Rajasthan High Court - Jodhpur
Parasmal vs Prakash Chandra on 7 November, 2025
Author: Kuldeep Mathur
Bench: Kuldeep Mathur
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HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil First Appeal No. 301/2023
1. Parasmal S/o Jassu Devi And Ishwarchand, Aged
About 65 Years, Resident Of Gangashahar, District
Bikaner, At Present Residing At Jorawar Pura, Nokha,
District Bikaner. (Plaintiff)
2. Babu Lal S/o Jassu Devi And Ishwarchand, Aged About
59 Years, Resident Of Gangashahar, District Bikaner,
At Present Residing At Jorawar Pura, Nokha, District
Bikaner. (Plaintiff)
----Appellants
Versus
1. Prakash Chandra S/o Late Sh. Bhanwar Lal Maroti, R/o
Pabu Chowk, Nai Line, Gangashahar, District Bikaner.
2. Hadman Mal S/o Late Kistoorchand Maroti, Resident
Of Pabu Chowk, Nai Line, Gangashahar, District
Bikaner.
3. Smt. Pushpa Devi Maroti W/o Late Sh. Dev Chand
Maroti, Resident Of Pabu Chowk, Nai Line,
Gangashahar, District Bikaner.
4. Kamal Maroti S/o Late Sh. Dev Chand Maroti, R/o
Pabu Chowk, Nai Line, Gangashahar, District Bikaner.
5. Navratan Maroti S/o Late Sh. Dev Chand Maroti, R/o
Pabu Chowk, Nai Line, Gangashahar, District Bikaner.
6. Tarachand S/o Surajmal, R/o Pabu Chowk, Nai Line,
Gangashahar, District Bikaner.
7. Manoj S/o Surajmal, R/o Pabu Chowk, Nai Line,
Gangashahar, District Bikaner.
8. Dal Chand S/o Late Sh. Sohan Lal, R/o Pabu Chowk,
Nai Line, Gangashahar, District Bikaner.
9. Magan Mal S/o Late Of Sh. Sohan Lal, R/o Pabu
Chowk, Nai Line, Gangashahar, District Bikaner.
10. Harakhchand S/o Late Sh. Sohan Lal, R/o Pabu
Chowk, Nai Line, Gangashahar, District Bikaner.
11. Smt. Sarla W/o Sh. Mohan Lal, R/o Pabu Chowk, Nai
Line, Gangashahar, District Bikaner.
12. Vishwajeet S/o Sh. Mohan Lal, R/o Pabu Chowk, Nai
Line, Gangashahar, District Bikaner.
13. Uttam S/o Sh. Mohan Lal, R/o Pabu Chowk, Nai Line,
Gangashahar, District Bikaner.
14. Vijay Kumar S/o Jas Karan, R/o Pabu Chowk, Nai Line,
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Gangashahar, District Bikaner.
15. Smt. Prakash W/o Late Sh. Inder Chand Maroti, R/o
Pabu Chowk, Nai Line, Gangashahar, District Bikaner.
16. Tarun S/o Late Sh. Inderchand Maroti, R/o Pabu
Chowk, Nai Line, Gangashahar, District Bikaner.
17. Smt. Maina Devi W/o Late Sampat Lal, R/o Pabu
Chowk, Nai Line, Gangashahar, District Bikaner.
18. Smt. Jaishree D/o Late Sh. Sampat Lal, W/o Sh.
Rajesh Sonawat, R/o Bhinasar, Bikaner.
19. Smt. Rajshree D/o Late Sh. Sampat Lal, W/o Sh.
Dheeraj Kochar, R/o Shiva Basti, Gangashahar,
Bikaner.
20. Branch Manager, Punjab National Bank, Kem Road,
Bikaner.
21. Punjab National Bank, Near Milan Travellers Office,
Sadulganj, Bikaner.
