The determination of whether a property is agricultural land, and thus exempt from the SARFAESI Act, is a question of fact that must be decided in the suit based on evidence.

JUDGMENT :

1. This Civil Revision Application challenges an order passed by Civil Judge, Junior Division, Kagal, Kolhapur, on an application of the Applicant herein in a Regular Civil Suit filed by the Respondents herein. The application was under Order 7 Rule 11 of the Code of Civil Procedure (“Code”), on the footing that that the Applicant (original defendant) had adopted measures under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”) against the Respondents’ property and under Section 34 of that act, no civil court had jurisdiction to entertain any suit or application in respect of those measures.

2. The present suit has been filed by the Respondents/plaintiffs inter alia on the ground that the property, being the subject matter of security interest in favour of the Applicant/defendant, is an agricultural land, to which provisions of SARFAESI Act do not apply. The Respondents have averred in the plaint that the suit property is an agricultural land, relying upon a 7/12 extract in respect thereof. The Applicant/defendant herein disputes those averments. According to the Applicant, the property in respect of which security interest has been created in its favour, is not an agricultural land. Whether or not the property is an agricultural land is, thus, an issue arising in the suit. If it is an issue arising in the suit, it must be decided in the suit, even if as a preliminary issue in a proper case; it surely does not support a case for rejection of plaint under Order 7 Rule 11 of the Code. That is precisely what the trial court has held and it is difficult to find any fault with that order.

3. Learned Counsel for the Applicant relies on the judgment of Jagdish Singh Vs. Heeralal (2014) 1 Supreme Court Cases 479) in support of his submission. In Jagdish Singh’s case what the Supreme Court has held is that Section 34 bars jurisdiction of civil courts to entertain a suit or proceeding “in respect of any matter”, which DRT or Appellate Tribunal is empowered, by or under the SARFAESI Act, to determine; the expression “in respect of any matter”, under Section 34 of SARFAESI Act includes any measure taken by a bank or a financial institution, and consequently, aggrieved persons having grievance against such measure have to approach DRT or Appellate Tribunal, as the case may be, and not a civil court. The statement of law by the Supreme Court in Jagdish Singh’s case presupposes that the measure was taken by the concerned bank or financial institution in respect of a matter “which DRT or Appellate Tribunal is empowered by or under this Act (i.e SARFAESI Act) to determine”. If security interest in its favour has been created in respect of an agricultural land, no bank or financial institution can resort to measures provided under Section 13 of SARFAESI Act in respect of such security interest and there is no question of civil court’s jurisdiction being barred in such a case. It is important to note that we are not considering whether the civil court should grant any injunction against the action taken or to be taken by the defendant bank under the SARFAESI Act; we have not come to that stage as yet. We are at the stage of an application under Order 7 Rule 11 of the Code, which is on the footing that the plaint, as it stands, discloses want of jurisdiction on the part of the civil court to entertain the same.

4. In Indian Bank Vs. K. Pappireddiyar (AIR 2018 S.C. 3440), the Supreme Court has considered the contents of clause (i) of Section 31, which stipulates that the provisions of SARFAESI Act do not apply to any security interest created in an agricultural land. The court observed that Section 2 did not contain a definition of the expression “agricultural land”. Whether a particular piece of land is agricultural in nature is a question of fact and the answer must be deduced from the nature of the land, the use to which it has been put on the date of creation of secu