STATE BANK OF INDIA v. M/S. PATEL ENGINEERING LIMITED

Judgment

1. State Bank of India [SBI], had filed the present appeal under Section 13(1A) of the Commercial Courts Act, 2015 [CC Act] impugning an order dated 25.07.2024 [impugned order] passed by the learned LXXXV Additional City Civil and Sessions Judge, - 3 - COMAP No. 372 of 2024 Bengaluru [Commercial Court] I.A. No.2 Com.O.S.No.1159/2023.

2. The respondent, Patel Engineering Limited [PEL], has instituted the said suit, inter alia, seeking a decree declaring that no liability accrued under the guarantee executed by it. PEL had filed the above-mentioned application (I.A. No.2) under Order XXXIX Rules 1 and 2 read with Section 151 of the Code of Civil Procedure, 1908 [CPC], inter alia, seeking a temporary injunction restraining SBI, its officers, agents, representatives, assigns, sub-ordinates, and superiors from taking further proceedings or any steps or actions in respect to the PEL's guarantee dated 06.07.2018. PEL also sought directions to be issued to the SBI for removal of its name from Credit Information Bureau of India Limited [CIBIL] list as a defaulter of its corporate guarantee till disposal of the suit.

3. The learned commercial court has, in terms of the impugned order, restrained SBI from proceeding in respect of PEL’s corporate guarantee till the disposal of the suit.

4. In the meantime, SBI had filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 [IBC] before the National Company Law Tribunal [NCLT]. It had, prior to the initiation - 4 - COMAP No. 372 of 2024 of the suit, also issued a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [SARFAESI Act] demanding the amounts claimed from PEL as a guarantor. In view of the impugned order, SBI is precluded from pursuing its petition before the NCLT or under the Recovery of Debts and Bankruptcy Act, 1993 [RDB Act] for recovery of the amounts claimed by it. PREFATORY FACTS

5. SBI had, in terms of the letter of arrangement dated

06.07.2018, sanctioned a term loan of `49,00,00,000/- (Rupees Forty Nine Crores only) under Builder Finance for Residential Housing Projects Scheme to GM Infinite Dwelling (India) Private Limited [hereafter referred to as ‘the Principal Borrower’ or ‘the Developer’] which is a company involved in the business of development of real estate. The said loan was sanctioned to enable the Developer to fund the development of a real estate project named 'Townsville'. The letter of arrangement dated 06.07.2018 was accompanied by the terms and conditions on which the loan was sanctioned. The said letter was accepted by the Developer and the guarantors – two individuals, Mr Gulam Mustafa and Mr Jawid - 5 - COMAP No. 372 of 2024 Hussain; a company named Gulam Mustafa Enterprises Private Limited; and PEL.

6. The terms and conditions also refer to the guarantees required to be provided. The relevant portion of the tabular statement setting out the terms and conditions regarding the guarantees is reproduced below: Personal guarantees:

1. Mr. GULAM MUSTAFA, Director of M/s GM Infinite (India) Private Limited [Net Means of Rs.334.60 crore]

2. Mr. JAWID HUSSAIN, Director of M/s GM Infinite (India) Private Limited [Net Means of Rs. 6.90 crore] Corporate Guarantee:

3. M/S Gulam Mustafa Enterprises Private Ltd.

4. M/S Patel Engineering Limited for the value not below the value of their share of land mortgaged.

7. The loan was also required to be secured by a mortgage of (immovable properties): Schedule A comprising of land to the extent of 4 acres and 38 guntas comprising Survey No.352 (Old Survey No. 155/11) at Hulimangala Village, Jigani Hobli, Anekal Taluk, Bengaluru; and Schedule B — 61 residential villament units falling in the share of the Developer as specified in the schedule are annexed to the said letter. - 6 - COMAP No. 372 of 2024

8. The guarantors, including PEL, also executed the 'Guarantee Agreement' dated 06.07.2018 [the guarantee deed]. It is relevant to state that the guarantee deed reflected the names of the guarantors as under: 3 Name/s Guarantor(s) [Full name in block letters] (Father's/Husband's mentioned) S/o Jawid Hussain

1. Mr. Gulam Mustafa, Mr. Gulam Rasul 2. Mr. Mr. Gulam Rasul 3. M/S Gulam Mustafa Enterprises Private Ltd. 4. M/s Patel Engineering Limited (For the value not below the value of their share of land mortgaged) S/o

