Dismissed

M/S Radiant Jasmine Properties v. M/S Tumkur Grain Merchants Co. Operative Bank Ltd.

Karnataka HC5 Apr 2022WP/1930/2022

Case brief

AI extract

What is this about?

The High Court of Karnataka dismissed a writ petition filed by borrowers under Section 13 of the SARFAESI Act. The court rejected the challenge to the sale notice and enforcement proceedings because the petitioners failed to comply with an interim order requiring a deposit of one-third of the demand amount before obtaining relief.

What did the court decide?

The writ petition is disposed of without granting the prayer, and the petitioners are given liberty to approach the Debt Recovery Tribunal.

M/S Radiant Jasmine Properties Vs M/S Tumkur Grain… — Banking and Recovery | Karnataka HC (2022)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 5^TH DAY OF APRIL 2022

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BEFORE

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THE HON’BLE MR. JUSTICE S G PANDIT

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WRIT PETITION NO.1930/2022 (GM-RES)

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BETWEEN :

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M/S. RADIANT JASMINE PROPERTIES “SATYAMS” NO.48/49, 1^ST FLOOR, 9^TH CROSS, SARAKKI MAIN ROAD, OPP. RAJASHEKAR HOSPITAL J.P. NAGAR, 1^ST PHASE, BENGALURU-560 078. REP. BY RAGHAVENDRA REDDY PARTNER.

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M/S. RADIANT STRUCTURES PVT LTD., A COMPANY REGISTERED UNDER COMPANIES ACT 1961, PARTNER- M/S. RADIANT JASMINE PROPERTIES REPRESENTED BY ITS DIRECTOR SRI. M. RAGHAVENDRA REDDY “SATYAMS” NO.48/49 1^ST FLOOR, 9^TH CROSS, SARAKKI MAIN ROAD, OPP. RAJASHEKAR HOSPITAL, J.P. NAGAR, 1^ST PHASE, BENGALURU-560 078.

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SMT. T. ANITHA W/O. M. RAGHAVENDRA REDDY NO.257, 7^TH MAIN, 4^TH CROSS, DOLLARS LAYOUT, J.P. NAGAR, 4^TH PHASE, BANGALORE-560 078. ... PETITIONERS

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(BY SRI. SHANKAR BHAT B. ADVOCATE)

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AND :

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M/S. TUMKUR GRAIN MERCHANTS CO-OPERATIVE BANK LTD, B.H. ROAD, TUMKUR-572 103 KARNATAKA

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BRANCH MANAGER TUMKUR GRAIN MERCHANTS CO-OPERATIVE BANK LTD, YELAHANKA BRANCH, NO.65, A SECTOR, OPP. TO SESHADRIPURAM PU COLLEGE YELAHANKA NEW TOWN, BANGLAORE-560 064. ... RESPONDENTS

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(BY SRI. K.V. LOKESH FOR C/R)

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THIS WRIT PETITION IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED SALE NOTICE DATED 31.12.2021 ISSUED BY THE R-2 ( ANNEXURE-B) AND TO QUASH THE ENTIRE ENFORCEMENT PROCEEDINGS TAKEN BY THE RESPONDENTS UNDER THE SARFAESI ACT AND SECURITY INTEREST ENFORCEMENT RULES 2002 AND TO SET ASIDE THE TENDER CUM AUCTION SCHEDULED TO BE HELD ON 01.02.2022 BY THE RESPONDENTS.

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THIS WRIT PETITION COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:

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O R D E R

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The writ petitioners being the borrowers from 1^st

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respondent – bank are before this Court challenging the sale notice dated 31.12.2021 vide Annexure – B and for

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a writ of certiorari to quash the entire proceedings initiated by the respondent under the Securitization and Construction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘SARFAESI Act’ for short).

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Heard Sri Shankar Bhat, learned counsel for

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the petitioners and Sri K V Lokesh, learned counsel for

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the respondents. Perused the writ papers.

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Admittedly the petitioners borrowed loan from

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the 1^st respondent – bank. As the petitioners failed to repay the loan and as their account being classified as Non Performing Asset, 1^st respondent – bank initiated recovery action under SARFAESI Act. In pursuance to the recovery proceedings impugned sale notice is issued under Rule 8(6) and Rule 9(1) of Security Interest (Enforcement) Rules,2002.

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4. This Court on 01.02.2022 passed the following

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order:

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Issue Emergent Notice.

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Interim order as prayed for is granted subject to petitioners depositing with the respondent-Bank a sum of one-third of the amount in demand, as under:

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(i) 10% of demand amount within two weeks,

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(ii) Another 10% within next two weeks,

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(iii) Yet another 10%, within two weeks next following, failing which not only the interim order stands rescinded on its own and that apart petition itself may be rejected.

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Petitioner was required to deposit 30% of the

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amount due within the time stated above. However, learned counsel for the petitioners fairly submits that the petitioners have failed to comply with the above interim order.

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The jurisdiction under Article 226 of the

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Constitution of India is a discretionary jurisdiction.

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Where the petitioner fails to comply with the interim order, such person would not be entitled for discretionary relief under Article 226 of the Constitution of India. Moreover, the petitioners are provided with alternate remedy to approach the Debt Recovery Tribunal under Section 17 of the SARFAESI Act. Under Section 17 of the SARFAESI Act, any person can approach the Debt Recovery Tribunal against the measures initiated under Section 13 of the SARFAESI Act.

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Hon’ble Apex Court in PHOENIX ARC PRIVATE LIMITED v/s VISHWA BHARATI VIDYA MANDIR AND OTHERS reported in 2022 SCC OnLine SC 44 at paragraphs 33, 34 and 35 has held as follows:

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“33. In the case of City and Industrial Development Corpn. Vs. Dosu Aardeshir Bhiwandiwala, (2009) 1 SCC 168, it was observed by this Court in paragraph 30 that the Court while exercising its jurisdiction under Article 226 is duty bound to consider whether ………………. (c) the

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petitioner has any alternative or effective remedy for the resolution of the dispute.”

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34. In the case of Kanaiyalal Lalchand Sachdev and Ors. (supra) after referring to the earlier decisions of this Court in the cases of Sadhana Lodh Vs. National insurance Co. Ltd. and Anr., (2003) 3 SCC 524; Surya Dev Rai Vs. Ram Chander Rai and Ors., (2003) 6 SCC 675 and State Bank of India Vs. Allied Chemical Laboratories and Anr., (2006) 9 SCC 252 while upholding the order passed by the High Court dismissing the writ petition on the ground that an efficacious remedy is available under Section 17 of the SARFAESI Act, it was observed that ordinarily relief under Articles 226/227 of the Constitution of India is not available if an efficacious alternative remedy is available to any aggrieved person.

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35. Similar view has been expressed by this Court in subsequent decisions in the case of General Manager, Sri Siddeshwara Co-operative Bank Limited & Anr. (supra) as well as in the case of Agarwal Tracom Private Limited (supra).”

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Where the statute provides for alternate remedy, normally this Court would not entertain the petition under Article 226 of the Constitution of India.

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8 . For the reasons stated above, the writ petition

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is disposed of with liberty to the petitioners to approach

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the Debt Recovery Tribunal.

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Sd/- JUDGE

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