Dismissed

Sudhir Kumar Jain v. Canara Bank and Ors.

Punjab & Haryana HC13 Nov 2009CWP/17445/2009

Case brief

AI extract

What is this about?

Petitioner challenged orders under the Securitisation Act alleging violation of natural justice. An interim stay was already in operation, and a statutory appeal was pending before the Appellate Authority. The Court held that exercising jurisdiction was not appropriate given these factors and dismissed the petition.

What did the court decide?

The petition was dismissed with no order as to costs.

Sudhir Kumar Jain Vs Canara Bank and Ors. — Banking and Recovery | Punjab & Haryana HC (2009)

¶1

CWP No.17445 of 2009 : 1 :

¶2

In the High Court of Punjab and Haryana at Chandigarh

¶3

Date of decision: 13.11.2009

Sudhir Kumar Jain

... Petitioner

Versus

Canara Bank through its Chairman and Managing Director, Bangalore and others

¶8

... Respondents

¶9

Present: Mr.Mathew J. Nedumpara, Advocate,for the petitioner. CORAM: HON'BLE MR. JUSTICE PERMOD KOHLI

¶10

PERMOD KOHLI, J. (Oral)

¶11

The petitioner claims to be one of the Directors of M/s. Mangla Cotex Limited, Ludhiana, engaged in manufacturing and export of textiles, garments etc. Admittedly, the company had been advanced loan by respondent No.1-Canara Bank. It is also not in dispute that the Company was unable to pay the loan. The respondents bank initiated proceedings under the Secuaritisation and Reconstruction of Financial Assets and Enforcement of Securities Interests Act, 2002 (hereinafter referred to as “the Act”) against the company. The Company was served a Show Cause Notice under Section 13 (2) of the Act for payment of Rs.75075519.50 vide its notice dated 30.12.2002, copy whereof has been placed on record Annexure P-1. It is also admitted by the petitioner in paragraph 4 of

¶12

CWP No.17445 of 2009 : 2 :

¶13

the writ petition that the respondent-Bank clamped its lock on the godown of the petitioner's factory containing goods worth Rs.6.60 Crores. The validity of the said notice has been assailed. The petitioner filed its response to the notice under Section 13 (2) of the Act. The respondents, however, seem to have passed a final order under Section 13 (4) of the Act and took over the possession of the petitioner's residential house on 02.04.2003. By invoking the aforesaid provision, the properties of the other Directors of the Company also seem to have been taken possession of. The petitioner along with others had also challenged the validity of the Securitisation Act before Hon'ble the Supreme Court. The validity of the Act has already been upheld. The respondent-Bank initiated proceedings against the Company and the petitioner before the Debts Recovery Tribunal. The petitioner appeared before the Tribunal and is contesting the proceedings. Apart from that, the petitioner has also filed a counter claim which is stated to be more than the demanded amount. In the meantime, the petitioner also filed an appeal under Section 17 of the Act being S.A.No.83 of 2007 before the Appellate Authority. It appears that the said appeal was dismissed for default. As a consequence of the dismissal of the Statutory Appeal, the petitioner filed CWP No.3313 of 2009. The petitioner challenged the notice dated 28.01.2009, issued under Section 13 (4) of the Act before this Court. The aforesaid writ petition was, however, disposed of vide order dated 03.03.2009 with the following direction:-

¶14

CWP No.17445 of 2009 : 3 :

¶15

“(i) The learned Debts Recovery Tribunal-II, Chandigarh, shall endeavour to decide OA No.753 of 2006 and SA No.83 of 2007 as early as possible and preferably before 31.5.2009;

¶16

(ii) in case it is found that the petitioners are delaying the disposal of the above mentioned cases, the Tribunal shall be at liberty to modify the interim order earlier granted in their favour. Similarly, the respondent Bank shall also be at liberty to seek vacation/modification of the said interim order;

¶17

(iii) till then, the interim stay granted by the Tribunal on 10.08.2007 shall continue to operate.

¶18

Disposed of.

¶19

Copy dasti on usual charges”.

¶20

The appeal stands restored and the aforesaid order passed by this Court in the writ petition is in currency. It appears that after the bank took over the possession of the residential house, an FIR No.29 was lodged against the petitioner for house tress pass on 25.02.2006. Learned counsel for the petitioner informed this Court that Charge Sheet in the criminal case has already been filed in the Court of competent jurisdiction.