22. State Of Rajasthan, Through The District Collector,
Bikaner
23. Sub Registrar-I, Bikaner
24. Sub-Registrar-II, Bikaner.
25. Sub-Registrar-III, Bikaner
----Respondents
For Appellant(s) : Mr. C.P. Soni
For Respondent(s) : Mr. Jagdish Chandra Vyas
Mr. Deepak Vyas
Mr. Hardik Gautam
HON'BLE MR. JUSTICE KULDEEP MATHUR
Order
[REPORTABLE]
Reserved on: 07.10.2025
Pronounced on: 07.11.2025
1. The present Civil First Appeal has been preferred against
the order dated 11.05.2023 passed by the learned Additional
District Judge No. 2, Bikaner (hereinafter referred to as 'the
learned trial Court'), whereby the application filed under Order
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VII Rule 11 of the Code of Civil Procedure, 1908 (hereinafter
referred to as 'C.P.C.'), read with Sections 17, 34, and 35 of
the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (hereinafter
referred to as 'the SARFAESI Act'), was allowed, and
consequently, Civil Original Suit No. 08/2023 (CIS No.
25/2023), titled 'Parasmal and Ors. v. Prakash Chandra and
Ors.', was rejected.
2. Learned counsel for the appellants-plaintiffs submitted
that the appellants-plaintiffs and respondents-defendants
Nos. 1 to 19 are close relatives. The suit property situated at
Pabu Chowk, Nai Line, Gangashahar, District Bikaner, is a
pattasuda property belonging to late Shri Pannalal Marothi,
who had five sons and one daughter, namely, Deepchand,
Trilokchand, Kisturchand, Bhanwarlal, Jaskaran, and
Jassudevi. Each descendant was entitled to a one-sixth share
in the property. However, since Shri Trilokchand died issueless,
the remaining descendants became entitled to an equal one-
fifth share each in the property. The appellants-plaintiffs are
the sons of Smt. Jassudevi, the daughter of late Shri Pannalal
Marothi.
3. Learned counsel submitted that when the respondents-
defendants Nos. 1 to 19 refused to give the appellants-
plaintiffs their due share in the suit property on the pretext
that the same had been mortgaged with respondent-
defendant No. 20, i.e., the Branch Manager, Punjab National
Bank, the appellants-plaintiffs were constrained to file a suit
for partition before the learned trial Court.
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4. During the pendency of the said partition suit,
respondents-defendants Nos. 20 and 21, i.e., Punjab National
Bank, filed an application under Order VII Rule 11 read with
Section 151 of the C.P.C. and Sections 17, 34, and 35 of the
SARFAESI Act, contending that defendant No. 1, Prakash
Chandra, had availed a loan of ₹2,41,20,000/- from the Bank
and had mortgaged the suit property as security for the said
loan. Upon his failure to repay the outstanding dues,
proceedings under the SARFAESI Act were initiated, and the
suit property was auctioned by the Bank on 29.11.2022.
5. Learned counsel for the appellants further submitted that
the learned trial Court, by the impugned order, allowed the
said application under Order VII Rule 11 C.P.C., holding that
the appellants-plaintiffs ought to have approached the Debts
Recovery Tribunal (DRT) to challenge the actions of Punjab
National Bank, as the Civil Court lacks jurisdiction to entertain
or adjudicate matters pertaining to properties governed by the
SARFAESI Act. He contended that the learned trial Court, while
allowing the application filed under Order VII Rule 11 C.P.C.,
failed to properly examine the averments made in the plaint
as well as the documents placed on record. The suit had been
instituted by the appellants-plaintiffs seeking partition of the
ancestral property, over which defendants Nos. 1 to 19 had
allegedly obtained a loan without having any right, title, or
interest therein. It was submitted that the appellants-plaintiffs
had committed no default in respect of the said loan
transaction and were in no manner connected with or liable for
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the loan availed by defendants Nos. 1 to 19. Therefore, the
appellants-plaintiffs were entitled to a decree of partition.
6. It was further urged that since the mortgaging of the suit
property by defendants Nos. 1 to 19 was done without any
valid title or interest and in an illegal manner, the suit for
partition of ancestral property and permanent injunction filed
by the appellants-plaintiffs ought not to have been rejected by
allowing the application under Order VII Rule 11 C.P.C.
On these premises, learned counsel for the appellants prayed
that the impugned order dated 11.05.2023 passed by the
learned Additional District Judge No. 2, Bikaner, be set aside.
Learned counsel for the appellants placed reliance on the
judgments passed by the Hon'ble Supreme Court of India in
Central Bank of India & Anr. v. Smt. Prabha Jain & Ors.,
(2025) 4 SCC 38, and Dwarka Prasad Agarwal (Dead) by
Lrs. & Anr. v. Ramesh Chander Agarwal & Ors., (2003) 6
SCC 220.
