Trial Court dismissed a writ petition seeking to quash SARFAESI notice and proceedings. The court held that the High Court cannot interfere when an alternative remedy before the Debt Recovery Tribunal exists, citing Supreme Court precedents.
Writ petition dismissed on ground of availability of alternative remedy.
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Court No. - 46
Case :- WRIT - C No. - 21153 of 2020
Petitioner :- Sandhya Respondent :- District Magistrate And 2 Other Counsel for Petitioner :- Prem Narayan Rai Counsel for Respondent :- C.S.C.,Sanjai Singh
Hon'ble Naheed Ara Moonis,J. Hon'ble Vivek Varma,J.
Case called out in revised list. None has appeared on behalf of the petitioner to address the Court. However, Sri Uma Dutt Shukla holding brief of Sri Sanjai Singh, learned counsel for the respondent nos. 2 and 3 and learned Standing Counsel for the respondent no.1 are present.
The instant writ petition has been filed seeking following reliefs:
"(i) a writ, order or direction in the nature of certiorari to quash the impugned e-auction notice dated 23.07.2020 published by the respondent bank in news paper namely Dainik Jagran.
(ii) a writ, order or direction in the nature of certiorari to quash the entire proceeding of case no. D202002030000969 Punjab National Bank Vs. Smt. Sandhya and others pending before respondent no.1.
(iii) a writ, order or direction in the nature of mandamus commanding and directing the respondents bank not to take any coercive measures/steps against the mortgaged property of the petitioner in any manner during the pendency of O.A. No. 547/2019 Smt. Sandhya Vs. Punjab National Bank and another pending before the learned Debts Recovery Tribunal at Allahabad by considering the Covid-19 lockdown situation."
Learned counsel for the respondents submits that against the proceedings drawn under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (for short, the "Act") the petitioner has already approached the Debts Recovery Tribunal, Allahabad under Section 17 (1) of the Act being S.A. No. 547 of 2019, which is still pending consideration. He further submits that the present writ petition has been filed for the same cause of action. Hence, the present writ petition may not be entertained.
Admittedly, in paragraph 25 of the writ petition, learned counsel for the petitioner has averred that the petitioner has already approached the Debt Recovery Tribunal, Allahabad by means of S.A. No. 547/2019, under Section 17(1) of the Act,
which is still pending consideration.
We have considered the submissions made at the bar.
The Hon'ble Supreme Court in the case of ICICI Bank Ltd. v. Umakanta Mohapatra, Civil Appeal Nos. 10243-10250 of 2018, decided on 05.10.2018 , has held as under:
"Delay condoned.
Leave granted.
Despite several judgments of this Court, including a judgment by Hon'ble Mr. Justice Navin Sinha, as recently as on 30.01.2018, in Authorized Officer, State Bank of Travancore and Another VS Mathew KC., (2018) 3 SCC 85, the High Courts continue to entertain matters which arise under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI), and keep granting interim orders in favour of persons who are Non-Performing Assets (NPAs).
The writ petition itself was not maintainable, as a result of which, in view of our recent judgment, which has followed earlier judgments of this Court, held as follows:-
"18. We cannot help but disapprove the approach of the High Court for reasons already noticed in Dwarikesh Sugar Industries Ltd. Vs Prem Heavy Engineering Works (P) Ltd and another, (1997) 6 SCC 450, observing:-
"32. When a position, in law, is well settled as a result of judicial pronouncement of this Court, it would amount to judicial impropriety to say the least, for the subordinate courts including the High Courts to ignore the settled decisions and then to pass a judicial order which is clearly contrary to the settled legal position. Such judicial adventurism cannot be permitted and we strongly deprecate the tendency of the subordinate courts in not applying the settled principles and in passing whimsical orders which necessarily has the effect of granting wrongful and unwarranted relief to one of the parties. It is time that this tendency stops."
The writ petition, in this case, being not maintainable, obviously, all orders passed must perish, including the impugned order, which is set aside.
The appeals are allowed in the aforesaid terms.
Pending applications, if any, shall stand disposed of."
Recently the Hon'ble Apex Court in the case of C.Bright Vs. The District Collector & others, Civil Appeal No. 3441 of 2020 decided on 05.11.2020 has observed as follows:
"21. Even though, this Court in United Bank of India v. Satyawati Tondon & Ors. held that in cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High
Court would have serious adverse impact on the financial health of such bodies/institutions, which will ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Hindon Forge Private Limited has held that the remedy of an aggrieved person by a secured creditor under the Act is by way of an application before the Debts Recovery Tribunal, how- ever, borrowers and other aggrieved persons are invoking the jurisdiction of the High Court under Articles 226 or 227 of the Constitution of India without availing the alternative statutory remedy. The Hon'ble High Courts are well aware of the limitations in exercising their jurisdiction when affective alternative remedies are available, but a word of caution would be still necessary for the High Courts that interim orders should generally not be passed without hearing the secured creditor as interim orders defeat the very purpose of expeditious recovery of public money, 21 (2010) 8 SCC 110.
22. Thus, we do not find any error in the order passed by the High Court. Consequently, the appeal is dismissed."
As such, we are not inclined to interfere in the present writ petition for the same cause of action. Even, otherwise in view of the settled legal position, we find, in this case, no justification for invoking extraordinary jurisdiction under Article 226 of the Constitution of India.
Accordingly, the writ petition is dismissed on the ground of availability of alternative remedy.
Order Date :- 14.12.2020 Lbm/-
2 issues framed by the court
Whether the High Court can exercise its jurisdiction to quash proceedings under the SARFAESI Act when an alternative remedy under Section 17(1) is available.
Whether interim remedies defeating the recovery purpose should generally be granted without hearing the secured creditor.
Colour shows how this judgement treated each authority
ICICI Bank Ltd. v. Umakanta MohapatraFollowed¶14
ICICI Bank Ltd. v. Umakanta Mohapatra, Civil Appeal Nos. 10243-10250 of 2018, decided on 05.10.2018
Mathew KC.Referred¶17
Authorized Officer, State Bank of Travancore and Another VS Mathew KC., (2018) 3 SCC 85 · Who else cites this
Dwarikesh Sugar Industries Ltd. Vs Prem Heavy Engineering WorksReferred¶19
Dwarikesh Sugar Industries Ltd. Vs Prem Heavy Engineering Works (P) Ltd and another, (1997) 6 SCC 450 · Who else cites this
United Bank of India v. Satyawati TondonReferred¶25
United Bank of India v. Satyawati Tondon & Ors.
Hindon Forge Private LimitedReferred¶25
Hindon Forge Private Limited
C.Bright Vs. The District CollectorFollowed¶24
C.Bright Vs. The District Collector & others, Civil Appeal No. 3441 of 2020 decided on 05.11.2020
Sandhya
District Magistrate
Naheed Ara Moonis
Vivek Varma
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
