How to determine whether particular dispute falls within jurisdiction of civil court or debt recovery tribunal?

 In view of above, the sum and substance of the decision is
that :
(i) The jurisdiction of the Civil Court to entertain,
try and decide any suit or proceeding in respect of
the property, which is the subject matter of security
interest created in favour of a secured creditor, is
barred only to the extent of the matters, which the
Debts Recovery Tribunal or the Appellate Tribunal is
empowered by or under the Act to determine.
(Para 18)
(ii) The jurisdiction of the Civil Court in respect of
the matters, which do not fall within the jurisdiction
of the Debts Recovery Tribunal or its Appellate

Tribunal under Sections 17 and 18 of the said Act, is
not ousted or barred under the provision of
Section 34 of the said Act and the Civil Court
continues to exercise such jurisdiction. (Para 18)
(iii) In order to decide the question as to whether
the jurisdiction of the Civil Court under Section 9 of
the Civil Procedure Code is ousted or not, the real
test would be to find out whether the Debts
Recovery Tribunal under Section 17, is empowered
to hold an enquiry on a particular question and to
grant relief in respect thereof. The extent of
jurisdiction of the Debts Recovery Tribunal under
Section 17 shall decide the extent of exclusion of
jurisdiction of Civil Court to decide the dispute in
respect of the suit property. (Para 18)
(iv) The jurisdiction of the Civil Court to entertain,
try and decide a civil suit challenging the action of
the defendant no.3-Bank to take possession of the
suit property and to sell the same to recover its
debts by enforcing security interest in the suit
property in accordance with the provisions of
Section 13 of the said Act, is completely barred by
Section 34 of the said Act. (Paras 19, 20 and 23)
(v) The jurisdiction of the Civil Court to entertain,

try and decide the suit for partition and separate
possession of the property in respect of which
security interest is created in favour of secured
creditor, is not barred under Section 34 of the Act.
(Para 21)
(vi) The jurisdiction of Civil Court to entertain, try
and decide the Civil Suit claiming relief of
declaration that the action of the secured creditor
to take possession of the property and to sell the
same, is fraudulent and void, as has been held by
the Apex Court in Mardia Chemical's case, is not
barred by Section 34 of the said Act. (Para 23)
(vii) The jurisdiction of the Civil Court to entertain,
try and decide Civil Suit simpliciter for permanent
injunction to permanently restrain the defendant
No.3-Bank from taking possession of the suit
property and selling the same or to create any
third-party interest without any substantive relief of
declaration that the creation of security interest in
favour of a secured creditor was fraudulent and
void ab initio, is completely barred under the
second part of Section 34 and hence
consequentially, the jurisdiction of Civil Court to
pass an order of temporary injunction in such suit,
restraining the defendant No.3-Bank from alienating

the suit property or creating any third-party interest
therein, is also barred. (Para 25)
(viii) Once it is held that the jurisdiction of Civil
Court is not ousted under Section 34, to grant
substantive relief of declaration that creation of
security interest in favour of a secured creditor, was
fraudulent and void, its jurisdiction to grant
consequential relief of permanent injunction and
the relief of temporary injunction in such suit, is not
ousted. (Para 26)
(ix) Once it is held that the jurisdiction of the Civil
Court to entertain, try and decide the civil suit for
partition and separate possession of the suit
property is not barred by Section 34 of the said Act,
then it follows that the jurisdiction of the Civil Court
to grant permanent and temporary injunction
restraining the defendants from dealing with the
suit property or creating third party interest therein
is also not ousted by Section 34 of the said Act.
(x) It is open for the plaintiffs or any other person
having any right, title, share or interest in the suit
property to lodge their/his objection under
Section 17 of the said Act before the Debts
Recovery Tribunal, which is competent to deal with

it in accordance with law and to pass such orders as
are necessary to protect the interest of the
plaintiffs/such person vis-a-vis the suit property and
also to balance the equities. (Para 30)
(xi) The question as to what shall be the effect of a
decree passed in the suit for partition and separate
possession of the suit property or for declaration
that the action of secured creditor is fraudulent and
void ab initio by the Civil Court, on the enforcement
of security interest by the defendant No.3-Bank, i.e.
the secured creditor, can be determined only after
culmination of both the proceedings and not before.
(Para 30)

IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
 NAGPUR BENCH, NAGPUR
Civil Revision Application No.33 of 2010
And
Appeal against Order No.38 of 2010
Civil Revision Application No.33 of 2010
State Bank of India,

Versus
Shri Sagar s/o Pramod Deshmukh,

CORAM : R.K. Deshpande, J.

Date of Pronouncing the Judgment : 11-2-2011
Citation:2011(3) MHLJ71

1. Both these matters are admitted and since the same arise out
of the proceedings of Special Civil Suit No.52 of 2010, they are heard
together finally – though both the matters challenge different orders.

2. Civil Revision Application No.33 of 2010 challenges the order
dated 23-2-2010 passed by the learned 2nd Joint Civil Judge, Senior
Division, Amravati, rejecting the application Exhibit 17 filed under
Order 7, Rule 11 of the Civil Procedure Code in Special Civil Suit No.52 of
2010 for rejection of the plaint on the ground that it is barred by the
provisions of Section 34 of the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002 (for short,
hereinafter referred to as “the said Act”). Appeal against Order No.38 of
2010 challenges the order passed below Exhibit 5 in Special Civil Suit
No.52 of 2010 by the learned 2nd Joint Civil Judge, Senior Division,
Amravati, allowing the application for grant of temporary injunction
restraining the appellant/defendant No.3 Bank temporarily from taking
possession of the suit property or auctioning the same during the
pendency of the suit.
3. The respondent Nos.1 and 2 are the original plaintiffs, who
have filed Special Civil Suit No.52 of 2010 for declaration, partition,
separate possession and permanent injunction in respect of the suit
property described in the schedule of the suit property attached to the
plaint. The plaintiffs joined their father as the defendant No.1, since he
had mortgaged the suit property with the respondent No.3-Bank, and the
mother of the plaintiffs was joined as the defendant No.3. The
applicant-State Bank of India was joined as the defendant No.3 in the said
suit, for the reason that it had issued notice under Section 13(2) of the
said Act to the plaintiffs on 28-1-2010. The application for grant of
temporary injunction restraining the applicant/defendant No.3 Bank from