9. It is relevant to note that although in the letter of arrangement, the name of the PEL as a guarantor contained the qualification of the value (not below the value of the share of land mortgaged), the body of the guarantee deed did not contain any such qualification. The relevant clauses of the Guarantee Deed are set out below: Loan-cum-Hypothecation "WHEREAS the Bank, at the request of the Guarantors, agreeing or continuing to finance the business by granting or continuing or granted all or some or any of the said facilities under the above Agreement of Loan-cum- Hypothecation as modified, if any, by Supplemental Agreement(s) Borrower(s) or otherwise giving financial accommodation or granting enhanced limits in the said facilities as the Bank may in its absolute discretion think fit or granting extension of time for repayment or agreeing to defer or agreeing not to sue the Borrower(s) in respect of all or some or any of the said facilities, the Guarantors have agreed to guarantee the due payment by the Borrower(s) of all the amounts due by and payable by the Borrower(s) from time to time or at any time under or in respect of the interest, costs, charges, together with facilities - 7 - COMAP No. 372 of 2024 expenses, and / or other monies due to the Bank under the said facilities or any of them on demand by the Bank, being these presents which the Guarantor(s) have agreed to do on the terms hereinafter appearing. NOW IN CONSIDERATION OF THESE PREMISES and it is hereby agreed by the Guarantors with the Bank (the Guarantors covenanting and agreeing jointly and severally) as follows: forthwith the Guarantors

1. If at anytime default shall be made by the Borrower(s) in payment of the principal sum and/or other monies for the time being due to the Bank in respect of or under the said facilities, unconditionally to the Bank merely on demand by the Bank, the whole of such principal sum together with interest costs, charges, expenses, fees, commission and or any other monies as may be then due to the Bank without any demur or protest or contestation and without reference to the Borrower(s), irrespective of any dispute or difference with the Borrower(s) in any proceedings and shall indemnity and keep indemnified the Bank against all losses of the said principal sum, Interest or other monies due and all costs, charges and expenses whatsoever which the Bank may incur by reason of any default on the part of the Borrower(s). the Bank

6. The Guarantee is a continuing one amounts advance to the Borrower(s) under the said facilities as also for all interest, costs, charges, expenses and/or other monies which may from time to time become due and remain thereunder and shall not be unpaid determined or be affected by any account/s becoming nil or coming into credit or being closed at any time or by any rephasement of repayment schedules of all or any of the said facilities/limits and/or fresh account/s being opened in respect of fresh/revised facilities granted/being granted to the borrower(s).

7. The Guarantors shall forthwith on demand made by the Bank deposit such sum or security as the Bank may specify for the due fulfillment of their obligations hereunder and the Bank shall have the liberty to sell any security so deposited with the Bank in or towards the satisfaction or non-fulfillment of the said obligations by the Guarantors. - 8 - COMAP No. 372 of 2024

10. That if the Borrower(s) being an individual becomes an insolvent or being a company enters into liquidation or winding up or if the management of the undertaking of the Borrower(s) is taken over or nationalized under any law or makes any arrangement or composition with creditors, the Bank may (notwithstanding payment to the Bank by the Guarantors or any other person of the whole or any part of the amount hereby secured) rank as creditor and prove against the estate of the Borrower(s) for the full amount of all the Bank's claims against the Borrower(s) or agree to and accept any composition in respect thereof and the Bank may receive and retain the whole of the dividends, composition or other payments thereon to the exclusion of all the rights of the Guarantors in completion with the Bank, until all the Bank's claims are fully satisfied and the Guarantors will not be paying off the amounts payable by them or any part thereof or otherwise prove or claim against the estate of the Borrower(s) until the whole of the Bank's claims against the estate of the Borrower have been satisfied and the Bank may enforce and recover payment from the Guarantors of the full amount payable by the Guarantors, notwithstanding any such proof or compassion as aforesaid. On the happening of any of the aforesaid events, the Guarantors shall forthwith inform the Bank in writing of the same.

12. This Guarantee is independent and distinct from any security that the Bank has taken or may take in any manner whatsoever and the liability of the Guarantors shall be in addition to such security and the loss, impairment, failure, realization or release of or parting with any such security shall not diminish, extinguish or affect the liability of the Guarantors hereunder and the Bank shall have fullest liberty to call upon the Guarantors to pay the principal sum together with interest, cost, charges, expenses and all other monies payable under all or any of the said facilities without requiring the Bank to realize from the Borrower(s) the amounts due to the Bank and/or enforcing any remedies or securities available to the Bank.”

