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2026 Supreme(Raj) 292

HIGH COURT OF JUDICATURE FOR RAJASTHAN, BENCH AT JAIPUR
ASHUTOSH KUMAR, J.
Yogendra Singh, Son of Late Shri Bhanwar Singh – Appellant
Versus
Baid Finserv Limited, Through Managing Director/Authorized Officer - Respondent 
S.B. Civil First Appeal No. 1651 of 2025
Decided On : 22-05-2026

Advocates Appeared:
For the Appellant : Mr. M.M. Ranjan, Sr. Adv. assisted by Mr. Rohan Agrawal, Adv., Mr. Yashvardhan Tolani, Adv., Mr. Naman Pareek, Adv., Mr. Lokesh Tiwari, Adv., Mr. Aman Pareek, Adv. & Mr. Yashvardhan Tolani, Adv.
For the Respondent: Mr. R.K. Agarwal, Sr. Adv. assisted by Mrs. Sunita Pareek, Adv., Mr. Adhiraj Modi, Adv. & Mr. Shubham Sharma, Adv., Mr. Sandeep Bansiwal, Adv., Mr. O.P. Mishra, Adv., Mr. Madho Prapan Swami, Adv.

The jurisdiction of a civil court is barred in matters pertaining to enforcement measures taken by a secured creditor under relevant financial legislation. All grievances regarding such measures must be exclusively adjudicated by the Debt Recovery Tribunal, rendering civil suits regarding these properties outside the court's jurisdiction.

Headnote:(A) Civil Procedure Code, 1908 - Order VII Rule 11 - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Sections 13(2), 13(4), 17(1), 34 and 35 - Rejection of plaint - Jurisdiction of Civil Court - When measures are taken by a secured creditor under the Act to enforce security interest, the jurisdiction of the Civil Court is barred in respect of any matter which the Debt Recovery Tribunal is empowered to determine - Any grievance against such measures must be adjudicated exclusively by the Debt Recovery Tribunal or Appellate Tribunal. (Paras 4, 18)

(B) Order VII Rule 11 CPC - Scope and ambit - In deciding an application for rejection of plaint, the court must consider the averments in the plaint to determine whether a real cause of action is set out or if it is an illusory attempt to circumvent statutory bars - The substance and nature of the suit must be analyzed to ascertain if the relief sought falls within the mandate of a specialized tribunal. (Paras 10, 11)

Facts of the case:
A civil suit for partition, declaration, and permanent injunction was instituted against a financial entity. The plaintiff claimed a share in the property, alleging it to be ancestral, and sought a declaration that an equitable mortgage created in favor of the lender was void. The lender had previously initiated recovery proceedings under the relevant financial statute due to loan defaults. The trial court rejected the plaint under Order VII Rule 11 CPC, citing a lack of jurisdiction due to the initiation of recovery measures by the creditor under the special statute.

Findings of Court:
The court noted that the registered owner had legitimately created an equitable mortgage for a loan, and no challenge to the validity of the underlying sale deeds was made earlier. Since the lender had initiated recovery measures under the special statutory framework, the civil court could not intervene, as the statute explicitly ousts civil jurisdiction in favor of the specialized tribunal.

Issues: The primary issues were whether the civil court retains jurisdiction to hear a partition suit when the disputed property is already subject to enforcement proceedings under the special financial legislation, and whether the plaintiff’s request to declare the equitable mortgage void constitutes a dispute triable by a civil court or falls under the exclusive domain of the debt recovery tribunal.

Ratio Decidendi: Given the overriding nature of the special financial statute, the jurisdiction of the civil court is completely ousted once the secured creditor commences enforcement measures under the Act. Parties aggrieved by such measures are provided a statutory remedy before the specialized tribunal, and civil courts cannot be approached to bypass these proceedings under the guise of partition or declaratory relief.

Result: Appeal dismissed.

Table of Content
1. summary of trial proceedings, reliefs sought, and initial suit rejection grounds. (Para 1 , 2 , 3 , 4 , 5)
2. competing arguments regarding civil court jurisdiction versus sarfaesi act exclusivity. (Para 6 , 7 , 8 , 13 , 14 , 15)
3. court's analysis of pleadings, evidence, and criteria for rejecting a plaint under order vii rule 11. (Para 9 , 10 , 11 , 12 , 16 , 17)
4. sarfaesi act sections 13 and 34 bar civil court jurisdiction over bank-initiated recovery measures. (Para 18 , 19)
5. final judicial determination upholding the dismissal of the civil appeal. (Para 20 , 21)

JUDGMENT :

ASHUTOSH KUMAR, J.

1. The present civil first appeal has been filed against the order dated 14.08.2025 passed by learned Additional District Judge No.6, Jaipur Metropolitan-II (hereinafter referred to as learned 'trial Court') in Civil Suit No.55/2025, whereby, the plaint filed by the appellant for partition, declaration and permanent injunction has been rejected on an application filed on behalf of the defendant-respondent No.1 under Order VII Rule 11 read with Section 151 CPC, on the ground that it was barred by the law as per provisions of Sections 34, 35, 13(2), 13(4) and 17(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the ‘Act of 2002’).

2. The plaintiff-appellant sought the following reliefs in the suit filed by him:-

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3. Brief facts of the case as averred in the plaint are that the Plot No.AC-4, Gayatri Sadan, Sawai Jaisingh Highway, Banipark, Jaipur was purchased in the name of Smt. Ratan Kanwar wife of Late Shri Bhanwar Singh on 30.06.1959 out of Hindu Undivided Family Funds. Therefore, the property in question is Joint Hindu Undivided Family property. It has also been averred in the plaint that on 01.10.1979, an oral partition was made which was reduced into writing on 24.11.1979 and the property was partitioned amongst Smt. Ratan Kanwar, Yogendra Singh, Devendra Singh, Bhanwar Singh and Bhawani Singh. It has further been averred in the plaint that this family settlement was acted upon and was relied upon by the Rajasthan Land and Building Tax Department to exempt the plot from Land and Building tax, acknowledging its partition amongst the five members of HUF, an order dated 28.07.1984 was passed in this regard. Furthermore, plaintiff-appellant’s mother Smt. Ratan Kanwar borrowed a loan from respondent No.1 and thereupon, respondents No.2 and 3 stood as co-borrowers, by creating an equitable mortgage and deposited the title documents of the property in question, which are in the name of plaintiff-appellant’s mother Smt. Ratan Kanwar. Smt. Ratan Kanwar has died on 29.11.2024. When installments of loan were not paid, notice under Section 13(2) of the Act of 2002 was issued by respondent No.1. At this stage, the plaintiff- appellant filed the Civil Suit No.55/2025 and made a prayer for partition of the property in question by way of metes and bounds, and also to declare the equitable mortgage of property in question created by plaintiff-appellant’s mother in favour of respondent No.1-Bank, as null and void qua the share of plaintiff-appellant and further to restrain the respondent No.

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