The jurisdiction of a civil court is not barred under Section 34 of the SARFAESI Act in suits where the primary reliefs sought include the declaration of title and cancellation of a sale deed, even if the property is subject to proceedings initiated by a secured creditor.

Per, Amitendra Kishore Prasad, J.

1. This First Appeal under Section 96 of the Code of Civil Procedure (hereinafter to be referred as ‘CPC’) has been preferred by the appellants/plaintiffs calling in question the legality, validity, and propriety of the judgment and decree dated 13.04.2022 passed by the learned 3rd Additional District Judge, Bilaspur (C.G.) in Civil Suit No. A/30/2020, whereby the plaint has been rejected under Order VII Rule 11 CPC holding that the suit is barred under Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter to be referred as ‘SARFAESI Act’).

2. Following prayer has been made by the appellants/plaintiffs by way of this appeal:-

“It is therefore prayer that the impugned judgment passed by the 3rd Additional District Judge, Bilaspur, C.G. parties Neeraj Prasad & others Vs. Smt. Gauri Prasad & others may kindly be set aside and allowed the Appellants/plaintiffs appeal and restore the main suit in the ends of justice.”

3. Briefly stated, the suit property was purchased by late Ramanand Prasad, father of the appellants, by a registered sale deed dated 11.12.2002. After his death on 08.05.2009, the property devolved upon the appellants and Respondent No.1 as legal heirs. It is the case of the appellants that Respondent No.1, without consent of other co-heirs and without partition, got her name mutated exclusively and executed a registered sale deed dated 03.07.2017 in favour of Respondent No.2. Respondent No.2 thereafter mortgaged the suit property with Bank of Baroda, and upon default in repayment of loan, proceedings under Section 13(4) of the SARFAESI Act were initiated and possession notice dated 21.05.2019 was issued. The appellants filed a civil suit seeking declaration of title to the extent of 75% share, cancellation of the sale deed dated 03.07.2017, and permanent injunction restraining the Bank from auctioning the suit property. During the pendency of the suit, the respondent Bank filed applications under Sections 13, 34, and 35 of the SARFAESI Act and under Order VII Rule 11 CPC, contending that the jurisdiction of the civil court was barred. The learned trial Court accepted the said objections, relying upon Section 34 of the SARFAESI Act and the judgment passed in Jagdish Singh vs. Heeralal (2014) 1 SCC 479, and rejected the plaint.

4. Learned counsel for the appellants submits that the learned trial Court has committed a manifest error of law in rejecting the plaint by holding the suit to be barred under Section 34 of the SARFAESI Act. It is contended that the provisions of Sections 13 and 17 of the said Act are not attracted in the present case inasmuch as the appellants are neither borrowers nor guarantors, but are claiming independent title over the suit property as co-heirs. The suit, in essence, is one for declaration of title, cancellation of the sale deed dated 03.07.2017 as null and void, and for grant of permanent prohibitory injunction, which falls within the exclusive domain of the civil court and not within the jurisdiction of the Debts Recovery Tribunal. It is further submitted that the learned trial Court has failed to consider this material aspect and has erroneously ousted the jurisdiction of the civil court. The Debts Recovery Tribunal cannot adjudicate upon complicated questions of title, particularly between third parties who are not parties to the loan transaction. Learned counsel also contends that while deciding an appl