The jurisdiction of a civil court is not barred under the relevant debt enforcement act where the dispute relates to the fundamental nature of the security interest or mortgage, as such matters do not fall under the specific measures defined for resolution by the designated recovery tribunal.

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S.B. Civil Revision No. 127 / 2017 ICICI Bank Limited through its Authorized Signatory Mohit Diwan, having its Branch Office at: New Mandi, Bharatpur.

----Petitioner Versus

1. Pramod Kumar Garg, S/o Tikaram, R/o Plot No.2, Gita Colony Bharatpur.

2. Smt. Sudha Garg, W/o Pramod Kumar Garg, R/o Plot No.2, Gita Colony Bharatpur.

----Respondents _____________________________________________________

For Petitioner(s) : Mr. Pankaj Gupta For Respondent(s) : Mr. G. C. Goel _____________________________________________________

HON'BLE MR. JUSTICE PRAKASH GUPTA

Judgment

30/11/2017

1. This revision petition has been filed by the petitioner against the order dated 23.05.2017 passed by the learned District Judge, Bharatpur rejecting an application under Order 7 Rule 11 CPC, filed by the petitioner in the civil suit No.34/2017.

2. Brief facts giving rise to this revision petition are that the petitioner-Bank issued a notice under Section 13 (2) of The Securitisation and Reconstruction of Financial Assets and Enforcement Of Security interest Act, 2002 (for short "SARFAESI Act") to enforce its security interest against the three properties specified in the notice which as per the petitioner Bank were mortgaged by the non-petitioners with the petitioner to secure the cash credit facility extended by the petitioner to a partnership firm in the name and style of M/s. Tikaram Industries in which non- petitioners are partners. On receipt of the notice, non-petitioners filed a civil suit No.34/2017 before the learned District Judge, Bharatpur for a decree of declaration to the effect that the mortgage interest of the bank in the non-petitioners’ property may be declared unenforceable under the "SARFAESI Act" without interference of the civil court and for a perpetual injunction to the effect that the petitioner must be restrained from enforcing its mortgage interest under Section 13 (2) of the "SARFAESI Act" as it is barred under Section 31 (1) of the said act. In the suit, the petitioner filed an application under Order 7 Rule 11 CPC, claiming that the suit was barred by section 34 of the "SARFAESI Act". The learned District Judge, Bharatpur having heard both the parties, rejected the application with the liberty to the petitioner bank that it may raise the issue in its reply to the suit.

Hence, the revision petition.

3. I have heard learned counsel for the parties and perused the record.

4. The main submission of the learned counsel for the petitioner Shri Pankaj Gupta is that the suit is barred by section 34 of the "SARFAESI Act" and the learned court below has committed jurisdictional and legal error in rejecting the application filed by the petitioner under Order 7 Rule 11 CPC. In this regard, it is submitted by him that the learned trial court has not rightly interpreted “security interest" as defined in Section 2 (ZF) of the "SARFAESI Act". The petitioner has a right to enforce its security interest over the properties mortgaged by way of equitable mortgage by the respondents in favour of the petitioner. The learned court below has misinterpreted section 31 of the "SARFAESI Act". Section 31 of the "SARFAESI Act" as well as Sections 125 to 127 of the Indian Contract Act have no application in the present matter. The finding of the court below is erroneous that jurisdiction of DRT is ousted in the present matter. It is an admitted case of the parties that properties had been equitably mortgaged in favour of the petitioner. The petitioner issued a valid notice under Section 13 (2) of the "SARFAESI Act" and thereafter, proceedings of at