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        2020 (9) TMI 1313 - HC - Indian Laws

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        SARFAESI jurisdiction bar cannot justify plaint rejection where the plaint pleads the secured asset is agricultural land. Section 34 SARFAESI bars civil jurisdiction only where the matter falls within the DRT or Appellate Tribunal's statutory competence, and Section 31(i) ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                          Provisions expressly mentioned in the judgment/order text.

                              SARFAESI jurisdiction bar cannot justify plaint rejection where the plaint pleads the secured asset is agricultural land.

                              Section 34 SARFAESI bars civil jurisdiction only where the matter falls within the DRT or Appellate Tribunal's statutory competence, and Section 31(i) excludes security interests in agricultural land. Whether land is agricultural is a factual issue depending on its nature and use, ordinarily to be decided on evidence. At the Order 7 Rule 11 stage, the court must accept the plaint as pleaded and cannot test the defence case. Because the plaint asserted that the secured property was agricultural land, rejection of the plaint was not warranted.




                              Issues: Whether a plaint can be rejected under Order 7 Rule 11 of the Code of Civil Procedure on the ground that the suit is barred by Section 34 of the SARFAESI Act when the plaint itself asserts that the secured property is agricultural land and therefore outside the Act.

                              Analysis: The jurisdictional bar under Section 34 operates only where the matter is one that the DRT or the Appellate Tribunal is empowered to determine under the SARFAESI regime. The statutory exclusion in Section 31(i) makes the Act inapplicable to security interest created in agricultural land. Whether land is agricultural is a question of fact that depends on the nature and use of the land and must ordinarily be decided on evidence. At the stage of Order 7 Rule 11, the court must proceed on the plaint as it stands and cannot test the defence case. Since the plaint specifically pleads that the suit property is agricultural land, the plaint cannot be rejected on the assumed absence of jurisdiction.

                              Conclusion: Rejection of the plaint was not warranted. The challenge to the trial court's order failed, and the civil revision application was dismissed.


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                              ActsIncome Tax
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