7. Per contra, learned counsel appearing on behalf of the
respondents-defendants Nos. 20 and 21 submitted that
respondent-defendant No. 1, Shri Prakash Chandra, being the
proprietor of M/s Laxmi Food Products, had availed credit
facilities to the tune of ₹2,41,20,000/- from the respondent
Bank. For the said credit facilities, Shri Ashok Kumar and Shri
Dheeraj Marothi stood as guarantors. To further secure the
aforesaid facilities, respondent-defendant No. 1, Prakash
Chandra, created an equitable mortgage by depositing the
original title deeds of the immovable property in question.
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8. It was submitted that the borrower and his guarantors
failed to repay the dues in accordance with the agreed terms
and conditions, whereupon the loan account was classified as
a 'Non-Performing Asset (NPA)' on 31.12.2021. Consequently,
after following the due procedure prescribed under the
SARFAESI Act, the respondent Bank initiated measures to
recover its outstanding dues.
9. Symbolic possession of the mortgaged property was
taken on 23.03.2022, and possession notices were duly served
upon the borrower and published in two daily newspapers. As
the borrower still failed to discharge the outstanding liability,
the Bank, in accordance with Section 14 of the SARFAESI Act,
preferred an application before the District Magistrate, Bikaner,
seeking actual possession of the secured assets. The said
application was allowed vide order dated 01.11.2022.
Thereafter, the mortgaged property was put to auction on
29.11.2022, wherein M/s Arihant Online Solution Private
Limited emerged as the highest bidder with a bid amount of
₹1,87,50,000/-. The said bid was duly accepted, and the
auction purchaser deposited the entire sale consideration.
10. Learned counsel further submitted that the appellants-
plaintiffs were at all material times fully aware of the
proceedings initiated by the respondent Bank under the
SARFAESI Act. They had, in fact, filed Securitisation
Application No. 318/2023 titled 'Paras Mal & Anr. v. Punjab
National Bank & Ors.' before the Debts Recovery Tribunal,
Jaipur, challenging the Bank's action.
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11. Before the Debts Recovery Tribunal, the appellants-
plaintiffs contended that respondent-defendant No. 1, Prakash
Chandra, had no authority to mortgage the property in
question until the partition of the estate of late Shri Pannalal
Marothi among all his legal heirs. In rebuttal, the respondent
Bank and the auction purchaser submitted that the loan was
sanctioned only after due verification of the title documents,
including a registered release deed executed by the concerned
parties, evidencing the ownership of Prakash Chandra over the
mortgaged property. It was further submitted that as per the
said registered release deed, the assets of late Pannalal
devolved upon his sons, namely, Shri Deepchand, Shri
Trilokchand, Shri Kisturchand, Shri Bhanwarlal, and Shri
Jaskaran. Therefore, Smt. Jassudevi, daughter of late Pannalal
Marothi and mother of the appellants-plaintiffs, could not
claim any share in the said property.
12. After hearing all parties, the Debts Recovery Tribunal,
Jaipur, dismissed S.A. No. 318/2023 by a detailed and
reasoned order dated 25.10.2023. Learned counsel thus
submitted that, in view of the express provisions of Sections
17 and 34 of the SARFAESI Act, the learned trial Court had
rightly allowed the application filed under Order VII Rule 11 of
the Code of Civil Procedure.
13. Learned counsel placed reliance on the judgments
passed by the Hon'ble Supreme Court of India in IEEE
Mumbai Section Welfare Association v. Global IEEE
Institute for Engineers, 2025 SCC Online SC 1756, and
Jagdish Singh v. Heeralal & Ors., (2014) 1 SCC 479.
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14. Lastly, learned counsel contended that the appellants-
plaintiffs had instituted the partition suit before the learned
trial Court solely with the ulterior motive of creating obstacles
in the lawful recovery proceedings and to deprive M/s Arihant
Online Solution Private Limited, the bona fide auction
purchaser, from enjoying the property purchased by it in the
e-auction after depositing the entire consideration amount. On
these premises, learned counsel urged that the present first
appeal be dismissed and the order dated 11.05.2023 passed
by the learned trial Court be affirmed.
