Dismissed

Saroja Jute Mills Private Limited v. State Bank of India

Telangana HC23 Nov 2012WP/35395/2012

Case brief

AI extract

What is this about?

The Supreme Court dismissed a writ petition challenging an order of the Debts Recovery Tribunal dismissing an appeals under the SARFAESI Act. Relying on United Bank of India v. Satyawati Tandon, the Court held that High Courts should not normally interfere and directed petitioners to approach the DRT Appellate Tribunal.

What did the court decide?

Writ petition dismissed; petitioners directed to approach the Debts Recovery Appellate Tribunal; no costs.

Saroja Jute Mills Private Limited Vs State Bank of… — Company and Corporate | Telangana HC (2012)

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THE HON’BLE THE ACTING CHIEF JUSTICE SRI PINAKI CHANDRA GHOSE AND THE HON’BLE SRI JUSTICE VILAS V. AFZULPURKAR

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WRIT PETITION NO.35395 of 2012

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DATED:23.11.2012

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Between: Saroja Jute Mills Pvt. Ltd., and others. … Petitioners And State Bank of India, Mumbai and others.

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…. Respondents

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THE HON’BLE THE ACTING CHIEF JUSTICE SRI PINAKI CHANDRA GHOSE AND

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THE HON’BLE SRI JUSTICE VILAS V. AFZULPURKAR

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WRIT PETITION No.35395 of 2012

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Order: (per the Hon’ble the Acting Chief Justice Sri Pinaki Chandra Ghose)

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Challenging the order dated 12.10.2012 passed by the Debts Recovery Tribunal, Visakhapatnam in S.A. No. 68 of 2012, the petitioners filed the present writ petition.

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The brief facts of the case are that the 1^st petitionercompany availed financial assistance from the respondent-bank. However, when the petitioner company committed default in making payment of the loan amount, measures were taken by the respondent-bank under Securitisation & Reconstruction of Financial Assets and Enforcement of Securities Act, 2002 (for short ‘the Act’) and the respondent-bank also brought the properties and the machinery of the 1^st petitioner-company to sale. Challenging the said action of the respondent-bank, the petitioners approached the Debts Recovery Tribunal, Visakhapatnam and filed an appeal, being S.A. No. 68 of 2012. The Debts Recovery Tribunal, through the impugned order, dated 12.10.2012 dismissed the said appeal. Aggrieved by the said

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order, the petitioners filed the present writ petition.

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In view of the law laid down by the Supreme Court in UNITED BANK OF INDIA vs. SATYAWATI TANDON & OTHER S^[1] , the High Court should not normally interfere in these kind of matters. Further, in the aforementioned case, the Supreme Court has specifically held in paragraphs 53 & 55 of the said Judgment thus:

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“53. In Raj Kumar Shivahare v. Directorate of Enforcement(2010) 4 SCC 772, the Court was dealing with the issue whether the alternative statutory remedy available under the Foreign Exchange Management Act,1999 can be by passed and jurisdiction under Article 226 of the Constitution could be invoked. After examining the scheme of the Act, the Court observed:

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“31. When a statutory forum is created by law for redressal of grievance and that too in a fiscal statute, a writ petition should not be entertained ignoring the statutory dispensation. In this case, the High Court is a statutory forum of appeal on a question of law. That should not be abdicated and given a go by by a litigant for invoking the forum of judicial review of the High Court under writ jurisdiction. The High Court, with great respect, fell into a manifest error by not appreciating this aspect of the matter. It has however dismissed the writ petition on the ground of lack territorial jurisdiction.

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32. No reason could be assigned by the appellant’s counsel to demonstrate why the appellate jurisdiction of the High Court under Section 35 of FEMA does not provide an efficacious remedy. In fact, there could hardly be any reason since the High Court itself is the appellate

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forum.”

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55. It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection.”

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In these circumstances, we do not find any reason to interfere with the impugned order passed by the Debts Recovery Tribunal, Visakhapatnam, except directing the petitioners to approach the Debts Recovery Appellate Tribunal.

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The writ petition is accordingly dismissed. No costs.

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__________________________ PINAKI CHANDRA GHOSE, ACJ

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______________________ VILAS V. AFZULPURKAR,J

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23-11-2012 pnb

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[1] (2010) 8 SCC 110

Saroja Jute Mills Private Limited v. State Bank of India

Case brief

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Saroja Jute Mills Private Limited v. State Bank of India

Case brief

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