10. PEL states that it was the owner of the subject land (Schedule A properties) measuring 4 acres and 38 guntas, comprising Survey - 9 - COMAP No. 372 of 2024 No. 352 (old Survey No. 155/11), located at Hulimangala Village, Jigani Hobli, Anekal Taluk, Bengaluru Urban District. In the year 2011, the Karnataka Industrial Areas Development Board [KIADB] had sanctioned a project comprising 124 residential units with structures, open spaces, common entrances, passages, etc., by the name 'Townsville'. PEL states that as of 21.11.2017 – the date when it entered into a Joint Development Agreement [JDA] with the Developer to complete the project – the rights in respect of 63 of the 124 residential units [the sold units] had already been sold by PEL to various customers. The Developer was required to complete the project at its costs and recover the same from the sale of the 61 units that remained unsold [the unsold units]. The unsold units were, in effect, the Developers' share of the project.

11. Under the JDA, the borrower was authorised to obtain financing from banks and financial institutions against the security of the unsold units.

12. PEL also passed a resolution to mortgage the subject land to SBI by depositing the title deeds, enabling the Developer to avail of financial assistance for the completion of the project. - 10 - COMAP No. 372 of 2024

13. As noted above, SBI lent a sum of `49,00,00,000/- (Rupees Forty Nine Crores only) to the Developer (the Principal Borrower).

14. The Principal Borrower defaulted in repayment of the loan availed from the SBI. On 29.11.2022, SBI issued a notice calling upon the borrower to pay an overdue amount of `9.16 crores’ for regularising the same. Admittedly, the Principal Borrower did not repay the amount due, and SBI classified the loan account as a Non-Performing Asset [NPA] on 04.12.2022.

15. On 05.12.2022, the SBI issued a demand notice under Section 13(2) of the SARFAESI Act, claiming an amount of `54,64,50,739/-. It called upon PEL, as a guarantor, to pay the said amount, which, according to the SBI, was due as on 04.12.2022.

16. In response to the letter dated 05.12.2022, the PEL denied its liability and claimed that the SBI was entitled to the Principal Borrower's share of 61 villaments units, but that would be available only after completion of the project. PEL claims that the Principal Borrower had abandoned the project. PEL stated that 63 residential units had already been sold to third-party purchasers, along with the undivided right, title, and interest in the schedule 'A' property, and that their rights could not be defeated. PEL also contested the - 11 - COMAP No. 372 of 2024 notice as vague and failing to clearly explain how the dues were calculated. It is also material to note that the PEL claimed that its liability under the corporate guarantee would, at most, be limited to the value of its share of the mortgaged land.

17. SBI responded to the PEL's response dated 02.02.2023 by a letter dated 14.02.2023 asserting that the PEL was liable to pay the entire extent of the loan amount of `49,00,00,000/-. Thereafter, on

07.08.2023, the SBI issued a notice of possession to the Principal Borrower informing that it had taken possession of the mortgaged properties. The Principal Borrower filed a writ petition, W.P.No.5/2023, which was disposed of by this Court by an order dated 01.09.2023, relegating the Principal Borrower to avail its remedies before the Debts Recovery Tribunal.

18. Thereafter, on 16.09.2023, the SBI filed an application (CP (IB) No.4/2024) under Section 7 of IBC against the Principal Borrower. Subsequently, on 20.09.2023, the SBI initiated proceedings under Section 7 of the IBC before the NCLT against PEL. - 12 - COMAP No. 372 of 2024

19. Thereafter, on 11.10.2023, PEL filed a Commercial Suit, Com.O.S.No.1159/2023. PEL also sought an ex parte ad interim order in the said proceedings, which was not acceded to.

20. Thereafter, PEL filed a writ petition, W.P.No.24556/2023, impugning the SBI's demand notice. The learned Single Judge of this Court passed an interim order dated 29.11.2023 in the said writ petition, restraining SBI from taking any precipitative steps against the PEL for a period of four weeks.

21. Meanwhile, the borrower also filed an appeal, W.A. No. 1214/2023, against the order dated 01.09.2023 passed W.P.No.5/2023. The appeal was dismissed by an order dated

23.11.2023.

22. SBI states that in view of the interim order dated 29.11.2023 passed by this Court in W.P.No.24556/2023, the learned NCLT stayed the proceedings in CP (IB) No.1092/2023 by its order dated

08.12.2023. Subsequently, by an order dated 17.01.2024, this Court vacated the interim order granted in W.P.No.24556/2023.