15. Heard learned counsel for the parties at the Bar. Perused
the material available on record.
16. Sections 13, 17 and 34 of the SARFAESI Act, 2002 are
reproduced below for ready reference:-
13. Enforcement of security interest.--(1)
Notwithstanding anything contained in section 69 or
section 69A of the Transfer of Property Act, 1882 (4 of
1882), any security interest created in favour of
any secured creditor may be enforced, without the
intervention of court or tribunal, by such creditor in
accordance with the provisions of this Act.
(2) Where any borrower, who is under a liability to a
secured creditor under a security agreement,
makes any default in repayment of secured debt or any
instalment thereof, and his account in respect of
such debt is classified by the secured creditor as non-
performing asset, then, the secured creditor may require
the borrower by notice in writing to discharge in full his
liabilities to the secured creditor within sixty days from
the date of notice failing which the secured creditor shall
be entitled to exercise all or any of the rights under sub-
section (4).
Provided that--
(i) the requirement of classification of secured debt
as non-performing asset under this sub-section shall not
apply to a borrower who has raised funds through issue
of debt securities; and
(ii) in the event of default, the debenture trustee
shall be entitled to enforce security interest in the
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same manner as provided under this section with such
modifications as may be necessary and in
accordance with the terms and conditions of security
documents executed in favour of the debenture
trustee.
(3) The notice referred to in sub-section (2) shall give
details of the amount payable by the borrower
and the secured assets intended to be enforced by the
secured creditor in the event of non-payment of
secured debts by the borrower.
(3A) If, on receipt of the notice under sub-section (2),
the borrower makes any representation or
raises any objection, the secured creditor shall consider
such representation or objection and if the secured
creditor comes to the conclusion that such
representation or objection is not acceptable or tenable,
he shall communicate 3[within fifteen days] of receipt of
such representation or objection the reasons for
non-acceptance of the representation or objection to the
borrower:
Provided that the reasons so communicated or the
likely action of the secured creditor at the stage of
communication of reasons shall not confer any right
upon the borrower to prefer an application to the
Debts Recovery Tribunal under section 17 or the Court of
District Judge under section 17A.
(4) In case the borrower fails to discharge his
liability in full within the period specified in
sub-section (2), the secured creditor may take recourse
to one or more of the following measures to
recover his secured debt, namely:--
(a) take possession of the secured assets of
the borrower including the right to transfer by way of
lease, assignment or sale for realising the secured asset;
(b) take over the management of the business
of the borrower including the right to transfer by way of
lease, assignment or sale for realising the secured asset:
Provided that the right to transfer by way of lease,
assignment or sale shall be exercised only
where the substantial part of the business of the
borrower is held as security for the debt:
Provided further that where the management of
whole of the business or part of the business is
severable, the secured creditor shall take over the
management of such business of the borrower
which is relatable to the security for the debt;
(c) appoint any person (hereafter referred to as the
manager), to manage the secured assets the
possession of which has been taken over by the secured
creditor;
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(d) require at any time by notice in writing, any
person who has acquired any of the secured
assets from the borrower and from whom any money is
due or may become due to the borrower, to
pay the secured creditor, so much of the money as is
sufficient to pay the secured debt.
(5) Any payment made by any person referred to in
clause (d) of sub-section (4) to the secured
creditor shall give such person a valid discharge as if he
has made payment to the borrower.
(5A) Where the sale of an immovable property, for
which a reserve price has been specified, has
been postponed for want of a bid of an amount not less
than such reserve price, it shall be lawful for any
officer of the secured creditor, if so authorised by the
secured creditor in this behalf, to bid for the
immovable property on behalf of the secured creditor at
any subsequent sale.
(5B) Where the secured creditor, referred to in sub-
section (5A), is declared to be the purchaser of the
immovable property at any subsequent sale, the amount
of the purchase price shall be adjusted towards
the amount of the claim of the secured creditor for which
the auction of enforcement of security interest is
taken by the secured creditor, under sub-section (4) of
section 13.
(5C) The provisions of section 9 of the Banking
Regulation Act, 1949 (10 of 1949) shall, as far as
may be, apply to the immovable property acquired by
secured creditor under sub-section (5A).
