Dismissed¶47

M/S Dee Emm Residency Hotel v. State of Hp and Another

Himachal Pradesh HC21 Jun 2025CWP/3783/2024

Case brief

AI extract

What is this about?

SARFAESI Act; Section 13(2) demand notice; Section 13(4) possession notice; Section 14 DM possession order; writ maintainability; alternative efficacious remedy; Debt Recovery Tribunal; Article 226 self-imposed restraint; South Indian Bank v Naveen Mathew Philip (2023) 17 SCC 311; PHR Invent Educational Society v UCO Bank (2024) 6 SCC 579; Celir LLP v Bafina Motors (2024) 2 SCC 1; United Bank of India v Satyawati Tondon (2010) 8 SCC 110; hotel borrower near Victory Tunnel Shimla; capital subsidy and account upgradation; outstanding dues; Himachal Pradesh High Court; CWP No.3783 of 2024; petition dismissed as infructuous.

What did the court decide?

The order of taking of possession can be challenged before the Debt Recovery Tribunal, as consistently held by the Apex Court. ¶30

M/S Dee Emm Residency Hotel Vs State of Hp and… — Banking and Recovery | Himachal Pradesh HC (2025)

What the court decided

AI extract

Outcome

Dismissed

¶47

Issue for consideration

Whether the writ petition challenging the securitization proceedings under the SARFAESI Act is maintainable before the High Court, in view of the Bank's objection and the availability of an alternative efficacious remedy before the Debt Recovery Tribunal. +1 more

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Court's answer

The order of taking of possession can be challenged before the Debt Recovery Tribunal, as consistently held by the Apex Court.

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Ratio / Principle

Following South Indian Bank v. Naveen Mathew Philip, (2023) 17 SCC 311, an alternative efficacious remedy is available to the petitioner; the petition falls within Paragraph-18 thereof — in commercial lender-borrower matters where a specific mechanism is provided, the Writ Court is debarred from exercising its jurisdiction.

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Key takeaways

Once an alternative remedy is available, the Court is not inclined to entertain the writ petition.ratio¶42
Since a fresh notice under Section 13(2) dated 11.11.2024 was issued without any fresh notice under Section 13(4), the cause of action does not accrue; the writ petition is neither maintainable nor would the petitioner have a right to approach the Debt Recovery Tribunal in that circumstance, and the petition has become infructuous.ratio¶47

Detailed headnote1 paragraphs

Writ petition by a borrower-hotel against securitization measures of Punjab National Bank under the SARFAESI Act (notice under Section 13(2) dated 01.11.2023; notice under Section 13(4) dated 27.02.2024; possession order under Section 14 dated 28.04.2024 of the District Magistrate, Shimla). Held, following M/s South Indian Bank Ltd. v. Naveen Mathew Philip, (2023) 17 SCC 311 (Paragraph-18), PHR Invent Educational Society v. UCO Bank, (2024) 6 SCC 579, and Celir LLP v. Bafina Motors, (2024) 2 SCC 1 : 2023 INSC 838, that an alternative efficacious remedy lies before the Debt Recovery Tribunal, and in commercial lender-borrower matters where a specific statutory mechanism is provided the Writ Court is debarred from exercising jurisdiction. Further, after issuance of a fresh notice under Section 13(2) dated 11.11.2024, no fresh notice under Section 13(4) was issued and no cause of action accrued; the petition had become infructuous and was dismissed, with pending miscellaneous applications disposed of.

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2025:HHC:19720

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IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA

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CWP No.3783 of 2024 Decided on: 21.06.2025

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__________________________________________________________ M/s DEE EMM Residency Hotel ...Petitioner Versus State of H.P. and Another ….Respondents

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Coram

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Hon’ble Mr. Justice G.S. Sandhawalia, Chief Justice Hon’ble Mr. Justice Ranjan Sharma, Judge

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1 Whether approved for reporting?.

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For the petitioner: Mr. Sunil Mohan Goel, Senior Advocate with Mr. Ankit Dhiman, Mr. Abhinav Mohan Goel and Mr. Abhishek Mohan Goel, Advocates. For the respondents: Mr. Sidharth Jalta, Deputy Advocate General, for respondent No.1-State. Mr. Arvind Sharma and Mr Devan Sharma, Advocates, for respondent No.2-Punjab National Bank.

