kumar Tiwari Counsel for Respondent :- Sanjai Singh

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Hon'ble Sandeep Jain, J.

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The instant first appeal under section 96 CPC has been filed by the plaintiff against the impugned judgment and decree dated 08.5.2025 passed by the court of Civil Judge(Senior Division) Bulandshahar in O.S. No. 382 of 2024 Smt.Noushad Begam vs. Punjab National Bank and others, whereby the application of defendant no.3 under Order 7 Rule 11(d) CPC has been allowed and consequently, the plaint has been rejected on the ground that the suit was barred under Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002( SARFAESI Act, 2002).

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The facts leading to the present appeal in a nutshell are as under:-

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(A)The plaintiff-appellant filed O.S. No. 382 of 2024 in the trial court against Punjab National Bank(defendant no.1) and Harish Kumar Verma(defendant no.5), the proprietor of Messers Dharamveer Jewellers(defendant no.4) with the averments that she is a very poor lady, whose husband Sabir was a labourer employed in the occupation of cleaning, polishing and repairing gold and silver jewellery with defendant no.4. She further averred that in the beginning of year 2017 defendant no.5, Harish KumarVerma told her husband that since he remains in the possession of valuable goldsilver jewellery during the process of cleaning and repairing it, as such, for securing the above valuable jewellery, surety was required and then her husband had deposited the sale deed of a house, which was in her name, with the above defendant, since her husband was not having any property in his name. She further averred that her above sale deed was kept by defendant no.5 as surety for giving her husband employment.

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(B)The plaintiff further averred in the plaint that the defendants Punjab National Bank and Harish Kumar Verma colluded with each other and consequently, the bank sanctioned a cash credit loan of ₹

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32 lakhs on 6.7.2017 in favour of the above firm of the defendant, which came into the knowledge of the plaintiff after having oral talks with the defendant Harish KumarVerma. It was further averred that the bank sanctioned the above loan to the defendant no.4 & 5 illegally without obtaining the consent of the plaintiff. The sale deed of the plaintiffs house was deposited in equitable mortgage, fraudulent guarantee papers were prepared on her behalf and for causing illegal gain to the defendant firm and for causing wrongful loss to the plaintiff, the above loan was sanctioned by the bank to the defendant firm.

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(C)It was further averred by the plaintiff that she is a poor, illiterate, parda-nashin woman of rural background, who is unaware of the legal niceties. She neither deposited the sale deed of her house as a surety nor stood as a guarantor for the loan sanctioned by the bank to defendant no. 4 & 5, she never executed any guarantee agreement, surety agreement etc. in favour of the bank for the alleged loan and if any such document was having her signature/thumb impression, then it was a fraudulent and fabricated document because she never executed any such agreement/document in favour of the bank. She further averred that she has only the disputed house of area 48 square yard, to reside with her family and as such, she had no reason to give surety of this house to the bank.

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(D)She further averred that she was informed by the defendant bank that she was a guarantor of the loan sanctioned to defendant no. 4 & 5, to which she had protested and then, the defendant bank had assured her in the year 2020 that it will not take any action against her and she will be absolved from the guarantee/surety given by her, to which she had believed.

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(E)She further averred that the defendant Harish KumarVerma had obtained the sale deed of the house by practising fraud on her husband, which was subsequently used malafidely for obtaining loan from the defendant bank. She further averred that on the basis of her fraudulent guarantee, the defendant bank intends to realise the loan from her disputed house, on the pretext that the house has been mortgaged in favour of the defendant bank.

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(F)She further averred that the defendant bank had assured her that they will firstly realise the loan from the mortgaged shop of the defendant no.5 and other property situated in Sarai Ghasi,pargana and tehsil Sikandrabad, District Bulandshahar, which was currently valued at about ₹ 80 lakhs, on which the first charge is of the defendant bank, from which the defendant bank may realise its loan, in accordance with law.

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(G)She further averred that the defendant bank and Harish KumarVerma has practised fraud on her and also betrayed her, malafidely and illegally gave her notice dated 22.3.2024 which was received by her on 5.4.2024, and by reading it, she became aware that the defendant bank has not absolved her as guarantor, who intends to illegally auction her house for realising the unpaid loan. She averred that the principal borrower of the alleged cash credit loan of 32₹ lakhs obtained from the defendant bank, are defendant no. 4 & 5, who are solely responsible for paying the above loan under equitable mortgage. The plaintiff has been served with the above illegal notice by the defendant bank, under which the defendants have got no right to sell her disputed house. She further averred that her liability can never be joint and several with defendant no. 4 & 5.

