The High Court · 2025

...RESPONDENTS/PLA|NTtFF/DEFENDANTS 1 ro 4 .i: r. IA NO: 10F 2024 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit fired in suppori ot fl.," p.titi;n,irrJHign court may be preased to stay atl further proceedings i. d.s. N;'b'glioiz d^t"il 29'12'2023 on the file of the lll Additional Junior Civil Jrd;""R;;;; Htooy oistrict at L B' Nagar pending disposal of the main CRP. IA NO: 20F 2024 Petition under Ser>tion 151 CPC praying that. in the circumstances stated in Court ma1' be ple-as^ed to the affidavit filed in suppo.t oi tttt plition' irtt .Hlgkt receive the additional rat;;ials i.". bb bearing t'to goaas+ dt 06-04-2016 and letter issued by the 5th .us[onaent dt. 18-03-2014 in the interest o1' justice. Counsel for the Petitioners: SRI CH RAVINDER Counsel for the Respondents: SMT N ARTHI The Court made the following: ORDER : HON'BLE SRI JUSTICD LAXMI NARAYANA ALISHETTY CIVIL REVISIONPETITIONNo.780 of2024 ORDER: This Civil Revision petition, under Article 227 of the Constitution of India, is filed againsr the order dated 29.12.2023 in I.A.No.276 of 2022 in O.S.No.929 of 2022,passed by the III Addirional Junior CivilJudge, Ranga Reddy District at L.B. Nagar.

2. Heard Sri CH. Ravinder, learned counsel for the petitioners. and Smt N. Arthi, learned counsel lor respondent No.l.

3. Petitioner Nos.l and 2 herein are defendant Nos.5 and 6, respectively, respondent No.l is fie plaintiff and respondent Nos.2 to 5 are dcfendant Nos.l to 4, respectively, in the suit. For convenience, the parties will be hereinafter referred 10 as they are arrayed in the suit.

4. In concise, the facts of the case required for a_djudication of the present Civil Revision petition are that the plaintifl. filed the suit_ oS No'g2g of 2022 seeking the rerief or parlition of the suit schedule propcrty and to allot l/3'd share to the plaintiff and arso to decrare the sale deed bearing No.199l/2016, dated 07.04.2016, Certificate of Sare bearing document No.2g40/2021, d,ated, 2g.04.202r - .document I ! I 2 LNA,J C R.P No.78A o12021 I ti: and Mortgage l)eed bearing documentNo 3 69312016' dated 21 06 2016' u. ngl[ a1d voic 5 Defendant No.3 alleged to have purchased the suit schedule propefiy fiom the plaintiff and defendants No i and 2 through a registered sale decd bearing docurnent No iq91i20l 6' datecl O7 'O4 2016' by availing a house loan frotn Defendant No 4-Bank; that due to default committed b1' ILirn in repayment of [oan' the said loan was classihed as 'NPA' antt proceedings under thc Securitization And Reconstruction of Financial Ass,:ts And Errfbrcement of Security Intercst ,,\ct' 2022 (for brevity 'SARTAESI Act') were iniliated against defcndant No 3; and thatclefenclarltNo.4-Bankconductedspubiicauclion.inwhich defendanl No.5 and 6 ernerged as successlul bidders and purchased the suit schedu[e Property'

6. Meanrvhile, defendant No 3 hled S A No'17i of i1020 befbre the Debt Recoirrr.v Tribunat-Ii, Hyderabacl' (hereinaftcr referred to as 'DRT') challcnging the sale ancl the same is pending l)efendant No 4 Bank has ini-iated rleasures under the SARFAESI Act' took possession of the suit schedule property, pursuant to orclcr passed in Crl.M.P.No.l02 of 2020 by the Chief Metropolilan Magistrate' Cybcrabad at L.B. Nagar, and delivered thc same to dcfendant Nos 5 =\ ,/ 3 LNA,J C R.P No.rco of 202a and 6; that a sale ceftificate was issued in their favour, which was registered as Document bearing No.2g4 0/2021, dated 2g.04.2021, in the Sub-Registrar's Offi ce.

7. Defendant No.3 averred that since the salc is ijnder challengc before the DRT, as per Section 34 of SARIAESI Act, the civil court shall not have jurisdiction to entedain any suit or proceeding in respect of the matter which the DRT is empowered by or under the saicl Act and accordingly, he prayed to reject the plaint.