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G.S. Sandhawalia, Chief Justice [Oral]

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Challenge herein is primarily to the

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securitization proceedings initiated in various forms against the petitioner, which is a commercial establishment, apparently, running a hotel in as much as under the name and style of “M/s DEE EMM Residency” near Victory Tunnel, Shimla, Himachal

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Pradesh.

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1 Whether reporters of Local Papers may be allowed to see the judgment?

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2025:HHC:19720

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2. Initial notice dated 01.11.2023, Annexure P-3,

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was served upon the petitioner, wherein, notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [hereinafter referred to as ‘SARFAESI Act’] was issued bringing to the notice of the petitioner whereby an outstanding amount was classified as Rs.14,40,27,088.33 with further interest. Apparently, the same was replied on 09.11.2023 [Annexure P-20], wherein, no undertaking was given for making any payment and the only request for Restructuring-cumResolution Plan was stressed.

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3. Similar reply was also made on 26.12.2023, [Annexure P-23], that the petitioner was cooperating with the Bank on all scores and requested to withdraw the captioned notice issued under Section 13(2) of SARFAESI Act’. Apart from such communication, nothing substantial, as such, was proposed for clearing the outstanding, leading to notice under Section 13 (4) of SARFAESI Act, being issued on 27.02.2024 [Annexure P-4], wherein, a reference was made to a possession notice dated 09.02.2024 regarding the mortgaged

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property as such and asking the petitioner to pay the outstanding dues w.e.f. 01.11.2023.

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4. It is not disputed that thereafter the necessary order on 28.04.2024 was also obtained of possession under Section 14 of the SARFAESI Act from the District Magistrate, Shimla.

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5. A perusal of communication dated 21.03.2024 would go on to show that apparently Rs.2.60 Crores were infused by the petitioner, as such, by way of capital subsidy and, therefore, the Bank, vide communication dated 22.03.2024 had intimated the petitioner that the captioned amount was upgraded on 12.03.2024 and the SARFAESI action was put on hold as per Bank’s guidelines, which has been highlighted by the learned Senior Counsel for the petitioner, as such. Apparently, vide letter dated 02.04.2024 also petitioner had written to the Bank that monthly instalments from the loan account have been increasingly burdensome due to shorter repayment period and on account of impact of COVID-19 and severe weather conditions.

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6. The matter was taken up before this Court on

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6^th May, 2024 and detailed interim order as such was

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passed. The Bank in its reply now has objected to the maintainability of the writ petition and it has been brought to our notice that even as on today [21.06.2025], approximately Rs.12.43 Crores is outstanding and a sum of Rs.3.45 Crores is required to upgrade the account.

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7. Counsel for the petitioner has tried to argue the matter on merits without coming up with a concrete plan, to at-least deposit some amount of approximately 20% of the outstanding amount.

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8. Keeping in view the above, we are of the considered opinion that order of taking of possession, as such, can be challenged before the Debt Recovery Tribunal, as has been consistently held by the Apex Court.

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9. Resultantly, keeping in view the law laid down by Apex Court in M/s South Indian Bank Ltd. & Ors Versus Naveen Mathew Philip & Anr. etc. etc., (2023) 17 SCC 311, we are of the considered opinion that there is an alternative efficacious remedy available to the petitioner. The instant petition as such can be brought within the ambit of Paragraph-18 of the said judgment, wherein, it is specifically mentioned that in commercial

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2025:HHC:19720

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matters regarding a lender and a borrower, once the specific mechanism has been provided, the Writ Court, as such, would be debarred from exercising its jurisdiction.

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10. A similar view has also been taken by a 3-Judge Bench in Civil Appeal arising out of SLP (C) No.8867 of 2022, titled as PHR Invent Educational Society Versus UCO Bank and others, (2024) 6 SCC 579, wherein, the settled law from United Bank of India v. Satyawati Tondon and others, (2010) 8 SCC 110, was taken into consideration, apart from the judgment in

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the case of Celir LLP v. Bafina Motors (Mumbai) Private Limited and Others, (2024) 2 SCC 1: 2023 INSC 838, wherein, it was specifically mentioned that while dismissing the writ petitions, the High Courts have to be reminded of the observations made in the case of Satyawati Tondon, supra. Relevant part reads as under:-

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“15. It could thus be seen that, this Court has clearly held that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person. It has been held that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. The Court clearly observed

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that, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. It has been held that, though the powers of the High Court under Article 226 of the Constitution are of widest amplitude, still the Courts cannot be oblivious of the rules of self-imposed restraint evolved by this Court. The Court further held that though the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, still it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution.

