2011 Supreme(Bom) 167

2011 (2) ALL MR 520
IN THE HIGH COURT OF BOMBAY AT NAGPUR
R.K. DESHPANDE
State Bank of India
Versus
Shri Sagar s/o Pramod Deshmukh & Others
Civil Revision Application No.33 of 2010 And Appeal against Order No.38 of 2010
Decided on : 11-02-2011

Headnote:Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Sections 13 and 17-Objections under Section 17-Filing of before D.R.T.-Any person including borrower, aggrieved by any action taken by secured creditor under Section 13 of Act-Can file an objection before D.R.T. under Section 17 of Act.-Any person, including the borrower, aggrieved by any such action taken by the secured creditor under Section 13, can file an objection before the Debts Recovery Tribunal under Section 17 of the said Act. If it is found by the Debts Recovery Tribunal that the recourse taken by the secured creditors under sub-section (4) of Section 13 is in accordance with the provisions of the said Act and the Rules framed thereunder, then it has jurisdiction under sub-section (4) of Section 17 to see that secured creditor is entitled to take recourse of one or more of the measures specified under sub-section (4) of Section 13 to recover its secured debts, notwithstanding anything contained in any other law for the time being in force.

       Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 13(1)-Security interest-Enforcement of-Right of secured creditor-Secured creditor entitled to enforce his security interest without intervention of any Court or Tribunal.-In view of the provision of Section 13(1) of the said Act and the factual background, the secured creditor is entitled to enforce his security interest without intervention by any Court or Tribunal.

       Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 17(3)-Jurisdiction of Debt Recovery Tribunal (D.R.T.)-In respect of action of secured creditor, D.R.T. exercises jurisdiction of superintendence under Section 17(3) of Act-Jurisdiction of D.R.T. under Section 17(3) of Act is akin to jurisdiction of civil Court.-So far as the action of secured creditor is concerned, the Debts Recovery Tribunal exercises the jurisdiction of superintendence under sub-section (3) of Section 17, to see that the secured creditor acts only in accordance with the provisions of the said Act and the rules framed thereunder, to enforce its security interest and that it neither does not exceed its jurisdiction nor acts in breach or non-compliance with the provisions of the said Act and the rules thereunder. The jurisdiction of the Debts Recovery Tribunal under sub-section (3) of Section 17 is akin to the jurisdiction of Civil Court, as has been held by the Apex Court, Mardia Chemical’s case and it also extends to protecting the interest of borrowers or any other person against any such illegal acts of secured creditor, by directing such secured creditor to restore the management or possession of secured assets to the borrower and to pass such order as it may consider appropriate and necessary in relation to any of the recourse taken by the secured creditor under sub-section (4) of Section 13. While exercising such jurisdiction, the Debts Recovery Tribunal can also adjudicate upon the questions whether security interest was in fact created in respect of any property or part thereof in favour of a secured creditor, or whether creation of such security interest in favour of secured creditor was legal, valid and proper, or that the measures taken by the secured creditor under sub-section (4) of Section 13 of the said Act are in accordance with the provisions of said Act and the Rules framed thereunder, or even the question whether any bank or financial institution or any consortium or group of banks or financial institutions claiming itself or themselves to be secured creditors, are in fact the secured creditors in respect of any property or part thereof. The jurisdiction of civil Court to decide all such questions is barred by Section 34 of the said Act.

       Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 34-Civil Procedure Code, 1908, Section 9-Jurisdiction of civil Court-Ousted or not-Real test-To be findout whether D.R.T. under Section 17 of Act empowered to held an enquiry on a particular question and to grant relief in respect thereof-Extent of jurisdiction of D.R.T. under Section 17 of Act shall decide execution of jurisdiction of civil Court.-In order to decide the question as to whether the jurisdiction of the civil Court under Section 9 of the Civil Procedure Code is ousted or not, the real test would be to find out whether the Debts Recovery Tribunal under Section 17 of the said Act is empowered to hold an enquiry on a particular question and to grant the relief in respect thereof. The extent of jurisdiction of the Debts Recovery Tribunal under Section 17 of the said Act shall decide the extent of exclusion of the jurisdiction of the civil Court to decide the dispute in respect of the suit property.

       Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 34-Jurisdiction of civil Court-Suit or proceeding in respect of any matter which a D.R.T. or Appellate Tribunal is empowered by or under Act to determine-Jurisdiction of civil Court specifically barred to entertain such suit or proceeding.-Section 34 of the said Act deals with the ouster of the jurisdiction of the civil Court, the same being relevant is reproduced below :

       "Civil Court not to have jurisdiction.-No civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted to any Court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Bank and Financial Institution Act, 1993 (51 of 1993)."

       Bare perusal of Section 34 shows that the jurisdiction of the civil Court is specifically barred to entertain any suit or proceeding only to the extent of the matters, which the Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under the said Act, to determine.

       Civil Procedure Code, 1908 - Section 9-Jurisdiction of Civil Court-Exclusion of-An exception-Existence of jurisdiction in Civil Courts to decide question of civil nature, a general rule-Burden of proof to show that jurisdiction of Civil Court excluded in any particular case lies on party raising such a contention.-Section 9 of the Code of Civil Procedure deals with the Courts to try all civil suits unless barred. It states that the Courts (subject to the provisions herein contained) have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred. There is a strong presumption that Civil Courts have jurisdiction to decide all questions of civil nature. The rule that the exclusion of jurisdiction of Civil Courts is not to be readily inferred, is based on the theory that Civil Courts are the Courts of general jurisdiction and the people have a right, unless expressly or impliedly debarred, to insist for free access to the Courts of general jurisdiction of the State. As a necessary corollary of this rule, provisions excluding jurisdiction of Civil Courts and provisions conferring jurisdiction on authorities and Tribunals other than Civil Courts are required to be strictly construed. The extent of exclusion will largely depend upon construction of the provision enacted for that purpose. When, with the object of speedy adjudication of certain matters, which are widely defined, the jurisdiction of the normal Courts, in respect such defined matters is excluded. The existence of jurisdiction in Civil Courts to decide the question of civil nature being the general rule and exclusion being an exception, the burden of proof to show that jurisdiction is excluded in any particular case is on the party raising such a contention.