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2026 Supreme(Bom) 468

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
N.J. JAMADAR, J.
Central Bank of India, through Chembur Branch – Appellant 
Versus
Vikas Kashinath Gaikwad – Respondent
Civil Revision Application Nos. 580, 590, 591, 592, 593, 594, 595, 596, 597, 598, 599, 600, 601 of 2024, Civil Revision Application Nos. 133, 252 of 2025
Decided On : 04-02-2026

Advocates Appeared:
For the Appellants : Rohan Sawant, Vikas Mulik, Sunil Kadam
For the Respondents: A.S. Khandeparkar, Amogh K. Karandikar

Civil courts retain jurisdiction for developer's suit declaring agreement rescission and mortgage non-binding, as such reliefs fall outside DRT's recovery jurisdiction under RDB Act; no partial plaint rejection under Order VII Rule 11.

Headnote:(A) Recovery of Debts and Bankruptcy Act, 1993 - Sections 17 and 18 - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Sections 13(4), 17 and 34 - Code of Civil Procedure, 1908 - Order VII Rule 11 - Suit by developer for declaration of rescission of agreement for sale due to buyer's default and that mortgage created by buyer in favour of bank is not binding on developer - Civil court has jurisdiction as reliefs do not fall within tribunal's adjudicatory province limited to recovery applications by banks/financial institutions - Plaintiff-developer neither borrower nor guarantor - Prior proceedings before tribunal do not oust civil court jurisdiction for such declarations - Plaint cannot be rejected under Order VII Rule 11 if any relief survives, no partial rejection qua defendant-bank possible. (Paras 24 to 39, 51 to 53)

(B) Code of Civil Procedure, 1908 - Order VII Rule 11(d) - Res judicata plea cannot lead to rejection of plaint as requires factual inquiry beyond plaint averments - Application for preliminary issue on jurisdiction treated as for plaint rejection. (Paras 20 to 22)

(C) Jurisdiction - Civil court jurisdiction plenary unless expressly/impliedly barred - Tribunal jurisdiction limited to statutory functions. (Paras 23 to 24)

Facts of the case:
Developer instituted suit against buyer for declarative reliefs re rescission of agreement for sale of plot due to default in payments, later impleaded bank as defendant over mortgage created by buyer in breach of agreement prohibiting encumbrances till full payment. Bank applied for framing preliminary issue on jurisdiction bar under RDB Act and dismissal, claiming prior tribunal orders binding; trial court rejected application.

Findings of Court:
Civil court has jurisdiction; no interference with trial court order rejecting application for plaint rejection.

Issues: Whether suit barred by Sections 17/18 RDB Act or Section 34 SARFAESI Act; whether plaint rejectable under Order VII Rule 11 qua bank-defendant or on res judicata; applicability of partial plaint rejection.

Ratio Decidendi: Tribunal lacks jurisdiction for declarations on pre-existing contract rescission and mortgage invalidity against non-party developer; civil court competent as reliefs outside recovery ambit; plaint survives if any relief viable, mandating trial.

Result: Revision applications dismissed.

Table of Content
1. suit seeks rescission of sale agreement due to default. (Para 1 , 2 , 3)
2. rdb act and sarfaesi bar civil jurisdiction over mortgages. (Para 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 17)
3. civil court jurisdiction survives for non-borrower rescission claims. (Para 12 , 13 , 14 , 15 , 16)
4. res judicata not ground for order vii rule 11 rejection. (Para 18 , 19 , 20 , 21 , 22)
5. drt jurisdiction limited; civil court plenary unless barred. (Para 23 , 24 , 25 , 26 , 27 , 28)
6. sarfaesi does not bar civil suits by third parties. (Para 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37)
7. precedents clarify no drt jurisdiction for rescission reliefs. (Para 38 , 39 , 40)
8. plaint cannot be rejected partially under order vii rule 11. (Para 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53)
9. revisions dismissed; suit proceedings to continue unhindered. (Para 54 , 55 , 56 , 57 , 58)

JUDGMENT :

N.J. JAMADAR, J.

1. All these Revision Applications are directed against identical orders dated 15th June 2024 passed by the learned Civil Judge, Senior Division, Panvel, whereby the Applications preferred by the Applicant-Defendant No.2, purportedly seeking the framing and trial of issue of jurisdiction as a preliminary issue and dismissal of the suit for want of jurisdiction, came to be rejected.

2. Since identical questions of facts and law arise, these Revision Applications were heard together and are being decided by this common judgment.

3. The facts in Revision Application No. 580 of 2024, assailing the order in SCS No. 57 of 2007, are noted as a representative case. The background facts can be summarised as under:

3.1 Late Rohini Ramesh Kalyankar, the predecessor-in-tile of Plaintiff Nos. 1A and 1B, initially instituted a suit against Respondent No.1- Defendant No.1 only, seeking declarative reliefs, in the context of a transaction of sale of a developed plot. The Plaintiff claimed that she had developed a project, “Dwarka Bungalow Scheme” at Survey No. 117, Hissa Nos. 1 and 2, Village Taloja Majkur, Taluka: Panvel, District: Raigad.

3.2 Defendant No.1 had evinced interest in purchasing a Bungalow Plot. Post negotiations, Defendant No.1 agreed to purchase Plot No. 86 admeasuring 160 sq mtr (“the suit plot”). An Agreement for Sale came to be executed on 7th January 2005 by and between the Plaintiff and Defendant No.1, under the terms whereof the consideration was settled at Rs.17,60,000/-. In addition, Defendant No.1 had agreed to pay 20% of the total consideration to the Plaintiff at the time of delivery of possession of the suit plot, towards charges for development for the amenities. In the event of default in payment of the amounts as agreed, Defendant No.1 has agreed to pay interest @ 24% per annum.

3.3 The Plaintiff claims, at the time of the execution of the Agreement for Sale, Defendant No.1 had drawn a cheque of Rs.3,52,000/- towards earnest money/booking amount. Though Defendant No.1 paid the amount of Rs.14,08,000/- towards the balance consideration yet the said cheque drawn towards the first installment was dishonoured upon presentment. Defendant No.1 also committed default in payment of 20% of the amount, i.e., Rs.3,52,000/- towards the development charges. The Plaintiff repeatedly called upon Defendant No.1 to pay the outstanding amount.

3.4 In view of the persistent default, a legal notice was addressed on 16th October 2006 calling upon Defendant No.1 to pay due amount of Rs.10,20,800/-. As Defendant No.1 did not comply with the said notice, vide notice dated 28th November 2006, the Plaintiff terminated the Agreement for Sale dated 7th January 2005, and, thereby, forfeited the earnest money and offered to refund the balance amount after deducting the expenses incurred towards the stamp duty and registration charges, after the sale of the said plot to another purchaser. 3.5 Thus, initially, the Plaintiff prayed for declarations that the Agreement for Sale dated 7th January 2005 between the Plaintiff and Defendant stood

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