1. Revision against rejection of plaint under Order 7 Rule 11 CPC in civil suit for declaration and injunction; DRT proceedings and recovery certificate issued; bar under SARFAESI Act. (Para 1 , 2 )
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2026 Supreme(Online)(Chh) 9209
IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
Amitendra Kishore Prasad, J
Bank Of Baroda – Appellant
Versus
Start Up Engineers – Respondent
CR No. 315 of 2025
Section 34 of the SARFAESI Act bars civil court jurisdiction over matters adjudicated by the DRT. A subsequent application under Order VII Rule 11 CPC is maintainable if material changes in circumstances, such as a final DRT order, occur after a prior application's rejection.
Headnote:(A) Code of Civil Procedure, 1908 - Order VII Rule 11 - SARFAESI Act, 2002 - Section 34 - Recovery of Debts and Bankruptcy Act - Section 19(22) - Rejection of plaint - Statutory bar on jurisdiction of civil courts - Section 34 of the SARFAESI Act expressly excludes the jurisdiction of civil courts in respect of matters falling within the domain and competence of the Debt Recovery Tribunal (DRT), relegating the aggrieved borrower to remedies under Sections 13(4) and 17 of the Act (Para 7) - A civil suit seeking to impede or nullify the enforcement of a secured asset after a final adjudication by the DRT is manifestly barred by law (Para 7).
(B) Code of Civil Procedure, 1908 - Order VII Rule 11 - Second application for rejection of plaint - Res judicata - Maintainability of subsequent applications - An application under Order VII Rule 11 CPC can be entertained at any stage of proceedings if the suit appears to be barred by any law (Para 7) - The doctrine of res judicata does not bar a second application for rejection of plaint if subsequent material developments, such as a final determination by a competent tribunal and issuance of a recovery certificate, substantially alter the factual and legal matrix of the case (Paras 6, 7).
Facts of the case:
A borrower filed a civil suit for declaration and injunction regarding a mortgaged property, alleging fraud, despite having availed a loan. The lender initiated recovery proceedings before the Debt Recovery Tribunal (DRT), which passed a final judgment and issued a recovery certificate for the outstanding dues. The borrowers did not challenge this order before the appellate tribunal. The lender subsequently filed an application under Order VII Rule 11 CPC in the civil suit to have the plaint rejected, arguing that the civil court's jurisdiction was barred. The trial court dismissed this second application on the grounds that a previous application under the same provision had already been rejected, thus invoking the principle of res judicata.
Findings of Court:
The trial court's order rejecting the application under Order VII Rule 11 CPC is legally unsustainable. The final adjudication by the DRT and the statutory bar under Section 34 of the SARFAESI Act exclude the jurisdiction of the civil court. The issuance of the recovery certificate by the DRT constitutes a material change in circumstances that renders the second application maintainable, overriding any claim of res judicata.
Issues: Whether a second application under Order VII Rule 11 CPC is maintainable when subsequent material developments occur, and whether the civil court's jurisdiction is barred by Section 34 of the SARFAESI Act in the face of a final DRT order.
Ratio Decidendi: The court ruled that the statutory bar under Section 34 of the SARFAESI Act precludes civil courts from entertaining suits that challenge the enforcement of secured assets already adjudicated by the DRT. Additionally, a subsequent application under Order VII Rule 11 CPC is maintainable if fresh grounds arise due to changed circumstances, even if an earlier application was rejected (Para 7).
Result: Civil revision allowed; impugned order set aside; plaint rejected under Order VII Rule 11(d) CPC.
Legal Category Hierarchy
- practice and procedure
- banking and finance
- jurisdiction
Table of Contents
2. Revisionist contended suit barred by SARFAESI Act and DRT finality; respondents argued second application barred by res judicata. (Para 3 , 4 )
3. Court held DRT final order and SARFAESI Act bar civil court jurisdiction; second Order 7 Rule 11 application maintainable on changed circumstances. (Para 5 , 6 , 7 )
4. Civil suit barred by law where DRT has passed final order and SARFAESI Act ousts civil court jurisdiction; subsequent application maintainable on new grounds. (Para 6 , 7 )
5. Revision allowed; impugned order set aside; plaint rejected under Order 7 Rule 11(d) CPC as barred by law. (Para 8 , 9 , 10 )