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The plaintiff has claimed the following reliefs from the court:-

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(a)By a declaratory decree granted in favour of the plaintiff against the defendant's, it be declared that the alleged guarantee/surety executed by the plaintiff for securing cash credit loan sanctioned on 6.7.2017 was fabricated, fraudulent, fake, void and ineffective, which was not binding on the plaintiff and on the basis of these documents, the defendant no.1 to 3 do not have any legal right to auction her disputed house, in pursuance of alleged illegal and void notice dated 22.3.2024.

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(b)By decree of permanent injunction granted in favour of the plaintiff against the defendant no.1 to 3, the above defendants be restrained from auctioning her house for realisation of the alleged loan sanctioned on 6.7.2017 in favour of defendant no.4 & 5 ,in pursuance of fraudulent and fabricated surety/guarantee documents and illegal notice dated 22.3.2024.

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The defendant no.3, the authorised officer of the Bulandshahar Divisional Office of the defendant Punjab National Bank, moved an application under Order 7 Rule 11 CPC before the trial court on the ground that the defendant no.4 had obtained a loan from the defendant Punjab National Bank of 32 lakhs in the year 2017, and₹ as guarantee, the disputed property was mortgaged with the defendant bank by the plaintiff on the request of defendant no.4. It was further submitted that since the loan was not repaid by the defendant no.4, as such his loan account was declared non performing asset (NPA) and then, the defendant bank gave a demand notice under Section 13(2) of the SARFAESI Act,2002 to the defendant no.4. Thereafter, the defendant bank had given a notice of taking possession under Section 13(4) of the above Act read with Rule 8(1) of the Security

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Interest(Enforcement) Rules, 2002.

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It was further submitted by the defendant that on 20.8.2019 the defendant bank, for obtaining the physical possession of the disputed property, had moved an application before the District Magistrate under Section 14 of the above Act, which was allowed on 23.1.2020 and thereafter, the Senior Supdt. of Police, Bulandshahar was directed to provide the police force to the defendant bank on demand. It was further submitted that on 22.3.2024 the defendant bank for auctioning the disputed property under Rule 8(6) of the above Rules of 2002 had given notice to the defendant no.4 and the plaintiff. It was further submitted that under Section 34 of the SARFAESI Act,2002, if any action was taken under this Act, then the civil court has got no jurisdiction to interfere and grant an injunction or issue any declaratory decree. The only remedy was to prefer an appeal under Section 17 of the SARFAESI Act,2002 before the concerned Debt Recovery Tribunal(DRT). It was specifically submitted by the defendant that since regarding the disputed property proceedings under the SARFAESI Act,2002 have been initiated by the bank as such, under Section 34 of the above Act, the Court has got no jurisdiction to try and decide the suit. The suit was not legally maintainable and was liable to be dismissed at the threshold.

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The plaintiff opposed the above application of the defendant bank on the ground that she has not obtained the loan, she has been fraudulently made guarantor of the alleged loan whereas, she had not executed any guarantee deed in favour of the defendant bank. She further submitted that a fraud was practised upon her, which has been elaborately mentioned by her in the plaint, as such, suit was cognizable by civil court because the DRT was not vested with the right to decide a case where there were allegations of fraud and collusion. She further averred that the officials of the defendant bank had colluded with defendant no. 4 & 5, who had prepared fraudulent guarantee papers of the plaintiff which was used by the defendant no. 4 for obtaining loan from the defendant bank with malafide intention as guarantor, which has been challenged by her in the suit. She specifically stated that since she has filed the suit on the ground of collusion and fraud practised on her by the defendants as such the suit was not barred under Section 34 of the SARFAESI Act,2002. She further submitted that the relief claimed by her can only be granted by a civil court, which cannot be granted by the DRT. The defendant's application under Order 7 Rule 11 CPC was not legally maintainable and was liable to be dismissed.

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The trial court by impugned order dated 8.5.2025 has allowed the application of defendant no. 3 under Order 7 Rule 11 CPC on the ground that it is the admitted case of the plaintiff that a notice has

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been issued to her under Section 13 of the SARFAESI Act,2002 for auctioning the disputed property, against which an appeal under Section 17 of the above Act lies before the Debt Recovery Tribunal (DRT). The trial court further opined that the plaintiff has cleverly drafted the plaint without specifically stating in which manner, how and when a fraud was practised upon her so as to enable her to circumvent the prohibition of Section 34 of the above Act. The trial court concluded that it lacked jurisdiction to hear and decide the suit, since the suit was barred under Section 34 of the SARFAESI Act,2002 and accordingly, the plaint was rejected under Order 7 Rule 11(d) CPC, aggrieved against which, the plaintiff has filed the instant first appeal under section 96 of the CPC.

