Dismissed

Sri. J. Kamatchi Pandian v. the Authorized Officer

Karnataka HC11 Feb 2021WP/909/2017

Case brief

AI extract

What is this about?

In this writ petition challenging forfeiture of bid amount by a bank under SARFAESI Act, the High Court held that the writ petition was not maintainable because an effective alternative remedy existed under Section 18 of the SARFAESI Act before the Appellate Tribunal.

What did the court decide?

Writ petition dismissed; petitioner directed to file appeal before Appellate Tribunal within 30 days.

Sri. J. Kamatchi Pandian Vs the Authorized Officer — Banking and Recovery | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11^TH DAY OF FEBRUARY, 2021

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BEFORE

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THE HON'BLE MR.JUSTICE PRADEEP SINGH YERUR WRIT PETITION NO.909 OF 2017 (GM-RES)

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BETWEEN :

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SRI. J. KAMATCHI PANDIAN S/O JAYARAM RATHNASWAMY, AGED ABOUT 38 YEARS, R/A NO.16, 1ST CROSS, JAYAMAHAL EXTENSION, BENSON TOWN, BENGALURU – 560 046.

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... PETITIONER

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(BY SRI.M.R.RAJAGOPAL., ADVOCATE)

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AND :

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THE AUTHORIZED OFFICER INDIAN BANK, DODDA BANASWADI BRANCH, NO.9, GREEN PLAZA, 1^ST FLOOR, RAMAMURTHY NAGAR MAIN ROAD, DODDA BANASWADI, BENGALURU – 560 043.

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THE CHIEF MANAGER (LAW) INDIAN BANK ZONAL OFFICE, NO.26/27, RAHEJA TOWERS, 4^TH FLOOR, EAST WING, M.G.ROAD, BENGALURU-560 001.

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THE GENERAL MANAGER INDIAN BANK ZONAL OFFICE, NO.26/27, RAHEJA TOWERS, 4^TH FLOOR, EAST WING, M.G.ROAD, BENGALURU-560 001.

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... RESPONDENTS

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(BY SRI.U.S.YOGESH KUMAR, ADVOCATE FOR R1-R3)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE COMMUNICATION DATED 04.09.2015 AS ADDRESSED BY THE R-1 TO THE PETITIONER VIDE ANNXURE-M AND ALSO THE ORDER DATED 18.11.2016 PASSED BY THE DEBTS RECOVERY TRIBUNAL, KARNATAKA, BANGALORE IN S.A.NO.457/2015 AS PER ANNEXURE-N AND ETC.,

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THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioner has called in question the legality and correctness of communication dated 04.09.2015 vide Annexure-M issued by respondent No.1-Bank and also its confirmation by Debt Recovery Tribunal in SA.No.457/2015 dated 18.11.2016, Annexure-N and has also sought to quash the same being is illegal, arbitrary and contrary to law.

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It is the case of petitioner that one M/s. Sai Abivrudhi Infrastructures Pvt Ltd., had borrowed certain money from respondent No.1-Bank and committed default in repayment of loan. Accordingly, the bank initiated proceedings under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (herein after referred as the ‘SARFAESI Act’) and consequently the sale process was commenced by the bank under Rule 6 of Security Interest (Enforcement) Rules, 2002. Based on which, a public notice came to be issued which was published on 03.06.2015 vide Annexure-A, wherein the secured assets were intended to disposed of by conducting e-auction and accordingly date was fixed for inspection of the property on 07.07.2015 and payment of EMD (Earnest Money Deposit) by 08.07.2015. The date of auction was fixed on 10.07.2015 vide AnnexureA which was issued on 03.06.2015.

