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Section 34: Civil court not to have jurisdiction

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2002
Section 33 All 42 Sections of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 Section 35

Legal Commentary & Landmark Judgments: Section 34

Section 34 of the SARFAESI Act, 2002 enacts a comprehensive and absolute statutory bar ousting the jurisdiction of civil courts over any matter that the Debts Recovery Tribunal or Appellate Tribunal is empowered to determine, prohibiting any civil court injunction against statutory recovery measures.

  • Absolute Ouster of Civil Court Jurisdiction: Total bar prohibiting civil courts from entertaining any suit or proceeding in respect of matters within the jurisdiction of DRT/DRAT.
  • Absolute Injunction Prohibition: No court or other authority shall grant any injunction against actions taken or to be taken under SARFAESI or the RDDBFI Act.
  • Narrow Fraud Exception: Civil suit maintainable only in the exceptionally rare circumstance where the secured creditor's action is tainted by fraud or is demonstrably absurd on its face.
Key Landmark Precedents:
  • Mardia Chemicals Ltd. v. Union of India (2004) 4 SCC 31: The Supreme Court held that Section 34 bars civil suits entirely regarding SARFAESI measures, with the extremely narrow exception of cases where the secured creditor's action is tainted by fraud or where the claim is absurd or untenable on the face of it.
  • United Bank of India v. Satyawati Tondon (2010) 8 SCC 110: The Supreme Court held that High Courts must exercise extreme self-restraint and not entertain Article 226 writ petitions where effective statutory remedies before DRT under Section 17 are available, emphasizing the primacy and exclusivity of the SARFAESI framework.
  • Jagdish Singh v. Heeralal (2014) 1 SCC 479: The Supreme Court held that civil court jurisdiction is completely barred even in suits for partition or declaration of title if the suit property is mortgaged to a secured creditor; all such third-party rights must be adjudicated exclusively by the DRT under Section 17.
Courtroom Practice & Strategic Litigation Guidance:

Immediately file an application under Order VII Rule 11(d) CPC for rejection of any civil suit seeking an injunction against SARFAESI action, citing Mardia Chemicals, Jagdish Singh, and Section 34. Demonstrate that third-party claims or mortgagor disputes fall squarely within the exclusive domain of DRT under Section 17.

Section 33 All 42 Sections of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 Section 35