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2025 Supreme(SC) 163

J. B. PARDIWALA, R. MAHADEVAN
Central Bank Of India – Appellant
Versus
Prabha Jain – Respondent


Advocates appeared:
For The Appellant(s) Mr. O. P. Gaggar, AOR Mr. Sachindra Karn, Advocate Appeared: .
For The Respondent(s) Mr. Umesh Babu Chaurasia, Adv. Ms. Prity Kumari, Adv. Ms. Manjula Chaurasia, Adv. Mr. Maneesh Pathak, Adv. Mr. Rameshwar Prasad Goyal, AOR Ms. Pragati Neekhra, AOR Mr. Aditya Bhanu Neekhra, Adv. Mr. Atul Dong, Adv. Mr. Aniket Patel, Adv.

Judgement Key Points

Key Holdings

  • The civil court retains jurisdiction to adjudicate the validity of sale deeds and mortgage deeds executed prior to measures under Section 13(4) of the SARFAESI Act, as the Debts Recovery Tribunal (DRT) lacks power to determine such matters of title or document validity. (!) (!) (!)
  • Section 34 of the SARFAESI Act bars civil court jurisdiction only for matters the DRT or Appellate Tribunal is empowered to determine, limited to examining whether measures under Section 13(4) comply with the Act and rules. (!) (!) (!) (!)
  • DRT jurisdiction under Section 17 is confined to challenges against measures taken by secured creditors under Section 13(4); it cannot declare prior sale or mortgage deeds null or decide independent title disputes adverse to the borrower. (!) (!) (!) (!) (!)
  • Under unamended Section 17(3) of the SARFAESI Act (applicable here), DRT can only "restore" possession to the borrower or those claiming through them who were in prior possession; it cannot "hand over" possession to third parties with independent adverse claims not in possession at takeover. (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!) (!)
  • A plaint cannot be rejected in part under Order VII Rule 11 CPC; if any relief survives (e.g., declaration of prior document invalidity), the entire plaint proceeds, and courts must avoid adverse observations on other reliefs at this stage. [summary] (!) (!)
  • Plaintiff paid proper court fees for declarations of nullity (not requiring cancellation as non-party) and possession (valued per land revenue under Court Fees Act S.7(v)(a)). (!)

Facts

  • Plaintiff claimed 1/3rd share in inherited land; co-heir allegedly sold plot illegally (03.07.2008) to defendant who mortgaged to bank; bank took possession under SARFAESI S.13(4). Plaintiff sued for declarations of sale/mortgage nullity, possession, damages/mesne profits. (!) (!) (!) (!) (!) (!)
  • Trial court rejected plaint under O.VII R.11 (no jurisdiction per S.34 SARFAESI, insufficient fees); High Court reversed, restoring suit. (!) (!) (!)

Ratio

  • SARFAESI Act enables speedy debt recovery but does not adjudicate title/validity of antecedent documents; such disputes fall under civil court jurisdiction per CPC S.9. (!) (!) (!)
  • Illustrations clarify DRT limits: cannot resolve conflicting wills, adoption validity, or partition affecting title prior to security interest. (!) (!) (!) (!) (!) (!)
  • Wide "any person" in S.17(1) does not expand DRT powers beyond S.17(3) reliefs tied to S.13(4) measures. (!) (!) (!)
  • Bar under S.34 requires strict interpretation; civil jurisdiction retained unless expressly/impliedly ousted for DRT-empowered matters. (!) (!)

Result

  • Appeals dismissed; High Court order upheld; civil suit to proceed expeditiously. (!)

ORDER :

Since the issues raised in all the captioned appeals are the same, those were taken up for hearing analogously and are being disposed of by this common judgment and order.

2. The Civil Appeal No.1876 of 2016 is treated as the lead matter. The disposal of this appeal shall govern the disposal of all connected appeals.

3. This appeal arises from the judgment and order dated 30.10.2012 passed by the High Court of Madhya Pradesh at Jabalpur in First Appeal No.408 of 2012 by which the High Court allowed the appeal filed by the respondents herein-original plaintiffs and thereby, set aside the order passed by the 5th Additional District Judge, Bhopal in Civil Suit No.25A/2011 rejecting the plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908 (for short, “the CPC”).

4. The facts giving rise to this appeal may be summarised as under:-

Respondent no.1 namely, Smt. Prabha Jain instituted Civil Suit No.25A/11 praying for the following reliefs:-

    “a. It be declared that the disputed sale deed and the mortgage deed described in para 6 above are a nullity and it be declared that the defendant numbers 4 and 5 had no right to sell the disputed plot, to the defendant number 3 and the

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      Cases Referred (12)

      Mardia Chemicals Ltd. & Ors. v. Union of India & Ors. reported in (2004) 4 SCC 311 [Para 26]

      Jagdish Singh v. Heeralal & Ors. reported in (2014) 1 SCC 479 [Para 27]

      State Bank of Patiala v. Mukesh Jain & Anr. reported in (2017) 1 SCC 53 [Para 31]

      Robust Hotels Private Limited & Ors. v. EIH Limited & Ors. reported in (2017) 1 SCC 622 [Para 32]

      Authorised Officer

      Madhav Prasad Aggarwal & Anr. v. Axis Bank Limited & Anr. reported in (2019) 7 SCC 158 [Para 34]

      Electrosteel Castings Ltd. v. UV Asset Reconstruction Co. Ltd. & Ors. (2022) 2 SCC 573

      Bank of Baroda v. Moti Bhai & Ors. reported in (1985) 1 SCC 475 [Para 37]

      Harshad Govardhan Sondagar v. International Assets Reconstruction Co. Ltd. reported in (2014) 6 SCC 1 [Para 38]

      M.P. Wakf Board v. Subhan Shah (Dead) by LRs. reported in (2006) 10 SCC 696 [Para 39]

      Bank of Rajasthan Ltd. v. VCK Shares & Stock Broking Services Ltd.

      Dwarka Prasad Agarwal (Dead) by LRs. & Anr. v. Ramesh Chander Agarwal & Ors. reported in (2003) 6 SCC 220 [Para 43]

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