On May 3, 2018, the Supreme Court (“SC”) passed a judgement in the case of M/s Sree Anandhakumar Mills Ltd. v. M/s Indian Overseas Bank (C.A. No(s). 7214-7216 of 2012) wherein the SC held that a civil suit would not be maintainable if proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI”) have already been initiated.

In the instant case, the SC was considering an appeal made against the decision of the Madras High Court, wherein the High Court held that the civil court’s jurisdiction is not totally ousted by section 34 of the SARFAESI and therefore a suit for partition would be maintainable. 

The SC referred to its decision in Jagdish Singh v. Heeralal ((2014) 1 SCC 479) (“Jagdish Singh case”). In the Jagdish Singh case, the SC while interpreting section 34 of the SARFAESI held that a civil court has no jurisdiction to entertain any suit or proceedings in respect of those matters which fall under Section 13(4) of the SARFAESI because those matters are within the jurisdiction of the debt recovery tribunal or the debt recovery appellate tribunal, as the case maybe. Further, the SARFAESI would override section 9 of the Civil Procedure Code, 1908 since section 35 of the SARFAESI provides that the SARFAESI would override all other laws, if such laws are inconsistent with the provisions of the SARFAESI.

The SC set aside the order of the Madras High Court and allowed the appeal.