Telangana High Court
Yadav Venkatesh vs Modukuru Kiran on 7 July, 2025
HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY
CIVIL REVISION PETITION No.780 of 2024
ORDER:
This Civil Revision Petition, under Article 227 of the
Constitution of India, is filed against the order dated 29.12.2023 in
I.A.No.276 of 2022 in O.S.No.929 of 2022, passed by the III Additional
Junior Civil Judge, Ranga Reddy District at L.B. Nagar.
2. Heard Sri CH. Ravinder, learned counsel for the petitioners, and
Smt N. Arthi, learned counsel for respondent No.1.
3. Petitioner Nos.1 and 2 herein are defendant Nos.5 and 6,
respectively, respondent No.1 is the plaintiff and respondent Nos.2 to 5
are defendant Nos.1 to 4, respectively, in the suit. For convenience, the
parties will be hereinafter referred to as they are arrayed in the suit.
4. In concise, the facts of the case required for adjudication of the
present Civil Revision Petition are that the plaintiff filed the suit-
OS.No.929 of 2022 seeking the relief of partition of the suit schedule
property and to allot 1/3rd share to the plaintiff and also to declare the
sale deed bearing document No.1991/2016, dated 07.04.2016,
Certificate of Sale bearing document No.2840/2021, dated 28.04.2021,
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and Mortgage Deed bearing document No.3693/2016, dated 21.06.2016,
as null and void.
5. Defendant No.3 alleged to have purchased the suit schedule
property from the plaintiff and defendants No.1 and 2 through a
registered sale deed bearing document No.1991/2016, dated 07.04.2016,
by availing a house loan from Defendant No.4-Bank; that due to default
committed by him in repayment of loan, the said loan was classified as
'NPA' and proceedings under the Securitization And Reconstruction of
Financial Assets And Enforcement of Security Interest Act, 2022 (for
brevity 'SARFAESI Act') were initiated against defendant No.3; and
that defendant No.4-Bank conducted a public auction, in which
defendant No.5 and 6 emerged as successful bidders and purchased the
suit schedule property.
6. Meanwhile, defendant No.3 filed S.A.No.175 of 2020 before the
Debt Recovery Tribunal-II, Hyderabad, (hereinafter referred to as
'DRT') challenging the sale and the same is pending. Defendant No.4
Bank has initiated measures under the SARFAESI Act, took possession
of the suit schedule property, pursuant to order passed in
Crl.M.P.No.102 of 2020 by the Chief Metropolitan Magistrate,
Cyberabad at L.B. Nagar, and delivered the same to defendant Nos.5
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and 6; that a sale certificate was issued in their favour, which was
registered as Document bearing No.2840/2021, dated 28.04.2021, in the
Sub-Registrar's Office.
7. Defendant No.3 averred that since the sale is under challenge
before the DRT, as per Section 34 of SARFAESI Act, the civil Court
shall not have jurisdiction to entertain any suit or proceeding in respect
of the matter which the DRT is empowered by or under the said Act and
accordingly, he prayed to reject the plaint.
8. The trial Court, vide order dated 29.12.2023 dismissed the said
application on the ground that in the plaint, since the status of the
property is questioned and there is allegation against the secured
creditor, in the light of the judgment of the erstwhile High Court of
Andhra Pradesh in D.Ram Reddy Vs. Asset Reconstruction Company
(India) Private Limited and others 1, the bar under Section 34 of
SARFAESI Act would not at all apply and the civil Court is having
jurisdiction to entertain the suit. Questioning the legality and validity of
the said order, the present Revision Petition is filed.
9. Learned counsel appearing for the revision petitioners submitted
that the impugned order passed by the trial Court is ex-facie illegal and
2016(6) ALT 533 (DB)
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the jurisdiction to deal with the instant case lies with the DRT as
defendant No.3 has mortgaged the property with defendant No.4-bank
and as he committed default in repayment of loan amount, defendant
No.4-bank has invoked the provisions of the SARFAESI Act. He further
submitted that Section 34 of the SARFAESI Act debars the civil Court
from entertaining any suit or proceedings in respect of any matter in
which the DRT or the Appellate Tribunal is empowered by or under the
said Act, and hence, no injunction can be granted by any civil Court. He
further submitted that the suit schedule property was sold in public
auction in the year 2016 and thereafter, physical possession was taken
under Section 34 of the SARFAESI Act in the year 2020 itself,
however, the plaintiff-respondent No.1 herein filed the suit alleging
fraud, obviously, only to overcome the bar under Section 34 of the
SARFAESI Act. Learned counsel further submitted that the plaintiff
was also one of the signatories of the sale deed, therefore, his plea of
fraud is only invented for the purpose of filing the suit. By contending
thus, learned counsel prayed to set aside the impugned order as the trial
Court has erroneously held that the civil Court is having jurisdiction to
entertain the suit.
