2020 (9) TMI 1313 - HC - Indian Laws

Rejection of plaint under Order 7 Rule 11 of the Code of Civil Procedure - no civil court had jurisdiction to entertain any suit or application - HELD THAT - One can understand the Applicant s apprehension; but a clear answer to this dreaded predicament is making of an application for framing a preliminary issue of jurisdiction questioning the status of the suit property as agricultural land, and requiring the court to read evidence and hear the parties on that preliminary issue and dismiss the suit, if the suit property is not found to be agricultural. It is not really necessary in such a case to go to trial on all issues, if the defendant bank is right on the preliminary issue. There are no merit in the challenge to the impugned order. Civil Revision Application is, in the premises, dismissed.

Summary

Issues:
Challenge to rejection of plaint under Order 7 Rule 11 of the Code of Civil Procedure based on SARFAESI Act provisions.

Analysis:

The Civil Revision Application challenges the rejection of the plaint by the trial court under Order 7 Rule 11 of the Code of Civil Procedure. The Applicant, who was the original defendant, had taken measures under the SARFAESI Act against the Respondents' property, leading to the application. The Respondents filed a suit claiming that the property is agricultural land and hence not subject to SARFAESI Act provisions. The trial court rightly held that the issue of whether the property is agricultural land must be decided in the suit and does not support rejection under Order 7 Rule 11.

In support of the rejection, the Applicant's Counsel cited the judgment in Jagdish Singh Vs. Heeralal, where the Supreme Court clarified that civil courts lack jurisdiction over matters within the purview of the DRT or Appellate Tribunal under the SARFAESI Act. However, if security interest is in an agricultural land, SARFAESI Act provisions do not apply, and civil court jurisdiction is not barred. The court emphasized that at the stage of Order 7 Rule 11, the plaint should be taken as it is, and the question of whether the land is agricultural must be decided based on evidence in the suit.

Referring to Indian Bank Vs. K. Pappireddiyar, the court noted that determining if land is agricultural involves factual analysis of its nature, use, and purpose. The trial court correctly held that such determinations require evidence and cannot be decided at the stage of Order 7 Rule 11. The Applicant's concern about prolonged trials under SARFAESI Act provisions was addressed by suggesting the framing of a preliminary issue on the status of the land, which if resolved in favor of the bank, could lead to suit dismissal without a full trial.

Ultimately, the court found no merit in challenging the rejection of the plaint under Order 7 Rule 11 and dismissed the Civil Revision Application, with no costs awarded. The judgment emphasized the need for factual determinations regarding the nature of the land in question before invoking SARFAESI Act provisions and highlighted the importance of following proper legal procedures for jurisdictional issues in civil suits.