(6) Any transfer of secured asset after taking
possession thereof or take over of management under
sub-section (4), by the secured creditor or by the
manager on behalf of the secured creditor shall vest in
the transferee all rights in, or in relation to, the secured
asset transferred as if the transfer had been made
by the owner of such secured asset.
(7) Where any action has been taken against a
borrower under the provisions of sub-section (4), all
costs, charges and expenses which, in the opinion of the
secured creditor, have been properly incurred by
him or any expenses incidental thereto, shall be
recoverable from the borrower and the money which is
received by the secured creditor shall, in the absence of
any contract to the contrary, be held by him in
trust, to be applied, firstly, in payment of such costs,
charges and expenses and secondly, in discharge of
the dues of the secured creditor and the residue of the
money so received shall be paid to the person
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entitled thereto in accordance with his rights and
interests.
(8) Where the amount of dues of the secured
creditor together with all costs, charges and expenses
incurred by him is tendered to the secured creditor at
any time before the date of publication of notice for
public auction or inviting quotations or tender from
public or private treaty for transfer by way of lease,
assignment or sale of the secured assets,--
(i) the secured assets shall not be transferred by
way of lease assignment or sale by the secured
creditor; and
(ii) in case, any step has been taken by the secured
creditor for transfer by way of lease or
assignment or sale of the assets before tendering of such
amount under this sub-section, no further
step shall be taken by such secured creditor for transfer
by way of lease or assignment or sale of such
secured assets.
(9) Subject to the provisions of the Insolvency and
Bankruptcy Code, 2016, in the case of] financing
of a financial asset by more than one secured creditors
or joint financing of a financial asset by secured
creditors, no secured creditor shall be entitled to
exercise any or all of the rights conferred on him under
or pursuant to sub-section (4) unless exercise of such
right is agreed upon by the secured creditors
representing not less than sixty percent in value of the
amount outstanding as on a record date and
such action shall be binding on all the secured creditors:
Provided that in the case of a company in
liquidation, the amount realised from the sale of secured
assets shall be distributed in accordance with the
provisions of section 529A of the Companies Act, 1956
(1 of 1956):
Provided further that in the case of a company
being wound up on or after the commencement of this
Act, the secured creditor of such company, who opts to
realise his security instead of relinquishing his
security and proving his debt under proviso to sub-
section (1) of section 529 of the Companies Act, 1956
(1 of 1956), may retain the sale proceeds of his secured
assets after depositing the workmen's dues with
the liquidator in accordance with the provisions of
section 529A of that Act:
Provided also that liquidator referred to in the
second proviso shall intimate the secured creditor the
workmen's dues in accordance with the provisions of
section 529A of the Companies Act, 1956 (1 of
1956) and in case such workmen's dues cannot be
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ascertained, the liquidator shall intimate the estimated
amount of workmen's dues under that section to the
secured creditor and in such case the secured creditor
may retain the sale proceeds of the secured assets after
depositing the amount of such estimate dues with
the liquidator:
Provided also that in case the secured creditor
deposits the estimated amount of workmen's dues, such
creditor shall be liable to pay the balance of the
workmen's dues or entitled to receive the excess
amount, if any, deposited by the secured creditor with
the liquidator:
Provided also that the secured creditor shall furnish
an undertaking to the liquidator to pay the balance of
the workmen's dues, if any.
Explanation.--For the purposes of this sub-section,
--
(a) "record date" means the date agreed upon
by the secured creditors representing not less than
2[sixty per cent.] in value of the amount outstanding on
such date;
(b) "amount outstanding" shall include
principal, interest and any other dues payable by the
borrower to the secured creditor in respect of secured
asset as per the books of account of the secured
creditor.
(10) Where dues of the secured creditor are not
fully satisfied with the sale proceeds of the secured
assets, the secured creditor may file an application in the
form and manner as may be prescribed to the
Debts Recovery Tribunal having jurisdiction or a
competent court, as the case may be, for recovery of the
balance amount from the borrower.
(11) Without prejudice to the rights conferred on
the secured creditor under or by this section, the
secured creditor shall be entitled to proceed against the
guarantors or sell the pledged assets without first 20
taking any of the measured specifies in clauses (a) to (d)
of sub-section (4) in relation to the secured
assets under this Act.
