SARFAESI Act, 2002

Section 13

Enforcement of security interest - Suit for a decree of partition and restraining bank from proceeding with auction rejected by Trial Court - Availability of remedy under SARFAESI Act - Jurisdiction of Civil Court over matters contained in SARFAESI Act

Borrower failed to repay secured debt as provided by bank. Thereafter the bank proceeded with action against borrower by way of auction of the secured asset under section 13. Co-sharer of the secured asset filed civil suit for a decree of partition and restraining the bank from proceeding with auction under the SARFAESI Act. The bank raised objection that there was availability of remedy under the SARFAESI Act. Trial Court rejected the application on the ground that Civil Courts do not have jurisdiction over the matter and remedy is available under SARFAESI Act. The co-sharer filed an appeal against the order of Trial Court on the ground that the suit for partition challenging the action of the bank is maintainable since only Civil Court has jurisdiction to decide the suit for partition. Held: As per the provisions of the SARFAESI Act, any person aggrieved against any measures taken under the provisions of the Act is entitled to approach the Debts Recovery Tribunal or Appellate Tribunal, and Civil Court has no jurisdiction to entertain such matters. With regard to maintainability of the suit of partition in civil Court, the Civil Court has jurisdiction over all the matters of civil nature but excluding those to be tried by the Debts Recovery Tribunal under sections 13 and 17 of SARFAESI Act in relation to enforcement of security interest of the secured creditor. Therefore, no injunction can be granted by any Court or authority other than a DRT or DRAT in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act. Thus, the Trial Court rightly rejected the application for a temporary injunction.

REFERRED :

FAVOUR : Against the appellant

A.Y. :

SUBSCRIBE FOR FULL CONTENT