In a packed courtroom at the Himachal Pradesh High Court on Tuesday, Justice Ajay Mohan Goel delivered an oral order that left both sides a bit tense. The judge refused to interfere with a lower court’s decision that allowed a Solan woman’s civil suit-alleging fraud in the mortgage of her flat-to proceed. The bank had hoped to get the case thrown out at the very threshold, but the High Court didn’t see sufficient reason.
Background
The dispute traces back to a modest-looking ground-floor flat in the Housing Board Colony at Saproon, Solan. The plaintiff, Smt. Manjana Verma Sahni, claims she purchased the flat in December 2019 from Manjeet Singh. Everything seemed routine, she says, and the necessary permissions from HIMUDA had been secured earlier.
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Trouble surfaced when UCO Bank and its associate allegedly initiated steps to take possession of the flat, pointing to an earlier mortgage created by one Amandeep Singh. She insists she has no link to him. In her suit before the Civil Judge, Solan, she accuses the bank officials and Amandeep Singh of “playing fraud" by relying on documents she calls “false and fictitious.”
The bank responded with an application under Order VII Rule 11 of the Code of Civil Procedure, essentially asking the court to reject the plaint outright. Their argument was simple: matters involving mortgage enforcement fall under the SARFAESI Act (2002), which bars civil courts from entertaining such disputes. The trial court rejected the plea, prompting the bank to knock on the High Court’s doors.
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Court’s Observations
Justice Goel heard both sides patiently. UCO Bank pressed the point that Sections 34 and 35 of the SARFAESI Act clearly bar civil court jurisdiction. Their counsel argued that the plaintiff should have gone to the Debt Recovery Tribunal, as provided under Section 17 of the Act.
But the respondent’s senior counsel countered that the case wasn’t a simple mortgage enforcement matter. It involved serious allegations of fraud and a prayer for a declaration that the gift deed and mortgage deed were void from the very beginning. Those issues, he said, could only be examined by a civil court.
The judge appeared to agree. At one point he remarked-almost conversationally-“The plaintiff is a stranger to the bank’s loan transaction. How can the Tribunal decide her claim of original ownership?”
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In the order, Justice Goel noted that the Supreme Court had earlier clarified that the bar on civil courts must be interpreted strictly. “The bench observed, ‘Throwing out the plaint at the initial stage would be a very dangerous step, especially when allegations of fraud and ownership disputes are raised.’” He emphasised that issues like the validity of gift deeds and sale deeds cannot be adjudicated by the Debt Recovery Tribunal.
The court further pointed out that allowing the suit to go to trial did not mean accepting the plaintiff’s claims as gospel. The bank would still get full opportunity to contest every allegation.
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Decision
Concluding that the matter involved complicated questions of ownership and alleged fraud-beyond the scope of proceedings under the SARFAESI Act-the High Court upheld the trial court’s refusal to reject the plaint.
Accordingly, the petition filed by UCO Bank was dismissed, and the civil suit will now proceed before the Solan court.
Case Title: UCO Bank and Another vs. Smt. Manjana Verma Sahni and Another
Case No.: CMPMO No. 294 of 2022
Case Type: Civil Miscellaneous Petition (Order VII Rule 11 CPC challenge)
Originating Case: Civil Suit No. 19/2020 (Trial Court, Solan)
Decision Date: 11 November 2025