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Petitioner herein is one of the bidders who

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was participated in e-auction. The bid amount quoted by the petitioner was Rs.50.13 lakhs as against the reserved price of Rs.41.38 lakhs. Petitioner being the highest bidder was accepted and the petitioner was called upon to deposit 25% of the total bid amount. At the time of submitting e-Tender and the said amount was calculated as Rs.12,53,250/-. After confirmation, 25% of the total bid amount including EMD(Earnest Money Deposit) which amount was calculated as Rs.12,53,250/-, out of which 10% of the EMD was paid at the time of submitting e-Tender which was deducted at Rs.4,14,000/-. Therefore, the petitioner had paid 25% of the total bid amount i.e., Rs.12,53,2504,14,000/-=8,39,250/-. The balance 75% of the bid amount was deposited after confirmation of the sale and petitioner to be put in physical possession of the property. Petitioner being the highest bidder and being

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successful in the auction, Annexure-B came to be issued by respondent No.1-Bank calling upon the petitioner for payment of balance amount of 25% of the bid amount, failing which, the bid will be accepted/conferred on the second successful bidder and petitioner would stand to forfeit the EMD.

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Pursuant to the issuance of Annexure-B by the respondent No.1-Bank and on payment of 25% of the bid amount, the petitioner got issued a letter dated 14.08.2015, wherein petitioner sought for property related document and other process by way of an e-mail, wherein the petitioner question the bank being a vacant possession of the property and sought for other legal documents which are mentioned in Annexure-C, pursuant to which respondent No.1-Bank issued a letter as per Annexure-D confirming the sale in favour of the petitioner and sought the petitioner to remit the balance 75 % of the bid amount within a period of 15 days of the

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confirmation, failing which, 25% of the amount which is already deposited would be forfeited. On receipt of Annexure-D dated 14.08.2015, petitioner addressed several letters as per Annexure-E, F and G dated 19.08.2015, 20.08.2015 and 26.08.2015 respectively wherein petitioner questioned the process initiated by respondent No.1-Bank with regard to possession not having been taken from the borrower while putting up the sale notice as per Annexure-A dated 03.06.2015 and therefore petitioner questioned the entire process of the bank in initiating the sale without taking physical possession of the property.

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Respondent No.1-Bank got issued a letter dated 28.08.2015 as per Annexure-H and vide this letter the bank sought for payment of 75 % of bid amount within a period of 15 days from the petitioner. Thereafter, since the petitioner/auction purchaser had not paid the balance amount, a letter dated 04.09.2015

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came to be issued by respondent No.1-Bank vide Annexure-M forfeiting 25% of the bid amounting to Rs.12,53,250/- and forfeited all the rights as a successful bidder over the said immovable property, in view of non payment of balance of 75% of the bid amount as per Rule 9 (5) of the Security Interest (Enforcement Rules, 2002).

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Aggrieved by this order of forfeiture which is issued at Annexure-M, petitioner filed an application before the Debt Recovery Tribunal, Bengaluru, Karnataka, under Section 17 of the SARFAESI Act in S.A.No.457/2015.

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The petitioner approached the said Tribunal with regard to the illegalities and unfair practice by respondent No.1-Bank and sought for refund of the said amount which was forfeited by the bank or in the alternative to accept the remaining 75% of the bid amount and confirm the sale and execute the sale deed

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in favour of the petitioner herein. After having heard the learned counsel for both the parties, the Tribunal rejected the appeal vide its order dated 18.11.2016.

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Aggrieved by the order of rejection of the application before the Tribunal, petitioner has approached this Court invoking its discretionary jurisdiction under the Article 226 of Constitution of India and challenged Annexure-M, letter of communication dated 04.09.2015 of forfeiture and the order of the Debt Recovery Tribunal at Annexure-N. Petitioner has also sought for the alternative relief of directing respondent No.1-Bank to refund 25% bid amount deposited by the petitioner along with interest at 12%p.a. forthwith.

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Respondent No.1-Bank has filed statement of objections mainly contending that the writ petition filed by the petitioner is not maintainable on two grounds. Primarily, on the ground that there is alternative efficacious remedy available to the petitioner to

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challenge the order of the Tribunal before the DRAT (Debt Recovery Appellate Tribunal) under Section 18 of the SARFAESI Act, 2002. Apart from that the respondents also have taken the plea that the order passed by the Tribunal is in accordance with law and has followed due process of law. It is further pleaded that there is no illegality committed by the bank while issuing sale notice or while forfeiting 25% of the bid amount. On the process & procedure of the auction conducted by the bank, the respondent has stated that there is absolutely no illegality, misrepresentation and same is in accordance with law.

