Order VII Rule 11 of the CPC contending that the Court had no jurisdiction to entertain the suit in view of the provisions of Section 34 read with Section 13(2) of the Act, which prohibits a Civil Court from dealing with the matters arising under the provisions of the Act.= we hold that the Debt Recovery Tribunal constituted under the DRT Act has jurisdiction to entertain an appeal as per Section 17 of the Act even if the amount involved is less than Rs.10 lakh. But, the said appellate jurisdiction need not be misunderstood with the original jurisdiction of the Tribunal. = 2016 Dec.http://judis.nic.in/supremecourt/imgst.aspx?filename=44293 - STATE BANK OF PATIALA Vs. MUKESH JAIN & ANR. ANIL R. DAVE, L. NAGESWARA RAO

                                                                  REPORTABLE



                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 210  OF 2007



STATE BANK OF PATIALA              … APPELLANT


VERSUS



MUKESH JAIN & ANR.                     … RESPONDENTS



                               J U D G M E N T



ANIL R. DAVE, J.



1.    Being aggrieved by the judgment dated 8th  April,  2005  delivered  in
Civil Revision Petition No.242 of 2004 by the  High  Court  of  Delhi,  this
appeal has been filed by the appellant, whose application filed under  Order
VII Rule 11 of the Code of Civil Procedure, 1908 had been  rejected  by  the
trial Court and  being  aggrieved  by  the  order  of  rejection  dated  9th
February, 2004, the aforestated Civil Revision  Petition  was  filed  before
the High Court, but the said Civil Revision Petition was  also  rejected  by
the impugned order and therefore, this appeal has been filed.

2.    The facts giving rise to the present litigation, in  a  nutshell,  are
as under:

      The appellant is a nationalized  bank  which  had  lent  Rs.8,00,000/-
(Rupees eight lakh) to respondent no.1 by way of  a  term  loan  on  certain
conditions and so as to secure the said debt,  respondent  no.1  debtor  had
mortgaged his immovable property forming  part  of  premises  bearing  no.C-
8/298, Yamuna Vihar, Delhi.  As respondent no.1  committed  default  in  re-
payment of the said loan, the  appellant  initiated  proceedings  under  the
provisions of the Securitisation and Reconstruction of Financial Assets  and
Enforcement of Security Interest Act, 2002 (hereinafter referred to as  ‘the
Act’).  When notice under Section 13(2) of  the  Act  had  been  issued  and
further proceedings were sought to be initiated  by  the  appellant  against
respondent no.1, the said proceedings  had  been  challenged  by  respondent
no.1 by filing Civil Suit No.4 of 2003 in the Court of Civil  Judge,  Delhi.


3.    In the said suit, the appellant filed an application under  Order  VII
Rule 11 of the  CPC  contending  that  the  Court  had  no  jurisdiction  to
entertain the suit in view  of  the  provisions  of  Section  34  read  with
Section 13(2) of the Act, which prohibits a Civil Court  from  dealing  with
the matters arising under the provisions of the Act.  After considering  the
averments made in the application as well as the reply given  by  respondent
no.1 and upon hearing the concerned counsel, the said application  had  been
rejected by the trial Court by an order dated 9th February, 2004.

4.    Being  aggrieved  by  the  rejection  of  the  said  application,  the
appellant filed Civil Revision Petition No.242 of 2004 in the High Court  of
Delhi.  The said petition was also rejected by the impugned  judgment  dated
8th April, 2005 and being  aggrieved  by  the  said  judgment,  the  present
appeal has been filed by the appellant.

5.    The reason for which the application filed under Order VII Rule 11  of
the CPC had been  rejected  by  the  trial  Court  was  that  the  suit  was
maintainable in view of the fact that the subject matter of  the  suit  i.e.
the  amount  which  was  sought  to  be  recovered  by  the  appellant  from
respondent no.1 (original plaintiff) was less  than  Rs.10,00,000/-  (Rupees
Ten lakh) and according to the provisions of Section 1(4)  of  the  Recovery
of Debts due to Banks and  Financial  Institutions  Act,  1993  (hereinafter
referred to as ‘the DRT Act’), the provisions  of  the  DRT  Act  would  not
apply, where the amount of debt due to any bank or financial institution  is
less than Rs.10 lakh and therefore, it was not open  to  the  Debt  Recovery
Tribunal (hereinafter referred  to  as  “the  Tribunal”)  to  entertain  the
matter as the amount claimed in the suit was less than Rs.10 lakh.

