Borrower challenged SARFAESI proceedings seeking regularisation of housing loan and payment by EMIs. Court held writ petition not maintainable as statute provides efficacious alternate remedy before the Tribunal, following Supreme Court precedents, and dismissed it.
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
WEDNESDAY, THE 3RD DAY OF JANUARY 2024 / 13TH POUSHA, 1945
WP(C) NO. 31175 OF 2022
PETITIONER:
C.M.JOHN,
AGED 48 YEARS
S/O.MATHEW, CHAMAVALAPPIL HOUSE,
NEAR HOLY CONVENT, POTTA, THRISSUR – 680722
BY ADV T.RAJASEKHARAN NAIR
RESPONDENTS:
1 M/S.PEGASUS ASSETS RECONSTRUCTION (P) LTD., NO.31/970 B2, UZHIZELIL TOWERS, 1ST FLOOR, SUBHASH CHANDRA BASE ROAD,PONNURUNNI, VYITTLA P.O., KOCHI - 682019, REP. BY P.M.MOHAN.2 INDUSIND BANK LIMITED, REGISTERED OFFICE, AT 2401, GEN.THIMMAYYA ROAD, PUNE - 411001, REPRESENTED BY ITS MANAGER.BY ADVS.
ANZIL SALIM
LAL K.JOSEPH
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 03.01.2024, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
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WP(C) No.31175 of 2022
JUDGMENT
Dated this the 3rd day of January, 2024
The petitioner has approached this Court aggrieved by initiation of proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
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2nd respondent resorted to SARFAESI proceedings and a Demand Notice was issued for payment of 1,14,98,000/-₹ along with further interest, as per Ext.P1. The 2nd respondentBank also moved the Chief Judicial Magistrate’s Court, Thrissur and obtained an order under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The Advocate Commissioner has issued Ext.P2 Demand Notice. The petitioner states that he is not in a position to remit the amount demanded by the Bank in a lump.
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viable.
entered appearance and resisted the writ petition. The 1st respondent filed a statement. On behalf of the 1st respondent, it is submitted that the petitioner created equitable mortgage of the property having an extent of 3.80 Ares. When the EMIs were defaulted, security proceedings were initiated against the petitioner. The prayer in the writ petition is to regularise the loan and allow the petitioner to pay the amount by the agreed EMI regularly. Due to the failure of the petitioner to
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comply with the agreed terms, the loan account has been
declared as NPA and the debt has been made over to the 1st respondent-Asset Reconstruction Company.
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the other hand, would point out that the loan account was declared as NPA in the year 2018 and the loan account was transferred to the Asset Reconstruction Company on 14.03.2019. In the circumstances, I do not find any illegality in the action of the Bank transferring the loan account to the 1st respondent-Asset Reconstruction Company.
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proceedings are initiated under the SARFAESI Act and any proposed action is to be taken and the borrower is aggrieved by any of the actions of the Private Bank, borrower has to avail the remedy under the SARFAESI Act and no writ petition would lie and is maintainable or entertainable. Filing of writ petitions by the borrower before the High Court under Article 226 of the Constitution of India is an abuse of process of the Court.
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entertained against the proceedings initiated under the SARFAESI Act at the instance of a defaulter since the statute provides for an efficacious alternate remedy.
Philip [2023 (4) KLT 29] , the Apex Court held that when the legislature has provided a specific mechanism for appropriate
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redressal, the powers conferred under Article 226 of the Constitution of India shall be exercised only in extraordinary circumstances.
In the light of the categorical pronouncements of law made by the Apex Court and by this Court, the above writ petition is not maintainable and it is dismissed.
Sd/-
N.NAGARESH
JUDGE
spk
WP(C) No.31175 of 2022
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APPENDIX OF WP(C) 31175/2022
PETITIONER EXHIBITS
EXHIBIT P1A TRUE PHOTOCOPY OF THE DEMAND NOTICE
ISSUED BY THE 1 ST RESPONDENT TO THE
PETITIONER DATED 05.02.2019
EXHIBIT P2A TRUE PHOTOCOPY OF THE NOTICE DATED
18.9.2019 ISSUED BY THE ADVOCATE
COMMISSION IN CRI.M.P. NO.3335/2019 ON
THE FILE OF THE CJM, THRISSUR TO THE
PETITIONER
EXHIBIT P3A TRUE PHOTOCOPY OF THE NOTICE ISSUED
BY THE ADVOCATE COMMISSIONER TO THE
PETITIONER DATED 06.08.2022
EXHIBIT P4A TRUE PHOTOCOPY OF THE JUDGMENT IN
W.P.(C) 25520/2019 DATED 25.8.2022
PASSED BY THIS HONOURABLE COURT
EXHIBIT P5A TRUE PHOTOCOPY OF THE PROPOSAL
SUBMITTED BY THE PETITIONER BEFORE THE
LST RESPONDENT
EXHIBIT P6A TRUE PHOTOCOPY OF THE LETTER DATED
13.9.2022 ISSUED BY THE LST RESPONDENT
RESPONDENT ANNEXURES
ANNEXURE R1(A)TRUE COPY OF THE ASSIGNMENT DEED DATED
14.03.2019
ANNEXURE R1(B)TRUE COPY OF THE ASSIGNMENT INTIMATION
LETTER DATED 5.02.2019 SENT BY THE
ASSIGNOR BANK TO THE RESPONDENTS
ANNEXURE R1(C)TRUE COPY OF THE ACCOUNT STATEMENT FOR
THE PERIOD FROM 29/12/2018 TO
20/11/2019
ANNEXURE R1(D)TRUE COPY OF THE LETTER DATED
28/09/2022 ISSUED BY THE PETITIONER TO
THE 1ST RESPONDENT
EXHIBIT R1(E)TRUE COPY OF THE RBI CIRCULAR
RBI/2022-23/128 DOR.SIG.FIN.REC.75/
26.03.001/2022-23 DATED 11/10/2022
REVIEWING THE REGULATORY FRAMEWORK FOR
WP(C) No.31175 of 2022
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ASSET RECONSTRUCTION COMPANIES (ARCS).
EXHIBIT R1(F)TRUE COPY OF THE JUDGMENT DATED
12/01/2022 OF THE HON'BLE SUPREME
COURT OF INDIA IN PHOENIX ARC PVT.
LTD. V. VISHWA BHARATI VIDYA MANDIR
AND REPORTED AS 2022 (1) KLT ONLINE
1124 (SC)
1 issue framed by the court
Is a writ petition under Article 226 maintainable against SARFAESI proceedings initiated by the bank/asset reconstruction company?
Colour shows how this judgement treated each authority
Phoenix ARC Private Limited v. Vishwa Bharati Vidya MandirRelied on¶11
2022 (1) KLT Online 1124 (SC)
United Bank of India v. Satyawati Tondon and othersRelied on¶13
(2010) 8 SCC 110 · Who else cites this
Authorised Officer, State Bank of Travancore v. Mathew K.C.Relied on¶14
2018 (1) KLT 784
Anilkumar v. State Bank of IndiaFollowed¶15
2020 (2) KLT 756
South Indian Bank Limited v. Naveen Mathew PhilipRelied on¶16
2023 (4) KLT 29
4 provisions across 2 enactments
C.M.JOHN
M/S.PEGASUS ASSETS RECONSTRUCTION (P) LTD.
INDUSIND BANK LIMITED
N.NAGARESH
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court