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Heard Sri.M.R.Rajgoapal, learned counsel for the petitioner and Sri.U.S.Yogesh Kumar, learned counsel for the respondents.

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It is the contention of the learned counsel for

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the petitioner that petitioner is innocent common man without having any knowledge of law and he being a

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layman not a lawman, is not bound to know the illegal intricacies of the proceedings of the bank or otherwise. Learned counsel contends that respondent No.1-Bank while issuing the notice vide Annexure-A dated 03.06.2015 has not come up with clean hands and has played fraud on the public and petitioner in particular, as they have not mentioned in the sale notice with regard to physical possession having not taken by the bank and that the possession as mentioned in Annexure-A taken on 23.04.2015 is only symbolic possession which is now submitted before the Court by the respondent. This factual matter has been deliberately suppressed which amounts to misrepresentation, misleading Court and therefore he contends that there is unfair play by respondent No.1- Bank.

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Learned counsel further contends that it is specifically mentioned in the sale notice vide Annexure-A that the authorized officer of the bank has taken

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possession of the schedule premises on 23.04.2015, after complying with all legal formalities is prima facie incorrect. The layman understanding all these sentence would be that the Bank is in possession of the property and there are no encumbrance or discrepancies with regard to either possession or documentation of the schedule property. On the basis of the said statement made by the bank in the sale notice, petitioner had participated and was a successful bidder and believing that the Bank would act in fair manner, petitioner deposited EMD initially and thereafter on calling upon 25% of the bid amount has paid up as sought for without delay. It is only thereafter, the petitioner realized that the bank is not in physical possession of the property in question and hence he wanted to check and verify the documents of the property. Thereafter, the petitioner received a letter from the Bank to deposit the balance 75% of the bid amount vide Annexure-D. Pursuant to which, petitioner issued several letters

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asking the bank to show bonafides with regard to physical possession of the property and also several documents was sought for by the petitioner. Since the sale documents were not produced, petitioner did not pay the balance amount.

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Learned counsel for the petitioner contends that Annexure-M issued by respondent No.1-Bank for forfeiture of amount for non-payment of balance 75% of the bid amount is illegal and contrary to the law. Therefore he contends that when the bank itself is not in possession of the property which they sought for auction vide Annexure-A, it was the mistake of the bank for putting up such a false notice to the public and thereby the bank has played fraud and cheated the petitioner. Issuance of the notice itself is bad in law, hence the petitioner has approached the DRT(Debt Recovery Tribunal), challenging the letter of forfeiture, AnnexureM.

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Learned counsel further contends that all

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these aspects of not following legal process as contemplated under the Act was brought to the notice of the Tribunal with regard to provisions of Section 13(4) and 13(6) and 14 of the SARFAESI Act, 2002 but, the same was not considered by the Tribunal but in a mechanical manner dismissed the application filed by the petitioner. Learned counsel further contends that there is violation of the provisions of the Section 14 of the SARFAESI Act and so also there is violation of provisions of the Section 13(6) of the SARFAESI Act. These aspects have been ignored by the Tribunal despite bringing to its knowledge. Learned counsel further contends that the petitioner being a layman on the belief that the bank would be exercising its fair jurisdiction in selling the property by way of auction was on the bonafide belief that the statements made in the said notice vide Annexure-A would be truthful, participated in

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the bid and was a successful bidder, but little did he know that the bank was not trustworthy and he realized that the bank has not taken the possession as contemplated under Section 14 of the SARFAESI Act. Learned counsel further contends that respondent No.1Bank has not made fair commitment to the petitioner but rather has made unjust, enrichment which cannot be ignored by this Court.

