The Court upheld the bank's actions under the SARFAESI Act, finding no prima facie case for injunction while allowing appellants to pursue claims in ongoing litigation.

JUDGMENT :

P. VELMURUGAN, J.

1. Challenging the order dated 21.01.2026 dismissing the application for injunction in Original Application No.1101 of 2026 in C.S.No.282 of 2025, the present Original Side Appeal has been filed.

2. The facts, in brief, leading to the institution of the appeal are as under:

(i) The appellants are the absolute owners of the agricultural lands described in the schedule of properties. In the year 2007, with an intention to augment the family’s income, they decided to construct agricultural godowns upon the said agricultural lands for the purpose of storing agricultural goods and produce. Therefore, the appellants approached the 1^st respondent/Bank seeking financial assistance and also they obtained a loan to the tune of Rs.7.35 Crores. In consideration of the said loan, the appellants executed a Memorandum of Deposit of Title Deeds in respect of the suit schedule properties in favour of the Bank. At the time of sanctioning the loan, the 1^st respondent/Bank deducted a sum of Rs.2,22,98,265/-, towards interest, and consequently credited only a sum of Rs.5,12,01,735/- to the appellants’ account.

(ii) The scheme known as Grameen Bhandran Yojana was formulated with the avowed object of creating scientific storage capacity with allied facilities in rural areas, so as to meet the requirements of farmers for storing their agricultural produce. Under the said scheme, the individuals are permitted to undertake projects for the construction of rural godowns, with the subsidy component being linked to institutional credit. The appellants, having been assured that subsidy would be sanctioned in their favour, were required to contribute their share towards the construction of the godowns. It is further contended that, under the NABARD Rural Godown Scheme, the appellants are legally entitled to the grant of Government subsidy, the said subsidy being intended to promote capital investment in rural infrastructure and thereby enhance income generation in the agricultural sector. The NABARD, in accordance with the provisions of the scheme released a subsidy of Rs.18,68,500/- towards the loan account of the first appellant and Rs.20,91,500/- towards the loan account of the second appellant on 27.02.2008, aggregating to a total sum of Rs.39,60,000/-. However, it is alleged that the officials of the 1^st respondent/Bank, by playing fraud and committing criminal breach of trust, fraudulently returned the entire advance subsidy amount of Rs.39,60,000/- to NABARD on 11.11.2009, without the knowledge or consent of the appellants/plaintiffs.

(iii) The appellants had duly applied for plan approval before the Panchayat, which was granted on 25.09.2008. Pursuant thereto, the appellants again approached the 1^st respondent/Bank for financial assistance. The Bank being satisfied with the project proposal sanctioned a sum of Rs.110 lakhs as a term loan, for which, the appellants executed the requisite loan documents, including the creation of an equitable mortgage over the title deeds of the suit properties. It is the case of the appellants that the sanctioned amount was inadequate, and consequently, they sought additional loans to the tune of Rs.245 lakhs and Rs.125 lakhs respectively. It is further stated that, owing to unforeseen circumstances, the project suffered setbacks, inasmuch as the area was inundated during the monsoon season and the earthing work was adversely affected. The appellants assert that the progress of the project and the difficulties encountered were duly intimated to the Bank from time to time.

(iv) It is further stated that though the Bank did not sanction the loan in its entirety, they were unable to complete the construction and could only achieve about 60% progress. The appellants further contend t