The civil court retains jurisdiction to adjudicate on the validity of sale and mortgage deeds under the SARFAESI Act, and a plaint cannot be partially rejected under Order VII Rule 11.

ORDER :

Since the issues raised in all the captioned appeals are the same, those were taken up for hearing analogously and are being disposed of by this common judgment and order.

2. The Civil Appeal No.1876 of 2016 is treated as the lead matter. The disposal of this appeal shall govern the disposal of all connected appeals.

3. This appeal arises from the judgment and order dated 30.10.2012 passed by the High Court of Madhya Pradesh at Jabalpur in First Appeal No.408 of 2012 by which the High Court allowed the appeal filed by the respondents herein-original plaintiffs and thereby, set aside the order passed by the 5th Additional District Judge, Bhopal in Civil Suit No.25A/2011 rejecting the plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908 (for short, “the CPC”).

4. The facts giving rise to this appeal may be summarised as under:-

Respondent no.1 namely, Smt. Prabha Jain instituted Civil Suit No.25A/11 praying for the following reliefs:-

“a. It be declared that the disputed sale deed and the mortgage deed described in para 6 above are a nullity and it be declared that the defendant numbers 4 and 5 had no right to sell the disputed plot, to the defendant number 3 and the possession taken by the defendant number 2 is against the law and the grant of loan by the defendant number 1 on the security of the plot is against the law.

b. That the possession of the plot of land shown in slanted red lines in the plan attached to the suit may be given to the plaintiff after demolishing the construction.

c. That the plaintiff may be awarded damages of Rs. 7200/- for period from December 2009 to December 2010.

d. That the mesne profit from the date of institution of the suit till possession may be granted to the plaintiff at the rate of Rs. 600/- p.m.”

5. It is the case of the plaintiff that the suit land was purchased by her late father-in-law vide sale deed dated 19.06.1967 and after his death on 15.08.2005, the same was inherited in equal shares by her late husband Mahendra Kumar Jain, husband’s elder brother Sumer Chand Jain (defendant no.4) and mother-in-law. After the death of Mahendra Kumar, his 1/3rd share was inherited by the plaintiff. However, Sumer Chand Jain without any partition amongst the heirs divided the land into several plots and sold them of illegally to different persons. Once such plot was sold to defendant no.3 (Parmeshwar Das Prajapati) vide registered sale deed dated 03.07.2008 who in turn, mortgaged the same with the Central Bank of India (defendant no.1) for the purpose of obtaining loan.

6. It seems that the person who obtained loan defaulted and that is how the Bank decided to proceed further in accordance with the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, “the SARFAESI Act”).

7. It is a case of the plaintiff that the sale deed as well as the mortgage could be said to be a nullity. She claimed possession of the suit land in the suit.

8. It appears that the appellant-Bank herein preferred an application under Order VII Rule 11 of the CPC and prayed that the plaint be rejected as the civil court has no jurisdiction to try the same in view of Section 17 of the SARFAESI Act. The trial court rejected the plaint. The original plaintiff carried the matter in appeal before the High Court. The High Court allowed the First Appeal holding in paras (9) and (10) respectively, as under:-

“9. From the scheme of the SARFAESI Act narrated above, it is apparent that the Debts Recovery Tribunal has no jurisdiction to decide the question whether persons other than the mortgager had title in the mortgaged property. In that context the validity of the sale deed of a property mortgaged with the Central Bank of India cannot be decided by the Debts Recovery Tribunal. If the sale deed is held to be wholly or partially invalid it will immediately affect the validity of the mortgage of that property. The jurisdiction of civil court is ousted in re