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Learned counsel further contends buying a property for a common man of middle class is a life time investment and once in a time chance, as he would be putting his entire effort of his lifetime to save huge amount to buy an immovable property, which would be the dream of any middle class person, only with an intention to have shelter over his head, therefore the petitioner had an intention of buying the property and accordingly he had deposited 25% of bid amount and it was only because of the inability of the Bank to secure

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physical possession, he had not made payment of the balance 75% of the amount. Learned counsel further contends, these aspects were brought to the notice of the Tribunal which has not considered any of the aspects canvassed by the petitioner and the Tribunal has held that the petitioner having participated in the auction sale ought to have been aware of the terms and conditions of the sale and he did not raise any objection at the time of participation in the bid and even thereafter unconditionally accepted the terms and conditions of the Bank, with the property being sold on “as is where is and as is what is basis” and on the basis of non objection by the petitioner and as per Rule 9(5) of the Security interest (Enforcement) Rules, 2002, forfeiture made by the bank as against 25% of the bid amount held to be right and dismissed the application filed by the petitioner.

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16. Learned counsel vehemently contends that

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there is absolutely non application of mind by the Tribunal in not considering the aspects of unfair play, unjust enrichment and has passed cryptic order which is non speaking order and therefore the same deserves to be set aside and quashed. Learned counsel further contends that the Tribunal vide Annexure-N has not assigned any reasons for dismissal of the application made by the petitioner and therefore on this count also the order passed by the Tribunal is liable to set aside.

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Learned counsel further contends that on the

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aspect of maintainability of the writ petition that this Court has immense powers to deal with the matter where there is illegalities committed on the face of the records, judicial review is permissible within the powers of this Court under Article 226 of Constitution of India to set right an order which is illegal, therefore despite the fact that there being alternative remedy available in

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provisions of the SARFAESI Act, learned counsel for the petitioner contends that remedy under Article 226 of Constitution of India is not barred and this Court would be well within its powers to set right the illegalities apparent on the face at Annexures-M & N and hence he seeks to quash Annexures-M and N. Learned counsel places his reliance on the following judgments in support of his case.

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1988 (8) SCC 1 WHIRPOOL CORPORATION Vs. REGISTRAR OF TRADE MARKS, MUMBAI AND OTHERS.

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2018 (6) SCC 162 BHARATI REDDY Vs. STATE OF KARNATAKA AND OTHERS.

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ILR 1987 Page-973.

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ILR 2015 KAR 3060.

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E.ALI Vs. SYNDICATE BANK AND OTHERS in W.P.No.15546/2011.

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K.P.TEXTILES (COIMBATORE) P.LTD., Vs. THE AUTHORISED OFFICER in W.P.No.38487/2014.

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Per contra, learned counsel appearing on behalf of the respondents vehemently contends that the bank has got issued the sale notice dated 03.06.2015 pursuant to taking possession on 23.04.2015 as per Section 13(4) of the SARFAESI Act. Thereafter bank has conducted the auction as contemplated under law and stipulated and specified the date for auction on 10.07.2015 and provided the date of inspection by purchaser of the property as well as inspection of documents on 07.07.2015. Thereafter date was fixed for payment of EMD on 08.07.2015. Learned counsel contends that the petitioner herein had inspected the schedule property and all the relevant documents and after verification of the same, participated in the auction sale.

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Learned counsel further contends that aggrieved by the sale notice dated 03.06.2015 vide

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Annexure-A, the borrower infact had filed an application before the Tribunal in S.A.No.219/2019, wherein the Tribunal had granted interim order and deferred auction sale subject to the borrower paying 15% of the outstanding dues. Since the borrower had not paid the outstanding amount due the interim order came to be vacated and the application filed by the borrower came to be dismissed.

