1. This application is directed against the order dated August 19, 2010 passed by the learned Civil Judge (Senior Division), 4th Court, Alipore in Title Suit no.1245 of 2010 thereby rejecting an application under Order 7 Rule 11 of the C.P.C. filed by the defendants.
2. The plaintiff / opposite party herein instituted a suit being Title Suit No.1245 of 2010 against the petitioners and the proforma opposite party praying for the relief that the plaintiff is a lawful tenant in respect of the premises-in-suit under the defendant no.1 and is not liable to be evicted without due process of law, that the plaintiff is entitled to hold the tenancy right over the said premises-in-suit at the exclusive of any claim, demand, right and interest of the defendant nos.2 and 3, their men and agents, permanent injunction restraining the defendants, their men and agents from disturbing plaintiff’s peaceful possession over the premises-in-suit and other reliefs.
3. The petitioners entered appearance in the said suit and filed an application under Order 7 Rule 11 of the C.P.C. for rejection of the plaint on the ground that the said suit is a bar in view of the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (henceforth shall be described as SARFAESI Act, 2002). The plaintiff filed a written objection to the said application. Upon hearing both the sides, the learned Trial Judge has rejected the said application. Being aggrieved, the defendants / petitioners have preferred this application. Now, the point for consideration is whether the impugned order should be sustained.
4. Upon hearing the learned counsel for the parties and on going through the materials on record, I find that the plaintiff / opposite party herein instituted the said suit contending, inter alia, that he was inducted as a tenant under the defendant no.1 / proforma opposite party herein by a tenancy agreement dated January 1, 2008. The plaintiff has claimed that he is in possession of the premises-in-suit and he is paying rent for the premises to the landlord as per agreement dated January 1, 2008. He has also contended in the plaint that the landlord issued a notice upon him on March 10, 2010 intimating that the defendant nos.2 and 3 had taken action and initiated proceedings against him under the SARFAESI Act, 2002 and as such, he asked the tenant to vacate the premises-in-suit.
5. The plaintiff has also annexed the copy of the letter dated March 10, 2010 served upon him by the defendant no.1 and also the notice dated March 3, 2010 upon the defendant no.1 by the defendant nos.2 and 3 / petitioner herein and those notices have been marked as annexures ‘B’ and ‘C’ to the said suit. From the copy of the said notice issued by the petitioners, it reveals that the premises-in-suit is covered within the security to have the loan by the landlord from the petitioners. Thus, from the copy of the plaint and annexures filed by the plaintiff in respect of the plaint, it is evident that the petitioners are the secured creditors in respect of the loan taken by the landlord from the petitioners. From the said annexure, it also reveals that the secured creditors issued a notice upon the debtor under Section 13(2) of the said SARFAESI Act, 2002. Thus, on perusal of the plaint supported by annexures, it is evident that the dispute between the parties is covered by the provisions of the SARFAESI Act, 2002.
6. Under the circumstances, if any lease is granted, subsequently, such lease shall be subject to the liabilities of the landlord to the secured creditors unless otherwise dealt with under Section 65 A of the Transfer of Property Act. The landlord has asked the tenant to vacate the premises on receiving a notice under Section 13(2) of the said SARFAESI Act, 2002. From the above facts and circumstances, it is evident that the reliefs sought for by the plaintiff are to be taken into consideration in view of the provisions of the SARFAESI Act, 2002. Mr. Anirban Bose appearing for the petitioners has referred to the decision of Mardia Chemicals Ltd. & ors. v. Union of India & ors. reported in (2004) 4 SCC 311 and submits that according to the ratio of this decision, the said suit is not maintainable.
7. For convenience, I am referring to the relevant paragraph nos.50 and 51 of the said decision:-
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 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 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.
51. 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.
8. 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 at pp.141 and 144, a judgment of the learned Single Judge where it is observed as follows in Para 22: (AIR p.143)
“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. 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, 4 th Edn. p.784.)”.
9. The ratio of the said decision has been summed up in paragraph no.80 and for the purpose of disposal of the instant application I am quoting the paragraph no.80.5 of the said decision: As discussed earlier in this judgment, we find that it will be open to maintain a civil suit in civil court, within the narrow scope and on the limited grounds on which they are permissible, in the matters relating to an English mortgage enforceable without intervention of the court. Therefore, I find that this decision clearly indicates that a separate suit by a tenant of this nature is not maintainable at all. A civil suit could be maintained within the narrow scope as indicated in paragraph nos.50, 51 and 80.5 of the said decision, that is, when the action of the secured creditor is alleged to be fraudulent English mortgages etc.
10. Whenever a tenant faces such a situation as indicated above, the tenant is not at all remediless under the provisions of the SARFAESI Act, 2002. He may take recourse under the provisions of Section 17(1) of the SARFAESI Act, 2002.
For convenience I am quoting the said Section below:-
17. Right to appeal.- (1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor or his authorized officer under this Chapter, [may make an application along with such fee, as may be prescribed] to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken: [Provided that different fees may be prescribed for making the application by the borrower and the person other than the borrower.] [Explanation. – For the removal of doubts it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection of the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under sub-section (1) of Section 17.]
11. Therefore, if the petitioner has any grievance, he may file an application to the concerned Debts Recovery Tribunal having jurisdiction within the time schedule as indicated in the said section. Therefore, this decision is sufficient to come to the conclusion that the plaint is liable to be rejected under the provisions of Order 7 Rule 11(d) of the C.P.C.
