Civil courts are barred from adjudicating matters under the SARFAESI Act, with jurisdiction limited to designated tribunals, reinforcing the insularity of debt recovery protocols in financial disputes.

ORDER :

1. The present Civil Revision Petition has been filed to call for the records pertaining to the impugned order passed by the learned Principal District Munsif, Nagercoil, Kanyakumari District, dated 05.12.2025 in I.A.No.2 of 2025 in O.S.No.118 of 2025 and set aside the same and allow the application in I.A.No.2 of 2025 in O.S.No.118 of 2025 by restraining the respondents from conducting sale of the plaint schedule properties in any manner whatsoever till the disposal of the suit.

2. Heard Mr.Isaac Mohanlal, learned Senior Counsel for the petitioners and Mr.N.Dilip Kumar, learned Counsel for the respondents 1 and 2.

3. The petitioners are the plaintiffs in the suit in O.S.No.118 of 2025 on the file of the Principal District Munsif Court, Nagercoil, Kanyakumari District. The respondents are the defendants in the suit. The suit was filed for declaration and for a further relief of the notice sent by the defendants, dated 13.05.2025, as sham, nominal, fictitious, fraudulent, null and void ab initio and for permanent injunction. During the pendency of the suit, the petitioners have preferred an interlocutory application in I.A.No.02 of 2025 for an interim injunction. However, the learned Principal District Munsif, Nagercoil, Kanyakumari District, had not considered the said application and had only adjourned the matter periodically. Hence, the present Civil Revision Petition has been filed with the above prayer.

4. The learned Senior Counsel for the petitioners submitted that the Trial Court has no jurisdiction to deal with issues under SARFAESI Act, 2002 , where the jurisdiction of the civil Court is usurped and that it is just to be agitated only before the Debts Recovery Tribunal as per Sections 17 r/w 34 of the SARFAESI Act, 2002 . An application was filed before the Chief Judicial Magistrate for taking possession of the suit scheduled property. According to the learned Senior Counsel, the initiation of proceedings before the Chief Judicial Magistrate itself is without jurisdiction and without approaching the Debts Recovery Tribunal, the petition was entertained and based on that, an order of attachment has been passed.

5. The learned Senior Counsel further pointed out that an Advocate Commissioner was appointed by the Chief Judicial Magistrate in Cr.M.P.No. 2957 of 2025. He further pointed out that earlier, a loan facility was availed by the revision petitioners and an Emergency Credit Loan Guaranteed Scheme was sanctioned to the petitioners to manufacture oxygen, which was brought in at the time of COVID to save the lives of the people who were suffering from COVID. The petitioners have availed the same for a loan of Rs.2,00,00,000/- (Rupees Two Crores only), but only Rs.9,00,000/- was released. The rest of the amount was not sanctioned to the petitioner, however, the same was adjusted to earlier loan outstanding.

6. He further pointed out that this loan amount was sanctioned based on the plaintiff's claim that they stand under the MSME Act, 2006 . The primary contention of the learned Senior Counsel for the petitioners is that initiation of SARFAESI proceeding is not maintainable and that only a civil suit will lie, as the petitioners have protected under the MSME Act. It is their further contention that the petitioners have availed the loan under UDHAYAM scheme and that the respondent Bank has no jurisdiction to initiate action against the petitioners. He has also pointed out that the Bank has to form a Rehabilitation Committee to facilitate the revival of units facing