taking possession of the suit property or any portion thereof and
from selling the same in any manner, in the process under Section 13 of
the said Act, during the pendency of the suit was also filed. The parties
shall hereinafter referred to as per their original status in civil suit.
4. The claim of the plaintiffs in the suit is that the suit property is
the ancestral Joint Hindu Family property and they are the coparceners of
it, having 1/4th undivided share each in the said property. It is claimed in
the plaint that the suit property has been purchased by the defendant
Nos.1 and 2 from out of the income from the ancestral property, including
the income from the agricultural fields and other immovable properties.
It is alleged that the plaintiff Nos.1 and 2 together are carrying on the
ancestral business of selling of books on the ground floor of the suit
property and the first floor of the suit property is being used as the
residential house of the Joint Hindu Family. It is claimed that the suit
property has not been partitioned and hence a decree for partition and
separate possession of their share in the suit property has been claimed
by the plaintiff to the extent of their share.
5. It is the further averment in the plaint that the defendant No.1 has
taken a loan from the defendant No.3-Bank to satisfy his vices, by
mortgaging the suit property with the defendant No.3-Bank. The
defendant No.3-Bank has issued a notice under Section 13(2) of the said
Act to the plaintiffs and the defendant Nos.1 and 2 to discharge the
liabilities due and owing to the defendant No.3-Bank in the sum of
Rs.31,79,484.91 as on 31-12-2007 along with future interest. It is alleged
that the defendant Nos.1 and 2 were not the absolute owners of the entire

suit property and had, therefore, no authority to mortgage the same with
the defendant No.3-Bank. It is averred that the creation of mortgage was
not for the benefit of the family, but was for the purposes of satisfying
the vices of the defendant No.1. Hence, it is alleged that the creation of
mortgage was in collusion with the defendant No.3-Bank and the third
parties, which are interested in purchasing the property at throw-away
price, and the same was fraudulent. Hence, the relief is claimed for
declaration that the notice dated 8-2-2010 issued by the defendant No.3-
Bank was fraudulent and void ab initio and hence a permanent injunction
was claimed against the defendant No.3-Bank from proceeding to deal
with the property in accordance with the provisions of the said Act.
6. The defendant No.3-Bank filed an application Exhibit 17,
under Order 7, Rule 11 of the Civil Procedure Code for rejection of the
plaint on the ground that the suit as framed was barred by Section 34 of
the said Act. The plaintiffs filed their reply opposing the said application.
By an order dated 23-2-2010 passed below Exhibit 17 impugned in Civil
Revision Application No.33 of 2010, the application under order 7, Rule 11
of the Civil Procedure Code has been rejected. By a separate order
dated 23-2-2010, the application Exhibit 5 filed by the plaintiffs has been
allowed and the applicant/defendant No.3 Bank is temporarily restrained
from taking possession of the suit property or auctioning the same till the
decision of the suit.
7. While rejecting the application under Order 7, Rule 11 of the
Civil Procedure Code, the Trial Court has observed that the documents
placed on record clearly show that the plaintiffs and the defendant Nos.1

and 2 were forming the joint family and the defendant No.1 mortgaged
the suit property for loan with the Bank and he is absconding. Hence, the
argument that there is a collusion between the plaintiffs and the
defendant No.1 to defeat the proposed action of the Bank, has been
rejected. The contention of the applicant that the jurisdiction of the Civil
Court is barred in view of Section 34 of the said Act, has also been
rejected by holding that the plaintiffs are the sons of the defendant Nos.1
and 2 and they have share in the suit property and hence the statutory
provisions of Section 34 of the said Act will not take away the jurisdiction
of the Civil Court to deal with the suit for partition and separate
possession. While deciding the application Exhibit 5, the finding is
recorded that the Debts Recovery Tribunal under Section 17 of the said
Act, will not have jurisdiction to try legal right, title or interest of the
plaintiffs in the property mortgaged by their parents with the Bank. It has
been held that the question whether the suit property is self-acquired
property or joint family property, will have to be decided in the suit and
till then the auction of the property cannot be permitted to go on. With
these findings, the application under Order 7, Rule 11 has been rejected
and the application Exhibit 5 under Order 39, Rules 1 and 2 of the Civil
Procedure Code has been allowed.
8. In order to consider the question of rejection of the plaint
under Order 7, Rule 11(d) of the Civil Procedure Code, the facts as are
appearing from bare reading of the plaint are required to be considered
and not the facts stated in the defence by the defendants. If upon
consideration of such admitted facts a question of law arises for
consideration, then it can be decided under Order 7, Rule 11(d) of the

Civil Procedure Code. In the present case, the material fact, which is
admitted in the plaint, is that the suit property has in fact been
mortgaged with the defendant No.3-Bank for obtaining the loan by the
defendant Nos.1 and 2. The question is whether the suit for partition and
separate possession, challenge to the action of the secured creditor, i.e.
the defendant No.3-Bank, initiated under Section 13 of the said Act, or
the claim for injunction restraining the defendant No.3-Bank from taking
possession of property or selling it or any portion thereof, is barred by the
provision of Section 34 of the said Act. The questions whether the
plaintiffs are entitled to partition and separate possession, whether
creation of mortgage is legal valid, proper, without authority or
fraudulent, whether the action initiated by the defendant No.3-Bank
under Section 13 of the said Act is valid, legal, proper and in accordance
with the provisions of the said Act, and whether the plaintiffs are entitled
to get an order of injunction – permanent or temporary – restraining the
defendant No.3-Bank, can be gone into by the Civil Court only if it is held
that the jurisdiction of the Civil Court to grant such reliefs is not ousted by
the provision of Section 34 of the said Act.
9. Two questions arise in both these matters – (i) Whether the
jurisdiction of the Civil Court to entertain, try and decide such a suit, is
barred by the provisions of Section 34 of the said Act, and (ii) Even if
there is no such bar of jurisdiction of the Civil Court to entertain, try and
decide such a suit, whether its jurisdiction to grant or pass an order of
injunction is barred under Section 34 of the said Act.
10. In order to consider the question as to whether the jurisdiction

of the Civil Court to entertain, try and decide the suit for partition and
separate possession of the suit property, the provisions of Section 9 of
the Civil Procedure Code will have to be seen. Section 9 of the Code of
Civil Procedure deals with the Courts to try all civil suits unless barred. It
states that the Courts (subject to the provisions herein contained) have
jurisdiction to try all suits of a civil nature excepting suits of which their
cognizance is either expressly or impliedly barred. There is a strong
presumption that Civil Courts have jurisdiction to decide all questions of
civil nature. The rule that the exclusion of jurisdiction of Civil Courts is
not to be readily inferred, is based on the theory that Civil Courts are the
Courts of general jurisdiction and the people have a right, unless
expressly or impliedly debarred, to insist for free access to the Courts of
general jurisdiction of the State. As a necessary corollary of this rule,
provisions excluding jurisdiction of Civil Courts and provisions conferring
jurisdiction on authorities and Tribunals other than Civil Courts are
required to be strictly construed. The extent of exclusion will largely
depend upon construction of the provision enacted for that purpose.
When, with the object of speedy adjudication of certain matters, which
are widely defined, the jurisdiction of the normal Courts in respect of such
defined matters is excluded. The existence of jurisdiction in Civil Courts
to decide the questions of civil nature being the general rule and
exclusion being an exception, the burden of proof to show that
jurisdiction is excluded in any particular case is on the party raising such
a contention.
11. Now coming to the provisions of the said Act, Section 13 in
Chapter III of the said Act provides that a secured creditor may enforce

