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            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

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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.

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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 9 th

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

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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

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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.

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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

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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).”

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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

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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

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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

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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

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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

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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.