10. Per contra, learned counsel for respondent No.1 herein-plaintiff
submitted that the Civil Revision Petition is not maintainable and the
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impugned order was passed by the trial Court after due consideration of
facts and the law. He further submitted that the plaintiff never executed
any document in favour of defendant No.3 and the subject sale deed has
come into existence by way of impersonating him and as such, it is a
forged and fabricated document and hence, the plaintiff filed the suit to
declare the said sale deed as null and void and not binding on the
plaintiff. Learned counsel, therefore, submitted that in the above facts
and circumstances of the case, the trial Court has rightly held that bar
under Section 34 of the SARFAESI Act does not apply and the civil
Court has jurisdiction to entertain the suit and finally, prayed to dismiss
the Revision as the same is devoid of merit.
11. Learned counsel for respondent No.1 in support of his
aforesaid contentions and further, to demonstrate the scope and ambit of
Order VII Rule 11CPC, has relied upon the following judgments of the
Hon'ble Apex Court:-
(1) Madanuri Sri Rama Chandra Murthy v. Syed Jalal 2
(2) G. Nagaraj and Another Versus B.P. Mruthunjayanna
and Others 3
(3) Srihari Hanumandas Totala vs Hemant Vithal Kamat &
(2017) 13 SCC 174
2023 SCCONLINE SC 1270
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Ors 4
12. The categorical observations made by the Hon'ble Apex Court
in Madanuri Sri Rama Chandra Murthy's (cited supra) are
extracted as hereunder:-
"The averments of the plaint have to be read as a whole to
find out whether the averments disclose a cause of action or
whether the suit is barred by any law. It is needless to
observe that the question as to whether the suit is barred by
any law would always depend upon the facts and
circumstances of each case."
13. Further, the Hon'ble Apex Court in Srihari Hanumandas
Totala vs Hemant Vithal Kamat & Ors 5 took a similar view that
suit is barred by any law must be determined from the statements
in the plaint and it is not open to decide the issue on the basis of
any other material including in the written statement"
14. The Hon'ble Apex Court in G. Nagaraj and Another Versus
B.P. Mruthunjayanna and Others 6 observed that when the ground
pleaded for rejection of the plaint is the absence of cause of action,
(2021) 9 SCC 99
(2021) 9 SCC 99
2023 SCCONLINE SC 1270
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the Court has to examine the plaint and see whether any cause of
action has been disclosed in the plaint.
15. In the aforesaid judgments of the Hon'ble Apex Court, the
law is well settled that for dealing with an application under Order
VII Rule 11 of CPC, only the averments made in the plaint and the
documents produced along with the plaint are required to be seen.
16. The High Court of Bombay in Shashikant Gangar Versus
Aditya Birla Finance Limited and Others 7 observed as follows:-
" The above averments as well as documents would clearly
show that there are specific pleadings with regard to fraud and
collusion between the bank as well as Defendants 3 and 4 and
thus for that limited purpose of claim declaring loan facility
agreement dated 29-11-2020 and consequently creating of
mortgage i.e. secured assets is a fraud, certainly comes within
Section 9 CPC and to that effect bar under Section 34 of
the SARFAESI Act as discussed in Mardia Chemicals Ltd Vs.
(... ) would not be absolute.
Having concluded that the plaint cannot be rejected and
bar created under Section 34 of the Sarfaesi Act cannot be
applied to the averments in the plaint, option available to this
Court is to quash and set aside both the orders of the trial court
2024 SCCONLINE Bom 3329
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thereby restoring the plaint to the file of Commercial Court to
be decided in accordance with law.
CONSIDERATION:
17. Apropos the submissions advanced by learned counsel for
both the parties and the above factual matrix of the case and the
material placed on record, the only point that arises for
consideration in this Revision is whether the trial Court was right
in holding that Section 34 of the SARFAESI Act has no
application and the civil Court has jurisdiction to try the case.
18. The Hon'ble Supreme Court in Central Bank of India and
another vs. Smt. Prabha Jain and Others 8, took a view that the
jurisdiction of the civil Court is ousted only in the matters which
the DRT or DRAT is empowered by or under the SARFAESI Act
to determine and that the suits claiming relief beyond the
jurisdiction of the DRT or DRAT can be dealt with by the Civil
courts. For better appreciation, the relevant para i.e., para 18 of the
judgment is extracted as hereunder:
"18. Further, the SARFAESI Act is enacted essentially to provide
a speedy mechanism for recovery of debts by banks and financial
(2025) 45 SCC 38
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institutions. The SARFAESI Act has not been enacted for
providing a mechanism for adjudicating upon the validity of
documents or to determine questions of title finally. The DRT
does not have the jurisdiction to grant a declaration with respect
to the mortgage deed or the sale deed as sought by the plaintiff.
The jurisdiction to declare a sale deed or a mortgage deed being
illegal is vested with the civil court under Section 9 of the Code
of Civil Procedure. Therefore, the civil court has the jurisdiction
to finally adjudicate upon the first two reliefs."