(12) The rights of a secured creditor under this Act
may be exercised by one or more of his officers
authorised in this behalf in such manner as may be
prescribed.
(13) No borrower shall, after receipt of notice
referred to in sub-section (2), transfer by way of sale,
lease or otherwise (other than in the ordinary course of
his business) any of his secured assets referred to
in the notice, without prior written consent of the
secured creditor.
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"17. Application against measures to recover
secured debts.--(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
measure 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 this sub-section.
(1A) An application under sub-section (1) shall
be filed before the Debts Recovery Tribunal within
the local limits of whose jurisdiction--
(a) the cause of action, wholly or in part, arises;
(b) where the secured asset is located; or
(c) the branch or any other office of a bank or
financial institution is maintaining an account in
which debt claimed is outstanding for the time
being.
(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 or restoration of
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possession, of the secured assets to the borrower or
other aggrieved person, it may, by order,--
(a) declare the recourse to any one or more
measures referred to in sub-section (4) of section
13 taken by the secured creditor as invalid; and
(b) restore the possession of secured assets or
management of secured assets to the borrower or
such other aggrieved person, who has made an
application under sub-section (1), as the case may
be; and
(c) pass such other direction 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.
(4A) Where--
(i) any person, in an application under sub-section
(1), claims any tenancy or leasehold rights upon the
secured asset, the Debt Recovery Tribunal, after
examining the facts of the case and evidence
produced by the parties in relation to such claims
shall, for the purposes of enforcement of security
interest, have the jurisdiction to examine whether
lease or tenancy,--
(a) has expired or stood determined; or
(b) is contrary to section 65A of the Transfer of
Property Act, 1882 (4 of 1882); or
(c) is contrary to terms of mortgage; or
(d) is created after the issuance of notice of
default and demand by the Bank under subsection
(2) of section 13 of the Act; and
(ii) the Debt Recovery Tribunal is satisfied that
tenancy right or leasehold rights claimed in secured
asset falls under the sub-clause (a) or sub-clause
(b) or sub-clause (c) or sub-clause (d) of clause (i),
then notwithstanding anything to the contrary
contained in any other law for the time being in
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[2025:RJ-JD:44243] (15 of 21) [CFA-301/2023]
force, the Debt Recovery Tribunal may pass such
order as it deems fit in accordance with the
provisions of this Act.
(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 of 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 the application in accordance with the
provisions of the Recovery of Debts Due to Banks
and Financial Institutions Act, 1993 (51 of 1993)
and the rules made thereunder."
"34. 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 by 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 Banks and Financial Institutions Act, 1993 (51 of
1993)."
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17. The Hon'ble Supreme Court of India in the case of
Jagdish Singh v. Heeralal & Ors., (2014) 1 SCC 479, was
pleased to observe as under:-
"24. Statutory interest is being created in favour of the
secured creditor on the secured assets and when the secured
creditor proposes to proceed against the secured assets, sub-
section (4) of Section 13 envisages various measures to
secure the borrowers debt. One of the measures provided by
the statute is to take possession of secured assets of the
borrowers, including the right to transfer by way of lease,
assignment or realising the secured assets. Any person
aggrieved by any of the "measures" referred to in sub-section
(4) of Section 13 has got a statutory right of appeal to the
DRT under Section 17. The opening portion of Section 34
clearly states that no civil court shall have the jurisdiction to
entertain any suit or proceeding "in respect of any matter"
which a DRT or an Appellate Tribunal is empowered by or
under the Securitisation Act to determine. The expression "in
respect of any matter" referred to in Section 34 would take in
the measures provided under sub-section (4) of Section 13 of
the Securitisation Act. Consequently, if any aggrieved person
has got any grievance against any "measures" taken by the
borrower under sub-section (4) of Section 13, the remedy
open to him is to approach the DRT or the Appellate Tribunal
and not the civil court. The civil court in such circumstances
has no jurisdiction to entertain any suit or proceedings in
respect of those matters which fall under sub-section (4) of
Section 13 of the Securitisation Act because those matters
fell within the jurisdiction of the DRT and the Appellate
Tribunal. Further, Section 35 says, the Securitisation Act
overrides other laws, if they are inconsistent with the
provisions of that Act, which takes in Section 9 CPC as well."
