In Brief
Electrosteel Castings Limited (appellant) had mortgaged its assets to secure a loan taken by another company. When the borrower defaulted, the lender assigned all rights to respondent No.1 (UV Asset Reconstruction). Respondent No.1 then initiated SARFAESI proceedings against the appellant as guarantor. The appellant sued before the High Court, alleging the assignment was fraudulent because the borrower's debt had been discharged under an IBC resolution plan. The Supreme Court dismissed the appeal, holding that civil suits are barred by Section 34 of the SARFAESI Act, 2002, and that mere allegations of fraud without specific particulars cannot overcome this jurisdictional bar. The Court permitted the appellant to challenge the SARFAESI proceedings before the DRT instead.
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