Civil court bar under SARFAESI applies where the plaint challenges secured creditor action; fraud pleas must be specifically pleaded.

A plaint that, on its own averments, effectively challenges a secured creditor's measures under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 falls within the bar of Section 34, and the proper forum is the Debts Recovery Tribunal under Section 17. Where that bar is apparent from the plaint, rejection under Order VII Rule 11(d) of the Code of Civil Procedure is mandatory. General allegations of fraud or collusion do not avoid the bar unless pleaded with the specific particulars required by Order VI Rule 4 and shown to fall within the narrow Mardia Chemicals exception. Unregistered allotment letters or MOUs cannot override rights created by a registered mortgage or revive protection under the Maharashtra Ownership Flats Act.

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Issues: (i) Whether the plaints, in so far as they were directed against the bank, were barred by Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and liable to rejection under Order VII Rule 11(d) of the Code of Civil Procedure, 1908. (ii) Whether the pleaded allegations of fraud, collusion and the asserted protections under the Maharashtra Ownership Flats Act could save the suits from the statutory bar.

Issue (i): Whether the plaints, in so far as they were directed against the bank, were barred by Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and liable to rejection under Order VII Rule 11(d) of the Code of Civil Procedure, 1908.

Analysis: The plaints, read as a whole, showed that the bank was impleaded only because it had a mortgage and had taken measures under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The bank's grievance arose from enforcement of its security interest in the project secured by Orbit, and any challenge to those measures, or to the bank's right to proceed against the secured asset, lay before the Debts Recovery Tribunal under Section 17. Section 34 barred civil court jurisdiction in respect of matters the Tribunal was empowered to determine. Order VII Rule 11(d) was mandatory where the bar was apparent from the plaint. The reliefs claimed against the bank were not independent monetary or damages claims, but were tied to the validity and effect of the mortgage and the bank's enforcement measures.

Conclusion: The civil suits, insofar as they were directed against the bank, were barred and the plaints were liable to be rejected as against the bank.

Issue (ii): Whether the pleaded allegations of fraud, collusion and the asserted protections under the Maharashtra Ownership Flats Act could save the suits from the statutory bar.

Analysis: The allegations of fraud and collusion were found to be vague, general and unsupported by the particulars required by Order VI Rule 4. The exception recognised in Mardia Chemicals was confined to a very limited class of cases where the secured creditor's action was shown to be fraudulent or wholly absurd and untenable. That threshold was not met. The reliance on the Maharashtra Ownership Flats Act also failed because there was no registered agreement for sale as contemplated by Section 4, and therefore Section 4A and Section 9 could not be invoked to defeat the bank's mortgage or its security interest. On the facts pleaded, the plaintiffs could not use unregistered allotment letters or MOUs to override the bank's rights created by a registered mortgage.

Conclusion: The pleas of fraud, collusion and MOFA protections did not displace the statutory bar or sustain the plaints against the bank.

Final Conclusion: The bank's challenge succeeded, the impugned order was set aside, and the plaints were rejected as against the bank, leaving the plaintiffs to pursue the statutory remedy available under the Securitisation Act.

Ratio Decidendi: Where a plaint, on its own averments, in substance challenges measures taken by a secured creditor under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, civil court jurisdiction is barred by Section 34 and the proper remedy lies under Section 17 before the Debts Recovery Tribunal, unless a pleaded fraud is particularised with sufficient specificity and precision to bring the case within the narrow Mardia Chemicals exception.

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