The High Court dismissed a writ appeal challenging the dismissal of a petition opposing an auction under the SARFAESI Act. It held that filing writ petitions was an abuse of process given the statutory remedy under Section 17 exists.
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NAFR
HIGH COURT OF CHHATTISGARH AT BILASPUR Writ Appeal No. 338 of 2021
Sheetal Somawar, W/o. Late Sharad Somawar, Aged About 37 Years, R/o. Flat No. A/12, Ward No. 42, Shakuntala Heights, Sarkanda, P.S. Sarkanda, Bilaspur, Tahsil And District Bilaspur, Chhattisgarh.
------Appellant
Versus
1. State Of Chhattisgarh, Through the Secretary, Home Department, Mantralaya, Hahanadi Bhawan, Tatal Nagar, New Raipur, Chhattiagarh.
2. Superintendent Of Police, Bilaspur, Office Of The Superintendent Of Police, Bilaspur, Tahsil And District Bilaspur Chhattisgarh.
3. Station House Officer, Sarkanda, Bilaspur, Police Station Sarkanda, (Crime No. 567/20219) Tahsil And District Bilaspur Chhattisgarh.
4. Station House Officer, Tarbahar, Bilaspur, Police Station Tarbahar, Tahsil And District Bilasapur, Chhattisgarh.
5. Station House Officer, City Kotwali Bilaspur, Police Station City Kotwali, Tahsil And Distrtict Bilaspur, Chhattisgarh.
6. Vishwajeet Bhowkmik, S/o. Dilip Kumar Bhowkmik, Aged About 47 Years, R/o. R-1, Vinoba Nagar, Thana Tarbahar, Bilaspur, District Bilaspur, Chhattisgarh.
7. Ruma Bhowmik, W/o. Vishwajeet Bhowmik, Aged About 45 Years, R/o. R-1, Vinoba Nagar, Thana Tarbahar, Bilaspur, District Bilaspur, Chhattisgarh.
8. Bank Of Baroda, Through The Chief Manager, Band Of Baroda, Seepat Road Branch, Raj Kishor Nagar, Bilaspur, Tahsil And District Bilaspur, Chhattisgarh.
9. Punjab National Bank, Through The Chief Manager, Punjab National Bank, Link Road, Near Deep Hotel, Vyapar Vihar Bilaspur, Tahsil And District Bilaspur, Chhattisgarh.
10. Rajesh Seth, Through Rajnish Seth, S/o. Jagish Dayal Seth, Mortgaged Property Owner Of Plot No. 12, First Floor, Shri Kanha Heritage, Ring Road No. 2, Guru Ghasidas Nagar Ward, Tifra, Tahsil And District Bilaspur Chhattisgarh. R/o. LIG - 51, Dindayal Nagar Ward, Tifra, Tahsil And District Bilaspur Chhattisgarh.
11. Bilaspur Casting Prop. Smt. Pavitra Sikka, Mortgage Property Owner Rajnish Seth, S/o. Jagdish Dayal Seth, Plot No. 12, First
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Floor, Shri Kanha Heritage, Ring Road No. 2, Guru Ghasidas Nagar Ward Tifra, Tahsil And District Bilaspur, Chhattisgarh.
12. Abhilasha Light Infratech, Partner And Mortgage Property Owner Megha Parolkar And Uma Joshi, Behind R.T.O Office, Lagra, Bilaspur, Tahsil And District Bilaspur, Chhattisgarh.
13. Prahlad Kumar Sahu, Mortgage Property Owner, Near Brilient Public School, Bahatarai Seepat Road Bilaspur, Tahsil And District Bilaspur, Chhattisgarh.
14. Raghav Madhav Associates, Prop. Rajnish Seth And Mortgage Property Owner Seema Pandey, W/o. Sajnay Pandey, R/o. H.No. LIG -51, Dindayal Aawas, Bahtarai Bilaspur, Tahsil And District Bilaspur, Chhattisgarh.
15. Hemalata Sahu, W/o. Akhileshwar Sahu, Mortgage Property Owner R/o. Village Khamtarai, Tahsil And Block Bilha, District Bilaspur, Chhattisgarh.
16. Adhar Infratech Prop. Smt. Pargag Mishra, Mortgage Property Owner Anil Kumar Yadav, S/o. Tiharu Ram Yadav, R/o. H.No. E-2, Dream City, Face 2, Dream City, Bilaspur, Tahsil And District Bilaspur, Chhattisgarh.
17. Abhijeet Nag, Through Mortgage Property Owner Reena Nag, W/o. Chiranjeet Nag, R/o. Ramkrishan Paramhansh Ward, Near Radha Krishan Mandir, Lodhi Para, Koni Road, Sarkanda Bilaspur, Tahsil And District Bilaspur, Chhattisgarh
18. Udaan I.T.I. Prop. Ruma Bhowmik, Mortgage Property Owner Anita Narang, W/o. Sanjay Narang, R/o. Vikash Nagar, Ward No. 01, 27 Kholi Kududand, Bilaspur, Tahsil And District Bilaspur Chhattisgarh
19. Abhilasha Engineering Prop. Shri Abhilasha Banarjee, Mortgage Property Owner Smt. Vinita Pandey, W/o. Prashant Pandey, Ganga Nagar Ward, Ward No. 1, Mangla, Bilaspur Tahsil And District Bilaspur Chhattisgarh
20. Anil Kumar Trivedi, Mortgage Property Owner Govind, B-03, Krishna Nagar Colony, Nayapara, Ward No. 07, Village Hathni Bhatapara, District Baloda Bazar-Bhatapara Chhattisgarh
21. Sushmita Mishra, Mortgage Property Owner Susmita Mishra, Chhatrapati Shivaji School Road, Rawatpura Nagar, Mathpurena, Raipur, District Raipur Chhattisgarh
------Respondents
| For Appellants | :- Mr. Ravindra Agrawal, Advocate |
|---|---|
| For State/Respondents | :- Ms. Akanksha Jain, Dy. Govt. Advocate |
| No.1 to 5 | |
| For Respondent No.8 | :- Mr. Ankit Singhal, Advocate |
| For Respondent No.9 | :- Mr. Shivang Dubey, Advocate. |
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(Division Bench)
Hon'ble Shri Justice Sanjay K. Agrawal Hon'ble Shri Justice Arvind Singh Chandel
Order On Board
(23.06.2023)
Sanjay K. Agrawal, J.