23. The learned Commercial Court passed an interim order dated

09.07.2024, restraining the parties from precipitating the matter till - 13 - COMAP No. 372 of 2024 the disposal of PEL’s interim application. In view of the said order, the NCLT adjourned the proceedings in CPIB No.1092/2023, by an order dated 11.07.2024. Thereafter, the Commercial Court passed the impugned order.

24. On 12.02.2024, SBI filed an application under Order VII Rule 11 of the CPC, praying that the plaint be rejected for want of jurisdiction. However, the learned Commercial Court did not accept the application and dismissed it by an order dated 01.03.2025.

25. SBI has impugned the said order in WP No.38417/2025, which is pending. THE PLAINT

26. Before proceeding, it is relevant to examine PEL’s plaint filed before the Commercial Court. PEL states that, under clause 15 of the JDA, the Principal Borrower was not entitled to raise any loan against the security of the sold units. It also referred to the addendum to the JDA dated 22.06.2018, which entitled the Principal Borrower to obtain financial facilities against the mortgage of its share of unsold units. - 14 - COMAP No. 372 of 2024

27. PEL claims that the documents were examined by the SBI and that the SBI was therefore fully aware that 63 units had been sold. Therefore, the sold units with the commensurate area of land could not be mortgaged. It claimed that, in line with the said understanding, a memorandum of deposit of title deeds in respect to Schedule ‘A’ property (Schedule ‘A’ property) was executed.

28. PEL acknowledged that it was aware that SBI disbursed loans amounting to (cid:1)49,00,00,000/- to the Principal Borrower on various dates between 11.07.2018 and 12.02.2020. The tenure of the loan was 48 months including a moratorium period of twenty-four (24) months. However, due to COVID-19, the Principal Borrower requested an extension of the moratorium and repayment periods.

29. PEL also accepted that it had executed the guarantee deed as claimed and that the same was necessitated and intended only to ensure that PEL did not create any hindrance if SBI intended to enforce the mortgage. PEL claimed that its liability was limited to the value of its share of the land mortgaged to the SBI. PEL claimed that since only the Principal Borrower's share (the unsold units) was mortgaged to SBI, PEL’s share in the mortgaged property was nil. - 15 - COMAP No. 372 of 2024 Consequently, PEL’s liability as a guarantor under the guarantee deed was also nil.

30. On the basis of the pleadings as briefly noted hereinbefore, PEL sought the following reliefs: “a. Declare that no liability accrues to the plaintiff under the Guarantee dated 06.07.2018; b. In the alternative to (a) above, this Hon’ble Court may be pleased to determine the liability if any of the plaintiff under Guarantee dated 06.07.2018; c. Cost of the suit to the plaintiff; d. Pass such other and further orders as the nature and circumstances of the case may require.”

31. It is clear from the above that PEL essentially seeks a declaration that it is not liable to pay any amount to SBI against the guarantee deed dated 06.07.2018 executed by it. THE IMPUGNED ORDER

32. It is SBI's case that the PEL has guaranteed the Principal Borrower's repayment obligations, and that its liability is co-terminus with that of the Principal Borrower. SBI states that it has initiated proceedings against the Principal Borrower and the guarantors and has commenced the process to enforce its security interest under the SARFAESI Act. - 16 - COMAP No. 372 of 2024

33. SBI disputes PEL’s interpretation of the guarantee deed. It states that the terms of the guarantee are clear and that the Principal Borrower and the guarantors, including PEL, are jointly and severally liable for the amounts owed by the Principal Borrower.

34. As is apparent from the above, the principal dispute revolves around the interpretation of the terms of the guarantee deed dated

06.07.2018, which was admittedly executed by PEL. Whilst PEL claims that its liability under the agreement of mortgage is nil; SBI claims that its liability is to the full extent of the amounts payable by the borrower.