any security interest without intervention of the court of tribunal
irrespective of Section 69 or Section 69-A of the Transfer of Property Act
where according to sub-section (2) of Section 13, the borrower is a
defaulter in repayment of the secured debt or any instalment of
repayment and further the debt standing against him has been classified
as a non-performing asset by the secured creditor. Sub-section (2) of
Section 13 further provides that before taking any steps in the direction
of realizing the dues, the secured creditor must serve a notice in writing
to the borrower requiring him to discharge the liabilities within a period of
60 days failing which the secured creditor would be entitled to take any of
the measures as provided in sub-section (4) of Section 13. It may also be
noted that as per sub-section (3) of Section 13 a notice given to the
borrower must contain the details of the amounts payable and the
secured assets against which the secured creditor proposes to proceed in
the event of non-compliance with the notice given under
sub-section (2) of Section 13.
12. Sub-section (4) provides for four measures which can be
taken by the secured creditor in case of non-compliance with the notice
served upon the borrower. Under clause (a) of sub-section (4) the
secured creditor may take possession of the secured assets including the
right to transfer the secured assets by way of lease, assignment or sale;
may take over the management of the secured assets under clause (b)
including right to transfer; under clause (c) of sub-section (4) a manager
may be appointed to manage the secured assets which have been taken
possession of by the secured creditor and may require any person who
has acquired any secured assets from the borrower or from whom any

money is due to the borrower to pay the same to him as it may be
sufficient to pay the secured debtor as provided under clause (d) of
Section 3(4) of the Act. Sub-section (8) of Section 13, however, provides
that if all the dues of the secured creditor including all costs, charges and
expenses, etc. as may be incurred are tendered to the secured creditor
before sale or transfer, no further steps be taken in that direction.
13. Section 17 of the said Act deals with the right of appeal
before the Debts Recovery Tribunal and it states that any person
(including borrower) aggrieved by any of the measures referred to in
sub-section (4) of Section 13 taken by the secured creditor or his
authorised officer under this Chapter, may make an application along
with such fee, as may be prescribed to the Debts Recovery Tribunal
having jurisdiction in the matter within forty-five days from the date on
which such measures had been taken. The Apex Court in its judgment in
Mardia Chemicals Ltd. and others v. Union of India and others, reported
in (2004) 4 SCC 311, has considered this provision and it has been held
that the proceedings under Section 17 of the said Act, in fact, are not
appellate proceedings. It seems to be a misnomer. In fact, it is the initial
action which is brought before a forum as prescribed under the Act,
raising grievance against the action or measures taken by one of the
parties to the contract. It has been held that it is the stage of initial
proceeding like filing a suit in civil court and as a matter of fact
proceedings under Section 17 of the Act are in lieu of a civil suit which
remedy is ordinarily available but for the bar under Section 34 of the said
Act.

14. Section 34 of the said Act deals with the ouster of the
jurisdiction of the Civil Court and it is titled as “Civil court not to have
jurisdiction”. It states that no Civil Court shall have jurisdiction to
entertain any suit or proceeding in respect of any matter which a Debts
Recovery Tribunal or the Appellate Tribunal is empowered by or under
the said Act to determine. The Apex Court in Mardia Chemical's case,
cited supra, has considered the provisions of the said Act in para 50 of its
judgment, which are reproduced below :
“50. …............ A full reading of Section 34 shows that the
jurisdiction of the civil court is barred in respect of matters
which a Debts Recovery Tribunal or an Appellate Tribunal is
empowered to determine in respect of any action taken “or to
be taken in pursuance of any power conferred under this
Act”. That is to say, the prohibition covers even matters
which can be taken cognizance of by the Debts Recovery
Tribunal though no measure in that direction has so far been
taken under sub-section (4) of Section 13. It is further to be
noted that the bar of jurisdiction is in respect of a proceeding
which matter may be taken to the Tribunal. Therefore, any
matter in respect of which an action may be taken even later
on, the civil court shall have no jurisdiction to entertain any
proceedings thereof. The bar of civil court thus applies to all
such matters which may be taken cognizance of by the Debts
Recovery Tribunal, apart from those matters in which
measures have already been taken under sub-section (4) of
Section 13.”
Thus, the contention that the jurisdiction of Debts Recovery Tribunal is
available only when measures under sub-section (4) of Section 13 of the
said Act are taken and therefore, the jurisdiction of civil court to take
cognizance before such measures are taken is available, has been
rejected. It has been held that the prohibition covers even matters which
can be taken cognizance of by the Debts Recovery Tribunal, though no
measure in that direction has so far been taken under sub-section (4) of
Section 13 of the said Act. The bar of the civil court thus applies to all

such matters which may be taken cognizance of by the Debts Recovery
Tribunal, apart from those matters in which measures have already been
taken under sub-section (4) of Section 13. In para 51 of the judgment in
the Mardia Chemical's case, the Apex Court has held that to a very
limited extent the jurisdiction of the Civil Court can also be invoked,
where, for example, the action of the secured creditor is alleged to be
fraudulent or his claim may be so absurd and entertainable which may
not require any probe whatsoever or to say precisely, to the extent the
scope is permissible to bring an action in the Civil Court in the case of
English mortgages.
15. The matters in respect of which the Debts Recovery Tribunal
is empowered to take cognizance under Section 17 of the said Act, was
not the question before the Apex Court in Mardia Chemical's case.
Similarly, to what extent the relief can be granted by the Debts Recovery
Tribunal in exercise of its jurisdiction under Section 17 of the said Act has
also not been considered in the said judgment. The observations in para
51 of the said judgment in respect of the jurisdiction of the civil court are
general in nature. Hence, the extent of jurisdiction of the Debts Recovery
Tribunal under Section 17 of the said Act and the bar created under
Section 34 of the said Act in respect of the jurisdiction of the Civil Court
to entertain any suit or proceeding in respect of the matters which the
Debts Recovery Tribunal or the Appellate Tribunal is empowered by or
under the said Act to determine, will have to be considered.
16. Section 17 of the said Act being relevant is reproduced below:
“Right to appeal.-- (1) Any person (including borrower),