8. The trial Court, vide order daLed 29.12.2023 dismissed the said application on the ground thal in the plaint, since the status of the property is questioned and there is a egation against the secured crediror, in the light of the judgment of the erstwhile High Court of Andhra Pradesh in D.Ram Retldy Vs. Asset Reconslruction Company (India) Private Limitetl and otherst, the bar under Section 34 of SARIAESI Act would nor ar all apply and the civil Court is having jurisdiction to entertain the suit. euestioning the regality and varidity of the said order, the present Revision petition is filed. 9' Leamed counser appearing for the revision petitioners submitted that the irnpugned order passed by the trial court is ex-facie ilegal and ' zorelo; Rr-r s:: 1oe; 4 LNA,J I R.P No.780 of2024 ,], I the jurisdictiorr to deal with the instant case lies wilh the DRT as defendant No.:, has moflgaged the propertl' rvith defendant No 4-bank and as he cotrmilted ctefault in repaylnent of loan amount, defendant No.4-bank has invoked the provisions of the SAIIIAIISI Act. He further submitted that Scction 34 of the SARFAESI Act dcbars tl're civil Coutl from entertaining any suit or proceedings in respect of any matter in which the DR-- or the Appellate Tribunal is emporvercd b,v or under the said Act. and liettce, no iniunction can be granted b1' any civil Court' He furthcr subrnit.ted that the suit sohcdule propert)' r'vas sold in public auction in the 1'ear 2016 and thereafter, physical possession was taken under Sectior 34 of the SARIAESI Act in the year 2020 itsell howevcr, the plai ntiff-respondent No.1 herein filed the suit alleging fraud. obviou;l-v. only to overcomc the bar under Scctitx 34 of the SARFAESI ./,ct. Learned cotmsel lurthcr submitted thal the plaintiff was also one of the signatories of the sale deed, thcrefore' his plea ol fraud is only invcrrted fbr the purpose of filing the suit t)-v contending thus, learned oounsel prayed to sct aside the impugned ordcr as the trial court has entneously held that the civit courl is having turisdiction to enteftain the Suit.

10. Per ccntra, leamed counsel for respondent No 1 herein-plaintiff sbqgitted that the Civil Revision Petition is not maintrLinable and the ./' .ii-. 5 LNA,J C.R.P No 780 o!2024 lmpugned order was passed by the trial Court after due consideration of facts and the [aw. He further submifl.ed that the plaintiff never executed any document in favour of defendant No.3 and the subject sale deed has come into existence by way of impersonating him and as such, it is a forged and fabricated document and hencc, the plaintiff filed the suit to declare the said sale deed as null and void and not binding on the plaintifL Learned counsel, thercfore, submitted that in the above facts and circumstances of the case, the trial Court has rightly held that bar under Seclion 34 of the SARFAESI Act does not apply and the civil Court has .jurisdiction to enteftain the suit and finally, prayed to dismiss the Revision as the same is devoid of merit. 11. Learned counsel for respondent No.f in supporl of his aforesaid contentions and further, [o demonstrate the scope and ambit of Order VII Rule I lCpC, has relied upon the following judgments of the Ilon'blc Apex Court:- (l) Madanuri Sri Rama Chantlra lt[ urthy v. Syed Jalal2 (2) G. Nagoraj antl Another Versus B.p. Mruthunjayanna and Otherss ta Srihari Hanumandus Totala vs Hema Vithal Kamat & '1zon1 ts scc t.tn , 2023 SCCONLINE SC I27O I I LNA'J (..R P Na 780 oJ 2024 6 Orsa ' The r:atcgorical observations madc by the llon'b Le Apex Coutt t2 ir Madatturi Sri Ramo Chandra Mutthy's (cited supra) are extracted as hereunder:- "The aterments of the plaint have to be read as a "thole find out tvltether the avermenls disclose a cause of'trction or whetlrcr th.e suit is barretl blt any law' Il is needless lo obscrve that the qLLestiort cts to whelher lhe suit is barred bt' an.v ltttt' woukl always tlepentl upon lhe focts rtnd circufilrlatrces of each case' "

13. Furtht:r, the Hon'ble Apex Court in Srihari llanumandas Totala t,s Henrunt Vithal Kamat & Orss took a sinrilar view that suit is balaed by any law must be determined lrotn the statements in the plainl and it is not open to decide the issue on the basis of any other material inctuding in the written statement "

14. The l lon'ble Apex Court in G' Nagaraj an{l Another Versus B.P, Mrutltunifiyanna t'nd Olhers; obser-ved that when the ground pleaded for rejection of the plaint is the absence of cause of action' i o (zozt) g scc qg 5 {2021) 9 SCC 99 hrEa sccolLn s sc tzlo / 7 LN,1,J C.R.P No.780 o12024 the Court has to examine the plaint and see whether any cause of action has been disclosed in the plaint.

