Case Law Details
M/s Sree Anandhakumar Mills LTD Vs M/s Indian Overseas Bank & ORS. (Supreme Court of India)
1. The appellant herein seeks to challenge the order of the High Court of Madras by which the suit filed by the second respondent – Nandini has been held to be maintainable in law, notwithstanding the provisions of Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “SARFAESI Act”). Accordingly, the injunction granted by the learned trial Court was held to be justified and the sale transaction that had taken place in favour of the appellant (during the period when the injunction order was stayed by the High Court) has been invalidated.
2. Though the case has a chequered history and the facts are long the matter lies within a short compass. The core question is one relating to the maintainability of the suit, viz., O.S. No.106 of 2009 filed by the second respondent – Nandini seeking partition wherein the order of injunction was passed.
3. The High Court by the order under challenge took the view that as the said suit (O.S. No.106 of 2009) was for partition, Section 34 of the SARFAESI Act will not bar the same. Hence the order.
4. The matter need not engage the Court in any great detail as in view of the law laid down by this Court in Jagdish Singh vs. Heeralal and others1 it would clear and evident that the suit filed by the second respondent (i.e. O.S. No.106 of 2009) is not maintainable. In Jagdish Singh (supra) this Court after an elaborate consideration of the provisions of the SARFAESI Act, particularly, Section 2(zf), 2(zc), 13(1), 17, 18 and 34, took the view, on almost similar facts, that a suit for partition would not be maintainable in a situation where proceedings under the SARFAESI Act had been initiated. It was also held that the remedy of any person aggrieved by the initiation of proceedings under the SARFAESI Act lies under Section 17 which provides for an efficacious and adequate remedy to a party aggrieved. Paragraph 24 of the report in Jagdish Singh (supra) which make the above position clear may be usefully extracted below:
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