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Learned counsel for the plaintiff-appellant submitted that the plaintiff being an illiterate,parda- nashin woman belonging to a rural background, a fraud was practised upon her by the defendant Punjab National Bank and Harish Kumar Verma, the proprietor of Messers Dharamveer Jewellers. He submitted that the plaintiff never went to the bank to mortgage her house for securing the alleged loan obtained by the defendant firm, from the bank. He further submitted that the deceased husband of the plaintiff was a labourer, who used to clean and repair gold – silver jewellery of the defendant firm and in order to secure the above jewellery, the sale deed of the plaintiffs house was given as surety to the defendant firm, but the alleged house of the plaintiff was never mortgaged in favour of the defendant bank for securing the loan obtained by the firm, from the defendant bank. Learned counsel further submitted that since a fraud was practised on the plaintiff by the defendants, the civil court had jurisdiction in this matter as such, the suit could not have been dismissed at the threshold under Order 7 Rule 11(d) CPC, moreso when a triable issue was raised by the plaintiff. It was prayed that the appeal be admitted, allowed and the matter be remanded to the trial court for deciding it on merits.

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Learned counsel for the defendant-respondent Punjab National Bank submitted that the plaintiffs plea of fraud was false, which was not substantiated from any documentary evidence. The plaintiff had willingly mortgaged her disputed house in favour of the defendant bank for securing the loan obtained by the defendant firm. The plaintiff had also stood guarantor for the loan obtained by the defendant firm, from the bank and had also executed mortgage deed, guarantee deed and other papers in favour of the defendant bank willingly, without any coercion, as such, the plea of the plaintiff that a fraud was practised upon her and the alleged documents executed by her in favour of the defendant bank are fraudulent, is untenable. He further submitted that the case set up by the plaintiff in the plaint is unbelievable and improbable. Learned counsel submitted that even in

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such cases, the jurisdiction of the civil court is barred under Section 34 of the SARFAESI Act,2002 since, proceedings under Section 13(4) of this Act have already been initiated by the defendant bank, and consequently, the possession of the disputed house, which was mortgaged by the plaintiff in favour of the bank, has already been legally taken by the bank, which was put to auction as such, the plaintiff can challenge the above proceedings under Section 17 of the above Act, by initiating appropriate legal proceedings before the concerned Debt Recovery Tribunal (DRT). In support of his above contention, he has relied upon the case law of Punjab and Sind Bank vs. Frontline Corporation Ltd. (2023) 16 SCC 331 and Bank of Baroda Zonal officer vs. Jagdeep Singh and another, Neutral Ctation 2024 AHC 98107. With these submissions it was prayed that the appeal is meritless and be dismissed at the admission stage.

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I've heard the learned counsel of the parties, perused the impugned judgment and documents submitted with the appeal and the case law submitted by the parties.

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The Apex Court in the case of Mardia Chemicals Ltd. and others vs. Union of India and others (2004)4 SCC 311(by 3 Judges) , while analysing the provisions of SARFAESI Act,2002, held as under:-

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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 subsection (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

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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.

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However, to a very limited extent jurisdiction of the civil court can also be invoked, where for example, the action of the secured creditor is alleged to be fraudulent or his claim may be so absurd and untenable which may not require any probe whatsoever or to say precisely to the extent the scope is permissible to bring an action in the civil court in the cases of English mortgages. We find such a scope having been recognized in the two decisions of the Madras High Court which have been relied upon heavily by the learned Attorney General as well appearing for the Union of India, namely, V. Narasimhachariar [AIR 1955 Mad 135] , AIR at pp. 141 and 144, a judgment of the learned Single Judge where it is observed as follows in para 22: (AIR p. 143)

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“22. The remedies of a mortgagor against the mortgagee who is acting in violation of the rights, duties and obligations are twofold in character. The mortgagor can come to the court before sale with an injunction for staying the sale if there are materials to show that the power of sale is being exercised in a fraudulent or improper manner contrary to the terms of the mortgage. But the pleadings in an action for restraining a sale by mortgagee must clearly disclose a fraud or irregularity on the basis of which relief is sought: Adams v. Scott [(1859) 7 WR 213, 249] . I need not point out that this restraint on the exercise of the power of sale will be exercised by courts only under the limited circumstances mentioned above because otherwise to grant such an injunction would be to cancel one of the clauses of the deed to which both the parties had agreed and annul one of the chief securities on which persons advancing moneys on mortgages rely. (See Ghose, Rashbehary: Law of Mortgages, Vol. II, 4th Edn., p. 784.)”

