Rajiv Sareen Vs Divyanshu Enterprises And Others (Delhi High Court)
The Delhi High Court considered an appeal challenging a judgment of a Single Judge who had rejected the plaintiff’s civil suit under Order VII Rule 11 of the Code of Civil Procedure (CPC). The central question before the Court was whether a civil suit seeking cancellation of a registered sale deed is maintainable despite the bar on civil court jurisdiction under Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).
The appellant and his father had purchased the suit property in 2006. Due to delays in a bank loan, the appellant sought a friendly loan from Respondent No.2, resulting in a Memorandum of Understanding (MoU) in 2017 under which the appellant was to hand over original title documents on receiving the loan. The appellant received partial amounts, and after his father’s death and subsequent relinquishment of rights by family members, became sole owner. The appellant alleged that Respondent No.2 withheld the balance amount and, through threats and coercion, forced him to execute a sale deed in April 2018 for a stated consideration of Rs. 2.50 crores.
The appellant claimed that he was forcibly taken to the Sub-Registrar’s office for signing the sale deed, and later discovered that Respondent Nos.1 and 2 had deposited the title documents with a bank to obtain a loan, which subsequently became a Non-Performing Asset. The bank issued e-auction notices, prompting the appellant to file a civil suit seeking cancellation of the sale deed and an injunction against auction proceedings. The appellant simultaneously pursued proceedings before the Debts Recovery Tribunal (DRT), and later withdrew a writ petition filed before the High Court.