[Emphasis supplied]
18. The Hon'ble Supreme Court of India in Dwarka Prasad
Agarwal (Dead) by Lrs. & Anr. v. Ramesh Chander
Agarwal & Ors., (2003) 6 SCC 220, dealing with the
question of jurisdiction of Civil Courts in relation to mortgaged
properties qua which proceedings under the SARFAESI Act
have been initiated, was pleased to observe that the DRT has
jurisdiction with respect to "measures" taken by the secured
creditor under Section 13(4) and that, in respect of such
matters, the Civil Court's jurisdiction is ousted. However,
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[2025:RJ-JD:44243] (17 of 21) [CFA-301/2023]
under Section 17, the DRT has no power to partition
properties, and hence, the Civil Court's jurisdiction to grant a
decree of partition cannot be said to be ousted. Paragraphs 22
and 25 of the said judgment are reproduced below for ready
reference:-
"The dispute between the parties was eminently a civil
dispute and not a dispute under the provisions of the
Companies Act. Section 9 of the Code of Civil Procedure
confers jurisdiction upon the civil courts to determine all
disputes of civil nature unless the same is barred under a
statute either expressly or by necessary implication. Bar of
jurisdiction of a civil court is not to be readily inferred. A
provision seeking to bar jurisdiction of a civil court requires
strict interpretation. The court, it is well settled, would
normally lean in favour of construction, which would uphold
retention of jurisdiction of the civil court. The burden of proof
in this behalf shall be on the party who asserts that the civil
court's jurisdiction is ousted. (See Sahebgouda vs. Ogeppa
[(2003) 6 SCC 151: (2003) 3 Supreme 13].) Even
otherwise, the civil court's jurisdiction is not completely
ousted under the Companies Act, 1956.
xxxxx
25. In that view of the matter, we are of the opinion that the
civil suit was maintainable. In any event, we fail to
understand and rather it is strange as to how the High Court
while rejecting relief to the original plaintiff (late Dwarka
Prasad Agarwal), granted a similar relief in favour of the first
respondent herein."
[Emphasis supplied]
19. Further, the Hon'ble Supreme Court of India in Central
Bank of India & Anr. v. Smt. Prabha Jain & Ors., (2025)
4 SCC 38, while reiterating that the Civil Court retains
jurisdiction over matters which the DRT is not empowered to
decide, such as disputes related to the validity of sale deeds or
title disputes, and that the DRT's jurisdiction is limited to
examining whether the measures taken by the secured
creditor under Section 13(4) of the SARFAESI Act are in
accordance with law, was pleased to observe in the operative
portion of the judgment as under:-
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[2025:RJ-JD:44243] (18 of 21) [CFA-301/2023]
"44. Before we close this litigation, we deem it
necessary to observe that Banks should remain very
careful with inadequate title clearance reports, more
particularly, when such reports are obtained cheaply
and at times for external reasons. This concerns the
protection of public money and is in the larger
public interest. Therefore, it is essential for the
Reserve Bank of India and other stakeholders to
collaborate in developing a standardized and
practical approach for preparing title search report
before sanctioning loans and also for the purpose of
determining liability (including potential criminal
action) of the Officer who approves loan.
Additionally, there should be standard guidelines for
fees and costs associated with title search reports
so as to ensure that they maintain high quality."
20. In the above backdrop, this Court, upon a reading of the
relevant provisions of the SARFAESI Act and the judgments of
the Hon'ble Supreme Court of India finds that while the DRT,
being a creature of the The Recovery of Debts and Bankruptcy
Act, 1993, has limited jurisdiction confined to examining the
measures taken under the SARFAESI Act, the Civil Courts
retain jurisdiction to decide independent civil disputes such as
ownership, title, or partition, which are outside the ambit of
the SARFAESI framework. In other words, while the DRT has
exclusive jurisdiction to deal with disputes related to the
measures taken by secured creditors under sub-section (4) of
Section 13 of the SARFAESI Act, the Civil Court has jurisdiction
to deal with and decide disputes not covered under the
provisions of the SARFAESI Act. The partition suit instituted by
the petitioner- plaintiff therefore cannot be held to be barred
by law under Order 7 Rule 11 C.P.C.
