STATE BANK OF PATIALAversusMUKESH JAIN & ANR.

                       [2016] 8 S.C.R. 427



                  STATE BANK OF PATIALA                             A
                                v.
                    MUKESH JAIN & ANR.
                  (Civil Appeal No. 210 of2007)
                      NOVEMBER 08, 2016                              B

      [ANIL R. DAVE AND L. NAGESWARA RAO, JJ.)
      Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 - ss. 13(4), 17 and 34 -
Suit against proceedings initiated uls. 13(4) - lnvolving debt less C
than Rs. 10 lakhs - Whether the suit is not maintainable in view of
bar u!s. 34 or is it maintainable in view of s. 1(4) of DRT Act which
debars the jurisdiction of the Tribunal in respect of debts below Rs.
JO lakhs - Held: The jurisdiction of civil court is barred in respect
of action taken under the SARFAESl Act and the remedy available
is before the Tribunal under DRT Act - As per s. I (4) of DRT Act, D
provisions of DRT Act would not apply where the amount of debt is
less than Rs. JO /akhs - But the aggrieved debtor cannot be left
without any remedy - Therefore the provision uls. 1(4) of DRT Act
can be interpreted in such a manner which would not adversely
affect legal remedy to a debtor - Bar uls. 1(4) can be interpreted as E
limited to the original jurisdiction of the Tribunal - Tribunal will
have the jurisdiction to entertain the case in re~pect of proceedings
 under. the Act (where the amount involved is less than Rs. JO lakhs)
in exercise of its appellate jurisdiction u/s. 17 - Recovery of Debts
Due to Banks and Financial institutions Act, 1993 - s. 1(4).
                                                                     F
      Allowing the appeal, the Court
     HELD: 1 Upon perusal of Section 34 of the Securitisation
and Reconstruction of.the Financial Assets and Enforcement of
Security Interest Act, 2002, (SARFAESI Act), it is very clear that
no Civil Court is having jurisdiction to entertain any suit or G
proceeding in respect of any matter which a Debt Recovery ·
Tribunal or the appellate Tribunal is empowered by or under the
SARFAESI Act to determine the dispute. Further, the Civil Court
has no right to issue any injunction in ,pursuance of any action
taken under the SARFAESI Act or under the provisions of the
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                                427
428            SUPREME COURT REPORTS                      [2016] 8 S.C.R.


A Recovery of Debts Due to Banks and financial Institutions Act,
  1993 (DRT Act). In view of a specific bar, no Civil Court can
  entertain any suit wherein the proceedings initiated under Section ·
  13 of the SARFAESI Act are challenged. SARFAESI 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
8
  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.IO lakh. In the aforestated
  circumstances, one will have to make an effort to harmonize both
  the statutory provisions. [Paras 15, 16 and I7][433-D-G)
 c      2.I 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 I3 of the SARFAESI
o Act could not have been challenged by respondent No. I-debtor
  before any Civil Court. 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 SARFAESI Act. But, as per Section 1(4) of the
  DRT Act, provisions of the DRT Act would not apply where the
E amount of debt is less than Rs.IO lakh. The aggrieved debtor
  can never be without any remedy and the legislature would
  normally not leave a person without any remedy when a harsh
  action against him is initiated under the provisions of the
  SARFAESI Act. Therefore, the provision of' Section 1(4) of the
F 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. [Paras I8,
  19, 20 and 24)[434-A-D; 435-B-C)
            Marclia Chemicals Ltd. and Ors. v. Union of India and
 G          Or~·. 2004 (4) SCC 311: 2004 (3) SCR 982 - relied
            on.
            2.2 So, when the jurisdiction of the Tribunal has been
      referred to in Section I(4) of the DRT Act, which limits the
      jurisdiction of the Tribunal to Rs.10 lakh, primafacie, the intention
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     STATE BANK OF PATIALA v. MUKESH JAIN & ANR.                            429


of the legislature is to limit the original jurisdiction of the Tribunal.   A
Thus, the Tribunal would be exercising its appellate jurisdiction
u/s. 17 of the SAIU"'AESI Act when the action initiated under the
provisions of Section 13 of the Act is challenged before the
Tribunal. Section 17 specifically provides a right to the aggrieved
debtor to challenge the validity of an action initiated under Section
                                                                            8
13(4) of the SARFAESI Act before the Tribunal. Moreover, the
SARFAESI 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. [Paras 21, 23 and 25][434-E, G; 435-A, C-D]                     C
     · 3. 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 SARFAESI Act, a civil
court has no jurisdiction to entertain any appeal arising under
the SARFAESI Act. The Debt Recovery Tribunal constituted                     D
under the DRT Act has jurisdiction to entertain ail appeal as per
Sectfon 17 of the SARFAESI Act even if the amount involved is
less than Rs.to lakh. But, the said appellate jurisdiction need
not be misunderstood with the original jurisdiction of the Tribunal.
[Paras 26 and 27][435-E-F]
                                                                             E
                          Case Law Reference
2004 (3) SCR 982                  relied on               Paras 10, 24
        CIVIL APPELLATE JURISDICTION: Civil Appeal No. 210 of
2007.
                                                                             F
       From the Judgment and Order dated 08.04.2005 of the High Cou11
·Of Delhi at New Delhi in Revision Petition No. 242 of2004.
        Vishnu Mehra, (For B. K. Satija), Adv. for the Appellant.
        The Judgment of the Court was delivered by
      ANILR.DAVE,J. I. Being aggrieved bythejudgmentdated 81h               G
April, 2005 delivered in Civil Revision Petition No.242 of2004 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
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430               SUPREME COURT REPORTS                              (2016] 8 S.C.R.


