Authority: Supreme Court of India (Civil Appellate Jurisdiction)

Order Date: 17 September 2026

Case Overview

  • Parties: International Asset Reconstruction Co. Pvt. Ltd (Appellant) vs. Jayant Vitamins Ltd & another (Respondent).
  • Background: Respondent No.1 (Jayant Vitamins) obtained credit facilities from an unnamed bank (Respondent No.2). The bank created mortgage and hypothecation charges over movable and immovable properties of Jayant Vitamins.
  • Non‑payment: The account was classified as a Non‑Performing Asset (NPA) by the bank, leading to Suit No.3920 of 1996 filed in the High Court of Bombay, later transferred to Debts Recovery Tribunal‑II, Mumbai and renumbered Original Application No.283 of 2001.
  • DRT Order (17‑Oct‑2005): Directed Jayant Vitamins to pay Rs.28,28,56,282.49 plus future interest at 12% per annum. A recovery certificate dated 05‑Dec‑2005 was issued and Recovery Proceeding No.409 of 2005 commenced.
  • Deed of Assignment: The bank assigned the debts, assets and liabilities of Jayant Vitamins to International Asset Reconstruction.
  • SARFAESI Action: On 16‑Jan‑2009, a notice under Section 13(2) of the SARFAESI Act was served; possession was taken under Section 13(4).
  • Sale of Assets: On 21‑Jun‑2023, Apexter Corporation offered Rs.189 lacs, later improved to Rs.284 lacs. The offer was accepted via a letter dated 11‑Jul‑2023, and a Sale Certificate transferred possession of the hypothecated plants & machinery to Apexter.
  • High Court Proceedings:
  • Writ Petition No.21285 of 2023 (filed by Jayant Vitamins) sought setting aside the sale as null, arbitrary and fraudulent. The High Court of Madhya Pradesh, Indore dismissed the writ on 09‑Feb‑2024, noting the sale was completed and that any grievance could be pursued before the DRT/DRAT.
  • Review Petition No.368 of 2024 (filed by Jayant Vitamins) was allowed on 08‑May‑2024, modifying paragraph 14 of the 09‑Feb‑2024 order to grant the respondent liberty to avail alternative remedies.

Supreme Court Findings

  • The Court held that the High Court erred in expanding the scope of alternative remedies, failing to consider Sections 32, 34 and 35 of the SARFAESI Act.
  • Section 32 protects actions taken in good faith from suit, prosecution or other legal proceedings.
  • Section 34 bars civil courts from entertaining suits or injunctions concerning matters that the DRT or its Appellate Tribunal is empowered to determine under the Act.
  • Section 35 declares the SARFAESI Act to prevail over any inconsistent law.
  • Consequently, the High Court’s paragraph 6 of the review order (granting liberty to file suits for damages or pursue criminal proceedings) was set aside.

Final Outcome

  • The order passed in Review Petition No.368 of 2024 is set aside.
  • The original order dated 09‑Feb‑2024 dismissing the writ petition is restored.
  • The appeal is allowed as per the signed order.
  • All pending applications, if any, are disposed of.
  • The Court reiterates that any claim for damages or other relief must be pursued before the Debts Recovery Tribunal, as civil courts lack jurisdiction under the SARFAESI Act.

Topics: SARFAESI Act, Court Jurisdiction