1. This writ appeal is directed against the order dated 19.02.2021 passed in WPC No.1044 of 2021, by which the writ petition of the writ appellants has been dismissed finding no merit.
2. Mr. Ravindra Agrawal, learned counsel for the writ appellant would submit that the learned Single Judge is absolutely unjustified in dismissing her writ petition by recording a finding, which is perverse to record, as the writ appellant was subjected to fraud and the subject property which was being auctioned by the respondent No.8, Bank of Baroda, was not mortgaged with Bank and fraud has been played with her by the respondent No.6 & 7 and, as such, the impugned order be set aside by interfering with the order and the writ appeal be allowed.
3. Mr. Ankit Singhal, learned counsel for the respondent No.8 and Mr. Shivang Dubey, learned counsel for the respondent No.9 would support the impugned order.
4. We have heard learned counsel for the parties, considered their rival submissions made herein-above and went through the records with utmost circumspection.
5. The writ appellant filed the writ petition challenging the auction proposed by the Bank of Baroda, respondent No.8 herein, under Section 13 of the Securitisation and Reconstruction of
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Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to “the SARFAESI Act” ) to which the learned Single Judge declined to interfere in light of the remedy available to the writ appellant under Section 17 of the SARFAESI Act, which is sought to be challenged by filing of the writ appeal.
6. Learned Single Judge has held that the petitioner has remedy to approach the DRT under Section 17 of the SARFAESI Act and in that view of the matter, the writ Court declined to interfere.
7. Very recently, the Supreme Court in the matter of PHOENIX ARC PRIVATE LIMITED V. VISHWA BHARATI VIDYA MANDIR & OTHERS1 has held that if proceedings are initiated under the SARFAESI Act and any proposed action is to be taken and the borrower is aggrieved party by any of the actions of the private Bank, borrower has to avail the remedy under the SARFAESI Act, the writ petition is not maintainable and held as under :
21. Applying the law laid down by this Court in the case of Mathew K.C. [(2018) 3 SCC 85 to the facts on hand, we are of the opinion that filing of the writ petitions by the borrowers before the High Court under Article 226 of the Constitution of India is an abuse of process of the Court. The writ petitions have been filed against the proposed action to be taken under Section 13(4). As observed hereinabove, even assuming that the communication dated 13.08.2015 was a notice under Section 13 (4) , in that case also, in view of the statutory, efficacious remedy available by way of appeal under Section 17 of the SARFAESI Act, the High Court ought not to
1 (2022) 5 SCC 345
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have entertained the writ petitions. Even the impugned orders passed by the High Court directing to maintain the status quo with respect to the possession of the secured properties on payment of Rs.1 crore only (in all Rs.3 crores) is absolutely unjustifiable. The dues are to the extent of approximately Rs.117 crores. The ad-interim relief has been continued since 2015 and the secured creditor is deprived of proceeding further with the action under the SARFAESI Act. Filing of the writ petition by the borrowers before the High Court is nothing but an abuse of process of Court. It appears that the High Court has initially granted an ex-parte ad-interim order mechanically and without assigning any reasons. The High Court ought to have appreciated that by passing such an interim order, the rights of the secured creditor to recover the amount due and payable have been seriously prejudiced. The secured creditor and/or its assignor have a right to recover the amount due and payable to it from the borrowers. The stay granted by the High Court would have serious adverse impact on the financial health of the secured creditor/assignor. Therefore, the High Court should have been extremely careful and circumspect in exercising its discretion while granting stay in such matters. In these circumstances, the proceedings before the High Court deserve to be dismissed.
8. In view of the above stated legal position, the writ appellant has remedy of approaching the DRT under Section 17 of the SARFAESI Act and further following the principles of law laid down in Phoenix Arc (P) Ltd. (supra) we are not inclined to interfere with the impugned order and writ appeal deserves to be and accordingly dismissed. However, it would be open to the appellant to avail remedy before the DRT under Section 17 of the SARFAESI Act. No cost(s).
Sd/Sd/- (Sanjay K. Agrawal) (Arvind Singh Chandel) Judge Judge
aks
2 issues framed by the court
Whether a writ petition challenging an auction under the SARFAESI Act is maintainable given the availability of statutory remedies under Section 17.
Whether the High Court should interfere with the order of the Single Judge dismissing the writ petition.
Colour shows how this judgement treated each authority
Phoenix Arc Private Limited V. Vishwa Bharati Vidya MandirFollowed¶6
Phoenix Arc Private Limited V. Vishwa Bharati Vidya Mandir & Others
Mathew K.C.Relied on¶6
Mathew K.C. (2018) 3 SCC 85 · Who else cites this
3 provisions across 2 enactments
Sheetal Somawar
State Of Chhattisgarh
Bank Of Baroda
Punjab National Bank
Sanjay K. Agrawal
Arvind Singh Chandel
As recorded by the court registry
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