Central Bank of India & Anr. Vs. Smt. Prabha Jain & Ors.
Court: Supreme Court of India
The Debt Recovery Tribunal (DRT) lacks jurisdiction to declare a mortgage deed or sale deed invalid. The authority to determine the legality of such deeds rests exclusively with the civil court under Section 9 of the Code of Civil Procedure.
Brief Facts of the Case:
- The Central Bank of India had granted a loan to a borrower, which was secured by a mortgage deed.
- The borrower defaulted on the loan, leading the bank to initiate proceedings before the Debt Recovery Tribunal (DRT) for the recovery of dues.
- The borrower’s legal heirs (respondents) challenged the validity of the mortgage deed and the sale deed, alleging fraud and misrepresentation.
- They contended that the DRT had no jurisdiction to decide on the legality of the mortgage or sale deed and that such matters fell under the jurisdiction of the civil court.
Final Judgment:
- The Supreme Court held that the Debt Recovery Tribunal (DRT) does not have jurisdiction to declare a mortgage deed or a sale deed as illegal or void.
- The Court ruled that such powers rest exclusively with the civil courts under Section 9 of the Code of Civil Procedure (CPC).
- It clarified that while DRT has jurisdiction over debt recovery matters, it cannot grant declaratory reliefs regarding the validity of sale deeds or mortgage deeds.
- The Supreme Court upheld the respondents’ contention and reaffirmed the exclusive jurisdiction of civil courts in such matters.