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22. It can thus be seen that it is more than a settled legal position of law that in such matters, the High Court should not entertain a petition under Article 226 of the Constitution particularly when an alternative statutory remedy is available.”

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11. In such circumstances, once there is an alternative remedy available, we are not inclined to entertain the writ petition.

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12. It is now brought to our notice while dictating the order that thereafter another notice under Section 13 (2) of the SARFAESI Act dated 11.11.2024 had been issued by the Bank on account of the payments made through capital subsidy on earlier occasions, as noticed above.

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13. Thus, in view of the issuance of fresh notice

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under Section 13 (2) of the SARFAESI Act, no fresh notice had been issued under Section 13 (4) of the SARFAESI Act and the cause of action does not accrue. Thus, neither the present writ petition is maintainable nor the petitioner would have a right to approach the Debt Recovery Tribunal in that circumstance. Therefore, the present writ petition becomes infructuous and is dismissed as such.

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14. Pending miscellaneous(s), if any, shall

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also stand disposed of.

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(G.S. Sandhawalia) Chief Justice

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(Ranjan Sharma) Judge

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June 21, 2025

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[Bhardwaj/Chiranjeev]

Procedural history

How this case reached the court

AI extract

Order under challenge
Securitization proceedings initiated in various forms under the SARFAESI Act by respondent No.2-Bank against the petitioner-hotel, including notices under Sections 13(2) and 13(4) and possession measures under Section 14¶11
Punjab National Bank (SARFAESI measures); District Magistrate, Shimla (order under Section 14)
Prior proceeding
Notice under Section 13(2) SARFAESI Act dated 01.11.2023 (Annexure P-3) served on petitioner, classifying outstanding at Rs.14,40,27,088.33 with further interest¶17
Prior proceeding
Reply dated 09.11.2023 (Annexure P-20): no undertaking to pay; only request for Restructuring-cum-Resolution Plan¶17
Prior proceeding
Further reply dated 26.12.2023 (Annexure P-23) requesting withdrawal of the Section 13(2) notice¶18
Prior proceeding
Notice under Section 13(4) SARFAESI Act dated 27.02.2024 (Annexure P-4), referencing possession notice dated 09.02.2024 regarding mortgaged property and calling for dues w.e.f. 01.11.2023¶18
Prior proceeding
Order of possession under Section 14 SARFAESI Act obtained from the District Magistrate, Shimla on 28.04.2024¶22
Prior proceeding
Rs.2.60 crores infused by petitioner as capital subsidy (communication dated 21.03.2024); Bank intimated on 22.03.2024 that account was upgraded on 12.03.2024 and SARFAESI action put on hold per Bank guidelines¶23
Prior proceeding
Letter dated 02.04.2024 from petitioner to Bank stating monthly instalments increasingly burdensome due to shorter repayment period, COVID-19 impact and severe weather conditions¶23
Prior proceeding
Matter taken up before this Court on 06.05.2024 and detailed interim order passed¶25
Prior proceeding
Bank's reply objected to maintainability of writ petition; as on 21.06.2025 approximately Rs.12.43 crores outstanding and Rs.3.45 crores required to upgrade the account¶28
Prior proceeding
Fresh notice under Section 13(2) SARFAESI Act dated 11.11.2024 issued by the Bank on account of payments made through capital subsidy on earlier occasions; no fresh Section 13(4) notice followed¶43

M/S Dee Emm Residency Hotel v. State of Hp and Another

Case brief

What is this about?

What did the court decide?

M/S Dee Emm Residency Hotel v. State of Hp and Another

Case brief

What is this about?

What did the court decide?

What the court decided

Issues for consideration

Cases cited

Statutes considered

Procedural history

Parties & counsel

Coram

Case details

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