Court upholds Trial Court's decision on maintainability in Civil Court, emphasizing law of limitation and natural justice

The High Court dismissed the appeal, affirming the Trial Court's decision that the suit was maintainable in a Civil Court. The court held that the respondents had no alternative remedy but to approach a Civil Court for the reliefs sought. The court also emphasized the importance of adhering to the law of limitation and the principles of natural justice, concluding that the appellant-bank could not perpetually delay proceedings and deprive the respondents of their legal remedies.

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Issues Involved:
1. Non-maintainability of the suit before a Civil Court under Section 34 of the SARFAESI Act.
2. Jurisdiction of Civil Courts in matters related to the SARFAESI Act and RDDBFI Act.
3. Delay in the execution of the Sale Deed and the claim for compensation and damages by the respondents.
4. Applicability of the law of limitation under Section 36 of the SARFAESI Act.

Detailed Analysis:

1. Non-maintainability of the suit before a Civil Court under Section 34 of the SARFAESI Act:
The appellant-bank contended that the suit was not maintainable in a Civil Court due to the bar under Section 34 of the SARFAESI Act. The Trial Court, however, held that since the appellant-bank had not initiated any proceedings under Section 13 of the SARFAESI Act against the respondents, the provisions of Section 13 were not set into motion, and consequently, the bar under Section 34 could not operate. The Trial Court further noted that the respondents sought reliefs due to the delay in the registration of the Sale Deed, which could only be granted by a Civil Court. Therefore, the suit was maintainable.

2. Jurisdiction of Civil Courts in matters related to the SARFAESI Act and RDDBFI Act:
The Trial Court found that the jurisdiction of Civil Courts is not ousted by the SARFAESI Act or the RDDBFI Act for matters beyond their scope. It was noted that the suit for declaration and reliefs arising from the delay in the issuance of the Sale Deed was beyond the domain of these Acts. The High Court concurred, emphasizing that the SARFAESI Act's Section 34 applies only to matters within the exclusive jurisdiction of the Debt Recovery Tribunal (DRT) or the Appellate Tribunal.

3. Delay in the execution of the Sale Deed and the claim for compensation and damages by the respondents:
The respondents claimed compensation and damages due to the delay in the registration of the Sale Deed. The Trial Court found that the delay was attributable to the appellant-bank and held that the respondents were entitled to seek reliefs through a Civil Court. The High Court upheld this view, noting the appellant-bank's failure to initiate proceedings under the SARFAESI Act within the prescribed limitation period, thereby rendering the respondents remediless if restricted from approaching a Civil Court.

4. Applicability of the law of limitation under Section 36 of the SARFAESI Act:
The High Court emphasized that the appellant-bank's right to initiate proceedings under the SARFAESI Act was subject to the limitation period prescribed under Section 36 of the Act. The court noted that the cause of action for the appellant-bank arose long back in 2016, and any action initiated thereafter was time-barred. The court highlighted that the appellant-bank's reply dated 20.01.2020, indicating future proceedings, was itself time-barred as per the Limitation Act, 1963.

Conclusion:
The High Court dismissed the appeal, affirming the Trial Court's decision that the suit was maintainable in a Civil Court. The court held that the respondents had no alternative remedy but to approach a Civil Court for the reliefs sought. The court also emphasized the importance of adhering to the law of limitation and the principles of natural justice, concluding that the appellant-bank could not perpetually delay proceedings and deprive the respondents of their legal remedies.

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