Borrower challenged a SARFAESI possession notice by writ petition while an insolvency petition was pending. Relying on Supreme Court precedent, the Madras High Court held an efficacious alternative remedy lay under Section 17 SARFAESI and dismissed the petition, relegating him to that appeal.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
W.P.No.21799 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 05.08.2024
CORAM :
THE HON'BLE MR.D.KRISHNAKUMAR, ACTING CHIEF JUSTICE AND
THE HON'BLE MR.JUSTICE P.B.BALAJI
W.P.No.21799 of 2024
Ramesh
.. Petitioner
vs
Authorised Officer, State Bank of India, SME Branch, Villupuram, Villupuram District. .. Respondent
Prayer: Petition filed under Article 226 of the Constitution of India seeking issuance of a writ of certiorarified mandamus calling for the records and quash the possession notice dated 13.5.2024 issued by the respondent and direct the respondent to abandon the proceedings initiated under SARFAESI Act till the pending disposal of the I.P.No.10 of 2023 on the file of the Principal District Judge, Pondicherry.
For the Petitioner : Ms.S.Suseela Devi
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W.P.No.21799 of 2024
ORDER
(Order of the Court was made by the Hon'ble Acting Chief Justice)
Questioning the legality of the possession notice dated 13.5.2024 issued by the respondent/bank under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [for brevity, “ the SARFAESI Act ”], the petitioner, who is a borrower, has filed this writ petition.
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which is impugned in this writ petition, the petitioner has an efficacious alternative remedy to prefer an appeal before the Debts Recovery Tribunal under Section 17 of the SARFAESI Act.
4. The Supreme Court in the case of The Authorized Officer, State Bank of Travancore and another Vs. Mathew K.C., reported in (2018) 3 SCC 85 and Agarwal Tracom Private Limited Vs. Punjab National Bank and others, reported in (2018) 1 SCC 626 held that the aggrieved parties cannot challenge the SARFAESI proceedings directly by filing a writ petition under Article 226 of the Constitution of India without exhausting the appeal remedy available to them.
5. In ICICI Bank Limited v. Umakanta Mohapatra, reported in 2018 SCC Online SC 2349, the Supreme Court has referred to the decision in Mathew K.C. case, referred supra, and has observed that despite several judgments, including the decision of Mathew K.C., supra, the High Courts continue to entertain matters which arise under the SARFAESI Act and keep granting interim orders in favour
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W.P.No.21799 of 2024
of persons whose accounts are declared as Non-Performing Assets. Further, the Supreme Court held that writ petition filed by the aggrieved party without exhausting the statutory remedy available under the SARFAESI Act is not maintainable.
"10. In Union Bank of India v. Satyawati Tandon, (2010) 8 SCC 110, it was observed and held by this Court that the remedies available to an aggrieved person against the action taken under Section 13(4) or Section 14 of the
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W.P.No.21799 of 2024
SARFAESI Act, by way of appeal under Section 17, can be said to be both expeditious and effective.
12. In the case of Kanaiyalal Lalchand Sachdev v. State of Maharashtra, (2011) 2 SCC 782, 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. ”
[emphasis supplied]
Bank Ltd and others v. Naveen Mathew Philip and another,
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W.P.No.21799 of 2024
MANU/SC/0400/2023 , deprecated the practice adopted by the High Courts whereby the writ petitions are being entertained as against proceedings initiated by the secured creditor under SARFAESI Act and further held that when the statute prescribes a particular mode, an attempt to circumvent should not be encouraged by the writ Court.
The writ petition is, accordingly, dismissed. There shall be no order as to costs. Consequently, W.M.P.No.23788 of 2024 is closed.
(D.K.K., ACJ.) (P.B.B, J.) 05.08.2024 Index : Yes/No NC : Yes/No sasi
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W.P.No.21799 of 2024
To:
The Authorised Officer, State Bank of India, SME Branch, Villupuram, Villupuram District.
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W.P.No.21799 of 2024
THE HON'BLE ACTING CHIEF JUSTICE AND P.B.BALAJI, J.
(sasi)
W.P.No.21799 of 2024
05.08.2024
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1 issue framed by the court
Whether a writ petition under Article 226 challenging a SARFAESI Section 13(4) possession notice is maintainable without exhausting the appeal remedy under Section 17 before the DRT.
Colour shows how this judgement treated each authority
The Authorized Officer, State Bank of Travancore and another Vs. Mathew K.C.Relied on¶4
(2018) 3 SCC 85 · Who else cites this
Agarwal Tracom Private Limited Vs. Punjab National Bank and othersRelied on¶4
(2018) 1 SCC 626 · Who else cites this
ICICI Bank Limited v. Umakanta MohapatraRelied on¶5
2018 SCC Online SC 2349 · Who else cites this
Phoenix ARC Private Limited v. Vishwa Bharati Vidya Mandir and othersRelied on¶6
(2022) 5 SCC 345 · Who else cites this
South Indian Bank Ltd and others v. Naveen Mathew Philip and anotherRelied on¶7
MANU/SC/0400/2023
3 provisions across 3 enactments
Ramesh
Authorised Officer, State Bank of India, SME Branch, Villupuram
D.Krishnakumar
P.B.Balaji
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
