BANK OF BARODA versus MOTI BHAI AND ORS.

Citation: [1985] 2 S.C.R. 784 · Decided: 29-01-1985 · Supreme Court of India · Bench: Y.V. CHANDRACHUD · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
BANK OF BARODA 
v, 
MOTi BHAI AND ORS. 
B 
29th January, 1985 
[Y. V. CHANDRACHUD, C.J. AND V. BALA KRISHNA ERADI, J .) 
Bar to jurisdlctiofi·of •~ivil court's-Suit for recovery of a demand loan 
sanctioned to agrlculturist by a Bank under a pro1nissory note duly covered by 
hypothecating the standing crop of his lands and supported with two guarantors 
C 
; ·f(Jr the repayment of the loan- Maintainability of the Sult-Raja,han Tenancy 
D 
E 
F 
G 
Act (Act 3 to 1955) seetions 43, 207 and 256 read with Entrty 35 of Third 
Schedule, scope of. 
The appellant Bank filed a suit for the recovery of the amount of Joan 
together with interest thereon granted to Respondent No. J who had not 
only executed a promissory note but al110 a bond hypothecaling the standing 
crop of bis lands siluated at Khandu and Surjipada in Rajasthan. Respondents 
2 and 3 being guarantors for the repayment of the loan were also proceed~·d 
against. The Trial Court overruled the preliminary objection raised by the 
Respondents as to the maintability of the Sui 1, in view of sections 207 and 
256 of the Raiasthao Tenancy Act, 1955. But the High Court, while 
allowing the Civil Revision Application set asid·~ the judgment of the Trial 
Court and dismissed the suit, 
Hence the appeal by special leave of the Court. 
Allowing the appeal, the Court, 
HELD: 1.1 A combined reading of sections 207 and 256 of the 
Rajaslhao Tenancy A,,;t, 1955 wvuld ~how that the jurisdiction of the civil 
courts is barred only in respect of suits and applications of the oalure 
specified in the Third S~·hedule to the Act and in respect of suits or applica. 
tions based on a cause or action in respect of which any relief could be 
obtained by means of a suit or application of the nature specified in the 
Third Schedule. The civil 
COU!t has no jurisdiction to entertain a suit or 
proceeding with respect to any matter arising under the Act or the Rules 
made thereunder, provided that a remedy by way of a suit. application or 
appeal or otherwise is provided in the Act. the long title of which shows 
that it was passed in order "to consolidate" and amend the law relating to 
tenancies of agricultural lands and to provide for certain measures of land 
reforms and matters connected therewith. [787C-D; 788A] 
1.2. Entry 3S is described in the Third Schedule as a "General" 
H 
entry, that is to say, not relatable to any particular section of the Act. The 
\. .. 
. .. 
B\NKi OF B.\~ODA '· Mor( BfHI (ChanJracl1uJ, 01.) 
785 
• 
suit filed by the Bank cannot fall under this ''General'' or "residuary" 
entry. A loan given by a Bank to an agriculturist, which is in the nature of 
a commercial transaction, is outside the contemplation of the Act and cannot 
be said to be in respect of any matter arising under the Act. 
[787G; 788A·B) 
1.3. The business of the Bank, in so far as lending transactions are 
concerned, is not to lend moneys on mortgages but the business i9 to lend 
moneys. In this particular case, the Bank lent a certain sum of money to 
respondent 1 in the 
u~ual course of its commercial business and nothing 
could be further removed from the contemplation of the Act than such a 
transaction. It is only by way of a collateral security that the Bank obtained 
a bypothecation bond and a deed of mortg1ge from respondent 1 and a 
letter of guarantee from respondents 2 and 3. The assumption that the 
mortgage was executed in pursuance of section 43 of the Act and, therefore, 
residuary Entry 35 of the Third Schedule is attracted, is not correct. 
[788G-H; 789A] 
2. On the question uf jurisdiction, one must always have regard to 
the substance of the matter and not to the form of the suit. Approaching 
the matter from that point of view, primarily and basically the suit filed by 
the Bank is one for recovering the amount which is due to it from the 
respondents on the basis of the promissory note executed by respondent 
No. 1 and the guarantee given by respondents 2 and 3. The reliefs sought 
for also make it clear that the suit is not one to enforce the mortgage and, 
even assuming that it is, the mortgage not having been executed under 
section 43 of the Act, nor being one rclatable to that section, the residuary 
Entry 35 can have no application. lf that entry is out of way, there is no 
other provision in the Act which \\oould apply to the instant suit and 
therefore, the civil court has jurisdiction to entertain the suit filed by the 
appellant Bank. [789C·B) 
CIVIL APPE

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