JAGDISH SINGH versus HEERALAL AND OTHERS

Citation: [2013] 12 S.C.R. 232 · Decided: 30-10-2013 · Supreme Court of India · Bench: K.S. RADHAKRISHNAN · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
B 
[2013) 12 S.C.R. 232 
JAGDISH SINGH 
v. 
HEERALAL AND OTHERS 
(Civil Appeal No. 9771 of 2013) 
OCTOBER 30, 2013 
[K.S. RADHAKRISHNAN AND A.K. Slt<RI , JJ.] 
SECURITISATION AND RECONSTRUCTION OF 
FINANCIAL 
ASSETS 
AND 
ENFORCEMENT 
OF 
C SECURITY INTEREST ACT, 2002: 
ss. 2(zc) and 2(zf) - Security interest - Onginal title deeds 
of properties deposited with bank creating equitable mortgage 
against loan - Held: Security interest, within the meaning of 
0 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 can always 
enforce its security interest over the secured assets. 
E 
ss.13(4), 17 and 34 - Title deeds deposited with bank as 
security against loan - Borrower failed to repay the loan - Bank 
sold the property after publishing the auction notice - Suit by 
plaintiff's claiming the property as HUF property - Held: In 
case the borrower fails to discharge his /iab1/ity, the bank can 
F take the "measures" provided in s.13(4) for recovery of the 
loan amount - s.17confers a right of appeal to any person, 
aggrieved by any of the "measures" referred to in sub-s. (4) 
of s.13 taken by the secured creditor- Expression 'any person' 
used in s. 17 is of wide import and takes witbjn its fold the 
G borrower, the guarantor as also the plaintiffs in the-suit as well 
- Thus, irrespective of the question whether the civil suit is 
maintainable or not under the Act itself, a remedy is provided 
to such persons so that they can invoke the provisions of s. 17, 
in case the bank (secured creditor) adopts any measure 
H 
232 
JAGDISH SINGH v. HEERALAL 
233 
including the sale of secured assets, on which plaintiffs claim A 
interest. 
s. 34 rlw s. 35 - Civil court not to have jurisdiction - Held: 
Civil court jurisdiction is completely barred, as regards the 
"measure" taken by a secured creditor under sub-s. (4) of s.13 B 
against which an aggrieved person has a right of appeal 
before ORT or Appellate Tribunal to determine as to whether 
there has been any illegality in the "measures" taken - Bank, 
in the instant case, has proceeded only against secured 
assets of borrowers - In the circumstances, High Court was in c 
error in holding that only civil court has jurisdiction to examine 
as to whether the "measures" taken by secured creditor under 
sub-s. (4) of s.13 were legal or not - Judgment of High Court 
is set aside - Code of Civil Procedure, 1908 - s.9. 
Respondent no. 6 obtained a loan from the Bank of D 
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 
under 
the 
Securitisation 
and 
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 fil
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