15. In the aforesaid judgments of the Hon'ble Apex Court, the law is well settled that for dealing with an application under Order VII Rule 11 of CPC, only the averments made in the plaint and the documents produced along with the plaint are required to be seen.

16. The High Court of Bombay in Shoshikant Gangar Versus Aditya Birh Finance Limitetl and OfhersT observed as tbllows:_ " The above averments as well as tlocuments would clearly show that there are specific pleaclings with regard to fraud and collusion between the bank as well as Defendants 3 and 4 and thus for that limited purpose of claim declaring loan facility agreement dated 29-ll-2020 and consequently creating of mortgage i.e. secured ossets is a fraud, certainly comes within Section9CPC and to thot effect bar unrler Section34of the SARFAESI Act as discussed in Martlia Chemicals Ltd Vs. Union of India (2004)4 SCC3 I t would not be absolute. Having concluded that the plaint cannot be rejected and bar created under Section34 of the Sarfaesi Act cannot be applied to the overments in the plaint, option available to this Court is to quas'h and set aside both the orders ofthe trial court ' zoz+ sccoNt-tNe Bom 3329 I LNI,J (:.R.P Na 780 ol2024 therehl' r?storing the plaint to the file of Comntercial Court to be decided in accordance with law. Coxsmnn rrtoN:

17. Apropc s the subrnissions advanced by learned counsel lor both the pat'tjes and the above f'actual matrix of the :ase and the material plar:ed on record, the only point that arises for consideration in this Revision is whether the trial Cor.Lrl was right ln holding that Section 34 of the SARFAESLA.cr has no application and the civil Court hasjurisdiction to try thc case

18. The Hcn'lrle Supreme Court in Central Bank of Indfu and another vs. Smt. Prabha Jain and Otherss, took a view that the jurisdiction ol'the civil Court is ousted only in the matters which the DRT or DRAT is empowered by or under the SAI{FAESI Acr. to determine and that the suits claiming relicf heyond the jurisdiction ol'the DRT or DRAT can be dealt with bv the Civil courts. For be:tel appreciation, the relevant para i.e., para 18 of the judgment is e>:tracted as hereunder: " 18. Further, rhe SARFAESI Act is enacted essentially io provkle a speedy mt:ch6n6* 7o, recovery of debrc by banks anct finoncial '(h29 4s SCC 38 9 LNA,J C RP No 780 of2024 institutions. The SARFAESI Act has not been enacted for providing a mechanism for adjudicating upon the validity of documents or to determine questions of titte find y. The DRT does not have the jurisdiction to grant a declaration with respect to the mortgage deed or the sale deecl os sought by the plaintiff The jurisdiction to declare a sale deed or d mortgage deed being illegal is vested with the civil court under Section 9 of the Code of Civil Procedure. Therefore, the civil court has the juriscliction to finally adjudicate upon the first two reliefs. "

19. The above principle laid down by the Hon,ble Supreme Court squarely applies to the instant case. In the present case, the relief sought for in the suit is to declare the sale deed alleged to have been executed by defendant Nos.l and 2 and plaintiff in favour of defendant No.3 and fuither the mortgage deed executed by defendant No.3 in favour of delendant No.4_Bank are null and void, which explicitly does not fall under the purview of the SARFAESI Acr, thereby, imposing a bar on the jurisdiction of the civil Courts to enteftain, adjudicate and decide the dispute. Section 34 of SARFAESI Act clearly expresses that the jurisdiction of the civil Courls is barred only in relation to matters which the DRT or DRAT are empowered to decide under the Act. 1 'l I l0 LNA,J t:.R.P No.780 oI2024

20. Section 9 of the Code of Civil Procedure (CI'C) mandates that civil Corrts have the power to try all suits ol a civil nature, unless their: cognizance is expressly or impliedly barred by 1aw'

21. A ccnjoint reading of Section 9 of CPC and Section 34 of SARI'AESI .{ct, in the light of the ratio laid down bi' the Hon'ble Supreme Courl in Shashikant Gangar's case (cited srpra) and the judgment of tlie High Court of MadrasinD.Rant Reddv's case (cited supra), tnakt:s it clear that the DI{T does not have urisdiction to adjudicate upotr the validity of the documents or to cletermine the questions of title finally, and in such matters, only the civil Coutts will have jurisdiction and fuilher, only "in respect of any matter" or suit or pr,tceeding which a DRT or DRAT are empowered by or runder the SARFAESI Act to decide, the jurisdictic'n of the civil Courts is baired.

