SARFAESI Section 34 bar not attracted where security interest and borrower status are in doubt, allowing civil court remedy.

Where the existence of a valid security interest was itself in doubt and the petitioner was not shown to be a borrower or guarantor, the SARFAESI jurisdictional bar under Section 34 did not apply. The court reasoned that a third party in possession, without an efficacious remedy under Section 17, cannot be left without a forum to contest action against the property. The petitioner was therefore entitled to seek adjudication before the competent civil court.

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Issues: Whether the bar under Section 34 of the SARFAESI Act, 2002 applied to the petitioner's challenge to the action taken against the subject property, and whether the petitioner was required to seek relief before the civil court.

Analysis: The dispute turned on whether any valid security interest had been created in the subject property and whether the petitioner was a borrower or guarantor so as to attract SARFAESI proceedings. The Court held that where the status of the alleged secured asset itself is in doubt and the applicability of the SARFAESI Act is open to question, the jurisdictional bar under Section 34 is not attracted. It reasoned that a third party in possession, who is not shown to be a borrower or guarantor and has no efficacious statutory remedy under Section 17, cannot be left remediless. On that basis, the petitioner was held entitled to approach the competent civil court for adjudication.

Conclusion: The bar under Section 34 of the SARFAESI Act, 2002 did not apply on the facts, and the petitioner could pursue the dispute before the competent civil court.

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