¶21

CWP No.17445 of 2009 : 4 :

¶22

The petitioner is one of the Directors of the Company. He

¶23

has filed this petition seeking the following reliefs:-

¶24

(a) Issue a writ in the nature of certiorari, certiorarified mandamus or any other appropriate writ or order quashing and setting aside the measures under Sections 13 (2), 13 (3) and 13 (4) of the Securitisation Act, the First Information Report No.29 dated 25.02.2006 lodged against the Petitioner and the ongoing criminal trial pending in the Court of Judicial Magistrate Ludhiana based on the said FIR;

¶25

(b) pending the hearing and final disposal of the present petition, stay all further proceedings pursuant to measures under Section 13 (2), 13 (3) and 13 (4) of the Securitisation, the First Information Report No.29 dated 25.02.2006 lodged against the petitioner and the ongoing criminal trial pending in the Court of Judicial Magistrate Ludhiana as also to restore possession of the petitioner's residential premises of which he was illegally dispossessed, forthwith.

¶26

( C) pass such further and other orders as the nature and circumstances of the case may warrant.”

¶27

While the Statutory Appeal is still pending and there is an interim protection in terms of the order dated 03.03.2009, the validity of the order, subject matter of appeal has again been questioned in the present writ petition, primarily on the ground that while passing order under Section 13 (4) of the Act for initiating proceedings, the Authorised Officer has not afforded opportunity of being heard to the

¶28

CWP No.17445 of 2009 : 5 :

¶29

petitioner which, inter-alia, includes the personal hearing. It is also contended that the representation preferred by the petitioner in respect to the impugned order has not been considered, replied and answered adequately. Mr.Mathew, learned counsel appearing for the petitioner has referred to the following authorities :-

¶30

(i) Farid Ahmed Abdul Samad and another Vs. The Municipal Corporation and another, AIR 1976, Supreme Court, 2095;

¶31

(ii) S.L. Kapoor Vs. Jagmohan and others, AIR 1981, Supreme Court, 136;

¶32

(iii) A.K. Kraipak and others Vs. Union of India and others, AIR 1970 Supreme Court, 150;

¶33

(iv) Hari Vishnu Kamath Vs. Ahmad Ishaque and others, AIR 1955, S. C., 233;

¶34

(v) Nawabkhan Abbaskhan Vs. State of Gujarat, AIR 1974, Supreme Court, 1471; and

¶35

(vi) Syed Yakoob Vs. K..S. Radhakrishnan and others, AIR 1864, Supreme Court, 477, to canvass that where there is violation of principle of natural justice, the writ Court can conveniently and effectively exercise powers of judicial review under Articles 226/ 227 of the Constitution of India. His further contention is that mere violation of doctrine of Audi Alteram Partem is itself sufficient to invoke the writ jurisdiction of the High Court.

¶36

CWP No.17445 of 2009 : 6 :

¶37

There is no dispute regarding the proposition sought to be projected by the learned counsel for the petitioner during the course of hearing. The High Court in exercise of jurisdiction under Article 226 of the Constitution, can exercise power of Judicial Review where the High Court is of the opinion that the aggrieved party is without any remedy and in such other appropriate case where no efficacious remedy is available. The fact remains that jurisdiction under Article 226 of the Constitution of India is discretionary jurisdiction. The jurisdiction has to be exercised judicially. In the present case, there are sufficient circumstances which refrain this Court from exercising the jurisdiction; firstly, the petitioner/Company has already preferred Statutory Appeal, which is pending consideration for the last quite some time; Secondly, this Court in CWP No.3313 of 2009 has already passed interim directions which are in operation and shall remain in operation during the pendency of the Statutory Appeal; and Thirdly, that the Charge-Sheet has been filed before the competent Court after investigation in FIR No.29. What has been challenged before this Court is only the Extract of the FIR. Whether the allegations levelled in the FIR has been established by the Investigating Agency, it is not known to this Court. These questions can only be determined by the Court of Competent jurisdiction which is seized of the Charge-Sheet depending upon the material/evidence collected during the course of investigation. During the pendency of the Statutory Appeal, it is not appropriate to exercise discretionary jurisdiction, particularly when the

¶38

CWP No.17445 of 2009 : 7 :

¶39

some protection has already been granted by this Court in the writ petition mentioned above.

¶40

In the totality of the facts and circumstances, I find no merit

¶41

in the present petition and the same is hereby dismissed with no order

¶42

as to costs.

¶43

13.11.2009 (PERMOD KOHLI) BLS JUDGE