35. The learned Commercial Court examined the plaint and also considered SBI's defence as set out in the written statement. The court noted that the bone of contention between the parties was the extent of PEL’s liability under the guarantee deed. After considering the said contentions, the learned Commercial Court observed as under: the above contentions “22. Upon considering pleadings and documents placed on record it is clear that the entire extent of 4 acres 38 guntas owned by the plaintiff has been mortgaged for the loan sanctioned to GM Infinite. Under the terms of JDA the borrower GM Infinite was not permitted to raise any loan on the 63 sold units. As per the terms of sanction letter the liability of plaintiff is restricted to the value of plaintiff’s share in the land mortgaged. The letter of the bank dated 21.06.2018 - 17 - COMAP No. 372 of 2024 following observation stipulates that the land on which 63 sold units are situated is not available for the mortgage. Even in the letter dated 14.02.2023 also there is mention of the same. Had the liability of the plaintiff being not restricted, there was no occasion for the defendant bank to mention the same in its letter to the plaintiff. Upon considering the rival contention the document filed on record and narrated as above and judicial pronouncement referred supra, it can be held without hesitation the plaintiff cannot be proceed against without its liability being determined. It is restricted to the value not below the value of share in the land mortgaged. Hence, it can be held without hesitation that plaintiff has made out prima-facie case for grant of temporary injunction and the balance of convenience lies in its favour. Also it would be the plaintiff who would suffer irreparable loss or injury if temporary injunction is not granted. In so far direction to the defendant bank to withdraw/remove the name of the plaintiff from CIBIL as defaulter of corporate guarantee the same can be considered at the time of final disposal of the suit.”

36. According to the learned commercial court, it was essential to determine liability under the guarantee deed before SBI could be permitted to pursue the proceedings initiated on the strength of that deed. In view of the said findings, the learned commercial court passed the impugned order restraining SBI from taking any further steps/proceedings pursuant the deed of guarantee dated

06.07.2018. SUBMISSIONS

37. Mr K.G. Raghavan, the learned Senior Counsel appearing for the PEL, opposed the present appeal on several grounds. - 18 - COMAP No. 372 of 2024

38. First, he argued that the contention that the suit was barred under Section 34 of the SARFAESI Act, Section 18 of the RDB Act, and Section 63 of the IBC was not pleaded by SBI. He contended that this was neither articulated in SBI's written statement nor in the grounds of challenge in the present appeal. He argued that, in the absence of any pleadings, it was not permissible for SBI to raise these grounds to challenge the impugned order. He accepted that the question of whether the Commercial Court's jurisdiction was barred by the relevant statutes was a question of law. However, contended that a question of law could not be raised unless it was pleaded. He referred to the decision of the Supreme Court in Sulthan Said Ibrahim v. Prakasan and others1 in support of his contention.

39. Second, he submitted that SBI had filed an application (I.A.No.6 in COM.OS.No.1159/2023) under Order VII Rule 11 of the CPC based on the said assertion, which was rejected by the learned commercial court. He submitted that since SBI had filed a writ petition challenging the learned Commercial Court's order rejecting its application under Order VII Rule 11 of the CPC on the ground 1 2025 SCC online SC 1218 - 19 - COMAP No. 372 of 2024 that the Suit was not maintainable, it was estopped from agitating the said issue in the present appeal. He contended that raising the question of jurisdiction in the present appeal is an abuse of the process of the Court.

40. Third, he earnestly contended that PEL’s guarantee could not be invoked as its liability under the guarantee deed was yet to be determined. He submitted that without prior determination of the value of the guarantee, it could not be invoked. He referred to the decision of Punjab National Bank v. Vikram Cotton Mills2 in support of the said contention.

41. Fourth, he contended that the DRT lacked jurisdiction to adjudicate the issues raised. He submitted that although SBI issued a notice under Section 13(2) of the SARFAESI Act, it had neither initiated any proceedings under the SARFAESI Act nor under the RDB Act till the date of filing of the suit.

42. Fifth, he contended that since SBI had not instituted any proceedings before the DRT, the PEL was not entitled to approach the DRT. He referred to Section 17 of the RDB Act and submitted that Section 18 of the RDB Act bars the jurisdiction of Civil Courts in 2 (1970) 1 SCC 60 - 20 - COMAP No. 372 of 2024 respect of the matters specified under Section 17. And, since Section 17 confers jurisdiction on the DRT to entertain applications from banks and financial institutions for recovery of debts, recourse to the DRT was not available to PEL.

43. Sixth, he submitted that DRT cannot grant any declaratory relief; it can only issue recovery certificates. He also submitted that adjudication of the questions raised necessarily requires evidence regarding the determination of PEL’s share of mortgage land and its valuation, and this would require extensive cross-examination, which, according to him, DRT was not empowered to conduct. He contended that the issues raised in the suit could not be adjudicated by the NCLT. The NCLT could not grant any declaratory relief as it exercises only summary jurisdiction.

