JAGDISH SINGH v. HEERALAL & Ors.

India on 17.2.2000. The loan was secured by equitable mortgage executed by respondent Nos.7 to 9 in respect of the suit land. Respondent Nos.6 to 8 also created equitable mortgage on three houses, which were in their respective names. Original title deeds of all the properties E were deposited with the bank. Since they committed default in re-paying the loan, the bank initiated proceedings Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and, ultimately, the auction of F the suit land was confirmed by the Bank 8.11.2005 on the appellant-auction purchaser depositing the required amount. Respondents Nos. 1 to 5 filed a suit in the Court of the District Judge against respondent Nos.7 to 9 and others including the appellant and the Bank, for a G declaration of title, partition and permanent injunction. Respondent no. 6 and the Bank filed a preliminary objection before the civil court under 0.

7 r.11 of the Code of Civil Procedure, 1908 stating that in view of s. 13 read with s. 34 of the Securitisation Act, the civil court had no H 234 SUPREME COURT REPORTS [2013] 12 S.C.R A jurisdiction to entertain the suit. The civil court upheld the preiiminary objection holding that the suit was not maintainable. However, the High Court allowed the appeal of respondents nos. 1 to 5. Aggrieved, the auction- purchaser filed the appeal. B Allowing the appeal, the Court HELD: 1.1 The auction notice was duly published in the newspapers on 30.09.2005. No objection was raised by the plaintiffs and the suit land was auctioned on c 08.11.2005, which was settled in favour of the highest bidder - the appellant. The entire auction price was paid ·by the appellant and the sale in his favour was duly confirmed. Respondent Nos.7 to 9 challenged the sale notice by filing an application before the ORT, which was D dismissed on 21.07.2006, and as no appeal was preferred against it, it attained finality.

Respondent Nos.1 to 5 filed the suit claiming the properties as belonging to HUF. But, the facts would clearly indicate that the properties in question were purchased by respondent Nos.6 to 8 in E their individual names, long after the death of the common ancestor and that too by registered sale deeds and no claim was ever made at any stage by any member of the HUF that the said properties were HUF properties and not the individual properties of rnspondents nos. 6 to 8. [para 10-11) [241-H; 242-A-E] F

1.2 Security interest, within the meaning of s.2(zf) has been created in respect of the properties in question which are secured assets within the meaning of s.2(zc), in favour of the secured creditor (the bank) within the meaning of s.2(zd). On failure to re-pay, the bank, secured • creditor can always enforce its security interest over the secured assets. [para 13) [243-A-B] G

2.1 Section 13(1) of the Securitisation Act states that H notwithstanding anything contained in s.69 or 69A of the JAGDISH SINGH v. HEERALAL 235 Transfer of Property Act, 1882, any security interest A created in favour of any secured creditor may be enforced, without the intervention of the court or tribunal by such creditor, in accordance with the provisions of the Act. In case the borrower fails to discharge his liability, the bank can take the "measures" provided in s.13(4) of B the Securitisation Act for recovery of the loan amount. One of the measures provided by the statute is to take ilossession of secured assets of the borrowers, including the right to transfer by way of lease, assignment or realizing the secured assets. [para 14 and 22] [243-C-D; c 249-A-B]

2.2 Section 17 of the Securitisation Act confers a right of appeal to any person, if that person is aggrieved by any of the "measures" referred to in sub-s. (4) of s.13 taken by the Secured Creditor. The expression 'any D person' used in s.17 is of wide import and takes within its fold the borrower, the guarantor or any other person who may be affected by action taken uls 13(4) of the Securitisation Act. Therefore, the expression 'any person' referred to in s.17 would take in the plaintiffs in the suit E as well. Thus, irrespective of the question whether the civil suit is maintainable or not, under the Securitisation Act itself, a remedy is provided to such persons so that they can invoke the provisions of s.17 of the Securitisation Act, in case the bank (secured creditor) F adopts any measure including the sale of the secured assets, on which the plaintiffs claim interest. [para 15, 17 and 18] [244-E-F; 247-A-D] United Bank of India v. Satyavati Tondon and Others G