The main legal principle established is the complete ouster of jurisdiction of the Civil Court in matters falling under the SARFAESI Act, as interpreted under Section 34.

Soumen Sen, J.

1. The preemptive suit apparently with innocuous prayers to attract the jurisdiction of this Court in order to circumvent notice under Section 13(2) of the SARFAESI Act is liable to be dismissed.

2. There cannot be any doubt that the RDB Act completely ousts the jurisdiction of this Court. In the SARFAESI Act, the provisions are more stringent and there is a complete ouster of the jurisdiction of the Civil Court. Section 34 of the SARFAESI Act is the ouster clause. The said Section reads:

"S. 34. Civil Court not to have jurisdiction - No civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993).

3. The scope of the said section was considered by the Hon'ble Supreme Court in Mardia Chemicals and Ors. v. Union of India and Ors. reported at (2004) 4 SCC 311.

4. The said decision was subsequently followed in Jagdish Singh v. Heeralal and Ors. reported at 2014 (1) SCC 479 and the Standard Chartered Bank v. Noble Kumar and Ors. reported at 2013 (9) SCC 620.

5. The scope of Section 34 came up for consideration in the said Mardia Chemicals (supra). In paragraph 50 of the said judgment the Hon'ble Court held:

"It has also been submitted that an appeal is entertainable before the Debts Recovery Tribunal only after such measures as provided in sub-section (4) of Section 13 are taken and Section 34 bars to entertain any proceeding in respect of a matter which the Debts Recovery Tribunal or the Appellate Tribunal is empowered to determine. Thus before any action or measure is taken under sub-Section (4) of Section 13, it is submitted by Mr. Salve, one of the counsel for the Respondents that there would be no bar to approach the Civil Court. Therefore, it cannot be said that no remedy is available to the borrowers. We, however, find that this contention as advanced by Sri Salve is not correct. A full reading of Section 34 shows that the jurisdiction of the Civil Court is barred in respect of matters which a Debts Recovery Tribunal or an Appellate Tribunal is empowered to determine in respect of any action taken "or to be taken in pursuance of any power conferred under this Act." That is to say, the prohibition covers even matters which can be taken to cognizance of by the Debts Recovery Tribunal though no measures in that direction has so far been taken under Sub-Section (4) of Section 13. It is further to be noted that the bar of jurisdiction is in respect of a proceeding which matter may be taken to the Tribunal. Therefore, any matter in respect of which an action may be taken even later on, the Civil Court shall have no jurisdiction to entertain any proceeding thereof. The bar of civil courts thus applies to all such matters which may be taken cognizance of by the Debts Recovery Tribunal, apart from those matters in which measures have already been taken under sub-section (4) of the Section 13.

6. Elaborating on these aspects, the Hon'ble Supreme Court in Jagdish Singh (supra) in paragraphs 22 and 23 held:-

"22. Statutory interest is being created in favour of the secured creditor on the secured assets and when the secured creditor proposes to proceed against the secured assets, sub-section (4) of Section 13 envisages various measures to secure the borrower's debt. One of the measures provided by the statute is to take possession of secured assets of the borrowers, including the right to transfer by way of lease, assignment or realizing the secured assets. Any person arrived by any of the "measures" referred to in sub-section (4) of Section 13 has got a statutory right of appeal to the DRT under Section 17. The opening po