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Learned counsel for the respondents contends that the auction was continued pursuant to vacating of the interim order and thereafter the bank issued sale confirmation and requested to the petitioner to pay balance 75% of the bid amount within 15 days petitioner herein had not paid balance amount of 75% as sought for by the bank. Respondent No.1-Bank exercising its powers under the Rules 9(5) of Security Interest (Enforcement) Rules, 2002, forfeited 25% of the bid amount deposited by the petitioner by its letter

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dated 04.09.2015 at Annexure-M. Learned counsel for the respondent contends that as per Rule 9(4), the balance of purchase price shall be paid by the purchaser to the Bank on or before 15 days of confirmation of the sale of immovable property and or such extended date as made to be agreed upon between the purchaser and secured creditor. He contends that in the present case, the petitioner having not paid the balance amount, forfeiture clause invoked by the Bank is in accordance with law. As per Rule 9(5) of Security Interest (Enforcement) Rules, 2002 there is no illegality or perversity in auction initiated by respondent No.1-Bank.

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Learned counsel further contends that petitioner after having participated and invoked Section 17 of the SARFAESI Act before the Tribunal in S.A.No.457/2015 and having exhausted the remedy available before the Tribunal and being very well aware and having knowledge of the fact that the next available

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remedy is before Appellate Authority under Section 18 of

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the SARFAESI Act has willfully and deliberately not invoked the said provisions, rather he has taken a short cut to approach this Court under Article 226 of the Constitution of India, which is impermissible, as the alternative remedy is available to be exercised by the petitioner. Learned counsel further contends that the petition is not maintainable, as once there is an alternative efficacious remedy available, the petitioner cannot approach this Court to invoke its discretionary reliefs under Article 226 of the Constitution of India. On the basis of these submissions, he seeks for dismissal of the writ petition.

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Learned counsel for the respondents relies on

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the following judgments in support of his case:

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2016 (1) SCC 626, AGARWAL TRACOM PRIVATE LIMITED Vs. PUNJAB NATIONAL BANK AND OTHERS

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2010 AIR SCW 5267, UNITED INDIA Vs.SATYAVATHI TANDON.

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AUTHORISED OFFICER Vs. STATE BANK OF TRAVANCORE AND ANOTHER in CIVIL APPEAL No.1281/2018.

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ICICI BANK LTD Vs. UMAKANTA MOHAPATRA AND OTHERS in CIVIL APPEAL No.10243-10250/2018.

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Having heard the learned counsel for the petitioner and learned counsel for the respondents the point for consideration before this Court is, whether the petition filed by the petitioner, could be entertained by this Court or would it have to be dismissed on the ground of issue of maintainability.

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It is not in dispute that the petitioner is a a successful bidder in auction conducted by respondent No.1-Bank on 10.07.2015. It is also not in dispute that the petitioner had paid the EMD and thereafter paid the 25% of the bid amount after being selected as a

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successful bidder. It is also not in dispute that respondent No.1-Bank sought for payment for balance bid amount from the petitioner treating him as a successful bidder. It is a fact that due to non-payment of balance 75% of the bid amount by the petitioner, respondent got issued a letter Annexure-M for forfeiture of 25% of the bid amount. Though it is seen that the sale notice got issued by respondent No.1-Bank as per Annexure-A depicts that the possession of the schedule property was taken by the Authorized Officer of the bank on 23.04.2015 after complying all legal formalities, it does not specify as to whether the possession is symbolic or physical possession which is questioned by the petitioner as being misleading by the bank. It is also relevant to note that there are several other dates mentioned in the sale notice, wherein the inspection of the documents of the property and the physical property, date was given as 07.07.2015. These are specifically mentioned in the sale notice with regard to

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the verification, inspection of documents and the physical inspection of the property.