6.    In the aforestated circumstances, the trial  Court  was  of  the  view
that as the DRT Act had no jurisdiction to entertain an appeal  against  the
order passed under the provisions of the Act, a civil suit was  maintainable
and therefore, the application made under Order VII Rule 11 of the  CPC  had
been rejected by the trial Court.  The High Court confirmed  the  said  view
of the trial Court.

7.    The learned counsel  appearing  for  the  appellant,  challenging  the
validity of the impugned judgment, submitted that the view expressed by  the
High Court confirming rejection of the application under Order VII  Rule  11
is not correct because the Civil Court has no jurisdiction to entertain  any
proceedings under the Act as per the provisions of Section 34  of  the  Act.
Section 34 of the Act expressly bars the jurisdiction  of  the  Civil  Court
from dealing with any matter which arises under the Act.

8.    The learned counsel submitted that the trial  Court  as  well  as  the
High Court were  not  correct  while  coming  to  the  conclusion  that  the
Tribunal had no jurisdiction  to  entertain  an  appeal  against  the  order
passed under the Act in pursuance of the provisions of Section 1(4)  of  the
DRT Act.

9.    He also submitted that the Act was enacted in 2002,  whereas  the  DRT
Act was enacted in 1993.  As the Act was enacted later  in  point  of  time,
provisions of Section  34  of  the  Act  would  prevail  and  therefore,  no
proceedings of any type arising under the Act can be entertained by a  Civil
Court.   He,  therefore,  submitted  that  the  application  filed  by   the
appellant before the trial Court under Order VII Rule 11  should  have  been
granted by the trial Court.

10.   So as to substantiate his submission, the learned counsel relied  upon
a judgment delivered in the case of Mardia  Chemicals  Ltd.  and  others  v.
Union of India and others   2004(4) SCC 311.  For  the  aforestated  reasons
he submitted that the  appeal  deserved  to  be  allowed  and  the  impugned
judgment should be set aside so that the Civil Court can be restrained  from
proceeding further with the suit on the ground of lack of jurisdiction.

11.   Though served, nobody appeared for the respondents.

12.   We have heard the learned counsel at length and  also  considered  the
relevant provisions of law referred to and the judgment cited by him.

13.   The issue involved in the appeal is whether, in the instant case,  the
suit  was  maintainable  against  the  proceedings   initiated   under   the
provisions of the Act.  The application filed by the appellant  under  Order
VII Rule 11 of the CPC was rejected mainly for the reason that the  Tribunal
had no jurisdiction to entertain the proceedings  under  the  provisions  of
Section 1(4) of the DRT Act as the value of the suit  was  less  than  Rs.10
lakh and therefore, the Civil Suit was the  only  remedy  available  to  the
respondents (original plaintiffs).

14.   It would be beneficial to consider the relevant provisions of the  Act
referred to hereinabove:

“17. 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 authorized 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.

            ………………………………………..”

x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x-x

“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).”





Section 1(4) of the DRT Act reads as under:



“1.   Short title, extent, commencement and application. -

(1)   ……………..

(2)   ……………..

(3)   ……………..

(4)   The provisions of this Act shall not apply where the  amount  of  debt
due to any bank or financial institution or to  a  consortium  of  banks  or
financial institutions is less than ten lakh rupees or  such  other  amount,
being not less than one lakh rupees,  as  the  Central  Government  may,  by
notification, specify.”



15.   Upon perusal of Section 34 of the Act, it is very clear that no  Civil
Court is having jurisdiction to entertain any suit or proceeding in  respect
of any matter which a Debt Recovery Tribunal or the  appellate  Tribunal  is
empowered by or under the Act to determine the dispute.  Further, the  Civil
Court has no right to issue any injunction in pursuance of any action  taken
under the Act or under the provisions of the DRT Act.

16.   In view of a specific bar, no  Civil  Court  can  entertain  any  suit
wherein  the  proceedings  initiated  under  Section  13  of  the  Act   are
challenged.   The Act had been enacted in 2002,  whereas  the  DRT  Act  had
been enacted in 1993.  The legislature is presumed to be aware of  the  fact
that the  Tribunal  constituted  under  the  DRT  Act  would  not  have  any
jurisdiction to entertain any matter, wherein  the  subject  matter  of  the
suit is less than Rs.10 lakh.

17.   In the aforestated circumstances, one will have to make an  effort  to
harmonize both the statutory provisions.  According to  Section  17  of  the
Act, any person who is aggrieved by any of the actions taken  under  Section
13 of the Act can approach the Tribunal under  the  provisions  of  the  DRT
Act.

18.   In normal circumstances, there cannot be any action of  any  authority
which cannot be challenged before a Civil Court unless there is a  statutory
bar with regard to challenging  such  an  action.  Section  34  specifically
provides the bar of jurisdiction  and  therefore,  the  order  passed  under
Section 13 of the Act could not have  been  challenged  by  respondent  no.1
debtor before any Civil Court.

