Whether civil suit filed in civil court with a relief prayed of nature coming in the preview of civil court , suit would be maintainable ?
In Rajasthan , Banks financed agricultural loan to borrowers with charge of agri land and charge created over land under special statute Rajasthan credit operation removal of difficulties act 1974 and rules framed therein of rule 1976
The question was a very legal issue when bank filed a suit in civil court of Revovery against finance to agriculturist with the charge / mortgage in guarantee
The point for determination was when Rajasthan tenancy act specifically shows about suits related to mortgages are under preview of jurisdiction of Rajasthan tenancy act
Sec 43 of Rajasthan tenancy act reproduced here
1) khatedar tenant or with the general or special permission of the state govt or any officer authorized by it in this behalf , s Gair khatedar tenant May hypothecate or mortgage his interest in the whole or part of his holding for the purpose of obtaining loan from the state govt or a land development bank as defined in the Raj cooperative societies Act 1965 or a cooperative society registered or deemed to be registered as such under the said Act or any scheduled bank or any other institution notified by the state govt in that behalf
Further in pursuance of section 43 of tha Act if mortgage is created residuary entry 35 of the Third schedule of Act is attracted
The question whether bsnk mortgage is outside the scope of the Act ?
Supreme Court in a reported case title Bsnk of Baroda v/s Moti Bhai ors decided on 29/01/1985 AIR 1985 Supreme Court page 545 clarified the jurisdiction of civil court and set aside the judgement of High court while holding that no doubt the mortgage was executed in the case was in persuance to sec 43 of Raj tenancy Act but the business of the Bank is not to lend money on mortgage but the business is only to lend money and property is mortgaged under guarantee / mortgage deed and it is a commercial transaction
Further Supreme Court observed that a suit should be perused in the substance of the matter not in the form of the suit
On perusal it has been found that suit is basically for recovering the amount which is due to respondents on the basis of Promissory note executed by respondent and guarantee by redd Ad pkndeng number 2& 3
The relief in suit sought by Bank is that the suit should be decreed for the re payment of amount due from the respondents by the second prayer the Bank has asked that in case of non payment of the decretal amount the mortgaged property should be brought to sale and if proceeds of sale is not enough yo meet the decretal liability , the other movable and immovable property of respondent should be put at sale
Further it was held that the suit is not to enforce mortgage if the mortgage not having been executed under sec 43 of Raj tenancy Acf the residuary entry 35 mentioned in schedule can have no application When the entry is out of way there is no other provision in the Acf which would apply to the instant suit thus the civil court had jurisdiction
Schedule iii
