Civil Courts Can Decide Property Title Disputes Despite Recovery Proceedings: Madhya Pradesh High Court
Mohd.Rehan Ali
13 Nov 2026 10:30 AM IST
The Madhya Pradesh High Court at Gwalior has reiterated that Section 34 of the SARFAESI Act, 2002, does not bar civil courts from deciding disputes over property ownership and the validity of sale deeds and consequential mortgages, even when a secured creditor has initiated recovery proceedings under the Act.
A single-judge bench of Justice Ashish Shroti reiterated that "adjudication of title of a party and validity of a sale-deed can only be done by the civil court and the DRT has no jurisdiction to adjudicate such issues."
The case arose from a property ownership dispute involving a woman who claimed that the property belonged to her under a Will executed by her mother-in-law, Sheela Devi, on January 2, 2021. Her name was subsequently entered in the revenue records following an order passed by the Tahsildar on December 7, 2022.
Meeta Garg alleged that her father-in-law had no right to sell the property but had executed a sale deed in favour of another person on October 4, 2019. The purchaser subsequently mortgaged the property to Axis Finance Limited to secure financial facilities.
The Bank contended that the suit is barred by virtue of section 34 of the SARFAESI Act as the property was mortgaged it its favour and the recovery proceedings were initiated.
It also contended that the plaintiff had already approached the DRT for redressal of her grievance, therefore, she accepted that her remedy lies before the DRT and not before the civil Court.
Rejecting the argument, the High Court noted that merely because the plaintiff has approached the DRT, would not render the plaint liable to be rejected. The main relief prayed for in the plaint can be granted by the civil Court only.
To reject the objection with regard to Section 34 of the SARFAESI Act, the High Court relied on the Supreme Court's decision in Central Bank of India Vs. Prabha Jain, (2025).
Noting that the issue between the parties required adjudication, the High Court found no error in trial court's rejection of the Axis Bank Application.
For Applicant: Senior Advocate Vivek Khedkar- learned with Vivek Sinha
For Respondent: N.K. Gupta - learned senior counsel with Shri Saket Sharma and Anugrah Gupta