Dismissed

M/s. Sri Chakra Papers Pvt. Ltd., v. The State Bank of India

Telangana HC10 Feb 2014WP/3625/2014

Case brief

AI extract

What is this about?

The High Court dismissed a writ petition challenging a demand and possession notice under the SARFAESI Act. Relying on Apex Court precedent, the Court held that the borrower must exhaust the statutory appeal under Section 17 before approaching the High Court for extraordinary relief under Article 226.

What did the court decide?

Writ petition dismissed. Miscellaneous petitions pending, if any, shall stand closed.

M/s. Sri Chakra Papers Pvt. Ltd., Vs The State Bank… — Banking and Recovery | Telangana HC (2014)

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THE HON’BLE SRI JUSTICE ASHUTOSH MOHUNTA AND THE HON’BLE SRI JUSTICE M. SATYANARAYANA MURTHY

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WRIT PETITION No.3625 of 2014

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ORDER: (Per the Hon’ble Sri Justice Ashutosh Mohunta)

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The petitioner-M/s.Sri Chakra Papers Private Limited, rep., by Sri Parvathaneni Kaleswara Rao, has filed this writ petition under Article 226 of Constitution of India, seeking to call for the records relating to the proceedings of the respondent vide demand notice dated 29-11-2013 issued under Section 13(2) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the SARFAESI Act’) by the 2^nd respondent and the subsequent possession notice dated 03-02-2014 under Section 13 (4) of the Act read with Rule 6 & 8 of the rules issued by the 2^nd respondent demanding it to repay the amount of Rs.17,71,67,103.37, demand loan of Rs.27,65,267/- as on 27-11-2013+ interest w.e.f.01-11-2013.

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The material available on record shows that the petitioner has not approached the Debt Recovery Tribunal under Section 17 of the Act.

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In the similar circumstances, the Apex court in a judgment reported i n Kanaiyalal Lalchand Sachdev and others Vs State of Maharashtra and [1] others held in para 22 & 23 as follows : An action under Section 14 of the Act constitutes an action taken after the sage of Section 13(4), and therefore, the same would fall within the ambit of Section 17(1) of the Act. Thus the Act itself contemplates an efficacious remedy for the borrower or any person affected by an action under Section 13(4) of the Act, by providing for an appeal before the DRT. The High Court rightly dismissed the petition on the ground that an

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efficacious remedy was available to the appellants under Section 17 of the Act. It is well settled 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 by holding para 22 and 23 therefore uphold the order passed by the High court.

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In another decision reported in General Manager, Sri Siddeshwara [2] Cooperative Bank Limited and another Vs Ikbal and others held in para27 as follows : No doubt an alternative remedy is not an absolute bar to the exercise of extraordinary jurisdiction under Article 226 but by now it is well settled that where a statute provides efficacious and adequate remedy, the High Court will do well in not entertaining a petition under Article 226. On misplaced considerations, statutory procedures cannot be allowed to be circumvented.

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In another decision reported in Hindustan Steel Works Construction Limited and another Vs Hindustan Steel Works Construction Limited

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[3] Employees Union the Apex Court held that when the dispute relates to enforcement of a right or obligation under the statute and a specific remedy is, therefore, provided under the statute, the High court should not deviate from the general view and interfere under Article 226 except when a very strong case is made out for making a departure. The person who insists upon such remedy can avail of the process as provided under the statute.

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Thus in view of settled principles of law referred above when efficacious adequate alternative remedy by way of appeal under Section 17 of the SARFAESI Act is available to any person including borrower without exhausting the statutory efficacious and adequate remedy by way of appeal the petitioner shall not be allowed to circumvent the procedures prescribed by the statute and approach the High Court for extraordinary relief of Writ of Mandamus under Article 226 of Constitution of India.

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The word used any person under clause 1 of Section 17 of the SARFAESI Act, is an inclusive one it includes lessee or any of the person claiming right in the property including the borrower. Therefore, on close analysis of language used under clause 1 of Section 17 of the SARFAESI Act, the writ petitioner claiming to be a borrower has got right to file appeal under Section 17 of the Act, but without exhausting a statutory efficacious and adequate alternative relief has straight away approached this Court seeking extraordinary remedy of Writ of Mandamus, which is impermissible in view of the settled law referred above.

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Hence, in view of the above judgments the writ petition is not maintainable and accordingly, dismissed.

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Accordingly, the writ petition is dismissed. Miscellaneous Petitions pending, if any, shall stand closed. There shall be no order as to costs.

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_______________________ ASHUTOSH MOHUNTA,J.

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M. SATYANARAYANA MURTHY,J.

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Date : 10-02-2014 Rds

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