SARFAESI jurisdiction limits prevent diversion of secured asset disputes to another forum and unsupported deposit directions.

The SARFAESI Act bars civil proceedings and injunctions in matters the DRT or DRAT is empowered to determine, so a secured asset dispute cannot be diverted to another forum for fresh adjudication of title or interest. Where the property is already under an equitable mortgage and recovery proceedings have begun, the High Court's direction permitting such recourse was unsustainable. A further direction requiring the bank to place funds in an interest-earning deposit was also found unnecessary and unjustified in the statutory setting. The order was set aside and the writ petition restored for decision on merits.

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Issues: (i) Whether, in view of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the High Court could permit the writ petitioners to pursue adjudication of their alleged right, title and interest before another forum in relation to the secured flat. (ii) Whether the direction requiring the bank to deposit Rs. 25 lakhs in an interest-earning deposit was sustainable.

Issue (i): Whether, in view of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the High Court could permit the writ petitioners to pursue adjudication of their alleged right, title and interest before another forum in relation to the secured flat.

Analysis: The statutory scheme bars the institution of civil proceedings in respect of matters that the Debts Recovery Tribunal or the Debts Recovery Appellate Tribunal is empowered to determine, and also prohibits injunctions against action taken under the Act. The property was already subjected to an equitable mortgage and proceedings under the Act had been initiated. In that situation, the High Court could not have relegated the parties to another forum for adjudication of the same issues. The approach treating the matter as one requiring a fresh factual trial was held to be untenable.

Conclusion: The bar under the Act operated, and the High Court's direction permitting resort to another forum was unsustainable.

Issue (ii): Whether the direction requiring the bank to deposit Rs. 25 lakhs in an interest-earning deposit was sustainable.

Analysis: The direction was not supported by the legal framework governing the dispute and was made despite the matter arising out of recovery proceedings under the Act. It was held to be unnecessary and unjustified in the circumstances.

Conclusion: The deposit direction was unsustainable.

Final Conclusion: The High Court's order was set aside, the writ petition was restored to its file for decision on merits in accordance with law, and the appeal succeeded with no order as to costs.

Ratio Decidendi: Where a secured asset dispute is within the jurisdictional field of the DRT and DRAT under the SARFAESI Act, the High Court cannot direct parties to seek adjudication before another forum or grant ancillary relief inconsistent with the statutory bar.

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