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Though it is the contention of the learned counsel for the petitioner that the possession that is described under Annexure-A is not physical possession and that is not clearly forthcoming as to whether the same is symbolic possession, this fact of the matter is misleading the petitioner. Therefore, there is violation by respondent No.1-Bank and suppression of material fact by respondent No.1-Bank. However, this Court would not venture to go into the aspects whether sale notice is in accordance with law or not. It would be essential to decide whether the petition filed by the petitioner before this Court is in view of alternative efficacious remedy available, as same could act detrimental to the interest of the petitioner, after finding is given by this Court. Therefore, this Court would firstly take up the aspect of maintainability of writ petition itself; Petitioner having

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exercised his option of filing the application before the DRT (Debt Recovery Tribunal), was aware of the fact, that there is remedy available to be exercised before the Tribunal and therefore in his wisdom he approached the Tribunal and after putting forth all his grievance is unsuccessful before the Tribunal. Pursuant to which, the petitioner has approached this Court against the order of the Tribunal.

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In this view of the matter it is essential to extract Section 18 of the SARFAESI Act, which reads as under:

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18. Appeal to Appellate Tribunal.— (1) Any person aggrieved, by any order made by the Debts Recovery Tribunal 2[under section 17, may prefer an appeal along with such fee, as may be prescribed] to an Appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery Tribunal.

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3[Provided that different fees may be prescribed for filing an appeal by the borrower or by the person other than the borrower:]

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4[Provided further that no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal fifty per cent. of the amount

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of debt due from him, as claimed by the secured creditors or determined by the Debts Recovery Tribunal, whichever is less:

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Provided also that the Appellate Tribunal may, for the reasons to be recorded in writing, reduce the amount to not less than twenty-five per cent. of debt referred to in the second proviso.]

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(2) Save as otherwise provided in this Act, the Appellate Tribunal shall, as far as may be, dispose of the appeal in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and rules made thereunder.

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It is seen that any person who is aggrieved by the order made by the DRT (Debt Recovery Tribunal), may prefer an appeal to the Appellate Tribunal within 30 days from the date of receipt of the order of the Tribunal. It is the specific provision provided in the Act, for any person who is aggrieved by the order passed under Section 17 of the SARFAESI Act. Therefore, the petitioner would squarely come within the definition of any person as he has already exercised his rights challenging the order passed by the bank before the DRT (Debt Recovery Tribunal). So it is apparent on the face of the records

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that the petitioner having suffered the order, ought to have approached the Appellate Tribunal under Section 18 of the SARFAESI Act. Whereas, the petitioner has rushed to this Court knocking at the doors of writ court to invoke the discretionary jurisdiction under Article 226 of the Constitution of India. It is no doubt true that there is no bar for this court to exercise its jurisdiction to entertain the petition in 3 contingencies as stated in decision of Whirpool Corporation Vs. Registrar of Trademarks, Mumbai and others stated supra wherein 3 conditions enumerated there in are:

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Where the writ petition has been filed for the Enforcement of any of the fundamental rights or

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Where there has been a violation of principle of natural justice or

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Where the order or proceedings are wholly without jurisdiction or vires of an Act is challenged.

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It is for the petitioner to establish that the principle of natural justice has been violated or all the conditions stated above is violated and there is alternative efficacious remedy available. It is also clearly held that the courts would normally not interfere its jurisdiction when there is alternative efficacious remedy available unless there are good grounds to interfere thereof.

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In my considered opinion the writ courts in its jurisdiction would not interfere in any matter where alternative efficacious remedy is available to the petitioner. The Rule of exhaustion of alternative efficacious remedy is the Rule of dismissal and not one of compulsion but, it is difficult to fathom any reason as to why the High Court should interfere the petition filed under Article 226 of Constitution of India when the petitioner can effectively avail alternative efficacious remedy available to him and for this reason the

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legislature has provided the efficacious alternative remedy as the mechanism for redressal of the grievances of the parties. It is apparent and the matter of fact that the petitioner has already exercised his option of going before the Tribunal under Section 17(1) of the SARFAESI Act and pursuant to that the available remedy for the petitioner to exercise his option under Section 18 of the SARFAESI Act to file the appeal challenging the order of the Tribunal. Therefore the petitioner ought to have approached the Appellate Tribunal before approaching this Court under Article 226 of the Constitution of India.

