Allowed

M/S. Kotak Mahindra Bank Ltd. v. Dr. K. Priyalatha W/O Suresh

Madras HC2 Jan 2014CRP/3133/2013

Case brief

AI extract

What is this about?

Single-judge High Court quashed an ex parte interim injunction granted by a District Judge which barred a bank from auctioning secured assets under the SARFAESI Act, holding the trial court lacked jurisdiction under Section 34 of the Act.

What did the court decide?

The impugned interim injunction order dated 05.08.2013 in I.A.No.211 of 2013 is set aside; the lower court is directed to dispose of the application within one month.

M/S. Kotak Mahindra Bank Ltd. Vs Dr. K. Priyalatha W/O… — Banking and Recovery | Madras HC (2014)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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Dated : 02.01.2014

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CORAM

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THE HONOURABLE Ms.JUSTICE T.MATHIVANAN

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C.R.P.(PD).No.3133 of 2013

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M/s.KOTAK MAHINDRA BANK LTD., Rep.by its Authorised Offier,

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.... Petitioner

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1.Dr.K.Priyalatha W/o.Suresh

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2.B.S.Krishnan, S/o.Mr.B.A.Somasundaram Chettiar

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3.Mrs.Suganthi Krishnan, W/o.Mr.B.S.Krishnan

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4.B.K.Hemanthkumar S/o.Mr.B.S.Krishnan 5.Mrs.K.Rekha Prakash W/o.Mr.Prakash .... Respondents

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Prayer : Civil Revision Petition filed under Article 227 of the Constitution of India, challenging the ex parte interim injunction dated 05.08.2013 and made in I.A.No.211 of 2013 in O.S.No.207 of 2013, on the file of the learned II Additional District Judge, Salem.

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For Petitioner : Mr.M.Ramalingam

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For Respondent : MrA.K.Kumarasamy

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O R D E R

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This memorandum of civil revision has been directed

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against the fair and decretal order dated 05.08.2013 and made in I.A.No.211 of 2013 in O.S.No.207 of 2013, on the file of the learned II Additional District Judge, Salem and to dismiss the said application as being in derogation of Section 34 of The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

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The revision petitioner herein is the 5^th defendant

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i.e., M/s.KOTAK MAHINDRA BANK LTD., represented by its authorised Officer. The first respondent herein is the plaintiff in the suit in O.S.No.207 of 2013 whereas the respondents 2 to 5 are the defendants 2 to 5. The first respondent/plaintiff has filed the suit in O.S.No.207 of 2013 on the file of the learned II Additional District Judge, Salem as against the respondent 2 to 5 as well as against the revision petitioner/5^th defendant seeking the

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relief of partition and permanent injunction as against the defendants 1 to 4 as well as the revision petitioner/5^th defendant. Along with the suit the first

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respondent/plaintiff has also filed an interlocutory application in I.A.No.211 of 2013 under Order 39 Rule 1 and 2 r/w. Section 151 of C.P.C., to grant an order of interim injunction restraining the 5^th defendant their men, agents or anybody acting under or through them from auctioning the suit property pending disposal of the suit.

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It is pertinent to note here that the above said interlocutory application in I.A.No.211 of 2013 was filed on 01.08.2013 and on 05.08.2013, the learned trial judge had proceeded to pass an order, without giving notice to other side, granting the relief of ad interim injunction restraining the 5^th respondent/M/s.KOTAK MAHINDRA BANK LTD., from conducting any auction with respect to the suit property till 05.09.20136 as it includes the first respondent/plaintiffs 1/4^th share. After granting the order of interim injunction notice was ordered to the respondents. Impugning the correctness of the said order the revision petitioner/5^th defendant M/s.KOTAK MAHINDRA BANK LTD., has approached this court with this revision petition.

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It is significant to note here that the order of interim injunction has been passed as against the revision

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petitioner/5^th defendant M/s.KOTAK MAHINDRA BANK LTD., from conducting any auction with respect to the suit property till 05.09.2013. The main grievance of the revision petitioner/5^th defendant is that the impugned order of the learned second Additional District Judge, Salem is in total negation of Section 34 of the SARFAESI Act. While advancing his arguments Mr.Ramalingham learned counsel appearing for the revision petitioner has brought to the notice of this court that the 5^th defendant had proposed to brought the property on auction on 07.08.2013 under the provision of the SARFAESI Act for relisation of a huge amount of Rs.343 Crores, but without understanding the nuance of the provision of Section 34 of the SARFAESI Act

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the learned trial judge had erroneously granted the relief of ad interim injunction against the 5^th defendant for which he did not have jurisdiction. He has also drawn the attention of this court to the provisions of Section 34 of the Act.

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Section 34 envisages that “No Civil Court shall

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have jurisdiction to entertain any suit or proceeding in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any Court

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or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993).”

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Section 34 has crystallised the factum that no

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injunction shall be granted by any Court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993).

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It is obvious to note here that the suit properties

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are the secured assets of the revision petitioner Bank. The suit has been filed under the guise of seeking the relief of partition against the respondents 2 to 5 herein which includes the revision petitioner being the 5^th defendant in the suit. If really the suit is for partition, the revision petitioner/5^th defendant is not a necessary party. But the suit has been filed with an oblique to prevent the revision petitioner/5^th defendant

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from brining the suit property for sale and also to thwart

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the proposed auction scheduled to be held on 07.08.2013. The suit itself ought not have been taken on file by the

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learned II Second Additional District Judge, Salem.

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T.MATHIVANAN,J

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prm

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On account of granting of ad interim injunction against the revision petitioner being the secured creditor he is apparently prejudiced and injured and therefore this court finds that the learned II Additional District Judge has erroneously exercised his jurisdiction as against the provisions of Section 34 of the SARFAESI Act and therefore the impugned order dated 05.08.2013 is liable to be set aside.

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Accordingly, the revision petition is allowed. The impugned order dated 05.08.2013 is set aside. The learned II Additional District Judge, Salem is directed to dispose the application in I.A.No.211 of 2013 as expeditiously as possible preferably within a period of one month after inviting the objection from the revision petitioner without loss of further time.

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02.01.2014

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Index : Yes / No Internet: Yes / No

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prm

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C.R.P.(PD).No.3133 of 2013

M/S. Kotak Mahindra Bank Ltd. v. Dr. K. Priyalatha W/O Suresh

Case brief

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What did the court decide?

M/S. Kotak Mahindra Bank Ltd. v. Dr. K. Priyalatha W/O Suresh

Case brief

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What did the court decide?

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