44. In his written submissions, he stated that although SBI had filed an application (OA No.1373/2024) before the learned DRT-II, Bengaluru, the summons in the said application was issued on

16.10.2024, which was more than a year after the filing of the suit. He also referred to the decisions of the Supreme Court in Dwarka Prasad Agarwal v. Ramesh Chander Agarwal3 and Central Bank 3 (2003) 6 SCC 220 - 21 - COMAP No. 372 of 2024 of India v. Prabha Jain4 in support of the contention that a bar on the jurisdiction of the Civil Court could not be readily inferred. REASONS AND CONCLUSION

45. As is apparent from the above, the principal dispute raised by the PEL concerns its liability under the guarantee deed. According to PEL, the notation against its name – “for the value not below the value of their share of land mortgaged” – limits its liability under the guarantee deed to Nil. As noted earlier, this is the case set out in the plaint. However, we may also observe that before the learned Commercial Court, the counsel representing PEL argued that PEL was not avoiding its liability as a guarantor. Instead, it was merely attempting to determine the value of its share. The said argument, as recorded by the learned Commercial Court in the impugned order, is outlined below. “17. In the reply argument the learned senior counsel for the plaintiff submitted that at no point of time the plaintiff is escaping from its liability as a guarantor for the loan. On the other hand, determination of the value of its share and till then the plaintiff cannot be proceeded against by the defendant bank by undertaking any coercive measures. In other words the plaintiff is seeking in determination of liability under dated 06.07.2018” is only seeking the plaintiff 4 (2025) 4 SCC 38 - 22 - COMAP No. 372 of 2024

46. It is at once clear from the above that PEL has essentially filed a suit to preempt and obstruct the proceedings initiated by the SBI before the NCLT under the IBC and under the SARFAESI Act and to prevent SBI from initiating any recovery proceedings under the RDB Act.

47. As noted hereinbefore, it is the PEL's case that its liability under the guarantee is nil, as it is confined to the value of its share in the mortgage property and the mortgage property is confined to the Principal Borrower's share in the real estate development, that is, 61 residential units in the project with a proportionate share of the subject land (i.e., land measuring 4 acres 38 guntas falling in Survey No.352 of Hulimangala Village, Jigani Hobli, Anekal Taluk, Bengaluru). However, it is SBI’s case that the PEL’s liability in the guarantee deed executed is coextensive with the liability of the Principal Borrower and is not restricted.

48. It is once clear from the above that the PEL’s suit is essentially to reaffirm its defence to the claim set up by SBI. It is important to note that PEL has not raised any claim against SBI. But has sought a declaration holding that it has no liability under the guarantee deed executed by it. It is thus apparent that this suit - 23 - COMAP No. 372 of 2024 essentially covers the subject matter which would fall within the jurisdiction of the DRT under the RDB Act.

49. The written submissions filed by Mr Raghavan indicate that the SBI has already filed an original application before the DRT, being OA No.1373/2024. The contention that PEL was not precluded from filing a suit because, at the material time, SBI had not filed any application under the RDB Act is also without merit.

50. It is well settled that the jurisdiction of the Civil Courts, in respect of matters which the Debts Recovery Tribunal or the Debts Recovery Appellate Tribunal is empowered to determine under the SARFAESI Act, is excluded.

51. Section 34 of the SARFAESI Act, which ousts the jurisdiction of the civil court, reads as under:

34. Civil court not to have jurisdiction.—No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993).”

52. A plain reading of Section 34 of the SARFAESI Act indicates that it has two limbs. First, that the jurisdiction of the Civil Court to - 24 - COMAP No. 372 of 2024 entertain a suit or any proceeding in respect of matters, which can be determined by the Debts Recovery Tribunal or the Appellate Tribunal are excluded. And second, that no injunction can be granted by any court or any other authority in respect of any action taken or to be taken pursuant to the powers conferred under the SARFAESI Act or RDB Act. We may also note that Section 35 of the SARFAESI Act expressly provides that the provisions of the SARFAESI Act have an overriding effect over any other law inconsistent with the SARFAESI Act.

53. In Mardia Chemicals Limited and Others v. Union of India and Others5, the Supreme Court had authoritatively held that the jurisdiction of the Civil Court was barred in respect of all matters which could be determined by the Debts Recovery Tribunal even though no measures under Section 13(4) of the SARFAESI Act were taken.

54. It is also apposite to refer to the following extract of the decision of the Supreme Court in Punjab & Sind Bank v. Frontline Corporation Limited6: “20. The issue as to the exclusion of the jurisdiction of a civil court is no more res integra. The provisions of