Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2012 Supreme(MP) 1090

MADHYA PRADESH HIGH COURT AT JABALBUR BENCH
Ajit Singh, Sanjay Yadav, JJ.
Prabha Jain - Appellant
Versus
Central Bank of India and others - Respondent
First Appeal No. 406-2012 & From the Judgment and Order dated 10-2-2012 of the Court of V Addl. Distt. Judge. Bhopal in C.S. No. 34-A-2011.
Decided On : 30-10-2012

Advocates Appeared:
Appearances :Mr. Anand Kumar Jain, Advocate for the Appellant
Mr. Abhijit C. Thakur, Advocate for the Respondent Nos. 1 , 2.
None for the Respondent Nos. 3 , 4, though served Mr. S.P.S. Rai, Govt. Advocate for the Respondent No. 5.

The exclusion of civil court jurisdiction must be explicitly expressed or clearly implied, and the burden of proof lies on the party claiming such exclusion.

Headnote:
SARFAESI Act - Property Dispute - Section 13, Section 34 - The court discussed the provisions of the SARFAESI Act, particularly Section 13 which empowers secured creditors to enforce security interest without court intervention, and Section 34 which bars the jurisdiction of civil courts in matters determined by the Debts Recovery Tribunal. The court emphasized the strict construction of provisions excluding civil court jurisdiction and the burden of proof to show such exclusion. It concluded that the jurisdiction of the civil court was not ousted in matters beyond the scope of the Debts Recovery Tribunal, and set aside the order rejecting the plaint.
Fact of the Case:

The plaintiff sought to declare a sale deed and mortgage as illegal and obtain possession of the suit land after the Central Bank of India enforced security interest under the SARFAESI Act. The Trial Court rejected the plaint, citing jurisdictional bar under Section 34 of the SARFAESI Act and insufficient court fee payment.
Finding of the Court:

The court disagreed with the Trial Court's decision, ruling that the jurisdiction of the civil court was not ousted in matters beyond the scope of the Debts Recovery Tribunal and that the plaintiff had paid the proper court fee for the relief claimed.
Issues: Jurisdiction of civil court, sufficiency of court fee payment
Ratio Decidendi: The exclusion of civil court jurisdiction must be explicitly expressed or clearly implied, and the burden of proof lies on the party claiming such exclusion. The jurisdiction of the civil court was not ousted in matters beyond the scope of the Debts Recovery Tribunal, and the plaintiff had paid the proper court fee for the relief claimed.
Final Decision: The court set aside the order rejecting the plaint and remanded the case to the Trial Court for trial and decision in accordance with law. The appeal was allowed with costs payable to the appellant by the respondents.

JUDGMENT :

As per Ajit Singh, J. :-

This plaintiff's appeal is against the order dated 10-2-2012 passed by the 5th Additional District Judge, Bhopal, in Civil Suit No. 34-A/2011 whereby he has rejected the plaint under Order 7 Rule 11 of the Code of Civil Procedure.

2. The plaintiff's case is that the suit land was purchased by her late father-in-law vide sale deed dated 19-6-1967 and after his death on 15-8-2005, the same was inherited in equal shares by her late husband Mahendra Kumar Jain, husband's elder brother Sumer Chand Jain (defendant No. 4) and mother-in-law. After the death of Mahendra Kumar, his 1/3rd share was inherited by the plaintiff. But, Sumer Chand Jain without any partition amongst the heirs divided the land into several plots and illegally sold them to different persons. One such plot was also sold to Bhupendra Kumar Sakalle (defendant No. 3) vide registered sale deed dated 30-9-2008, who mortgaged the same with the Central Bank of India (defendant No. 1) for obtaining loan. Defendant No. 2 is an Authorised Officer of the Central Bank of India. The Authorised Officer in order to enforce the security interest has taken possession of the plot under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short "the SARFAESI Act"), and thereafter, published an advertisement in the newspaper for its auction. In the suit, the plaintiff has prayed that the sale deed and mortgage, be declared illegal and she be given possession of the suit land after demolishing the construction raised on it. The sale consideration mentioned in the sale deed is Rs. 2,00,000/- and the default amount due to the Central Bank of India is shown to be Rs. 8,02,972/-. The plaintiff has paid the Court fee of Rs. 1000/- for the relief of declaration, Rs. 100/- for the relief of possession and Rs. 875/- for damages caused to the suit land, i.e., total Rs. 1975/-.

3. The Central Bank of India and its Authorised Officer raised an objection under Order 7 Rule 11 of the Code of Civil Procedure before the Trial Court that since security interest created in their favour was being enforced under Section 13 of the SARFAESI Act, the suit is barred under Section 34 of the SARFAESI Act. They also took the objection that as the plaint is written upon paper insufficiently stamped, it be rejected on this ground also. Similar objection regarding insufficient payment of Court fee was- taken by Bhupendra Kumar Sakalle in a separate application.

4. The Trial Court, after hearing the parties by the impugned order, allowed the objections and rejected the plaint on the ground that it is barred under Section 34 of the SARFAESI Act. The Trial Court has even held that having regard to the valuation of the suit plaintiff has not paid the proper Court fee. We, therefore, have to examine whether the Trial Court has committed an illegality in rejecting the plaint.

5. The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (in short "the RDDBFI Act") was enacted because banks and financial institutions were experiencing considerable difficulties in recovering loans and enforcement of securities changed with them. This Act provided for the establishment of Debts Recovery Tribunals and Debts Recovery Appellate Tribunals for expeditious adjudication and recovery of debts due to banks and financial institutions. For few years, the new dispensation under the RDDBFI Act worked well and the officers appointed to man, the Tribunals worked with great zeal for ensuring that cases involving recovery of the dues of banks and financial institutions were decided expeditiously. But, with the passage of time, the proceedings before the Tribunals stopped bringing desired results. A committee was, therefore, constituted to suggest measures for expediting the recovery of debts due to banks and financial institutions. The committee in Us report made various suggestions for bringing about radical changes in the ex

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2012 Supreme(MP) 1090

The exclusion of civil court jurisdiction must be explicitly expressed or clearly implied, and the burden of proof lies on the party claiming such exclusion.

Cases Referred (2)