aggrieved by any of the measures referred to in
sub-section (4) of section 13 taken by the secured creditor or
his authorised officer under this Chapter, may make an
application along with such fee, as may be prescribed to the
Debts Recovery Tribunal having jurisdiction in the matter
within forty-five days from the date on which such measures
had been taken :
Provided that different fees may be prescribed for
making the application by the borrower and the person other
than the borrower.
Explanation.-- For the removal of doubts it is hereby
declared that the communication of the reasons to the
borrower by the secured creditor for not having accepted his
representation or objection or the likely action of the secured
creditor at the stage of communication of reasons to the
borrower shall not entitle the person (including borrower) to
make an application to the Debts Recovery Tribunal under
sub-section (1) of section 17.
(2) The Debts Recovery Tribunal shall consider whether
any of the measures referred to in sub-section (4) of
section 13 taken by the secured creditor for enforcement of
security are in accordance with the provisions of this Act and
the rules made thereunder.
(3) If, the Debts Recovery Tribunal, after examining the
facts and circumstances of the case and evidence produced
by the parties, comes to the conclusion that any of the
measures referred to in sub-section (4) of section 13, taken
by the secured creditor are not in accordance with the
provisions of this Act and the rules made thereunder, and
require restoration of the management of the secured assets
to the borrower or restoration of possession of the secured
assets to the borrower, it may by order, declare the recourse
to any one or more measures referred to in sub-section (4) of
section 13 taken by the secured assets as invalid and restore
the possession of the secured assets to the borrower or
restore the management of the secured assets to the
borrower, as the case may be and pass such order as it may
consider appropriate and necessary in relation to any of the
recourse taken by the secured creditor under sub-section (4)
of section 13.
(4) If, the Debts Recovery Tribunal declares the
recourse taken by a secured creditor under sub-section (4) of
section 13, is in accordance with the provisions of this Act
and the rules made thereunder, then, notwithstanding
anything contained in any other law for the time being in
force, the secured creditor shall be entitled to take recourse
to one or more of the measures specified under

sub-section (4) of section 13 to recover his secured debt.
(5) Any application made under sub-section (1) shall be
dealt with by the Debts Recovery Tribunal as expeditiously as
possible and disposed of within sixty days from the date of
such application :
Provided that the Debts Recovery Tribunal may, from
time to time, extend the said period for reasons to be
recorded in writing, so, however, that the total period of
pendency of the application with the Debts Recovery
Tribunal, shall not exceed four months from the date of
making such application made under sub-section (1).
(6) If the application is not disposed of by the Debts
Recovery Tribunal within the period of four months as
specified in sub-section (5), any party to the application may
make an application, in such form as may be prescribed, to
the Appellate Tribunal for directing the Debts Recovery
Tribunal for expeditious disposal of the application pending
before the Debts Recovery Tribunal and the Appellate
Tribunal may, on such application, make an order for
expeditious disposal of the pending application by the Debts
Recovery Tribunal.
(7) Save as otherwise provided in this Act, the Debts
Recovery Tribunal shall as far as may be, dispose of
application in accordance with the provisions of the Recovery
of Debts Due to Bank and Financial institutions ct, 1993 (51
of 1993) and the rules made thereunder.”
Perusal of sub-section (1) of Section 17 of the said Act shows that the
right of appeal is available to any person including borrower, who is
aggrieved by the measures referred to in sub-section (4) of Section 13,
taken by the secured creditor or his authorised officer under the said
Chapter. Sub-section (2) of Section 17 confers a jurisdiction upon the
Debts Recovery Tribunal to consider whether any of the measures
referred to in sub-section (4) of Section 13 are taken by the secured
creditor for enforcement of the security interest in accordance with the
provisions of the said Act and the rules made thereunder.
17. Section 34 of the said Act deals with the ouster of the

jurisdiction of the Civil Court, the same being relevant is reproduced
below :
“Civil Court not to have jurisdiction.-- No civil court shall
have jurisdiction to entertain any suit or proceeding in
respect of any matter which a Debts Recovery Tribunal or the
Appellate Tribunal is empowered by or under this Act to
determine and no injunction shall be granted to any court or
other authority in respect of any action taken or to be taken
in pursuance of any power conferred by or under this Act or
under the Recovery of Debts Due to Bank and Financial
Institutions Act, 1993 (51 of 1993).”
Bare perusal of Section 34 shows that the jurisdiction of the Civil Court is
specifically barred to entertain any suit or proceeding only to the extent
of the matters, which the Debts Recovery Tribunal or the Appellate
Tribunal is empowered by or under the said Act, to determine.
18. Once it is admitted that the suit property has in fact been
mortgaged with the Bank or Financial Institution, then it cannot be
disputed that the “security interest” is created, as defined under
Section 2(z-f) of the said Act in favour of a “secured creditor”, as defined
under Section 2(z-d) of the said Act in respect of the suit property. The
secured creditor thereupon, becomes entitled to enforce its secured
interest without intervention of the Courts or the Tribunals, in accordance
with the provisions of the said Act and the Rules framed thereunder, as
stipulated under sub-section (1) of Section 13 of the said Act and the
jurisdiction of the Debts Recovery Tribunal under Section 17 of the said
Act, springs in. However, even if the property in respect of which security
interest is found to be created in favour of a secured creditor, that by
itself will not be enough to oust the jurisdiction of the Civil Court to

decide other disputes in respect of such secured assets. The jurisdiction
of Civil Court to decide the suit involving such other disputes in respect of
secured assets, is barred only to the extent of the matters, which the
Debts Recovery Tribunal or its Appellate Tribunal is empowered by or
under the said Act, to determine. The Debts Recovery Tribunal is a Court
of limited jurisdiction, which cannot be enlarged beyond the examination
of validity of the action of a secured creditor under Section 13. All other
disputes in respect of secured assets, which do not fall within the
jurisdiction of the Debts Recovery Tribunal under Section 17 or its
Appellate Tribunal under Section 18, the Civil Court continues to exercise
its jurisdiction. Similarly, even if the jurisdiction of the Civil Court is not
barred under Section 9 of the Civil Procedure Code to decide other
disputes in respect of secured assets, that cannot encroach upon the
right of a secured creditor under Section 13 of the said Act, to enforce his
security interest in respect of such property and the jurisdiction of the
Debts Recovery Tribunal under Section 17 of the said Act, to protect such
security interest of a secured creditor remains exclusive to the extent of
the matters provided for under Sections 17 and 18 of the said Act.
Hence, a line of demarcation in this respect is required to be drawn to
define the compact area of jurisdiction of the Debts Recovery Tribunal
under Section 17 of the said Act. In order to decide the question as to
whether the jurisdiction of the Civil Court under Section 9 of the Civil
Procedure Code is ousted or not, the real test would be to find out
whether the Debts Recovery Tribunal under Section 17 of the said Act is
empowered to hold an enquiry on a particular question and to grant the
relief in respect thereof. The extent of jurisdiction of the Debts Recovery
Tribunal under Section 17 of the said Act shall decide the