22. ln th s regard, it is trite to refer to the judgment of the Hon'ble Supreme Court in Rohust Hotels Private Limited's case (cited supra), wherein it is explicitly observed that the expression "in respect of any matter" would take in the "measures" provided under sub-section (4) of Section 13 of the SAI$I\ESI Act. The l1 LNA,J C.R P No.780 oJ 2024 relief of declaration of sale deed and certificate of sale as null and void as sought for by plaintiff/respondent No.l herein in the suit does not fall under sub-section (4) of Section l3 olthe SARFAESI Act, thereby, conferring exclusive jurisdiction on the DRT or DRAT under the said Act. 23. Furthermore, as observed by the Hon,ble Supreme Court in Robust Hotels Private Limited's case (cited supra), if the jurisdiction overlaps in deciding the question of specific performance, the civil Court may be compelled to decide the validity of certain encumbrances created by the agreement vendor. 24. Applying the above-said principle of the Hon,ble Supreme Court to the instant case, it is evident that the civil Courl has got jurisdiction to adjudicate the present dispute as the plaintiff has sought to declare the sale deed and ceftificate of as null and void and consequently, for partition of the suit schedule prope(y and for allotment of l/3d share to him, on the ground of fraud and fabrication by defendant Nos.r and 2. Therefore, even if the charge created by defendant No.3 over the schedule propefty as security to the loan obtained by him from defendant No.4-bank overlaps with ( \ LNA,J C.R.P Na.780 oI2021 ,,j t2 the jurisdict on of the civil Court in deciding the question of validity of sale deed, Certificate of sale, etc., docurnents, the civil Courl will he.r,e jurisdiction to try and decide the same as the same cannot be said to be bared by the provisions of the Recovery of Debts Due tc, Financial Institutions Act, 1993 and SA.RFAESI Act

2002. There.nre, the trial Court has rightly held that bar under Section 34 ol the SARIAESI Act would not appl1, to the present case and the r;arne falls under the jurisdiction of the ci..,il court

25. In tl.e light of the judgments of the Hon'ble lrpex Courl in Madanuri Sli Rama Chandra Murtly's (cited supra), Srihari Hanumandas Totala's case (cited supra), G. Nagaraj's case (cited supra), the l: ri, is well settled that fbr clealing with an application under Order VII Rule 1 1 of CPC, only the avermentsr rnade in the plaint and the documents produced along with thc plaint are required to bt: seen.

26. In the instant case, a reading of averments ,:f the plaint clearly disclose a cause of action for filing the suit, as, the plaintiff sought to dr:clare the documents mentioned therein as null and void alleging the same as false and fabricated documents. IJence, in the I I 13 LNA,J C.RP No.780 of2024 light of the aforesaid judgments of the Hon'ble Apex Court, the plaintiff has made out a cause of action for filing the suit.

27. Perusal of the impugned order passed by the trial Court reveals that it had occasion to consider in detait the scope and applicability of Section 34 of the SARFAESI Act, in the context of the ground raised by the petitioner therein that the civil Court does not have jurisdiction to enteftain the suit as per Section 34 of the SARFAESI Act and as such, plaint is liable to be rejected. The trial Cour1, after meticulous analysis of the legal provisions goveming the aspect of jurisdiction has rightly concluded that the grounds raised in the said application does not fit into any of the grounds as provided under Order VII Rule 11 CpC for rejection of the plaint.

28. In the light of the foregoing discussion and reasons and also the settled legal position, this Court is of the considered opinion that the trial Court has rightly held that the DRT does not have jurisdiction to adjudicate upon the subject dispute the same falls under the jurisdiction of the civil court and rightry dismissed the application. The revision petitioners failed to point out any I 14 LNA,J C.R.P No 760 of2024 iltegality or Lrregularity in the impugned order passed by the trial Couft warrarting interference by this Court

29. IJence, this Civil Revision Petition fails and ir; accordingly dismissecl. No costs.

30. As a s:c1uel, the miscellaneous applications pending, if any, shall stand closed //TRUE COPY// SD/. MOHD. ISMAIL DEPIJTY REGISTRAR T SECTION OFFIGER To, l.lllAdditionalJurriorCivilJudge,RangaReddyDistrictatLB-Nagar 2. One CC to SRI (lH RAVINDER Advocate [OPUC] 3. One CC to SMT N ARTHI Advocate [OPUC] 4. Two CD CoPies SS/gh Y.V HIGH COURT DATED:0710712025 ) hIi:04 \ss \$! 1 + n- D o() i( DE.:I' ORDER CRP.No.780 of 2024 DISMISSING THE C.R.P. WITHOUT COSTS .oS*wb