IMPORTANT POINT
Tribunal conferred with power to adjudicate disputes between banking institutions and persons who indebted to such banks, it cannot decide contentious issues about legality of mortgage.

L. Narasimha Reddy, J.—One Sri Srinivas Kumar Mawle, the father of respondent Nos.1 to 3 and husband of respondent No.4 obtained loan from the petitioner for higher studies of respondent No.3 in the United States of America. An item of immovable property bearing house No.3-4-846/1, Barkatpura, Hyderabad was mortgaged for repayment of the loan. The original loanee Srinivas Kumar Mawle died. The loan became non-performing asset (NPA) on account of failure to pay instalments. Therefore, the petitioner got issued a notice dated 10.1.2013 to respondent Nos.1 to 4 for repayment of the loan. Since there was no positive response, O.A No. 303 of 2013 was field before the Debts Recovery Tribunal, Hyderabad (for short the Tribunal) by invoking the provisions of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short the Act).

2. Respondent Nos.1 and 2 i.e., the daughter and the son of late Srinivas Kumar Mawle filed O.S No. 2073 of 2013 in the Court of V Junior Civil Judge, City Civil Court, Hyderabad, with a prayer that the transaction of mortgage covered by letter dated 27.12.2006, followed by the deposit of instrument, be declared as null and void. The petitioner herein was shown as defendant No.1 and respondent Nos.3 and 4, as defendant Nos.2 and 3 in the suit.

3. On receipt of the summons in the suit, the petitioner filed I.A No. 364 of 2013 under Order VII, Rule 11 CPC, with a prayer to reject the plaint. It was pleaded that the O.A pending before the Tribunal is comprehensive in nature and being a party to that, respondent Nos.1 and 2 can put forward their contentions, including the filing of counter claim. It was pleaded that the filing of a separate suit would lead to several complications. According to the petitioner, the Act is a self-contained code in relation to the loan transactions with banks and once an O.A is filed, any suit in relation to that very dispute is barred. The application was opposed by respondent Nos.3 and 4. They pleaded that the plaint can be rejected only when the circumstances provided for under various clauses of Rule 11 of Order VII CPC are shown to be existing and that such grounds were not even pleaded. It was also pleaded that the Tribunal does not have the jurisdiction to decide the legality or otherwise of a mortgage deed.

4. The trial Court dismissed the I.A through order dated 14.3.2014. Hence, the revision.

5. Sri Hari Prasad Podila, learned Standing Counsel for the petitioner submits that the effort of respondent Nos.1 and 2 is to dispute and deny their obligation under the transaction of mortgage and that the same can be urged by filing a counter claim in the O.A. He made extensive reference to Sections 18 and 19 of the Act.

6. Sri G. Rama Chandra Reddy, learned counsel for respondent Nos.1 and 2, on the other hand, submits that the facility of filing a counter claim no doubt exists in an O.A filed under the Act, but the Tribunal is not conferred with the jurisdiction to declare the legality or otherwise of a transaction of mortgage. He submits that respondent Nos.1 and 2 have a definite share in the mortgaged property and mortgage of the property without their participation is null and void and at least, not binding upon them. He submits that the trial Court has taken the correct view of the matter on finding that none of the ingredients of Rule 11 of Order VII CPC are proved, and that the order under revision does not warrant any interference.

7. Late Sri Srinivas Kumar Mawle, the father of respondent Nos.1 to 3 and the husband of respondent No.4 obtained loan from the petitioner for the education of respondent No.3. An item of immovable property was mortgaged for securing repayment of the loan. Srinivas Kumar Mawle died before the loan could be liquidated. The petitioner filed the O.A before the Tribunal against his legal representatives.

8. Respondent Nos.1 and 2 who are parties to the O.A instituted suit O.S No. 2073 of 2013 for declaration to the effect that the