extent of exclusion of the jurisdiction of the Civil Court to decide the
dispute in respect of the suit property.
19. Any person, including the borrower, aggrieved by any such
action taken by the secured creditor under Section 13, can file an
objection before the Debts Recovery Tribunal under Section 17 of the
said Act. If it is found by the Debts Recovery Tribunal that the recourse
taken by the secured creditors under sub-section (4) of Section 13 is in
accordance with the provisions of the said Act and the Rules framed
thereunder, then it has jurisdiction under sub-section (4) of Section 17 to
see that the secured creditor is entitled to take recourse to one or more
of the measures specified under sub-section (4) of Section 13 to recover
its secured debts, notwithstanding anything contained in any other law
for the time being in force. In such situation, the normal jurisdiction of
Civil Court cannot be invoked to defeat the rights of secured creditor
under Section 13 and to arrest the jurisdiction exercised by the Debts
Recovery Tribunal under Section 17, in view of bar of its jurisdiction
created under Section 34 of the said Act.
20. So far as the action of secured creditor is concerned, the
Debts Recovery Tribunal exercises the jurisdiction of superintendence
under sub-section (3) of Section 17, to see that the secured creditor acts
only in accordance with the provisions of the said Act and the rules
framed thereunder, to enforce its security interest and that it neither
does exceed its jurisdiction nor acts in breach or non-compliance with the
provisions of the said Act and the rules thereunder. The jurisdiction of
the Debts Recovery Tribunal under sub-section (3) of Section 17 is akin to

the jurisdiction of Civil Court, as has been held by the Apex Court, in
Mardia Chemical's case and it also extends to protecting the interest of
borrowers or any other person against any such illegal acts of secured
creditor, by directing such secured creditor to restore the management or
possession of secured assets to the borrower and to pass such order as it
may consider appropriate and necessary in relation to any of the
recourse taken by the secured creditor under sub-section (4) of
Section 13. While exercising such jurisdiction, the Debts Recovery
Tribunal can also adjudicate upon the questions whether security interest
was in fact created in respect of any property or part thereof in favour of
a secured creditor, or whether creation of such security interest in favour
of secured creditor was legal, valid and proper, or that the measures
taken by the secured creditor under sub-section (4) of Section 13 of the
said Act are in accordance with the provisions of the said Act and the
Rules framed thereunder, or even the question whether any bank or
financial institution or any consortium or group of banks or financial
institutions claiming itself or themselves to be secured creditor/s, are in
fact the secured creditors in respect of any property or part thereof. The
jurisdiction of Civil Court to decide all such questions is barred by Section
34 of the said Act.
21. Now coming to the facts of the present case, the plaintiffs
have filed Special Civil Suit No.52 of 2010 for declaration, partition,
separate possession and injunction. The reliefs claimed in the suit are as
under :
“i) It be declared that the suit property is ancestral, joint

hindu family property coparcenery property and the plaintiffs
together have ½ undivided joint share in the suit property.
ii) It be declared that the proposed action of the defendant
No.3 bank to take possession of the suit property on 8.2.2010
or any other date and thereafter to sell the same is arbitrary,
illegal, capricious, malafide, collusive, clandestine, secret,
fraudulent, void ab initio and is not in pursuance of the
provisions of the said Act and said Rules and the same is
without jurisdiction.
iii) By grant of permanent injunction, defendant No.3 be
restrained from taking possession of the suit property or any
portion thereof and be further restrained from selling the suit
property or any portion thereof in any manner whatsoever.
iv) By passing preliminary decree for partition of suit
property and commissioner be appointed to effect the
partition of the suit property by metes and bounds and
plaintiffs be put in separate possession of their 50% share
while the defendant nos.1 and 2 be put in separate
possession of her 25% share each.
v) The plaintiffs' costs of the suit and any other suitable
reliefs be decreed against the defendants.”
The plaintiffs are asking for a declaration that the suit property is
ancestral joint Hindu family property and they have 50% undivided share
in the property. On that basis, a preliminary decree for partition of the
suit property and for appointment of Commissioner to effect such
partition by metes and bounds and for putting the plaintiffs in separate
possession of their 50% share, has been asked for. These are the reliefs,
which are covered by prayer clauses (i) and (iv) of the plaint, reproduced
above. There is no provision in the said Act conferring upon the Debts
Recovery Tribunal or its Appellate Authority, the jurisdiction to pass a
decree for partition and separate possession of the suit property. Neither
the Debts Recovery Tribunal under Section 17 or its Appellate Authority
under Section 18 of the said Act, is conferred with the power to grant
declaration that the suit property is ancestral joint Hindu family property

and that the plaintiffs have an undivided share and interest in the said
property. Similarly, there is no jurisdiction vested under Section 17 or
Section 18 of the said Act to pass a decree for partition and separate
possession in respect of the joint Hindu family property. Hence, it cannot
be said that the jurisdiction of Civil Court to entertain, try and decide the
suit claiming the reliefs in terms of prayer clauses (i) and (iv) reproduced
above, is barred by the provision of Section 34 of the said Act.
22. Bare reading of prayer clause (ii) reproduced above, shows
that it is in two parts – the first one is for a declaration that the proposed
action of the defendant No.3-Bank to take possession of the suit property
on 8-2-2010 or any other date and thereafter to sell the same is
arbitrary, illegal, capricious, mala fide, collusive, clandestine, secret,
fraudulent, and void ab initio, and the second one is for a declaration that
such action of the defendant No.3-Bank is not in pursuance of the
provisions of the said Act and the Rules framed thereunder and the same
is, therefore, without jurisdiction. The averment in the plaint in support
of the first part of the relief claimed in prayer clause (ii) is that the
defendant Nos.1 and 2 were not the absolute owners of the entire suit
property and, therefore, they had no authority to mortgage the suit
property with the defendant No.3-Bank. The further averment is that the
creation of mortgage was not for the benefit of the family, but was for
the purposes of satisfying the vices of the defendant No.1. It is the
further averment that the creation of mortgage was in collusion with the
defendant No.3-Bank and the third parties, which are interested in
purchasing the property at throw-away price and the same was,
therefore, fraudulent. So far as the second part of the relief claimed in

the said prayer clause (ii) is concerned, except a bald statement in the
plaint that the action is not in accordance with the said Act and the Rules
framed thereunder, there is no other averment in support of it in the
plaint.
23. In Mardia Chemical's case, the Apex Court has held in para 51
of its judgment that to a very limited extent the jurisdiction of the Civil
Court can be invoked, where for example, the action of the secured
creditor is alleged to be fraudulent or his claim may be so absurd and
entertainable, which may not require any probe whatsoever. The
question whether the cause of action is made out for filing such suit on
the basis of pleading of material facts to find out whether any probe is
required or not, can be gone into by the Civil Court. The Debts Recovery
Tribunal under Section 17 of the said Act cannot adjudicate upon the
question as to whether the defendant Nos.1 and 2 were not the exclusive
owners of the entire property and that they had no authority to mortgage
the suit property with the defendant No.3-Bank. It also cannot adjudicate
upon the question that the creation of mortgage was not for the benefit
of the family, but was for the purposes of satisfying the vices of the
defendant No.1. It also cannot adjudicate upon the question as to
whether the creation of mortgage was in collusion with the defendant
No.3-Bank and the third parties, which are interested in purchasing the
suit property at throw-away price and the same was, therefore,
fraudulent. The Debts Recovery Tribunal has no jurisdiction to grant the
first part of the relief claimed in prayer clause (ii), viz. that the action of
the defendant No.3-Bank to take possession of the property on 8-2-2010
and to sell the same, is fraudulent and void ab initio. Hence, it has to be