21. In the present case, the suit property situated at Pabu
Chowk, Nai Line, Gangashahar, Bikaner, was mortgaged by
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[2025:RJ-JD:44243] (19 of 21) [CFA-301/2023]
respondent-defendant No. 1, being the proprietor of M/s
Laxmi Food Products, with respondents-defendants Nos. 20
and 21 for availing a loan of ₹2,41,20,000/-. The loan account
was declared NPA on 31.12.2021, whereafter the respondent-
defendant Bank initiated proceedings under the SARFAESI Act
for recovering its outstanding dues. Symbolic possession of
the mortgaged property was taken on 23.03.2022. The
mortgaged property was thereafter put to auction on
29.11.2022 where M/s Arihant Online Solution Pvt. Ltd.
submitted the highest bid of ₹1,87,50,000/-, deposited the
entire sale consideration, and the bid was accepted.
22. After the auction of the mortgaged property, the
petitioners-plaintiffs, for the first time, came into the picture
and filed a partition suit before the learned District Judge,
Bikaner. During the pendency of the civil suit, an application
was also filed before the DRT, Jaipur, alleging that the
borrower, Prakash Chandra, had no right to mortgage the
property until the partition of the property owned by late Shri
Pannalal Marothi and demarcation of shares of all co-owners.
The DRT, Jaipur, vide order dated 25.10.2023, dismissed the
application filed by the petitioners-plaintiffs, holding that the
applicants had failed to prove, on the basis of any
documentary evidence, that they had any share in the
mortgaged property. The application filed by the respondent
Bank dated 20.03.2023 under Order VII Rule 11 C.P.C. read
with Sections 17, 34, and 35 of the SARFAESI Act came to be
considered by the learned trial Court, which, vide order dated
11.05.2023, accepted the same and rejected the partition suit,
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[2025:RJ-JD:44243] (20 of 21) [CFA-301/2023]
observing that the suit is barred by law and that the Civil
Court has no jurisdiction to hear and decide disputes relating
to mortgaged properties that have already been auctioned
under the SARFAESI Act.
23. Coming to the facts of the instant case, it is noticed that
the mortgaged property has been validly auctioned by the
secured creditor (respondent-defendant Bank). The auction
purchaser has already deposited the entire sale consideration,
and the rights of the borrower and co-borrowers in the
secured asset thus stand extinguished. No relief in Civil
Original Case No. 08/2023 (CIS No. 25/2023), titled 'Paras Mal
& Ors. v. Prakash Chandra & Ors.', in respect of the
proceedings initiated by the respondent-defendant Bank
against the borrower under the SARFAESI Act, has been
claimed or prayed for. In the civil suit for partition, the
petitioners-plaintiffs, claiming themselves to be sons of Smt.
Jassudevi, daughter of late Shri Pannalal Marothi, have prayed
for determination of their share in the property by metes and
bounds, which is essential for a valid partition. However, in
view of the fact that the property sought to be partitioned has
already been auctioned, it cannot now be divided by metes
and bounds amongst the legal heirs. The auction proceedings
dated 29.11.2022 cannot be invalidated or interfered with by
the learned trial Court, as the auction sale under the
SARFAESI Act can be questioned only before the DRT.
24. In the above factual situation, while the partition suit
filed by the petitioners-plaintiffs seeking determination of their
share in the suit property, said to be inherited by them from
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[2025:RJ-JD:44243] (21 of 21) [CFA-301/2023]
late Shri Pannalal Marothi and jointly owned by respondents-
defendants Nos. 1 to 19, is maintainable, the physical division
of the property is not permissible in the present case. The
learned trial Court, in these circumstances, shall be required
to decide the share of the petitioners-plaintiffs in the sale
proceeds of the property in dispute instead.
25. In the result, the instant Civil First Appeal is allowed. The
impugned order dated 11.05.2023 passed by the learned
Additional District Judge No. 2, Bikaner, is set aside. The
partition suit filed on behalf of the petitioners-plaintiffs is held
to be maintainable. The learned trial Court is directed to
proceed in the matter in accordance with law and, since
physical division of the suit property is not feasible, it may,
after determining the share of the petitioners-plaintiffs in the
suit property, if any, may direct distribution of their
proportionate share from the sale proceeds, if found entitled.
26. All pending applications stand disposed of. No order as to
costs.
(KULDEEP MATHUR),J
himanshu/-
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