Case at a Glance
Three family members took home and top-up loans totalling ₹43.2 lakh from ICICI Bank, secured on a house in Puri. After the accounts became NPA and the Bank issued a Section 13(4) possession notice, the widow of one borrower sued in the civil court, which restrained her dispossession; the appellate court affirmed. The Orissa High Court, under Article 227, held that the second limb of Section 34 of the SARFAESI Act independently bars any injunction against action taken or to be taken under the Act, and that “Jurisdiction is conferred by statute alone.” It set aside both orders and allowed her to approach the Debts Recovery Tribunal under Section 17 within four weeks for interim relief on merits.
The borrowers took a home loan of ₹22 lakh (2014) and top-up loans of ₹14 lakh (2014) and ₹7.2 lakh (2015), secured by the suit house. The accounts were classified as NPA on 1 December 2021. A Section 13(2) demand notice of 3 January 2022 was withdrawn because one borrower had died before it issued; a fresh notice followed, and a Section 13(4) possession notice dated 9 May 2022 was published on 13 May 2022. The Bank also filed O.A. No. 394 of 2023 before the DRT, Cuttack.
The opposite party, widow of one borrower, filed Civil Suit No. 341 of 2022 at Puri seeking a declaration that the SARFAESI steps were void and an injunction, alleging defects in the notice (missing address, signature and loan account number). The trial court restrained dispossession on 19 October 2023 and the appellate court affirmed on 10 December 2025. The Bank challenged both orders under Article 227.
The Key Question Before the Court
Can a civil court grant an injunction restraining a secured creditor from taking possession under the SARFAESI Act, in view of Section 34?
Section 34’s Second Limb Stands on Its Own
The Court treated the matter as one of jurisdiction, where Article 227 interference is warranted, relying on Shalini Shyam Shetty v. Rajendra Shankar Patil, (2010) 07 SC CK 0089 and Garment Craft v. Prakash Chand Goel, (2022) 01 SC CK 0028. It described the SARFAESI Act as a self-contained code: Section 17 gives ‘any person’ aggrieved by a Section 13(4) measure a remedy before the DRT. Section 34 has two limbs, and “The second limb does not depend on the first”: it bars any injunction against action taken or to be taken under the Act. Applying Mardia Chemicals Ltd. v. Union of India, (2004) 04 SC CK 0076, the bar extends to action that may be taken later, and its narrow exception for fraud or patently absurd claims did not apply. Electrosteel Castings Ltd. v. UV Asset Reconstruction Co. Ltd. was applied to reject clever drafting, and United Bank of India v. Satyawati Tondon for the policy against obstructing recovery.
An earlier order of the trial court on maintainability could not confer jurisdiction, since “Jurisdiction is conferred by statute alone.” Referring to Central Bank of India v. Prabha Jain, the Court accepted that some reliefs in a suit may survive, but held that no court could injunct statutory action: “No court had the power to make that order.” It found the appellate order internally inconsistent, and on the chronology found no basis for the allegation that the Bank drove the family’s son to death, as no coercive step preceded it. The Court noted the widow’s grief but said it could not alter the statutory boundaries.
What the Court Actually Held
- The second limb of Section 34 of the SARFAESI Act independently bars civil courts from granting injunctions against action taken or to be taken under the Act.
- The trial court’s order of 19 October 2023 and the appellate judgment of 10 December 2025 were set aside, and the injunction application was rejected.
- The opposite party may approach the DRT under Section 17; if she does so within four weeks, the Tribunal will consider interim relief on merits, uninfluenced by this judgment.
- The trial court will decide the maintainability of the civil suit according to law; no costs.
Why This Judgment Matters
- Borrowers and family members often go to civil courts to stop bank possession; this ruling confirms the DRT is the forum.
- It explains that recasting a plaint cannot get around the statutory bar.
- It preserves the widow’s remedy by giving her four weeks to seek interim relief from the DRT.
What Should Advocates Take Away From the Judgment?
For Borrowers and Families
- Challenge SARFAESI notices and possession before the DRT under Section 17, not by a civil suit for injunction.
- Act quickly; the DRT route has its own limitation.
- Defects in notices can be raised before the DRT.
For Counsel
- Raise the second limb of Section 34 against any civil-court injunction on SARFAESI action.
- Article 227 is available where a civil court acts without jurisdiction.
- Check whether any relief in the suit survives under Central Bank of India v. Prabha Jain.
Key Takeaways
- Civil courts cannot injunct SARFAESI possession action.
- The second limb of Section 34 operates independently.
- Jurisdiction comes from statute, not from an earlier court order.
- The borrower’s widow was given four weeks to seek relief before the DRT.
Frequently Asked Questions
Can I file a civil suit to stop a bank from taking possession of my house under SARFAESI?
According to this judgment, a civil court cannot grant an injunction against action taken or to be taken under the SARFAESI Act because of Section 34. The remedy is before the Debts Recovery Tribunal under Section 17.
Who can approach the DRT under Section 17?
Section 17 gives ‘any person’ aggrieved by a Section 13(4) measure a remedy before the DRT, which includes a family member in possession, such as the widow in this case.
What happens to the civil suit?
The High Court left the trial court to decide the suit’s maintainability according to law; only the injunction was set aside.
Conclusion
The Orissa High Court drew a firm jurisdictional line: sympathy for a grieving widow cannot give a civil court a power the statute takes away. Her protection lies before the DRT, which can weigh interim relief on merits.
Practical takeaway: Once a Section 13(4) notice is issued, go to the DRT under Section 17; a civil injunction is vulnerable to being set aside under Article 227.
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