Dismissed

Bank of Baroda v. Suman Dilip Kamath

Karnataka HC11 Sept 2024MSA/44/2021

Case brief

AI extract

What is this about?

Third defendant bank challenged the First Appellate Court's order restoring an injunction suit over two cents of land, contending SARFAESI proceedings barred civil jurisdiction. The High Court held that only 35 cents was mortgaged; the plaintiff claimed no right in it, so rejection of the whole plaint was unjustified.

What the court decided

AI extract

Bank of Baroda Vs Suman Dilip Kamath — Banking and Recovery | Karnataka HC (2024)

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NC: 2024:KHC:37420 MSA No. 44 of 2021

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 11^TH DAY OF SEPTEMBER, 2024

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BEFORE

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THE HON'BLE MR JUSTICE V SRISHANANDA MISCELLANEOUS SECOND APPEAL NO.44 OF 2021 (RO)

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BETWEEN:

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BANK OF BARODA FOUNDERS BRANCH LIGHT HOUSE HILL ROAD MANGALORE, D K DIST, PIN-575003 BY ITS C M MR SAKARAM BANDARKAR

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…APPELLANT

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(BY SMT.CHITRA NIRMALA, ADVOCATE)

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AND:

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SUMAN DILIP KAMATH W/O DILIP K KAMATH AGED ABOUT 42 YEARS R/T WING 71, SHANTIVAN BORIWILLI WEST MUMBAI PIN.400091

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Digitally signed by MALATESH K C Location: HIGH COURT OF KARNATAKA

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MRS SUDHA S NAYAK AGED 66 YEARS W/O LATE U SADANANDA NAYAK

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MR U ADITYA NAYAK AGED 41 YEARS S/O LATE U SADANANDA NAYAK

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RESPONDENT NO.2 AND 3 ARE AT ANANDA SUDHA KARANGALPADY, MANGALORE D K DIST-575003

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…RESPONDENTS

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NC: 2024:KHC:37420 MSA No. 44 of 2021

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(BY SRI. VIVEK HOLLA, ADVOCATE FOR R1; SRI BALARAM R. RAO, ADVOCATE FOR R2 AND R3)

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THIS MSA IS FILED UNDER ORDER 43 RULE 1(U) OF CPC, AGAINST THE JUDGMENT AND DECREE DATED 24.02.2021 PASSED IN R.A.NO.238/2019 ON THE FILE OF THE II ADDL.SENIOR CIVIL JUDGE AND CJM., MANGALURU D.K. , ALLOWING THE APPEAL AND SETTING ASIDE THE ORDER DATED 04.11.2019 PASSED ON IA No.III IN O.S.NO.1242/2019 ON THE FILE OF THE PRINCIPAL CIVIL JUDGE, MANGALURU, D.K. ALLOWING THE I.A.No.III FILED UNDER ORDER VII RULE 11 R/W. SECTION 151 OF CPC AND SECTION 34 OF SARFAESI ACT 2002 FOR REJECTION OF PLAINT.

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THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE V SRISHANANDA

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ORAL JUDGMENT

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Heard Smt. Chitra Nirmala, learned counsel for the appellant and Sri Vivek Holla learned counsel for the respondent No.1.

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Third defendant in O.S.No.1242/2019, on the file of Principal Civil Judge, Mangaluru, Dakshina Kannada, is the appellant, challenging the order passed by the First Appellate Court in R.A.No.238/2019, whereby the order passed by the

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NC: 2024:KHC:37420 MSA No. 44 of 2021

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Principal Civil Judge, Mangaluru, Dakshina Kannada, dated 04.11.2019, rejecting the whole plaint is set aside and matter is remitted to the Trial Court, for fresh disposal in accordance with law.

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Smt. Chitra Niramala, learned counsel for the appellant submits that appellant bank has lent money to defendant Nos.1 and 2, keeping 35 cents of the suit property as a mortgage and there was a default by defendant Nos.1 and 2 in respect of the said loan transaction which necessitated the appellant bank to initiate the action against the defendant Nos.1 and 2 under the SARFAESI Act and took possession of the mortgaged property measuring 35 cents and proceeded with the further action.

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The plaintiff being the daughter of first defendant and sister of second defendant, filed a suit seeking the relief of injunction in respect of the following properties which are hereinafter referred to as suit properties to the extent of her share of two cents.

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“ SCHEDULE ’A’

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DESCRIPTION OF THE PROPERTY

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NC: 2024:KHC:37420 MSA No. 44 of 2021

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Non agricultural immovable property situated in Kodialbail

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village of Mangalore taluk and comprised in :

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T.S.No. R.S.No. Extent A-C 1575/10B 58/4B2C 0-35

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Along with Residential House bearing Door No.3-31-2638, 3-312639, 3-31-2639/1 and all mamool and easementary rights appurtenant thereto.

