Facts: A plaintiff (later represented by legal heirs) filed a suit seeking declaratory reliefs regarding the sale of a developed plot. The defendant had agreed to purchase the plot, paid a portion of the consideration, but defaulted on the remaining amount. The plaintiff terminated the agreement and forfeited the earnest money. Subsequently, the defendant mortgaged the plot to a bank (Defendant No. 2), leading the plaintiff to amend the suit to include a declaration that the mortgage was not binding. Defendant No. 2 then applied for the framing of a preliminary issue of jurisdiction, arguing that the suit was barred under Section 18 of the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act), and by principles of res judicata due to prior DRT orders.
Procedural Posture: The Civil Revision Applications were filed in the High Court of Judicature at Bombay, challenging the orders of the Civil Judge, Senior Division, Panvel, which rejected the Defendant No. 2's applications for framing a preliminary issue of jurisdiction and dismissing the suit.
Issue: Whether the Civil Court's jurisdiction is barred under Section 18 of the RDB Act to entertain a suit where the plaintiff seeks declarations regarding the rescission of a sale agreement and the non-binding nature of a mortgage deed, given that the defendant has also pursued remedies under the RDB Act. Also, whether a plaint can be rejected in part, specifically against one of the defendants.
Holding: The High Court dismissed the Civil Revision Applications, holding that the Civil Court's jurisdiction was not barred and that the plaint could not be rejected in part.
Reasoning: The Court reasoned that the DRT's jurisdiction is limited to entertaining applications from banks and financial institutions for the recovery of debts. The suit filed by the plaintiff sought declarations regarding the sale agreement and mortgage, which fell outside the DRT's exclusive jurisdiction. The Court relied on precedents, including Central Bank of India and Anr Vs Prabha Jain and Ors, to emphasize that civil courts retain jurisdiction over matters not explicitly covered by the RDB Act. Furthermore, the Court reiterated the principle that a plaint cannot be rejected in part under Order VII Rule 11 of the Code of Civil Procedure; it must be rejected as a whole or not at all. The Court distinguished cases where a plaint could be rejected against some defendants, emphasizing that if one relief survives, the entire suit must proceed to trial.