19.   In  the  aforestated  circumstances,  the  only  remedy  available  to
respondent no.1 debtor can be to approach the Tribunal under the  provisions
of the DRT Act read with the provisions of the Act.   But,  one  would  feel
that as per Section 1(4) of the DRT Act, provisions of  the  DRT  Act  would
not apply where the amount of debt is less than Rs.10 lakh.

20.   The aforestated provision of Section 1(4) of the DRT Act must be  read
in a manner which would not adversely affect a debtor,  who  wants  to  have
some remedy against an action initiated under the provisions of  Section  13
of the Act.

21.   The DRT Act mainly pertains to institution of proceedings  by  a  bank
for recovery of its debt when the debt is not less than Rs.10 lakh.  If  the
debt is less than Rs.10 lakh, no suit can be filed by the creditor  bank  in
the  Tribunal  under  the  provisions  of  the  DRT  Act.   So,   when   the
jurisdiction of the Tribunal has been referred to in  Section  1(4)  of  the
DRT Act, which limits the jurisdiction of the Tribunal to Rs.10 lakh,  prima
facie,  the  intention  of  the  legislature  is  to  limit   the   original
jurisdiction of the Tribunal.  If  any  claim  is  to  be  made  before  the
Tribunal, the amount must be more than Rs.10 lakh and if the amount is  less
than Rs.10 lakh, the creditor bank will have to  file  a  suit  in  a  Civil
Court. So, one can safely interpret the provisions of Section  1(4)  of  the
DRT Act to the effect that  it  deals  with  original  jurisdiction  of  the
Tribunal under the provisions of the DRT Act.

22.   In the instant case, we  are  concerned  with  the  challenge  to  the
proceedings initiated under Section 13 of the  Act.   There  is  a  specific
provision in the Act to the effect that the proceedings initiated under  the
Act cannot be challenged before a Civil Court because the  Civil  Court  has
no jurisdiction to entertain any matter arising under the Act  and  in  that
event,  the  concerned  debtor  has  to  approach  the  Tribunal  under  the
provisions of Section 17 of the Act.

23.   Thus, the Tribunal would  be  exercising  its  appellate  jurisdiction
when the action initiated under the provisions of Section 13 of the  Act  is
challenged  before  the  Tribunal.   There  is  a  difference  between   the
Tribunal’s original jurisdiction under the provisions of  the  DRT  Act  and
the appellate jurisdiction under the Act.

24.   The issue with regard to availability of a forum for  challenging  the
action under the provisions of the Act had been dealt with by this Court  in
the case of Mardia Chemicals Ltd. (supra).  This Court, in  the  said  case,
unequivocally held that the  aggrieved  debtor  can  never  be  without  any
remedy and we firmly believe that the legislature would normally  not  leave
a person without any remedy when a harsh action  against  him  is  initiated
under the provisions of the Act.

25.   So as to know the appellate jurisdiction of the Tribunal, one  has  to
look at the provisions of the Act as Section  17  of  the  Act  specifically
provides a right to the aggrieved debtor to challenge  the  validity  of  an
action initiated under  Section  13(4)  of  the  Act  before  the  Tribunal.
Moreover, the Act was enacted in 2002 and the  legislature  is  presumed  to
have knowledge about the provisions of Section 1(4)  of  the  DRT  Act.   So
harmonious reading of both the aforestated Sections would  not  be  contrary
to any of the legal provisions.

26.   For the aforestated reasons, we are of the view that  the  application
submitted by the appellant bank under Order VII Rule 11 of  the  CPC  should
have been granted by the trial Court as, according  to  Section  34  of  the
Act, a Civil Court has no  jurisdiction  to  entertain  any  appeal  arising
under the Act.

27.   Thus, we hold that the Debt Recovery Tribunal  constituted  under  the
DRT Act has jurisdiction to entertain an appeal as per  Section  17  of  the
Act even if the amount involved is less than  Rs.10  lakh.   But,  the  said
appellate  jurisdiction  need  not  be  misunderstood  with   the   original
jurisdiction of the Tribunal.

28.   For the aforestated reasons, the impugned  judgment  as  well  as  the
order rejecting the application filed  under  Order  VII  Rule  11  are  set
aside.  The appeal is allowed with no order as to costs.



                                                             .…………………………….J.
                                          (ANIL R. DAVE)



                                                             ……………………………..J.
                                   (L. NAGESWARA RAO)
NEW DELHI
NOVEMBER 8, 2016.