held that the jurisdiction of the Civil Court to entertain, try and decide
Special Civil Suit No.52 of 2010 for a declaration that the creation of
mortgage in respect of the suit property was fraudulent, is not barred by
Section 34 of the said Act. However, the second part of prayer clause (ii),
wherein a declaration is claimed that the action of the defendant No.3-
Bank was not in accordance with the provisions of the said Act and the
Rules framed thereunder, can be gone into by the Debts Recovery
Tribunal under sub-sections (2), (3) and (4) of Section 17 of the said Act.
Hence, the jurisdiction of the Civil Court to grant the relief of declaration
that the action of the defendant No.3-Bank is not in accordance with the
provisions of the said Act and the Rules framed thereunder, is barred by
the provision of Section 34 of the said Act.
24. Now, coming to the reliefs claimed in terms of prayer
clause (iii) of the plaint reproduced above regarding permanent
injunction restraining the defendant No.3-Bank from taking possession of
the suit property or any portion thereof and further restraining from
selling the suit property or any portion thereof in any manner
whatsoever, the provision of Section 34 is required to be seen.
Section 34 of the said Act reproduced in earlier para is in two parts. The
first part states that no Civil Court shall have jurisdiction to entertain the
suit or proceeding in respect of any matter, which the Debts Recovery
Tribunal or the Appellate Tribunal is empowered by or under this Act to
determine. The second part of the provision prohibits the Court from
granting injunction in respect of any action taken or to be taken in
pursuance of any power conferred by or under the said Act or under the
Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

Once it is held that the suit in question to the extent it claims the reliefs
in prayer clauses (I), (iv) and the first part of prayer clause (ii), is
maintainable and the jurisdiction of the Civil Court to entertain, try and
decide the same, is not barred by Section 34 read with Section 17 of the
said Act, then the question is whether the jurisdiction of the Civil Court to
grant permanent injunction in terms of prayer clause (iii) is ousted.
25. The learned counsel for the applicant/appellant-Bank has
relied upon the judgment, which I have delivered in Punjab National Bank
Ballarpur v. Shaikh Jumman Shaikh Guljar, and which is reported in
2010(4) Mh.L.J. 133. It was a case arising out of the order passed by the
Trial Court dismissing the suit filed by the plaintiff, in exercise of its
jurisdiction under Order 7, Rule 11(d) read with Section 9A of the Civil
Procedure Code on the ground that there was no case of fraud made out
either in the pleadings or by placing any material on record. The
Appellate Court set aside the said order and directed the Trial Court to
restore the suit and to proceed further in accordance with law. It was
held that the question raised in the plaint as to whether there was a
fraud played or not, could not be gone into by the Debts Recovery
Tribunal under Section 17 of the said Act, but the Civil Court can go into
this aspect. This was the subject matter of the Civil Revision Application
filed before this Court. This Court noticed that it was the suit simpliciter
claiming decree for permanent injunction restraining the defendant No.3-
Bank and its officers from taking possession of the property on the basis
of the notice issued under Section 13(2) of the said Act. Thus, it was a
decision rendered on the preliminary issue, which was framed, as to
whether the jurisdiction of the Civil Court to entertain, try and decide the

suit claiming permanent injunction, was barred by Section 34 of the said
Act. In para 11 of the said judgment, it is made clear that there was no
relief of declaration claimed in the suit, that the defendant-Bank is an
unsecured creditor or that the creation of security interest in favour of
the Bank in respect of the suit property of the father of the plaintiff is
fraudulent and, therefore, null and void. Hence, simpliciter suit for
permanent injunction restraining the defendant No.3-Bank from taking
possession of the suit property and selling the same or to create thirdparty
interest, without substantive relief of declaration that the creation
of security interest in favour of secured creditor was fraudulent and void
ab initio, is completely barred by Section 34 of the said Act.
Consequently, it was held that the jurisdiction of Civil Court to grant
temporary injunction in such situation is also barred by Section 34 of the
said Act.
26. Here, in the present case, it is the suit claiming partition and
separate possession of the suit property with further declaration that the
proposed action of the defendant no.3-Bank is fraudulent and void
ab initio. Along with these main reliefs, a relief of permanent injunction
is claimed. Once it is held that the Civil Court has jurisdiction to entertain,
try and decide such a suit claiming reliefs under prayer clauses (i), (iv)
and first part of prayer clause (ii) and the bar under Section 34 of the
said Act does not apply, then the power of the Civil Court to grant
permanent injunction in terms of prayer clause (iii) on its own merits, on
the touchstone of the provisions of Section 38 of the Specific Relief Act,
cannot be ousted. Similarly, if the Civil Court has jurisdiction to grant
permanent injunction, then its jurisdiction to grant temporary injunction

under Order 39, Rules 1 and 2 read with Section 151 of the Civil
Procedure Code also cannot be held to be barred by Section 34 of the
said Act. It is only in cases where the suit simpliciter is for grant of
permanent injunction restraining the Bank or Financial Institution from
enforcing security interest under sub-section (1) of Section 13, the
jurisdiction of the Civil Court is held to be barred under Section 34 of the
said Act, in the aforesaid judgment. Hence, the said judgment does not
apply to the facts of this case.
27. The learned counsel for the applicant/appellant relied upon
the judgment of this Court in Khamgaon Urban Co-op. Bank Ltd.,
Amravati v. Karunashankar Ramkishore Tiwari and others, reported in
2007(2) Mh.L.J. 641, in support of his submission that a suit for specific
performance of contract filed after completion of action under
Section 13(4) of the said Act is held to be barred by Section 34 of the
said Act. The reliance is placed on paras 25 and 26 of the said judgment.
This Court has decided in the said judgment, the point as to whether the
plaintiff's suit for specific performance is maintainable. It was held that
the prayer for specific performance of agreement to sell would get
frustrated once the action under sub-section (4) of Section 13 of the said
Act is complete and reaches the finality. It was held that the prayer for
decree for specific performance was frustrated much before the date
when the suit was filed. It was further held that the plaint does not
disclose any cause of action against the Bank and the secured creditor
was, therefore, not a necessary party to such suit. It was held that prima
facie the plaintiff's suit is not maintainable. This decision, in my view,
does not help the applicant/appellant to urge that the present suit be