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The Apex Court in the case of Punjab and Sind Bank (supra) while analysing section 34 of the SARFAESI Act,2002, held as under:-

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The issue as to the exclusion of the jurisdiction of a civil

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court is no more res integra. The provisions of Section 34 of the Sarfaesi Act have been considered by a Bench of three Judges of this Court in Mardia Chemicals Ltd. v. Union of India [Mardia Chemicals Ltd. v. Union of India, (2004) 4 SCC 311] . It will be relevant to refer to the following observations of this Court in the said case : (SCC pp. 349-50, paras 50-51)

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“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 subsection (4) of Section 13.

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However, to a very limited extent jurisdiction of the civil court can also be invoked, where for example, the action of the secured creditor is alleged to be fraudulent or his claim may be so absurd and untenable which may not require any probe

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whatsoever or to say precisely to the extent the scope is permissible to bring an action in the civil court in the cases of English mortgages. We find such a scope having been recognised in the two decisions of the Madras High Court which have been relied upon heavily by the learned Attorney General as well appearing for the Union of India, namely, V. Narasimhachariar [V. Narasimhachariar v. Egmore Benefit Society, 1954 SCC OnLine Mad 352 : AIR 1955 Mad 135] , AIR at pp. 141 & 144, a judgment of the learned Single Judge where it is observed as follows : (SCC OnLine Mad para 22 : AIR para 22)

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‘22. The remedies of a mortgagor against the mortgagee who is acting in violation of the rights, duties and obligations are twofold in character. The mortgagor can come to the court before sale with an injunction for staying the sale if there are materials to show that the power of sale is being exercised in a fraudulent or improper manner contrary to the terms of the mortgage. But the pleadings in an action for restraining a sale by mortgagee, must clearly disclose a fraud or irregularity on the basis of which relief is sought : Adams v. Scott [Adams v. Scott, (1859) 7 WR 213, 249] . I need not point out that this restraint on the exercise of the power of sale will be exercised by courts only under the limited circumstances mentioned above because otherwise to grant such an injunction would be to cancel one of the clauses of the deed to which both the parties had agreed and annul one of the chief securities on which persons advancing moneys on mortgages rely. (See Ghose, Rashbehary : Law of Mortgages, Vol. II, 4th Edn., p. 784.)’ ”

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It could thus be seen that this Court in Mardia Chemicals [Mardia Chemicals Ltd. v. Union of India, (2004) 4 SCC 311] 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 sub-section (4) of Section 13 of the Sarfaesi Act. It has been held that the bar

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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.

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This Court has further held in Mardia Chemicals [Mardia Chemicals Ltd. v. Union of India, (2004) 4 SCC 311] that, to a very limited extent jurisdiction of the civil court can also be invoked, where for example, the action of the secured creditor is alleged to be fraudulent or his claim may be so absurd and untenable which may not require any probe whatsoever or to say precisely to the extent the scope is permissible to bring an action in the civil court in the cases of English mortgages.

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In the present case, it cannot be said that the action of the secured creditor i.e. the appellant is either fraudulent or that its claim is so absurd or untenable which may not require any probe whatsoever. It is further to be noted that the Sarfaesi Act itself provides remedies to an aggrieved party in view of the provisions of Sections 17 and 18.

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The Apex Court in the case of Electrosteel Castings Ltd. vs. UV Asset Reconstruction Co. Ltd. and others (2022)2 SCC 573 , while analysing whether plaintiff has raised the plea of fraud to circumvent the provision of Section 34 of the SARFAESI Act,2002, held as under:-

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7.1. It is the case on behalf of the plaintiff-appellant herein that in the plaint there are allegations of “fraud” with respect to the assignment agreement dated 30-6-2018 and it is the case on behalf of the plaintiff-appellant herein that assignment agreement is “fraudulent” inasmuch as after the full payment as per the approved resolution plan under IBC and the original corporate debtor is discharged, there shall not be any debt by the plaintiff-appellant herein as a guarantor and therefore assignment deed is fraudulent. Therefore, it is the case on behalf of the plaintiff-appellant herein that the suit in which there are allegations of “fraud” with respect to the assignment deed shall be maintainable and the bar under Section 34 of the Sarfaesi Act shall not be

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applicable.

