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SUPREME COURT OF INDIA
K.S. Radhakrishnan, A.K. Sikri, JJ.
Jagdish Singh – Appellant
Versus
Heeralal and others – Respondents
CIVIL APPEAL NO. 9771 OF 2013 (Arising out of Special Leave Petition (Civil) No.18 of 2011)
Decided On : 30-10-2013
(2010) 8 SCC 110 - Relied upon
(b) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 34 - Matters which a Debts Recovery Tribunal or an Appellate Tribunal is empowered to determine - Section 34 ousts jurisdiction of civil court. (Para 20)
(2004) 4 SCC 311 - Relied upon
(2009) 4 SCC 94; (2009) 8 SCC 366 - Referred
Facts of the case:
Bank of India had advanced a loan of Rs.25 lakhs to M/s Guru Om Automobiles, through its proprietor on 17.02.2000. The loan was secured by equitable mortgage in respect of land measuring one acre as also on three houses.
On default in repayment, the Bank took action and the land was auctioned. No objection was taken by anybody.
Auction was settled in favour of the appellant herein being the highest bidder.
Suit was filed by some of the respondents claiming the property to be joint family property. DRT dismissed by DRT and this order attained finality.
Respondents filed suit in civil court which was upheld by High Court holding that civil court had jurisdiction in view of the fact that the properties were allegedly joint family properties.
Finding of the Court:
High Court erred in holding that civil court had jurisdiction.
Result : Appeal allowed.
Key Points: - Appellant was highest bidder and auction purchaser of land sold by Bank of India under SARFAESI Act for loan recovery from M/s Guru Om Automobiles [1000533700001][1000533700002] (!) (!) (!) (!) (!) - Respondents 1-5 filed civil suit claiming the auctioned land as joint family property, seeking declaration of title, partition, and injunction [1000533700002] (!) (!) (!) (!) (!) [1000533700003] - DRT dismissed challenge to sale notice by respondents 7-9 under Section 17, order attained finality; civil court initially dismissed suit under Order 7 Rule 11 CPC citing Section 34 bar [1000533700003][1000533700004][1000533700005] - High Court allowed appeal, holding civil court has jurisdiction to decide title dispute over alleged joint family property [1000533700006] (!) - Section 17 allows any person aggrieved by measures under Section 13(4) to apply to DRT, expression "any person" includes those affected like plaintiffs [1000533700014][1000533700016][1000533700017] (!) - Section 34 bars civil court jurisdiction over matters DRT or Appellate Tribunal can determine, including measures under Section 13(4) [1000533700018] (!) [1000533700019][1000533700021] - SARFAESI Act overrides other laws like CPC Section 9 where inconsistent [1000533700021] - Supreme Court held High Court erred, civil court has no jurisdiction; proper remedy is Section 17 before DRT [1000533700022] (!) - Appeal allowed, High Court judgment set aside [1000533700022]
JUDGMENT
K.S. Radhakrishnan, J.
Leave granted.
2. The appellant herein was the auction purchaser, being the highest bidder for Rs.18,01,000/-, in respect of the land admeasuring one acre in Khasra Nos.104/3 and 105/2, Patwari Halka No.4, Village Segaon, Anjad Road, Barwani, M.P., which was brought to sale for recovery of loan amounts under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “the Securitisation Act”). The auction was confirmed by the bank on 08.11.2005 on the appellant’s depositing Rs.2,90,250/- by 09.11.2005 and remaining 75% within 15 days. The appellant was not put in possession of the property in question even though the auction was confirmed.
3. The appellant – auction purchaser then came to know that Respondent Nos.1 to 5 herein have filed a Civil Suit No.16A/07 in the Court of District Judge, Barwani District for a declaration of title, partition and permanent injunction against Respondent Nos.7 to 9 and others in which the appellant and the bank were also made parties. Following are the reliefs sought for in the said civil suit:
“(A) Decree may be passed in favour of the plaintiff and against the defendants for declaration of title to this effect that one acre land in survey No.104/3 and 105/2 described in plaint para 4 (a) is undivided joint family property of plaintiff and defendants No.1 to 4 and the defendants have no right to mortgage it or attachment and auction of the same against any loan recovery by defendant No.5 and if defendants No.1 to 5 might have created any charge on the said land then it is not binding on the plaintiff.
(B) Decree of partition may be passed in favour of the plaintiffs and against the defendants for division of the suit land by metes and bounds and decree may be passed for separating the land of title of the plaintiffs and mutation effected in revenue papers.
(C) Decree of permanent injunction may be passed in favour of the plaintiffs against the defendant that the defendants shall not, directly or indirectly, transfer, auction or interfere over the suit land of the plaintiff in any manner.
(D) Costs of the suit may be awarded against the defendants.
(E) Other relief which the Hon’ble Court may deem proper may be granted to the plaintiff against the defendants.”
4. Respondent Nos.7 to 9 herein, in the meanwhile, filed an application before the Debt Recovery Tribunal (for short “the DRT”), Jabalpur under Section 17 of the Securitisation Act challenging the sale notice dated 08.11.2005. The application was opposed by the bank and the same was dismissed by the DRT vide its order dated 21.07.2006.
5. Respondent Nos.6 and 7 (the Bank) filed a preliminary objection before the civil court stating that in view of Section 13 read with Section 34 of the Securitisation Act, the civil court has no jurisdiction to entertain the suit. The court, therefore, framed the following issues:
“Whether under the provisions of Section 34 & 35 of SARFAESI Act 2002 this court does not have the jurisdiction to decide the suit as mentioned in special pleadings in para 10 of the written statement of defendant No.10 and also mentioned in para 15 of the written statement of defendant Nos.6 & 7.”
6. The civil court upheld the preliminary objection stating that if the plaintiffs had any right, they ought to have filed an appeal under Section 17 of the DRT Act and not a suit in view of the specific bar contained in Section 34 of the Securitisation Act. Civil court, therefore, passed an order on 18.01.2008 holding that the suit is not maintainable and, hence, the application preferred by the bank under Order 7 Rule 11 of the Civil Procedure Code (for short “the CPC”) was allowed.
7. Aggrieved by the said order, Respondent Nos.1 to 5 herein filed Civil First Appeal No.130/08 before the High Court of Madhya Pradesh at Indore. The High Court, however, allowed the appeal. The operative portion of the judgment reads as follow:
“I have perused
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