dismissed in its entirety as not maintainable. It was not a case arising
out of an order passed under Order 7, Rule 11(a) and (d) or Section 9A of
the Civil Procedure Code. The case arose out of an order passed by the
Trial Court granting an injunction in favour of the plaintiff. The Court has
held that the order of injunction passed by the Trial Court was wholly
unjustified. The observation made by the Court on the question whether
the plaintiff's suit for specific performance was maintainable or not,
cannot constitute a binding precedent in such a situation for the reason
that it was only on prima facie assessment of case that such
observations were made. Hence, prima facie observations on merits of
the matter made while deciding the application for grant of temporary
injunction would not bind the Court, either while deciding the application
under order 7, Rule 11(a) and (d) or under Section 9A of the Civil
Procedure Code, or while deciding the suit on merits. In the said
judgment, the suit was not dismissed, but it was merely an application
for temporary injunction, which was rejected.
28. The another judgment relied upon by the learned counsel for
the applicant/appellant is delivered by this Court in Khamgaon Urban
Co-operative Bank Ltd., Khamgaon and another v. Prashant Bhagwantrao
Raikwar and others, reported in 2010(1) Mh.L.J. 875. It was also a case
arising out of the order passed by the Trial Court restraining the
Bank from enforcing liability of repayment of loan against the plaintiff. It
was not a judgment rendered either on the application under Order 7,
Rule 11(a) and (d) or under Section 9A of the Civil Procedure Code or
while deciding the suit on merits. In the said judgment, the earlier
judgment in the case of Khamgaon Urban Co-op. Bank Ltd., Amravati,

cited supra, was relied upon. In view of this, any observation on the
question whether the jurisdiction of the Civil Court to try the suit was
barred by Section 34 of the said Act on prima facie assessment of the
case, would not constitute a ratio, which will be binding, while deciding
the application under Order 7, Rule 11(a) and (d) or under Section 9A of
the Civil Procedure Code, or while deciding the suit on merits. The said
judgment is also of no help to the applicant/appellant.
29. The third judgment relied upon by the learned counsel for the
applicant/appellant is rendered by this Court in Yuth Development
Co-operative Bank Ltd., Kolhapur v. Balasaheb Dinkarrao Salokhe and
others, reported in 2008(5) Mh.L.J. 326. It was, however, a case where
an application under Section 9A of the Civil Procedure Code was made
before the Trial Court raising a preliminary issue about the jurisdiction
and tenability of the suit. The issue framed by the Trial Court was as
under :
“Whether this Court has jurisdiction to entertain, try and
decide the suit in view of the contentions regarding sections
91 and 164 of the M.C.S. Act and Securitisation Act ?”
The Trial Court has held that the suit was not barred under Section 91 of
the Maharashtra Co-operative Societies Act, 1960. It has further held
that the Civil Court had jurisdiction to entertain the suit. This Court did
not decide the question as to whether the jurisdiction of the Civil Court to
entertain, try and decide the suit was barred by Sections 91 and 164 of
the Maharashtra Co-operative Societies Act. However, on the basis of

the provisions of Section 13, 17 and 34 of the said Act, it was held that
the Civil Court had no jurisdiction to entertain the suit in view of the bar
of Section 34 of the said Act. Thus, a suit seeking declaration that the
notice issued under Section 13 of the said Act was illegal, unauthorized,
without jurisdiction and null and void, was held to be barred by
Section 34 of the said Act. The view, which I have taken in earlier
paras (19, 20 and 23), is in conformity with the view taken in this
judgment.
30. Where any property is the subject matter of suit for partition
and separate possession filed in the Civil Court and where security
interest is created in favour of secured creditor in respect of the very
same property and the secured creditor proceeds to deal with such
property under Section 13 under the protection provided by the Debts
Recovery Tribunal under Section 17 of the said Act, the question may
arise as to what shall be the effect of a decree for partition if passed by
the Civil Court, on the measures adopted by the secured creditor under
the protection of the Debts Recovery Tribunal. In such situation, the
provision of Section 35 of the said Act shall pay a vital role in
determination. It states that the provisions of the said Act shall have
effect, notwithstanding anything inconsistent therewith contained in any
other law for the time being in force or any instrument having effect by
virtue of any such law. Such a question will have to be determined with
reference to this provision, only upon occurrence of such eventuality and
not before. To consider such question and to decide it at any time before
the final decision of suit or proceedings under Section 17 of the said Act
will be premature. It would amount to pre-empting the issue. If such suit

is dismissed on merits, it shall clear the way of secured creditor. If it is
decreed, the question would arise as to whether such a decree is
executable and if it is, then against whom and to what extent. As
pointed out earlier, even if such suit is pending in a Civil Court on the
date when notice under sub-section (2) of Section 13 is issued, in respect
of the property, over which security interest is created, an objection can
be raised before the Debts Recovery Tribunal under Section 17 of the
said Act by any person including a person claiming to be a coparcener of
ancestral joint Hindu family property. It is always open for the Debts
Recovery Tribunal either to pass an order of injunction restraining the
Bank or the Financial Institution from selling the property or creating any
third party interest or to pass such orders as may be deemed fit or
proper to protect or secure the interest of such person approaching the
Debts Recovery Tribunal. If suit is filed subsequent to initiation of action
under Section 13 of the said Act by a secured creditor and the application
is filed for temporary injunction, the Civil Court can either pass an order
of injunction on well settled principles of law or can, without granting
injunction, put the parties to certain terms, to protect the interest of
plaintiffs or other parties to such suit, under order 39, Rules 1 and 2 of
the Civil Procedure Code. The fact that such suit is filed before or after
initiation of action under Section 13(2) of the said Act is not relevant to
decide the question as to whether the jurisdiction of Civil Court to decide
any other dispute in respect of the secured assets, is barred by Section
34 of the said Act. The factors relevant to decide such questions are
already pointed out in para 18 of this judgment.
31. Prima facie, after going through the averments made in the

plaint, it seems that the suit property has been mortgaged with the
defendant No.3-Bank by the defendant Nos.1 and 2, much prior to filing
of suit. It is also not in dispute that the loan was obtained for carrying on
the ancestral business of selling of books on the ground floor of the suit
property. It is not the loan obtained for the purposes of satisfying the
vices of the defendant No.1, as alleged. It is altogether a different
question whether the defendant No.1, the father of the plaintiffs, has
utilized the amount of loan for satisfying his vices. The suit has been
filed after receipt of notice under Section 13(2) of the said Act calling
upon the plaintiffs and the defendants to discharge the liabilities due and
owing to the defendant No.3-Bank in the sum of Rs.31,79,484.91 as on
31-12-2007 along with future interest.
32. In view of the provision of Section 13(1) of the said Act and
the factual background, the secured creditor is entitled to enforce his
security interest without intervention by any court or tribunal. The suit to
the extent it claims relief in second part of prayer clause (ii) of the plaint,
has been held to be barred by Section 34 of the said Act. The question
whether the defendant No.3-Bank is acting in accordance with the
provisions of the said Act and the Rules framed thereunder, can be gone
into by the Debts Recovery Tribunal under Section 17 of the said Act.
Any action of the secured creditor under Section 13 or any order of the
Debts Recovery Tribunal can be made subject to the result of the suit.
This will, however, not prevent the Debts Recovery Tribunal or its
Appellate Tribunal to pass such further orders as it may deem fit and
proper to protect the interest of the borrower or the plaintiffs herein in
terms of the provisions of sub-sections (2), (3) and (4) of Section 17 of