6. Is a civil suit barred by the SARFAESI Act when the DRT has passed a final order and issued a recovery certificate?
Yes, Section 34 of the SARFAESI Act expressly bars civil court jurisdiction in matters falling within DRT domain; a final DRT order makes the suit barred by law. (Para 2 , 7 )
7. Can a second application under Order 7 Rule 11 CPC be filed after an earlier rejection?
Yes, if subsequent events materially alter the legal matrix, such as a final DRT order, the second application is maintainable and res judicata does not apply. (Para 6 , 7 )
8. Does the doctrine of res judicata bar successive applications under Order 7 Rule 11 CPC on the same grounds?
No, res judicata does not apply when new grounds arise from changed circumstances; the court can entertain a subsequent application. (Para 7 )
1. By way of this revision, the applicant has prayed for following reliefs:-
“i. quash/set-aside the impugned order dated 24.06.2025 passed by First Additional District Judge, Bilaspur (C.G.) in Civil Suit (A)/88/2019 and consequently the application filed under Order 7 Rule 11of CPC may kindly be pleased to allow and dismiss the civil suit as prayed in the said application.
ii. quash/set-aside the order 24.06.2025 passed by the trial court i.e. First Additional District Judge, Bilaspur in Civil Suit (A)/88/2019.
iii. call for the entire record pertaining to the Civil Suit (A)/88/2019 for kind perusal.
iv. any other relief as Hon'ble Court may pleased to grant it.”
2. Brief facts of the case, is that, by way of the present civil revision, the revisionist Bank has challenged the impugned order dated 24.06.2025 passed by the First Additional District Judge, Bilaspur (C.G.) in Civil Suit (A)/88/2019, whereby the application filed by the revisionist under Order VII Rule 11 of the Code of Civil Procedure was dismissed. The plaintiffs/respondent Nos. 1 and 2 instituted a civil suit seeking declaration and injunction for a sum of Rs. 60,00,600/-, contending that plaintiff No. 1 had availed a loan of Rs. 40,00,000/- from the revisionist Bank on 04.06.2019 for extension of his business, and that, as security, defendant No. 2 (mother of plaintiff No. 1) mortgaged her immovable property situated at Tifra, P.H. No. 21, diverted land Sheet No. 19/20, Plot No. 45, Khasra No. 724/05, Rakba 2200 sq.ft., Gayatri Nagar Ward, Bhartiya Nagar, Tahsil and District Bilaspur, with original documents handed over to defendant No. 3, however, upon default, the plaintiffs alleged fraud and cheating against defendant No. 3, Vishwajeet Bhaumik, who had allegedly assured sanction of the loan and retained signed cheques of plaintiff No. 2. The Bank/defendant No. 1 filed a counter-claim raising all objections and asserting that the allegations of fraud do not confer jurisdiction upon the civil court. Simultaneously, the Bank approached the Debt Recovery Tribunal, Jabalpur, which, after the borrowers remained ex parte, passed judgment dated 04.11.2024 in Original Application No. 230/2022 in favour of the Bank, permitting sale of the mortgaged and other properties, restraining the borrowers from dealing with their assets, and issuing a Recovery Certificate under Section 19(22) of the Recovery of Debts and Bankruptcy Act for Rs. 59,07,165/-. Thereafter, on 29.07.2025, the Recovery Officer issued a demand notice claiming the awarded amount with simple interest and costs of Rs. 62,000/-. Earlier, the plaintiffs preferred M.A. No. 33/2022 challenging rejection of their application under Order XXXIX Rules 1 and 2 CPC, wherein status quo was granted by the Hon’ble Court and the matter remains pending. The revisionist Bank had also approached the Hon’ble Court in Writ Petition (227) No. 6/2023, wherein by order dated 22.08.2023 the trial court was directed to conclude the suit within one year, yet no substantial progress has been made since the suit’s institution on 04.12.2019. It is submitted that the plaintiffs have not challenged the DRT judgment before the Debt Recovery Appellate Tribunal, and the DRT order has thus attained finality, nevertheless, they continue the civil suit on the same subject matter relating to the mortgaged property, while the Bank is proceeding to realize its dues through auction pursuant to the DRT order. The revisionist had earlier filed Writ Petition (227) No. 599/2023 challenging dismissal of its order VII Rule 11 application, which was withdrawn with liberty to file a civil revision under Section 115 CPC, and thereafter Civil Revision No. 125/2023 was allowed by judgment dated 10.07.2024, wherein it was held that Section 34 of the SARFAESI Act, 2002 bars the jurisdiction of civil courts in matters falling within the domain of the DRT and consequently the suit was held not maintainable. The revisionist further relies upon the judgment of the