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Learned counsel for the petitioner

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vehemently relied on the judgment of the Co-ordinate Bench of this Court, wherein, on similar set of facts and circumstances a writ petition came to be filed before this Court and similar issues were raised where the possession was not taken by the bank under Section 13

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(6) and 14 of the SARFAESI Act, and similarly placed as the petitioner in the said case, the amount was forfeited by the Bank which was challenged before Writ Court and the same was accepted and allowed, quashing the forfeiture notice issued by the Bank. Similarly, learned counsel relied on the judgment of K.P.TEXTILES (COIMBATORE) P.LTD., Vs. THE AUTHORISED

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OFFICER stated Supra by the Co-ordinate Bench of this Court.

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On careful perusal of these judgments, it is seen that, the latest judgment of the Hon’ble Apex Court judgment in the case of AGARWAL TRACOM PRIVATE

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LIMITED Vs. PUNJAB NATIONAL BANK AND OTHERS

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which is of the year 2018; This judgment could not have been considered by the co-ordinate bench of this Court while deciding the facts of two judgments of the year 2015 and 2016. The question involved is the same in the case of AGARWAL TRACOM PRIVATE LIMITED Vs. PUNJAB NATIONAL BANK AND OTHERS , where the

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Hon’ble Apex Court decided this matter as to whether the Writ Court or the Appellate Court was deciding in dismissing the applicant’s writ petition on the ground of availability of alternative statutory remedy of filing application before the Tribunal. The Hon’ble Apex Court while considering this issue relied on the judgment of

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UNITED BANK OF INDIA Vs. SATYAWATI TANDON

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AND OTHERS, 2010 (8) SCC 110 and held as under

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“42. There is another reason why the impugned order should be set aside. If respondent No.1 had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14, then she could have availed remedy by filing an application under Section 17(1). The expression “any person” used in Section 17(1) is of wide import. It takes within its fold, not only the borrower but also guarantor or any other person who may be affected by the action taken under Section 13(4) or Section 14. Both, the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective.

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Unfortunately, the High Court overlooked the settled law 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 and 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. In our view, 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 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. Therefore, in all such cases, High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute.

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44. While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the five prerogative writs for the Enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self-imposed restraint evolved by this Court, which every High Court is

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bound to keep in view while exercising power under Article 226 of the Constitution.

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45. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance.”

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And held that :

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In the light of the foregoing discussion, we are of the considered opinion that the writ court as also the appellate court were justified in dismissing the appellant’s writ petition on the ground of availability of alternative statutory remedy of filing an application under Section 17(1) of the SARFAESI Act before the Tribunal concerned to challenge the action of PNB in forfeiting the appellant’s deposit under Rule 9(5). We find no ground to interfere with the impugned judgment of the High Court.

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Therefore, in view of the judgment of the Hon’ble Apex Court in the case of AGARWAL TRACOM PRIVATE LIMITED Vs. PUNJAB NATIONAL BANK AND OTHERS ,

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stated supra it is no more resintegra with regard to availability of option of exercising the remedy for the petitioner would be before the Appellate Authority that is passed by the DRT (Debt Recovery Tribunal) aggrieved by the orders passed under section 17(1) of the SARFAESI Act. It is also necessary to add that all the contentions and grievances raised by the learned counsel for the petitioner with regard to the validity and authority of the Bank and unfair play made by the bank while issuing the sale notice and the suppression of the facts in the sale notice could be agitated before the Appellate Authority.

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Therefore this Court is not inclined to deal

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with any of those aspects as the same would prejudice the mind of the Appellate Authority and so also it would

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be detrimental to the petitioner. It suffices to say that the petitioner will be at liberty to canvas all his arguments of facts of law before the Appellate Authority as that would be the remedy/forum for him to address his grievances. Therefore point No.1 would be answered in the negative, as the writ petition would not be maintainable. For the aforesaid reasons, I pass the following:

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ORDER

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1. Writ petition is dismissed . No costs.

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It is needles to mention that this Court has not expressed any opinion with regard to merits of the matter. Parties are at liberty to urge questions of fact or on point of law.

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