Jurisdiction of Civil Court Not Barred Under SARFAESI Act: Punjab and Haryana High Court

In a recent ruling, the High Court of Punjab and Haryana has set a significant precedent in a case involving the enforcement of a Memorandum of Understanding (MOU) and the jurisdiction of civil courts under the SARFAESI Act. The bench, led by Hon’ble Mr. Justice Sanjay Vashisth, pronounced its decision on 20^th November 2023, in a case that has captured the attention of legal circles.

The court addressed a critical issue in the case between Ujjagar Construction Pvt. Ltd. And Nayati Healthcare and Research NCR Pvt. Ltd., regarding the applicability of the SARFAESI Act to civil suits. In its detailed judgment, the court observed, “Jurisdiction of civil court is plenary in nature, unless the same is ousted, expressly or by necessary implication, it will have jurisdiction to try all types of suits.” This statement has resonated across the legal community, highlighting the comprehensive authority of civil courts.

The dispute centered around a MOU for the purchase of land, with the plaintiff seeking specific performance and related injunctions. The court delved into the nuances of the SARFAESI Act and its impact on civil court jurisdiction, concluding that the civil suit’s maintainability was not barred by the SARFAESI Act.

Further, the court meticulously analyzed the principles for granting temporary injunctions. It concluded that the plaintiff’s case did not satisfy the essential criteria of prima facie case, balance of convenience, and irreparable loss or injury, leading to the rejection of the injunction plea.

Legal experts view this judgment as a crucial affirmation of the civil court’s jurisdiction in complex financial and property-related disputes. The decision clarifies the legal landscape around MOUs, specific performance suits, and the SARFAESI Act, offering a robust framework for future cases.

This ruling is expected to have far-reaching implications in legal proceedings involving SARFAESI Act and property disputes, as it reinforces the civil court’s comprehensive jurisdiction while emphasizing the need for a meticulous approach in granting injunctions in such matters.

Date of Decision: 20.11.2023

Ujjagar Construction Pvt. Ltd. VS Nayati Healthcare and Research NCR Pvt. Ltd.