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7.2. However, it is required to be noted that except the words used “fraud”/“fraudulent” there are no specific particulars pleaded with respect to the “fraud”. It appears that by a clever drafting and using the words “fraud”/“fraudulent” without any specific particulars with respect to the “fraud”, the plaintiff-appellant herein intends to get out of the bar under Section 34 of the Sarfaesi Act and wants the suit to be maintainable. As per the settled proposition of law mere mentioning and using the word “fraud”/“fraudulent” is not sufficient to satisfy the test of “fraud”. As per the settled proposition of law such a pleading/using the word “fraud”/“fraudulent” without any material particulars would not tantamount to pleading of “fraud”.

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In Bishundeo Narain [Bishundeo Narain v. Seogeni Rai, 1951 SCC 447 : 1951 SCR 548] in para 22, it is observed and held as under : (SCC p. 454)

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“22. … Now if there is one rule which is better established than any other, it is that in cases of fraud, undue influence and coercion, the parties pleading it must set forth full particulars and the case can only be decided on the particulars as laid. There can be no departure from them in evidence. General allegations are insufficient even to amount to an averment of fraud of which any court ought to take notice however strong the language in which they are couched may be, and the same applies to undue influence and coercion. See Order 6 Rule 4, Civil Procedure Code.”

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8.1. Similar view has been expressed in Ladli Parshad Jaiswal [Ladli Parshad Jaiswal v. Karnal Distillery Co. Ltd., (1964) 1 SCR 270 : AIR 1963 SC 1279] and after considering the decision of the Privy Council in Bharat Dharma Syndicate Ltd. v. Harish Chandra [Bharat Dharma Syndicate Ltd. v. Harish Chandra, 1937 SCC OnLine PC 24 : (1936-37) 64 IA 143] , it is held that a litigant who prefers allegation of fraud or other improper conduct must place on record precise and specific details of these charges. Even as per Order VI Rule 4 in all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, wilful default, or undue influence, particulars shall be stated in the pleading. Similarly in K.C. Sharma & Co. [Union of

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India v. K.C. Sharma & Co., (2020) 15 SCC 209] it is held that “fraud” has to be pleaded with necessary particulars. In Ram Singh [Ram Singh v. Gram Panchayat Mehal Kalan, (1986) 4 SCC 364] , it is observed and held by this Court that when the suit is barred by any law, the plaintiff cannot be allowed to circumvent that provision by means of clever drafting so as to avoid mention of those circumstances by which the suit is barred by law of limitation.

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8.2. In T. Arivandandam v. T.V. Satyapal [T. Arivandandam v. T.V. Satyapal, (1977) 4 SCC 467] , it is observed and held in para 5 as under : (SCC p. 470)

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“5. We have not the slightest hesitation in condemning the petitioner for the gross abuse of the process of the court repeatedly and unrepentantly resorted to. From the statement of the facts found in the judgment of the High Court, it is perfectly plain that the suit now pending before the First Munsif's Court, Bangalore, is a flagrant misuse of the mercies of the law in receiving plaints. The learned Munsif must remember that if on a meaningful — not formal — reading of the plaint it is manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue, he should exercise his power under Order 7 Rule 11 CPC taking care to see that the ground mentioned therein is fulfilled. And, if clever drafting has created the illusion of a cause of action, nip it in the bud at the first hearing by examining the party searchingly under Order 10 CPC.An activist Judge is the answer to irresponsible law suits.”

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8.3. A similar view has been expressed by this Court in the recent decision in P. Selathal [Canara Bank v. P. Selathal, (2020) 13 SCC 143] .

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Having considered the pleadings and averments in the suit more particularly the use of word “fraud” even considering the case on behalf of the plaintiff, we find that the allegations of “fraud” are made without any particulars and only with a view to get out of the bar under Section 34 of the Sarfaesi Act and by such a clever drafting the plaintiff intends to bring the suit maintainable despite the bar under Section 34 of the Sarfaesi Act, which is not permissible at all and which cannot be approved. Even otherwise it is required to be noted that it is the case on

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behalf of the plaintiff-appellant herein that in view of the approved resolution plan under IBC and thereafter the original corporate debtor being discharged there shall not be any debt so far as the plaintiff-appellant herein is concerned and therefore the assignment deed can be said to be “fraudulent”.

