Disputed Title Deed's Genuineness Can Be Decided By Civil Court Despite SARFAESI Proceedings: Calcutta High Court

On October 8, the Calcutta High Court has held that the bar on civil court jurisdiction under the Section 34 of the SARFAESI Act does not automatically prevent a civil suit seeking adjudication of a disputed title deed, particularly where the genuineness of the document forms the foundation of the claimant's ownership.

The Court observed that the Debt Recovery Tribunal's jurisdiction cannot be extended to determining substantive disputes concerning the validity or genuineness of title deeds.

Justice Partha Sarathi Chatterjee set aside a possession notice issued by Canara Bank on October 1, 2026 and directed the bank to restore possession of the flat to the petitioners forthwith. The Court restrained the respondents from taking coercive steps concerning the property for two months, allowing the petitioners to approach the competent Civil Court.

"Section 34 bars the jurisdiction of a Civil Court in respect of matters which the Debt Recovery Tribunal or the Appellate Tribunal is empowered by or under the said Act to determine. The Tribunal, while exercising jurisdiction under the SARFAESI Act, is required to act within the four corners of the statute and its jurisdiction cannot be extended to adjudication of a substantive dispute as to the validity or genuineness of a deed of title, particularly where such determination is foundational to the claim of ownership itself."

The case arose from a dispute over a residential flat in Kolkata which the petitioners, Amit Kumar Saha and another claimed to have purchased under a conveyance deed registered on December 4, 2021. They relied on mutation in their names in Kolkata Municipal Corporation records, municipal tax payments, a No Outstanding Certificate and electricity bills to establish ownership and possession since 2021.

Canara Bank initiated proceedings under the SARFAESI Act following an alleged loan default and obtained an order under Section 14 from the Additional Chief Judicial Magistrate at South 24 Parganas, to take physical possession of the flat. The petitioners challenged the proceedings after a possession notice was affixed to the property on August 1, 2026, alleging that Rishita Nandi had mortgaged the flat despite having no right or title over it.

The bank disputed the genuineness of the petitioners' conveyance deed, arguing that one of the owners had died before its execution. During the proceedings, a registration record relating to Deed registered on December 14, 2021, was also produced in support of the petitioners' claim.

The Court observed that disputed questions of fact and title must be decided by a competent Civil Court and cannot appropriately be examined under Article 226 of the Constitution.

Relying on the Supreme Court's decision in Central Bank of India v. Prabha Jain, the Court held that the existence of SARFAESI proceedings does not by itself, bar a civil suit seeking determination of disputed ownership.

"In this context, useful reference may be made to the decision of the Hon'ble Supreme Court in Central Bank of India & Anr. v. Prabha Jain & Ors., reported in (2025) 4 SCC 38. Thus, where the very title claimed by a person is founded upon a document whose genuineness or validity is seriously disputed, the appropriate remedy for obtaining an authoritative determination of such dispute would lie before the competent Civil Court, and the bar contained in Section 34 of the SARFAESI Act would not, merely on account of the existence of SARFAESI measures, preclude institution of such a suit."

Accordingly, the Court disposed of the writ petition, clarifiying that it had expressed no opinion on the validity of either the conveyance deed or the mortgage deed.

The petitioners were directed to institute a civil suit and seek interim relief within two months, failing which the protection granted would automatically lapse.

For Petitioners: Advocates Nimish Mishra, Abir Mondal

For Bank: Advocate Farooque Ali