Dismissed

Praveen Shankar v. State of U.P. and 3 Others

Allahabad HC12 Jan 2021WRIC/21461/2020

Case brief

AI extract

What is this about?

High Court dismissed a writ petition challenging dispossession under the SARFAESI Act. The court held the petition non-maintainable due to availability of alternative remedies before the Debts Recovery Tribunal, citing Supreme Court precedents against interfering with bank recovery proceedings.

What did the court decide?

Writ petition dismissed on the ground of availability of an alternative remedy.

Praveen Shankar Vs State of U.P. and 3 Others — Banking and Recovery | Allahabad HC (2021)

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Court No. - 39

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Case :- WRIT - C No. - 21461 of 2020

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Petitioner :- Praveen Shankar Respondent :- State Of U.P. And 3 Others Counsel for Petitioner :- Vijit Saxena,Kuldeep Saxena Counsel for Respondent :- C.S.C.,Yashwant Singh

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Hon'ble Naheed Ara Moonis,J. Hon'ble Dinesh Pathak,J.

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Heard learned counsel for the petitioner, Shri Yashwant Singh, learned counsel appearing on behalf of respondent No. 3 and learned Standing Counsel appearing on behalf of the State.

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The instant writ petition has been filed seeking the following relief:

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By means of this writ petition, the petitioner has prayed for issuance of a writ of mandamus commanding respondents No. 2 and 3 not to dispossess the petitioner from the premises in question except in accordance with law.

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Learned counsel appearing on behalf of respondent No. 3 has raised a preliminary objection with regard to the maintainability of the writ petition and has contended that the District Magistrate in a proceeding under the SARFAESI Act has passed the order under Section 14 of the Act in favour of the bank. The petitioner, who is a guarantor, has approached this Court by concealing the material facts and as such the instant petition may not be entertained.

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Learned counsel for the petitioner does not dispute that there exists alternative remedy.

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The Hon'ble Supreme Court in the case of ICICI Bank Ltd. v. Umakanta Mohapatra, 2019(13) SCC 497, has held as under:

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"Delay condoned.

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Leave granted.

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Despite several judgments of this Court, including a judgment by Hon'ble Mr. Justice Navin Sinha, as recently as

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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:-

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"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:-

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"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.

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The appeals are allowed in the aforesaid terms.

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Pending applications, if any, shall stand disposed of."

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The Hon'ble Supreme Court in the case of C. Bright Vs. District Collector and others, Civil Appeal No. 3441 of 2020, decided on 05.11.2020, has held as under:

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"21. Even though, this Court in United Bank of India v. Satyawati Tondon & Ors.21 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, however, borrowers and other aggrieved persons are invoking the jurisdiction of the High Court under

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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 effective 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. Thus, in view of the settled legal position, we find, in this case, no justification for invoking our extraordinary jurisdiction under Article 226 of the Constitution of India."

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In the light of the principles enunciated by the Hon'ble Supreme Court, we decline to entertain the present writ petition.

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Accordingly, the writ petition is dismissed on the ground of availability of an alternative remedy.

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Order Date :- 12.1.2021 Ishrat

Praveen Shankar v. State of U.P. and 3 Others

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Praveen Shankar v. State of U.P. and 3 Others

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