Civil Courts Cannot Injunct SARFAESI Measures; 'To Be Taken' Includes Future Action: Calcutta High Court

The Calcutta High Court has held that civil courts cannot grant injunctions against measures already taken, or “to be taken," by banks under the SARFAESI Act.

The court held that Section 34 of the SARFAESI Act imposes a wider bar on civil courts granting injunctions against any action taken or “to be taken” in pursuance of powers under the Act.

“Whereas a suit or proceeding cannot be instituted if a notice under Section 13(4) of the SARFAESI Act, 2002 has been issued, the bar to grant of injunction by the civil court, as couched in the language in Section 34, is wider and precludes the civil court or other authority from granting injunction in respect of any action taken or “to be taken” in pursuance of any power conferred under the SARFAESI Act, 2002,” a Division Bench of Justice Sabyasachi Bhattacharyya and Justice Supratim Bhattacharya observed.

The bench added that the expression “to be taken” also covers the future course of action under the SARFAESI Act, if available to the bank or creditor.

The ruling came on Axis Bank Limited's appeal against an ad interim order passed by the Judge-in-Charge, Tenth Bench, City Civil Court at Calcutta, on January 31, 2026.

The trial court had granted an injunction in a suit concerning an immovable property given as security for a loan and directed Tarun Kanti Ghosh to deposit ₹20,000 every month in the loan account.

Axis Bank argued that it had already issued a notice under Section 13(4) of the SARFAESI Act and had also issued a notice under Section 13(2) before the suit was filed. It contended that the injunction was therefore barred by Section 34.

Ghosh, however, contended that he had not received any notice under Section 13(4) when the injunction was granted. He also argued that the subsequent extensions of the interim order had not been separately challenged and questioned the urgency of the bank's appeal in view of the delay in filing it.

The bench left questions concerning the valuation of the property and whether the dispute was a commercial dispute and territorial jurisdiction open for consideration by the trial court. It held that these were mixed questions of fact and law and that it would be premature to examine them at the appellate stage.

On Section 34, the bench found that Ghosh had categorically admitted in the plaint and injunction application that the transaction arose from a loan for which the property had been given as security. Since Axis Bank had already initiated action under Section 13 of the SARFAESI Act, the bar under Section 34 was “squarely attracted”, the bench observed.

The court further held that the restriction under Section 34 on civil court injunctions is wider than the bar on instituting a suit or proceeding. Since the bank had already initiated action under Section 13, the court held that the expression “to be taken” also covers future action under the SARFAESI Act, if available to the bank or creditor.

The bench, therefore, held that the trial judge had acted “de hors jurisdiction” by granting an injunction that potentially prevented Axis Bank from taking measures under the SARFAESI Act.

The court also took exception to the direction requiring Ghosh to deposit ₹20,000 every month. It noted that the amount was different from the instalments contemplated under the original loan agreement.

“Also, by imposing the condition of payment of an amount of money monthly by the respondent, which is entirely different from the instalments contemplated in the original loan agreement between the parties, the learned Trial Court, even at the ad interim stage, has virtually re-written the contract between the parties,” the bench observed.

The bench further observed that the trial judge had mechanically granted the injunction without properly considering the relevant issues and had merely referred to the legal principles governing injunctions.

It accordingly allowed Axis Bank's appeal and set aside the January 31, 2026, order passed by the City Civil Court at Calcutta.

All subsequent orders extending the interim order were also deemed to stand vacated.

The bench clarified that nothing in its order would prevent Ghosh from pursuing an appropriate legal remedy available under the SARFAESI Act.

For Appellant: Advocates Sayak Ranjan Ganguly, Srijani Ghosh, Simrin Hussain, Pujali Musahib

For Respondent: Advocates Sounak Bhattacharya, Lalratan Mondal