A claim for the residue amount of a property auctioned under the SARFAESI Act, based on the property being HUF assets, does not constitute a challenge to the SARFAESI proceedings and is therefore not barred by Section 34 of the SARFAESI Act.

ORDER

1. Present petition is preferred by the defendant under Article 227 of the Constitution of India, assailing order dated 06.03.2026 passed in RCS-A/171/2025 by Vth Additional District Judge, Dewas, District Dewas in a suit filed by the respondent No.1 for declaration and injunction, whereby the application filed by petitioner under Order VI Rule 16 of CPC was dismissed.

2. Short facts of the case are that, petitioner (hereinafter referred as defendant) and respondent No.1 (hereinafter referred as plaintiff) and other defendants are the members of Hindu Undivided family (hereinafter referred as 'HUF'). The plaintiff filed a suit for declaration and injunction in respect of the property bearing survey no. 719/1 and 720 of Village Khatamba District Dewas and survey no.170/5/2 of Village Bilwali, District Dewas on the ground that these two properties were purchased in the name of defendant through registered sale deeds from the nucleus of the HUF and these properties are the not self-acquired properties of defendant no. 2. It is further pleaded in the plaint that the defendant No.2 has dedicated these properties for the benefit of HUF as the properties were purchased by HUF in the name of defendant No.2. By way of amendment, it is also incorporated in the petition that one of the property has already been auctioned by the bank in the proceedings initiated under the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred as ‘SARFAESI ACT 2002’) and the residue amount after the auction be not handed over to the defendant No.2 as the HUF is entitled to get that amount from the bank.

3. After appearance, the petitioner/defendant No.2 moved an application under Order VII Rule 11 of CPC for rejection of the plaint, which was also dismissed by the impugned order, however, the said part of the order is not under challenge in the instant petition.

4. Another application is moved on behalf of defendant No.2 under Order VI Rule 16 for striking off the pleadings in the plaint on the ground that the pleadings are self contradictory as the plaintiff on the one hand has pleaded that the properties were purchased by HUF itself from the nucleus of the HUF in the name of defendant No.2 for the benefit of family and on the other hand the plaintiff has pleaded that defendant No.2 has dedicated the properties to HUF for use of the family. It is further stated in the application that the relief, which was incorporated by way of amendment in respect of the payment of residue amount by the bank, the same cannot be sought in this suit as the civil court has no jurisdiction under Section 34 of the SARFAESI Act in respect of the matters those may be decided by the Debts Recovery Tribunal and no injunction can be granted by any court or other authorities in respect of any action taken under the provisions of SARFAESI Act.

5. Plaintiff filed the reply of the application and opposed the application on the ground that the pleadings are not contradictory and no direction can be issued for striking off the pleadings. The plaintiff further submits that the plaintiff has not challenged the proceedings initiated by the bank under Section 13 of the SARFAESI Act, and therefore, the pleadings are not required to be struck out.

6. By the impugned order dated 06.03.2026, learned trial Court dismissed the application filed under Or