Axis Bank Limited v. Tarun Kanti Ghosh
Section 34 of the SARFAESI Act bars a civil court from granting an injunction in respect of any action taken or to be taken under the Act, a bar wider than the bar on instituting a suit after a section 13(4) notice, so an injunction restraining the bank's measures was granted without jurisdiction.
By CA Nikhil Gupta · Reviewed against the retained judgment 2026-10-13
A borrower sued in a city civil court and obtained an ex parte ad interim injunction on a property that was the security for his loan, with a condition to pay a monthly amount. Axis Bank, which had already begun action under section 13 of the SARFAESI Act, appealed. The High Court condoned the delay, held that section 34 barred the injunction and that the Trial Court had effectively rewritten the loan contract, and set the order aside.
What happened
The respondent, the plaintiff in Title Suit No. 296 of 2026 in the City Civil Court at Calcutta, admitted throughout the plaint and the injunction application that the transaction arose from a loan for which the property was given as security. The appellant bank had issued a notice under section 13(4) of the SARFAESI Act and, before the suit, a notice under section 13(2). The Trial Court's order of 31 January 2026 granted an injunction that could debar the bank from taking measures under the Act, on condition that the plaintiff pay a monthly sum different from the instalments in the loan agreement. The bank was late in appealing, saying it learned of the order only when its agent went to paste a notice on the property, and the High Court examined the service record before condoning the delay.
Questions before the court
- Can a civil court grant an injunction against SARFAESI measures that a bank has begun or may take, and can it prescribe a monthly payment in a way that rewrites the loan contract?
Why the court ruled this way
On the delay, the Court found that the Trial Court's order of 2 February 2026 did not record an acknowledgment card endorsed received or any clear indication that notice had actually been served, so the explanation was plausible and no mala fides could be attributed to the bank (paragraphs 5 to 7). On the merits, since the bank had already initiated action under section 13, the bar under section 34 on the jurisdiction of the civil court was squarely attracted (paragraph 28). While a suit or proceeding cannot be instituted if a section 13(4) notice has been issued, the bar on injunctions in section 34 is wider and precludes a civil court or other authority from granting an injunction in respect of any action taken or to be taken under the Act (paragraph 30). The Trial Judge therefore acted without jurisdiction (paragraph 32). Imposing a monthly payment unlike the instalments in the loan agreement virtually rewrote the contract, and the injunction was granted mechanically by quoting the legal tests (paragraphs 33 and 34).
Controlling point
Section 34 of the SARFAESI Act bars a civil court from injuncting SARFAESI measures, whether taken or yet to be taken, and the injunction was granted without jurisdiction.
Order and next steps
The delay in filing the appeal was condoned and the appeal admitted and allowed. The order of 31 January 2026 in Title Suit No. 296 of 2026 was set aside and the later orders extending it were deemed vacated. Nothing in the order precludes the plaintiff from taking recourse to remedies under the SARFAESI Act. The connected application was disposed of and there was no order as to costs.
Practical implications
A borrower facing SARFAESI action should use the remedies under the Act (an application before the Debts Recovery Tribunal) and not a civil suit; a bank served with a civil-court injunction can appeal and cite section 34.
Limits of this ruling
- The Court did not decide the merits of the borrower's dues or his objections to the loan, which he can raise under the SARFAESI Act's remedies.
Law and judgment source
- Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, sections 13(2), 13(4) and 34
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Source checked: 2026-10-13 · Judgment paragraphs: paragraphs 1–40 · Later case history: not verified. Verify appeals, stays and subsequent orders before reliance.
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