CENTRAL BANK OF INDIA & ANR VERSUS SMT. PRABHA JAIN & ORS (Supreme Court) 2025 INSC 95

COURT:
JUDGES: ,
LEGISLATION(S):
COUNSEL: ,
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Section 17(3) of the SARFAESI Act, 2002: The Debt Recovery Tribunal (DRT) has no jurisdiction to hand over or restore possession of a secured asset to a person who is neither the borrower nor the possessor of the asset.

(i) Section 34 of the SARFAESI Act provides that no civil court shall have jurisdiction to entertain any suit or proceeding“in respect of any matter which Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine…” Hence, the Civil Court’s jurisdiction is only ousted in respect of those matters which the Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under the SARFAESI Act to determine. The SARFAESI Act confers certain powers upon the Debts Recovery Tribunal by virtue of the following sections: Sections 5(5), 13(10), 17 and 19.Except for Section 17, as such none of the other sections referred to above are relevant for the purposes of this matter.

(ii) From Section 17, it is clear that it is only the Tribunal that has the jurisdiction to determine whether “any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor” are in accordance with the Act or Rules thereunder.

(iii) The SARFAESI Act is enacted essentially to provide as peedy mechanism for recovery of debts by banks and financial 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.

Cases referred:

Mardia Chemicals Ltd. & Ors. v. Union of India & Ors. reported in (2004) 4 SCC 311
Jagdish Singh v. Heeralal & Ors. reported in (2014) 1 SCC 479

Bank of Baroda v. Gopal Shriram Panda and Another, reported in (2021) SCC OnLine Bom 466

State Bank of Patiala v. Mukesh Jain & Anr. reported in (2017) 1 SCC 53

Robust Hotels Private Limited & Ors. v. EIH Limited & Ors. reported in (2017) 1 SCC 622

Authorised Officer, SBI v. Allwyn Alloys Private Limited & Ors. reported in (2018) 8 SCC 120

Madhav Prasad Aggarwal & Anr. v. Axis Bank Limited & Anr. reported in (2019) 7 SCC 158

Sree Anandhakumar Mills Ltd. v. Indian Overseas Bank & Ors. reported in (2019) 14 SCC 788

Electrosteel Castings Ltd. v. UV Asset Reconstruction Co. Ltd. & Ors. (2022) 2 SCC 573

Bank of Baroda v. Moti Bhai & Ors. reported in (1985) 1 SCC 475

Harshad Govardhan Sondagar v. International Assets Reconstruction Co. Ltd. reported in (2014) 6 SCC 1

M.P. Wakf Board v. Subhan Shah (Dead) by LRs. reported in (2006) 10 SCC 696

Om Prakash Gupta v. Dr. Rattan Singh & Anr. reported in 1962 SCC OnLine SC 111

Bank of Rajasthan Ltd. v. VCK Shares & Stock Broking Services Ltd., reported in (2023) 1 SCC 1

Dwarka Prasad Agarwal (Dead) by LRs. & Anr. v. Ramesh Chander Agarwal & Ors. reported in (2003) 6 SCC 220

 

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