12. In order to clarify the word ‘any person’ as indicated in Section 17(1) of the said Act, Mr. Bose has referred to the decision of Arun Kumar Sarswat v. State of West Bengal & ors. Reported in 2009(3) CHN 76 to the effect that tenant comes within the expression ‘any person’. Mr. Bose has also referred to the other decisions such as 2008(1) SCC 125 particularly, the paragraph nos.73 and 74, the decision of Business India Builders & Developers Ltd. v. Union Bank of India & ors. Reported in AIR 2007 KERALA 114, the decision of Ram Kumar & anr. v. Ravinder Kumar Gulati & anr. reported in AIR 2007 Delhi 213, the decision of Sree Lakshmi Products Rep. By its Partner v. State Bank of India reported in AIR 2007 Madras 148 and the decision of Annapurna Paul v. State of West Bengal & ors. reported in 2009(3) CHN 342 and thus, he submits that in view of the ratio of such decisions, the secured creditor is within its right to take possession of the property.
The decision of Business India Builders & Developers Ltd.(supra) clearly lays down the ratio that the borrowers are bound by the terms & conditions stipulated in declaration executed by him in favour of the bank. The physical possession could be taken by the bank following the procedure laid down in Section 4 or after the sale is confirmed. The tenant in possession of the and secured asset can be evicted by the bank by resorting to the provisions of the SARFAESI Act, 2002. Mr. Bose has also submitted that in view of the provisions of Sections 34 and 35 of the said SARFAESI Act, 2002 the civil court has no jurisdiction to entertain a civil suit of this nature under Section 9 of the C.P.C.
13. Therefore, the observations made by the learned Trial Judge cannot be supported. For convenience, the Sections 34 and 35 of the SARFAESI Act, 2002 are quoted below: -
34. Civil court not to have jurisdiction.- No civil court shall 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 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).
35. The provisions of this Act to override other laws.- The provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. Thus, I find that the Section 35 lays down the provision that notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effected by virtue of any such law, the SARFAESI Act, 2002 has the overriding effect and according to Section 34 of the said Act, the civil court has no jurisdiction to entertain a suit like the person one. The decision of Business India Builders (supra) clearly lays down that the Sections 35 and 37 of the said Act have got the overriding effect over Kerala Buildings (Lease and Rent Control Act). By applying the ratio of the said decision, the provisions of the West Bengal Premises Tenancy Act, 1997 will not be applicable in the instant case.
14. Therefore, the plaintiff has no other way but to seek relief if any, under the provisions of Section 17(1) of the said Act. So, the decision of Business India Builders (supra) is very much applicable in the instant situation. The Division Bench of our Hon’ble High Court while disposing of a mandamous appeal being MAT No.2763 of 2007 has dealt with the similar situation as the present one and in that mandamous appeal, it has been decided that the secured creditor is permitted to take possession of the tenanted portion of the appellant after expiry of 72 hours from the date of passing of the order, that is, the tenant was given time for three days to vacate the premises.
15. In the instant case, as indicated above, the premises-in-suit was constructed by the borrower landlord after taking loan from the secured creditor and thereafter, the suit premises was tenanted to the plaintiff / opposite party herein. So, this decision is also appropriate in the instant situation. The subsequent agreement between the mortgager and the tenant are bound by the earlier transaction between the secured creditor and the mortgager. Mr. Jiban Ratan Chatterjee, learned Senior Advocate appearing on behalf of the plaintiff / opposite party has submitted that the suit is quite well within the provisions of Section 9 of the C.P.C. and a tenant cannot be evicted, save and except, the grounds as laid down under Section 6 of the West Bengal Premises Tenancy Act. He has also referred to the decision of Nahar Industrial Enterprises Ltd. v. Hong Kong and Shanghai Banking Corporation reported in (2009) 8 SCC 646 and thus, he submits that the suit is quite maintainable and the plaint cannot be rejected under the provisions of Order 7 Rule 11 of the C.P.C. and the learned Trial Judge has rightly rejected the said application.
16. With due respect to Mr. Chatterjee, I am of the view that since the provisions of the SARFAESI Act, 2002 has the overriding effect, the decision of Nahar Industrial Enterprises Ltd. (supra) which relates to transfer of a suit to DRT will not be applicable in the instant suit. The remedy of the tenant lies by filing an application under Section 17(1) of the SARFAESI Act, 2002.
In view of the findings as observed above, I am of the opinion that the secured creditors, that is, the petitioners are entitled to take over the possession of the mortgaged property and the plaintiff / opposite party herein has a remedy under Section 17(1) of the SARFAESI Act, 2002. The suit filed by the plaintiff / opposite party herein is not maintainable in view of Section 34 of the SARFAESI Act, 2002. Therefore, I hold that the plaint comes within the mischief of Order 7 Rule 11(d) of the C.P.C. and that for that reason the plaint should have been rejected by the learned Trial Judge by allowing the application under Order 7 Rule 11(d) of the C.P.C. The learned Trial Judge has committed errors of law in rejecting the application under Order 7 Rule 11 of the C.P.C. The impugned order cannot be supported. It should be set aside.
17. Accordingly, the revisional application is allowed. The impugned order is hereby set aside. The application under Order 7 Rule 11 of the C.P.C. stands allowed. Consequently, the plaint filed by the plaintiff / opposite party herein stands rejected.
18. Considering the circumstances, there will be no order as to costs.
19. Urgent Xerox certified copy of this order, if applied for, be supplied to the learned Advocates for the parties on their usual undertaking.