Civil court injunction barred after SARFAESI measures begin; borrowers must use the statutory remedy before the Tribunal.

Once a secured creditor invokes measures under section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, civil court intervention by injunction is barred because the Act provides a special enforcement regime and a statutory remedy before the Debts Recovery Tribunal under section 17. The article also notes that temporary injunction requires a prima facie case, balance of convenience, and irreparable injury; where the plaintiffs failed to establish the joint family character of the property, did not implead necessary parties, and suppressed material facts about the loan and mortgage, interim relief was not justified. The injunction order was therefore unsustainable.

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Issues: (i) whether, after initiation of measures under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, a civil court could grant an injunction restraining the secured creditor from proceeding against the secured asset; (ii) whether the plaintiffs were entitled to temporary injunction on the facts pleaded, including the effect of suppression of material facts and non-joinder of necessary parties.

Issue (i): whether, after initiation of measures under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, a civil court could grant an injunction restraining the secured creditor from proceeding against the secured asset.

Analysis: The statutory scheme gave the secured creditor the right to enforce security interest without intervention of court under section 13, and an aggrieved person was provided a remedy before the Debts Recovery Tribunal under section 17. Section 34 expressly barred civil court jurisdiction in respect of matters within the Tribunal's competence and also prohibited grant of injunctions against actions taken or to be taken under the Act. Once proceedings under section 13(4) had been initiated, the dispute over the secured asset came within the special regime of the Act, leaving no scope for civil court interference by way of interim injunction.

Conclusion: The civil court had no jurisdiction to grant the injunction against the secured creditor, and the restraint order could not stand.

Issue (ii): whether the plaintiffs were entitled to temporary injunction on the facts pleaded, including the effect of suppression of material facts and non-joinder of necessary parties.

Analysis: A party seeking temporary injunction had to establish a prima facie case, balance of convenience, and likelihood of irreparable injury. The plaintiffs did not place adequate material to establish the joint family character of the property, did not implead all necessary parties to the interlocutory proceeding, and suppressed material facts relating to the loan transaction and the mortgage. In these circumstances, the foundation for interim relief was not made out.

Conclusion: The plaintiffs were not entitled to temporary injunction.

Final Conclusion: The injunction order was unsustainable and was set aside, with the interlocutory application dismissed.

Ratio Decidendi: Once a secured creditor invokes measures under section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the civil court cannot restrain those proceedings by injunction, and the aggrieved party must pursue the statutory remedy under section 17.

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