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The aforesaid cannot be accepted. By that itself the assignment deed cannot be said to be “fraudulent”. In any case, whether there shall be legally enforceable debt so far as the plaintiff-appellant herein is concerned even after the approved resolution plan against the corporate debtor still there shall be the liability of the plaintiff and/or the assignee can be said to be secured creditor and/or whether any amount is due and payable by the plaintiff, are all questions which are required to be dealt with and considered by the DRT in the proceedings initiated under the Sarfaesi Act.

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It is required to be noted that as such in the present case the assignee has already initiated the proceedings under Section 13 which can be challenged by the plaintiffappellant herein by way of application under Section 17 of the Sarfaesi Act before the DRT on whatever the legally available defences which may be available to it. We are of the firm opinion that the suit filed by the plaintiff-appellant herein was absolutely not maintainable in view of the bar contained under Section 34 of the Sarfaesi Act. Therefore, as such the courts below have not committed any error in rejecting the plaint/dismissing the suit in view of the bar under Section 34 of the Sarfaesi Act.

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In view of the above and for the reasons stated above, the present appeal fails and the same deserves to be dismissed and is accordingly dismissed. However, it will be open for the appellant herein to initiate appropriate proceedings before the DRT under Section 17 of the Sarfaesi Act against the initiation of the proceedings by the assignee-Respondent 1 herein under Section 13 of the Sarfaesi Act inter alia on the ground : (1) that the assignee cannot be said to be secured creditor so far as the appellant is concerned; (2) that there is no amount due and payable by the plaintiff-appellant herein on the ground that in view of the proceedings under IBC against the corporate debtor and the corporate debtor being discharged after the approved resolution plan, there shall not be any enforceable debt against the appellant. If such an

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application is filed within a period of two weeks from today the same be considered in accordance with law and on merits after complying with all other requirements which may be required while filing the application under Section 17 of the Sarfaesi Act.

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From the law laid down by the Apex Court in the case of Mardia Chemicals Ltd. (supra)and Punjab and Sind Bank (supra) it is apparent that in cases where the secured creditor has initiated proceedings under SARFAESI Act,2002, against the borrower/guarantor, then only to a very limited extent jurisdiction of the civil court can also be invoked, where the action of the secured creditor is alleged to be fraudulent or his claim may be so absurd and untenable which may not require any probe whatsoever or to say precisely to the extent the scope is permissible to bring an action in the civil court in the cases of English mortgages. Otherwise, the jurisdiction of the civil court is barred under Section 34 of the above Act.

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From the law laid down by the Apex Court in the case of Electrosteel Castings Ltd. (supra) it is evident that if the allegations of fraud are made without any particulars,only with a view to get out of the bar enacted under Section 34 of the SARFAESI Act,2002 and by such a clever drafting the plaintiff intends to make the suit maintainable despite the above bar, it is neither permissible nor it can be approved. It was further held by the Apex Court that the plaintiff can avail the remedy by moving application under Section 17 of the above Act before the DRT, on all legal defences available to it.

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In the instant case the plaintiff – appellant has also raised a plea of fraud being practised on her in her plaint but the essential particulars of fraud such as when, in which manner and by whom fraud was practised on her, while sanctioning the loan by the defendant bank in favour of the defendant firm, has not been disclosed by the plaintiff. It is apparent that only in order to circumvent the bar of Section 34 of the SARFAESI Act,2002 the plaintiff has raised the plea of fraud in the plaint, which is not substantiated by essential particulars of fraud in accordance with Order 6 Rule 4 CPC, as such, the trial court has not committed any illegality in allowing the application of the defendant bank under Order 7 Rule 11(d) CPC and consequently, rejecting the plaint.

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The plaintiff can pursue her remedy by moving appropriate application under Section 17 of the SARFAESI Act,2002 by taking all the legal defences available to her, in accordance with law. It is made clear that this Court has not expressed any opinion on merits on the case set up by the plaintiff in her plaint in O.S. no. 382 of 2024. Accordingly, the instant appeal is meritless and is liable to be

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dismissed at the admission stage.

¶81

The instant appeal is hereby dismissed at the admission stage under Order 41 Rule 11 CPC . The impugned judgment and decree of the trial court dated 08.5.2025 is affirmed.

¶82

Order Date: 25.11.2025. Jitendra/Himanshu/Mayank

¶83

(Sandeep Jain,J)

¶84

15

¶85

Digitally signed by :- HIMANSHU YADAV High Court of Judicature at Allahabad

Smt. Noushad Begam v. Punjab National Bank and 4 Others

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Smt. Noushad Begam v. Punjab National Bank and 4 Others

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