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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the plaint seeking partition, declaration that the mortgage was void, and injunction against SARFAESI action was barred by the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, and was liable to rejection under Order VII Rule 11 of the Code of Civil Procedure, 1908.
Analysis: The plaint itself proceeded on the basis that the property stood in the name of the registered owner and that the loan had been secured by an equitable mortgage, after which measures under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 were initiated. The Court found the plaint internally inconsistent, since it acknowledged an earlier partition yet sought partition of the entire property and also challenged the mortgage only qua the appellant's share. It held that, in view of the statutory scheme and the bar under Sections 34 and 35, objections to measures taken under the Act must be pursued before the Debt Recovery Tribunal and the Appellate Tribunal. The reliance on the later decision dealing with partition suits did not assist the appellant on the facts, because the registered sale deed and ownership of the mortgagor were not challenged.
Conclusion: The civil suit was barred in respect of the challenged SARFAESI measures, the plaint was rightly rejected, and the appellant's challenge failed.
Final Conclusion: The appeal did not succeed, and the trial court's rejection of the plaint was maintained.
Ratio Decidendi: Where the substance of the suit is a challenge to measures taken under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, civil court jurisdiction is barred and the aggrieved party must pursue the statutory remedy before the Debt Recovery Tribunal and the Appellate Tribunal.
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