Ruling that disputed questions of title and the genuineness of a conveyance deed fall outside the writ court’s jurisdiction and outside the DRT’s statutory remit under Section 34 of the SARFAESI Act, the Calcutta High Court has directed restoration of possession while leaving the validity of both the sale deed and the mortgage deed open for civil adjudication.
Where the very foundation of a person’s claim to ownership rests on a document whose genuineness is seriously disputed, the High Court declined to entertain the dispute under Article 226 and relegated the parties to the competent Civil Court. The Court clarified that Section 34 of the SARFAESI Act, 2002 only bars civil court jurisdiction over matters the DRT or DRAT is empowered to determine, and does not preclude a substantive suit concerning the validity or genuineness of a title deed foundational to the ownership claim.
The High Court also said that the Debt Recovery Tribunal exercising jurisdiction under the SARFAESI Act must act within the four corners of the statute, and its jurisdiction cannot be stretched to adjudicate the validity or genuineness of a deed of title, particularly where such determination is foundational to the ownership claim itself.
Briefly, the petitioners had challenged the legality of a possession notice dated 1 October 2026 issued by Canara Bank, the secured creditor, through respondent no. 2. The petitioners claimed to be the lawful owners and in possession of a residential flat situated at a Premises at Netaji Subhas Chandra Bose Road, Kolkata, having purchased the same from the developer and owner of the land by virtue of a registered deed of conveyance dated 4 December 2021. They placed on record mutation in the Kolkata Municipal Corporation assessment records, regular payment of municipal taxes, a ‘No Outstanding Certificate’ issued by the Corporation, and electricity bills to substantiate their possession since 2021.
On 1 August 2026, a possession notice was affixed to the outer door of the flat by respondents 1 and 2, following which the petitioners learnt that one Rishita Nandi had created an equitable mortgage over the flat and availed of a credit facility from the Bank. Upon the borrower’s default, the Bank initiated measures under the SARFAESI Act, 2002 and obtained an order under Section 14 from the learned Additional Chief Judicial Magistrate, Alipore, South 24-Parganas, pursuant to which physical possession of the flat was taken. The petitioners contended that Rishita Nandi had no right, title or transferable interest in the property at the time of creating the mortgage, rendering the Bank’s security interest invalid and the SARFAESI measures unsustainable.
The Bank disputed the authenticity of the petitioners’ title deed, alleging that one of the owners had expired prior to its execution. During earlier hearing before a Co-ordinate Bench, the Bank was directed to obtain information from the website of the Directorate of Registration and Stamp Revenue, Government of West Bengal, and produced a document recording the registration of deed in respect of a flat on the 3rd Floor of Premises at N.S.C. Bose Road, Jadavpur, Kolkata. The Bank, however, disputed that this record was sufficient to establish the petitioners’ title, pointing out that the premises contained several towers.
A Single Judge Bench of Justice Partha Sarathi Chatterjee observed that the materials on record indicated that the deed was executed on 14 December 2021 in favour of the petitioners and that the deed, on the face of it, purported to confer title upon them. Property tax receipts and electricity bills prima facie indicated the petitioners’ possession over the property. However, the respondent Bank had seriously disputed the authenticity and genuineness of the deed and questioned the petitioners’ claim of title founded thereon.
The Court asserted that once the very foundation of the petitioners’ claim to title was put in issue, the question of whether they had acquired a valid and enforceable title under the deed would necessarily require adjudication upon the genuineness, validity and legal effect of the instrument, upon appreciation of evidence that may be adduced by the parties. Such adjudication, involving disputed questions of fact and title, fell within the province of the competent Civil Court and could not appropriately be undertaken in exercise of the extraordinary jurisdiction under Article 226 of the Constitution.
The Court further observed that the institution of such a suit could not be said to be barred merely by reason of Section 34 of the SARFAESI Act, 2002, since Section 34 only barred the jurisdiction of a Civil Court in respect of matters which the Debt Recovery Tribunal or the Appellate Tribunal was empowered to determine under the Act. The Tribunal, while exercising jurisdiction under the SARFAESI Act, was required to act within the four corners of the statute, and its jurisdiction could not be extended to adjudication of a substantive dispute as to the validity or genuineness of a deed of title, particularly where such determination was foundational to the claim of ownership itself.