the Act. Hence, no prima facie case is made out for grant of temporary
injunction, though the plaintiffs may be held entitled to grant of partition
and separate possession of the suit property. The balance of convenience
does not lie in favour of the plaintiffs, as they are carrying on the
ancestral business, for which loan is obtained from the defendant
No.3-Bank. The plaintiffs must have reaped the fruits of borrowings to
some extent. Hence, if the order of injunction is refused, then the
plaintiffs are not likely to suffer any irreparable loss. The application
Exhibit 5 is, therefore, liable to be rejected with the condition that the
outcome of the proceedings under Sections 13 and 17 of the said Act
would be subject to the decision of this Special Civil Suit.
33. In view of above, the sum and substance of the decision is
that :
(i) The jurisdiction of the Civil Court to entertain,
try and decide any suit or proceeding in respect of
the property, which is the subject matter of security
interest created in favour of a secured creditor, is
barred only to the extent of the matters, which the
Debts Recovery Tribunal or the Appellate Tribunal is
empowered by or under the Act to determine.
(Para 18)
(ii) The jurisdiction of the Civil Court in respect of
the matters, which do not fall within the jurisdiction
of the Debts Recovery Tribunal or its Appellate

Tribunal under Sections 17 and 18 of the said Act, is
not ousted or barred under the provision of
Section 34 of the said Act and the Civil Court
continues to exercise such jurisdiction. (Para 18)
(iii) In order to decide the question as to whether
the jurisdiction of the Civil Court under Section 9 of
the Civil Procedure Code is ousted or not, the real
test would be to find out whether the Debts
Recovery Tribunal under Section 17, is empowered
to hold an enquiry on a particular question and to
grant relief in respect thereof. The extent of
jurisdiction of the Debts Recovery Tribunal under
Section 17 shall decide the extent of exclusion of
jurisdiction of Civil Court to decide the dispute in
respect of the suit property. (Para 18)
(iv) The jurisdiction of the Civil Court to entertain,
try and decide a civil suit challenging the action of
the defendant no.3-Bank to take possession of the
suit property and to sell the same to recover its
debts by enforcing security interest in the suit
property in accordance with the provisions of
Section 13 of the said Act, is completely barred by
Section 34 of the said Act. (Paras 19, 20 and 23)
(v) The jurisdiction of the Civil Court to entertain,

try and decide the suit for partition and separate
possession of the property in respect of which
security interest is created in favour of secured
creditor, is not barred under Section 34 of the Act.
(Para 21)
(vi) The jurisdiction of Civil Court to entertain, try
and decide the Civil Suit claiming relief of
declaration that the action of the secured creditor
to take possession of the property and to sell the
same, is fraudulent and void, as has been held by
the Apex Court in Mardia Chemical's case, is not
barred by Section 34 of the said Act. (Para 23)
(vii) The jurisdiction of the Civil Court to entertain,
try and decide Civil Suit simpliciter for permanent
injunction to permanently restrain the defendant
No.3-Bank from taking possession of the suit
property and selling the same or to create any
third-party interest without any substantive relief of
declaration that the creation of security interest in
favour of a secured creditor was fraudulent and
void ab initio, is completely barred under the
second part of Section 34 and hence
consequentially, the jurisdiction of Civil Court to
pass an order of temporary injunction in such suit,
restraining the defendant No.3-Bank from alienating

the suit property or creating any third-party interest
therein, is also barred. (Para 25)
(viii) Once it is held that the jurisdiction of Civil
Court is not ousted under Section 34, to grant
substantive relief of declaration that creation of
security interest in favour of a secured creditor, was
fraudulent and void, its jurisdiction to grant
consequential relief of permanent injunction and
the relief of temporary injunction in such suit, is not
ousted. (Para 26)
(ix) Once it is held that the jurisdiction of the Civil
Court to entertain, try and decide the civil suit for
partition and separate possession of the suit
property is not barred by Section 34 of the said Act,
then it follows that the jurisdiction of the Civil Court
to grant permanent and temporary injunction
restraining the defendants from dealing with the
suit property or creating third party interest therein
is also not ousted by Section 34 of the said Act.
(x) It is open for the plaintiffs or any other person
having any right, title, share or interest in the suit
property to lodge their/his objection under
Section 17 of the said Act before the Debts
Recovery Tribunal, which is competent to deal with

it in accordance with law and to pass such orders as
are necessary to protect the interest of the
plaintiffs/such person vis-a-vis the suit property and
also to balance the equities. (Para 30)
(xi) The question as to what shall be the effect of a
decree passed in the suit for partition and separate
possession of the suit property or for declaration
that the action of secured creditor is fraudulent and
void ab initio by the Civil Court, on the enforcement
of security interest by the defendant No.3-Bank, i.e.
the secured creditor, can be determined only after
culmination of both the proceedings and not before.
(Para 30)
34. In view of above, Civil Revision Application No.33 of 2010
challenging the order dated 23-2-2010 passed by the learned 2nd Joint
Civil Judge, Senior Division, Amravati, rejecting the application Exhibit 17
filed under Order 7, Rule 11 of the Civil Procedure Code in Special Civil
Suit No.52 of 2010, is partly allowed by holding that the jurisdiction of
the Civil Court to grant second part of the relief in terms of prayer
clause (ii), as observed in para 23 above, of the Special Civil Suit No.52 of
2010, is completely barred by Section 34 of the said Act and hence to
that extent, the suit is dismissed.
Appeal against Order No.38 of 2010 is allowed. The order
passed below Exhibit 5 in Special Civil Suit no.52 of 2010 by the learned

2
nd Joint Civil Judge, Senior Division, Amravati, granting temporary
injunction restraining the defendant No.3-Bank from taking possession of
the suit property or auctioning the same during the pendency of the suit,
is quashed and set aside and the application at Exhibit 5 filed in Special
Civil Suit No.52 of 2010 is rejected, subject to the condition that the
action of defendant no.3-Bank under Section 13 of the said Act and the
decision of the proceedings, if instituted under Section 17 of the said Act,
shall be subject to the decision of Special Civil Suit No.52 of 2010.
35. Rule is made absolute in above terms. There shall be no
order as to costs.
JUDGE.

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