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SCHEDULE ’B’

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DESCRIPTION OF THE PROPERTY

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Non agricultural immovable property situated in Kodialbail village of Mangalore Taluk and comprised in :

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T.S.No. R.S.No. Extent A-C 1575/10B 58/4B2C 0-02

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Along with all mamool and easementary rights appurtenant thereto.

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The Schedule ‘A’ and ‘B’ properties together form a compact block with the following boundaries:

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North : Reserved Road South : Survey line and property of D.H Nazareth East : Portion of the same survey no and property of Gopala Krishna Nayak West : Road

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NC: 2024:KHC:37420 MSA No. 44 of 2021

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The Schedule ‘B’ property is situated to the western side of the schedule ‘A’ Property.”

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Defendant No.3 after appearing before the Trial Court, filed an application under Order VII Rule 11 invoking Section 34 of the SARFAEASI Act contending that the Civil Court has no jurisdiction to entertain a suit for an action initiated by a financial institution under the SARFAEASI Act. The said application was resisted by the plaintiff by filing a separate detailed objection apart from the plaint averments.

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The learned Trial Judge heard the parties on the application filed by the third defendant under Order VII Rule 11 r/w Section 151 CPC was allowed and rejected the entire plaint of the plaintiff filed under Order VII Rule 11 (d) r/w Section 151 CPC r/w Section 34 of SARFAESI Act.

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Being aggrieved by the same, plaintiff filed an appeal before the First Appellate Court.

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Learned Judge in the First Appellate Court, after securing the records noted that the rights of third defendant is only with regard to the 35 cents and the suit schedule property restricted itself to the remaining two cents which were not subject matter of the mortgage and set aside the order of the

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NC: 2024:KHC:37420 MSA No. 44 of 2021

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Trial Magistrate and allowed the appeal and restored the suit for consideration on merits in accordance with law by order dated 24.02.2021.

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The appellant/third defendant has challenged the said order in this appeal.

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Learned counsel for the appellant reiterating the grounds urged in the appeal memorandum, contended that in respect of an action under the SARFAESI Act, Section 34 is a bar for the Civil Court for entertaining any suit and therefore, the action of the First Appellate Court in remitting the suit for fresh disposal in accordance with law is totally uncalled for resulting in miscarriage of justice and sought for allowing the appeal.

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Per contra, Sri Vivek Holla, learned counsel for the respondent No.1/plaintiff contended that in the suit schedule itself it is clearly mentioned that the plaintiff is claiming her right only in respect of two cents of land and the third defendant in the guise of mortgage made by defendant Nos.1 and 2 should not disturb the possession of the plaintiff in respect of two cents of land. Therefore the First Appellate Court was justified in setting aside the order of the Trial Judge

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NC: 2024:KHC:37420 MSA No. 44 of 2021

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and directing the suit to be continued in respect of two cents of the land in the suit property.

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Having heard the parties in detail, this Court perused the material on record meticulously.

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On such perusal of the material on record it is crystal clear that the suit property is with regard to the two cents of land of the plaintiff.

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Admittedly, the subject matter of mortgage is to the extent 35 cents in the very same land for which there is a mortgage deed executed by defendant Nos.1 and 2 in favour of third defendant. Admittedly, action under SARFAESI Act has been taken after classifying the account of the defendant Nos.1 and 2 as a non performing asset.

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Under such circumstances, when the First Appellate Court has noted that two cents of the land is not the subject matter of the mortgage, rejecting the entire plaint by the Trial Court was thus unjustified and in respect of two cents of land, the trial has to be continued.

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Further, since the third defendant interest is only with regard to the 35 cents property for which the plaintiff has

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NC: 2024:KHC:37420 MSA No. 44 of 2021

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no claim, the interest of the appellant is also very important from the very plaint averments itself.

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Accordingly, the order of the First Appellate Court

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cannot be faulted with.

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Hence, the following:

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ORDER

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Appeal is dismissed.

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It is made clear that in the guise of continuing with the suit, plaintiff is not entitled to claim any right insofar as the land that has been mortgaged to the extent of 35 cents to the third defendant by defendant Nos.1 and 2.

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No order as to costs.

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Sd/-

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(V SRISHANANDA) JUDGE

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List No.: 1 Sl No.: 40

Bank of Baroda v. Suman Dilip Kamath

Case brief

What is this about?

What the court decided

Bank of Baroda v. Suman Dilip Kamath

Case brief

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