A     order of rejection dated 9rl' February, 2004, the aforestated Civil Revision
      Petition was tiled 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
B     under:
          The appellant is a nationalized bank which had lent Rs.8,00,000/-
   (Rupees eight lakh) to respondent no. I by way of a term loan on ceriain
   conditions and so as to secure the said debt, respondent no. I debtor had
   mortgaged his immovable property forming part of premises bearing
 c no.C-8/298, Yamuna Vihar, Delhi. As respondent no. I 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
 D against respondent no. I, the said proceedings had been challenged by
   respondent no. I by filing Civil Suit No.4 of2003 in the CourtofCivil
   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
 E    entertain the suit in view of the provisions ofSection 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.I and upon hearing the concerned counsel, the said application had
 F    been rejected by the trial Comi by an order dated 91h February, 2004.
         4. Being aggrieved by the rejection of the said application, the
   appellant filed Civil Revision Petition No.242 of2004 in the High Court
   of Delhi. The said petition was also rejected by the impugned judgment
   dated 8d' April, 2005 and being aggrieved by.the said judgment, the present
 G appeal has been filed by the appellant.
              5. The reason for which the application filed under Order VII
      Rule I I 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. I (original plaintifl) was less than Rs. I0,00,000/- (Rupees
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     STATE BANK OF PATIALA v. MUKESH JAIN & ANR.                               431
                  [ANIL R. DAVE, J.]

Ten lakh) and according to the provisions of Section 1(4) of the Recovery      A
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
                                                                                B
the matter as the amount claimed in the suit was less than Rs. I 0 lakh.
      6. In the aforestated circumstances, the trial Court was of the
view that as the ORT 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 Vil Rule
11 of the CPC had been rejected by the trial Court. The High Court              C
confirmed the said view of the trial Court.
       7. The learned counsel appearing for the appellant, challenging
the validity of the impugned judgment, submitted thatthe 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       D
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             E
Tribunal had no jurisdiction to entertain an appeal against the order passed
under the Act in pursuance of the provisions of Section I (4) of the ORT
Act.
      9. He also submitted that the Act was enacted in 2002, whereas
the ORT Act was enacted in 1993. As the Act was enacted later in                F
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.
                                                                                G
      10. So as to substantiate his submission, the learned counsel relied
upon a judgment delivered in the case ofMardia 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           H
432            SUPREME COURT REPORTS                           [2016) 8 S'.C.R.


A can be restrained from proceeding further with the Suit on the ground of
  lack ofjurisdiction.
            I I .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
 B cited by hini.
          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
 C 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. I 0 lakh and therefore, the CivilSuit was the only remedy
   available to the respondents (original plaintiffs).
           14. It would be beneficial to consider the relevant provisions of
 D · the Act referred to hereinabove:
            "17. Right to appeal (I )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
 E          application along with such fee, as may be prescribed) to
            the Debts Recovery Tribunal havingjurisdiction 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
 F          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
 G          "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 Tribunalis empowered by or underthis Act
            to detennine and no injunction shall be granted by any Court
            or other authority. in respect of any action taken or to be
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          STATE BANK OF PATIALA v. MUKESH JAIN & ANR.                              433
                       [ANIL R. DAVE, J.]

           taken in pursuance of any power conferred by or under                   A
           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:
           "l. Short title, extent, commencement and
           application. -                                                          B
           (1)
           (2)
           (3)
                                                                                   c.
           (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."                                                  D
           15. Upon perusal of Section 34 of the Act, it is very clear that no
     Civil Court is havingjurisdiction 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     E
     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 ente1tain 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              F
     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. I0 lakh.
            17. In the aforestated circumstances, one will have to make an          G
     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.

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434             SUPREME COURT REPORTS                           (2016] 8 S.C.R.


A            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 ofjurisdiction and therefore, the order passed
      under Section 13 of the Act could not have been challenged by respondent
      no. I debtor before any Civil Court.
 B
            19. In the aforestated circumstances, the only remedy available to
      respondent no. I 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 ORT Act, provisions of the
      ORT Act would not apply where the amount of debt is less than Rs. J0
 c    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.
 0
          21. The ORT Act mainly pertains to institution of proceedings by
   a bank for recovery of its debt when the debt is not less than Rs. I 0 lakh.
   If the debt is less than Rs. I 0 lakh, no suit can be filed by the creditor
   bank in the Tribunal under the provisions of the ORT Act. So, when the
   jurisdiction of the Tribunal has been referred to in Section 1(4) of the
 E DRT Act, which limits the jurisdiction of the Tribunal to Rs. IO 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. I 0 lakh and if the amount is less than
   Rs. I0 lakh, the creditor bank will have to file a suit in a Civil Court. So,
 F one can safely interpret the provisions of Section I(4) of the ORT Act to
   the effect that it deals with original jurisdiction of the Tribunal under the
   provisions of the ORT 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
 G 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
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     STATE BANK OF PATIALA v. MUKESH JAIN & ANR.                                435
                  [ANIL R. DAVE, J.]

when the action initiated under the provisions of Section 13 of the Act is      A
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           B
Court in the case ofMardia 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.
                                                                                 c
       25. So as to know the appellate jurisdiction of the Tribunal, one
has to look atthe 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 iti 2002 and the legislature is presumed
to have knowledge about the provisions of Section 1(4) of the ORT Act. · D
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             E
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 ente11ain an appeal as per Section
17 of the Act even if the amount involved is less than Rs. I 0 lakh. But,        F
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.                      G


Kalpana K. Tripathy                                           Appeal allowed.



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