Case Note & Summary
The applicant, Sundaram Home Finance Limited, a secured creditor, filed a Civil Revision Application challenging an order of the Civil Judge, Junior Division, Kagal, Kolhapur, which rejected its application under Order 7 Rule 11 of the Code of Civil Procedure, 1908 (CPC) for rejection of the plaint in a Regular Civil Suit filed by the respondents (plaintiffs). The respondents had filed the suit against the applicant, contending that the property over which the applicant had taken security interest was agricultural land, and therefore, the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) did not apply. The respondents relied on a 7/12 extract to support their claim. The applicant, as defendant, disputed that the property was agricultural land and argued that since it had taken measures under the SARFAESI Act, Section 34 of that Act barred the civil court from entertaining any suit in respect of those measures. The trial court dismissed the applicant's application, holding that the question of whether the property was agricultural land was a disputed issue of fact that could not be decided in an application under Order 7 Rule 11 CPC. The High Court upheld this decision, reasoning that the plaint disclosed a cause of action and raised a triable issue regarding the nature of the property. The court noted that if the property is indeed agricultural land, the SARFAESI Act would not apply, and the civil court would have jurisdiction. The disputed fact could not be resolved summarily; it must be decided in the suit, possibly as a preliminary issue. The High Court found no error in the trial court's order and dismissed the revision application.
Headnote
A) Civil Procedure - Rejection of Plaint - Order 7 Rule 11 CPC - Disputed Question of Fact - Where the plaint raises a disputed issue of fact (whether the property is agricultural land) which goes to the jurisdiction of the court, the plaint cannot be rejected under Order 7 Rule 11 CPC; the issue must be decided in the suit, possibly as a preliminary issue. (Paras 3-4) B) SARFAESI Act - Jurisdiction of Civil Court - Section 34 - Agricultural Land Exemption - The bar under Section 34 of the SARFAESI Act applies only to measures taken under the Act; if the plaintiff contends that the property is agricultural land and thus outside the Act's purview, the civil court has jurisdiction to entertain the suit, and the plaint cannot be rejected summarily. (Paras 2-4)
Issue of Consideration
Whether a plaint can be rejected under Order 7 Rule 11 CPC on the ground that the civil court lacks jurisdiction under Section 34 of the SARFAESI Act, when the plaintiff claims the property is agricultural land and the defendant disputes that fact.
Final Decision
The High Court dismissed the Civil Revision Application, upholding the trial court's order rejecting the application under Order 7 Rule 11 CPC. The court held that the disputed question of fact regarding the nature of the property cannot be decided in an application for rejection of plaint and must be decided in the suit.
Law Points
- Order 7 Rule 11 CPC
- Section 34 SARFAESI Act
- jurisdiction of civil court
- rejection of plaint
- disputed question of fact
- agricultural land exemption
