STATE BANK OF PATIALA versus MUKESH JAIN & ANR.

Citation: [2016] 8 S.C.R. 427 · Decided: 08-11-2016 · Supreme Court of India · Bench: ANIL R. DAVE · Disposal: Appeal(s) allowed

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Judgment (excerpt)

[2016] 8 S.C.R. 427 
STATE BANK OF PATIALA 
v. 
MUKESH JAIN & ANR. 
(Civil Appeal No. 210 of2007) 
NOVEMBER 08, 2016 
[ANIL R. DAVE AND L. NAGESWARA RAO, JJ.) 
A 
B 
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). 
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 
F 
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 
427 
H 
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 SARF AESI Act are challenged. SARF AESI Act had been 
enacted in 2002, whereas the DRT Act had been enacted in 1993. 
8 
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.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 
H 
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 
STATE BANK OF PATIALA v. MUKESH JAIN & ANR. 
429 
of the legislature is to limit the original jurisdiction of the 

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