The court held that the SARFAESI Act restricts Civil Court jurisdiction, necessitating the Commercial Court to consider its provisions when issuing interim measures under the Arbitration and Conciliation Act.

JUDGMENT :

VIBHU BAKHRU, CJ

1. The appellants have filed the present appeal impugning an order dated 06.09.2025 passed by the learned Commercial Court in applications being IA No.3 and 4 in Commercial AA.No.21/2025 filed by respondent No.1. Respondent No.1 had filed the said application (AA.No.21/2025) under Section 9 of the Arbitration and Conciliation Act, 1996 [A & C Act] and he has also secured the ad interim orders on 24.07.2025. The appellants had filed applications in IA No.3 and 4 seeking vacation of the said ex parte interim orders. The said applications have been disposed of by restraining the appellants from initiating any proceedings under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [SARFAESI Act] till the constitution of the Arbitral Tribunal or till expiry on 90 days from the date of the first order. This Court is informed that the said period of 90 days has been further extended by subsequent orders.

2. In the meanwhile, respondent No.1 has also filed an application for amendment of the prayers in the application filed under Section 9 of the A&C Act (AA.No.21/2025), inasmuch as the prayer made in the said application is confined to seeking ex parte order. However, respondent No.1 had filed application seeks interim measure till the disposal of the arbitral proceedings. Since the prayers made under Section 9 of the A&C Act are for interim measures till the disposal of the arbitral proceedings, no amendment to the said prayers are required solely for the reason that the prayers mention ex parte orders only.

3. We note from the impugned order that the learned Commercial Court did not examine the import of Section 34 of the SARFAESI Act, which expressly provides that the Civil Courts would not have the jurisdiction to entertain any proceedings in respect of any matter which a Debt Recovery Tribunal or an Appellate Tribunal is empowered under the SARFAESI Act. The learned Commercial Court had also not examined that the SARFAESI Act as a special Act.

4. Since by its very nature, an application under Section 9 is for interim measures pending culmination of the arbitral proceedings or other proceedings, and the considerable time has elapsed since the application were moved, we consider it apposite to request the learned Commercial Court to conclude the proceedings in AA.21/2025 as expeditiously as possible.

5. We are informed that the main application under Section 9 of the A&C Act is now listed for hearing before the learned Commercial Court on 19.01.2026, we request the Commercial Court to dispose of the said application. Since impugned order was passed pursuant to the request to vacate the ex parte interim order and considering that some of the vital issues have not been considered, we set aside the impunged order. Consequently, the ex parte order dated 24.07.2025 shall continue till the disposal of the main application which be disposed of as expeditiously as possible.

6. If the main application is not disposed of within a period of one month from date, the appellants are at liberty to file an application afresh, including raising a challenge to the ex parte order dated 24.07.2025.

7. All contentions of the parties are kept open.