- Case
- CENTRAL BANK OF INDIA v. SMT. PRABHA JAIN (Supreme Court of India, 09-01-2025)
- Law
- Code of Civil Procedure, Court-Fees Act, Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act.
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act): The judgment extensively discusses several sections of the SARFAESI Act. Section 13 is analyzed in relation to the measures a secured creditor can take to recover debts, particularly under sub-section (4). The judgment clarifies that DRT's power under Section 17(3) to "restore" possession is limited to restoring it to the party who was in possession when the bank took over, not to someone who was never in possession. Section 17 is discussed regarding the right to appeal to the DRT, clarifying that "any person" aggrieved by measures under Section 13(4) has this right. The judgment emphasizes that the DRT's powers are limited to the measures taken by the secured creditor under Section 13(4). Section 34, which bars civil court jurisdiction, is a central point of contention. The judgment clarifies that this bar applies only to matters the DRT or Appellate Tribunal is empowered to determine under the SARFAESI Act. It cites Mardia Chemicals Ltd. & Ors. v. Union of India & Ors. to support this interpretation. The judgment also notes that mere allegations of fraud in the plaint are insufficient to overcome the bar under Section 34, citing Electrosteel Castings Ltd. v. UV Asset Reconstruction Co. Ltd. & Ors.
Code of Civil Procedure, 1908 (CPC): Order VII Rule 11 CPC is discussed in the context of rejecting a plaint. The judgment emphasizes that a plaint cannot be rejected partially, i.e., against some defendants but not others, citing Madhav Prasad Aggarwal & Anr. v. Axis Bank Limited & Anr. and Sejal Glass Ltd. v. Navilan Merchants (P) Ltd. The judgment also mentions Section 9 CPC, stating that the jurisdiction to declare a sale deed or mortgage deed illegal is vested with the civil court under this section.
The Court Fees Act, 1870: Section 7(v)(a) is mentioned in relation to the court fee paid by the plaintiff for the relief claimed. The judgment notes that the plaintiff has paid the proper court fee for the declaration of the sale deed and mortgage as illegal.
Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDB Act): The judgment refers to the RDB Act in the context of the powers and limitations of the Debts Recovery Tribunal (DRT). It cites Bank of Rajasthan Ltd. v. VCK Shares & Stock Broking Services Ltd. to clarify that the civil court's jurisdiction is not ousted regarding an independent suit against the bank in the context of the RDB Act. The judgment also notes that the DRT, being a tribunal and a creature of the statute, does not have any inherent power which inheres in civil courts such as Section 151 of the Code.
General Principles of Law: The judgment discusses the principle that the jurisdiction of a civil court is plenary in nature unless expressly or impliedly ousted. It emphasizes that provisions barring civil court jurisdiction should be strictly interpreted and that the court should lean in favor of upholding the civil court's jurisdiction. The judgment also touches upon the principle that tribunals, being creatures of statute, have limited jurisdiction and must function within the four corners of the statute creating them.
