In Sree Anandhakumar Mills Vs. Indian Overseas Bank, The Supreme Court has reiterated that a civil suit cannot be maintainable when proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement Of Security Interest (SARFAESI) Act, 2002, has already initiated.
A bench comprising Justice Ranjan Gogoi and Justice R Banumathi was hearing an appeal which was filed against one of the Madras High Court’s orders of 2010 that held the Civil Court’s jurisdiction is not totally ousted by Section 31 of SARFAESI Act, 2002 and that the power to grant interim injunction in such cases which are maintainable is also not taken away by Section 34 of the SARFAESI Act, 2002. The order further mentioned that the jurisdiction of Civil Court is barred only in those matters in which the application is filed for the recovery of debts either by a bank or financial institutions and not in cases when the partition suit is filed by any other person who is not a borrower or guarantor.
The bench referred law laid down in Jagdish Singh vs. Heeralal and others, in which the apex court had held that a suit for partition would not be maintainable in circumstances where proceedings under the SARFAESI Act, 2002, had been initiated. It was also held that the remedy of any person aggrieved by the initiation of proceedings under the SARFAESI Act, 2002, lies under Section 17 of SARFAESI Act which provides for an efficacious and adequate remedy to a party aggrieved.
Closing the said suits filed, the bench further observed that the respondent has an adequate and efficacious remedy under the provisions of Sections 17 and 18 of the SARFAESI Act.