19. The above principle laid down by the Hon'ble Supreme
Court squarely applies to the instant case. In the present case,
the relief sought for in the suit is to declare the sale deed alleged
to have been executed by defendant Nos.1 and 2 and plaintiff in
favour of defendant No.3 and further, the mortgage deed
executed by defendant No.3 in favour of defendant No.4-Bank
are null and void, which explicitly does not fall under the
purview of the SARFAESI Act, thereby, imposing a bar on the
jurisdiction of the civil Courts to entertain, adjudicate and
decide the dispute. Section 34 of SARFAESI Act clearly
expresses that the jurisdiction of the civil Courts is barred only
in relation to matters which the DRT or DRAT are empowered
to decide under the Act.
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20. Section 9 of the Code of Civil Procedure (CPC) mandates
that civil Courts have the power to try all suits of a civil nature,
unless their cognizance is expressly or impliedly barred by law.
21. A conjoint reading of Section 9 of CPC and Section 34 of
SARFAESI Act, in the light of the ratio laid down by the Hon'ble
Supreme Court in Shashikant Gangar's case (cited supra) and the
judgment of the High Court of Madras in D.Ram Reddy's case (cited
supra), makes it clear that the DRT does not have jurisdiction to
adjudicate upon the validity of the documents or to determine the
questions of title finally, and in such matters, only the civil Courts
will have jurisdiction and further, only "in respect of any matter"
or suit or proceeding which a DRT or DRAT are empowered by or
under the SARFAESI Act to decide, the jurisdiction of the civil
Courts is barred.
22. In this regard, it is trite to refer to the judgment of the
Hon'ble Supreme Court in Robust Hotels Private Limited's case
(cited supra), wherein it is explicitly observed that the expression
"in respect of any matter" would take in the "measures" provided
under sub-section (4) of Section 13 of the SARFAESI Act. The
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relief of declaration of sale deed and Certificate of sale as null and
void as sought for by plaintiff/respondent No.1 herein in the suit
does not fall under sub-section (4) of Section 13 of the SARFAESI
Act, thereby, conferring exclusive jurisdiction on the DRT or
DRAT under the said Act.
23. Furthermore, as observed by the Hon'ble Supreme Court in
Robust Hotels Private Limited's case (cited supra), if the
jurisdiction overlaps in deciding the question of specific
performance, the civil Court may be compelled to decide the
validity of certain encumbrances created by the agreement vendor.
24. Applying the above-said principle of the Hon'ble Supreme
Court to the instant case, it is evident that the civil Court has got
jurisdiction to adjudicate the present dispute as the plaintiff has
sought to declare the sale deed and Certificate of as null and void
and consequently, for partition of the suit schedule property and
for allotment of 1/3rd share to him, on the ground of fraud and
fabrication by defendant Nos.1 and 2. Therefore, even if the charge
created by defendant No.3 over the schedule property as security to
the loan obtained by him from defendant No.4-bank overlaps with
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the jurisdiction of the civil Court in deciding the question of
validity of sale deed, Certificate of sale, etc., documents, the civil
Court will have jurisdiction to try and decide the same as the same
cannot be said to be barred by the provisions of the Recovery of
Debts Due to Financial Institutions Act, 1993 and SARFAESI Act
2002. Therefore, the trial Court has rightly held that bar under
Section 34 of the SARFAESI Act would not apply to the present
case and the same falls under the jurisdiction of the civil court.
25. In the light of the judgments of the Hon'ble Apex Court in
Madanuri Sri Rama Chandra Murthy's (cited supra), Srihari
Hanumandas Totala's case (cited supra), G. Nagaraj's case (cited
supra), the law is well settled that for dealing with an application
under Order VII Rule 11 of CPC, only the averments made in the
plaint and the documents produced along with the plaint are
required to be seen.
26. In the instant case, a reading of averments of the plaint
clearly disclose a cause of action for filing the suit, as the plaintiff
sought to declare the documents mentioned therein as null and void
alleging the same as false and fabricated documents. Hence, in the
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light of the aforesaid judgments of the Hon'ble Apex Court, the
plaintiff has made out a cause of action for filing the suit.
27. Perusal of the impugned order passed by the trial Court
reveals that it had occasion to consider in detail the scope and
applicability of Section 34 of the SARFAESI Act, in the context of
the ground raised by the petitioner therein that the civil Court does
not have jurisdiction to entertain the suit as per Section 34 of the
SARFAESI Act and as such, plaint is liable to be rejected. The trial
Court, after meticulous analysis of the legal provisions governing
the aspect of jurisdiction has rightly concluded that the grounds
raised in the said application does not fit into any of the grounds as
provided under Order VII Rule 11 CPC for rejection of the plaint.
28. In the light of the foregoing discussion and reasons and also
the settled legal position, this Court is of the considered opinion
that the trial Court has rightly held that the DRT does not have
jurisdiction to adjudicate upon the subject dispute the same falls
under the jurisdiction of the civil Court and rightly dismissed the
application. The revision petitioners failed to point out any
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illegality or irregularity in the impugned order passed by the trial
Court warranting interference by this Court.
29. Hence, this Civil Revision Petition fails and is accordingly
dismissed. No costs.
30. As a sequel, the miscellaneous applications pending, if any,
shall stand closed.
___________________________________
LAXMI NARAYANA ALISHETTY, J
Dated: 07.07.2025
dr
