Punjab-Haryana High Court
M/S Juneja Chemicals Partnership Firm vs The Collector, Jalandhar, Punjab And ... on 22 April, 2024
Author: Lisa Gill
Bench: Lisa Gill
SUNIL CWP No. 8700 of 2024 -1- 123 2024 PHTVVICOS54408 -DB IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP-8700-2024 Date of Decision: 22.04.2024 M/S JUNEJA CHEMICALS (PARTNERSHIP FIRM) bases Petitioner(s) Versus THE COLLECTOR, JALANDHAR, PUNJAB AND OTHERS eees Respondent(s) CORAM:- HON'BLE MRS. JUSTICE LISA GILL HON'BLE MS. JUSTICE AMARJOT BHATTI Present: Mr. Sardavinder Goyal, Advocate for petitioner. nea eae LISA GILL, J.
1. Prayer in this writ petition is for quashing order dated 30.03.2024 (Annexure P-8), whereby warrant of possession of secured asset has been issued. There is a further prayer for directing respondent- Bank to approve One Time Settlement (OTS) proposal submitted by petitioner and stay proceedings initiated against petitioner under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the SARFAESI Act), during pendency of present writ petition.
2. It is submitted that petitioner firm had availed financial credit from respondent-financial institution and mortgaged the property as detailed in para two of writ petition. Financial indiscipline on the part of petitioner, for reasons as may be, is a matter of record and not denied, though, it is submitted that there is grave error in calculating number of installments and the amount due from petitioner. Account of petitioner was 2024.04.26 10:08 | attest to the accuracy and authenticity of this document SUNIL CWP No. 8700 of 2024 -2- declared Non-Performing Asset (NPA) and proceedings under SARFAESI Act initiated with notice(s) under Sections 13(2) and 13(4) of SARFAESI Act being issued on 21.10.2021 and 10.08.2022, respectively. Order under Section 14 of SARFAESI Act was passed on 30.03.2024.
3. Learned counsel for petitioner vehemently argues that proper procedure was not followed by respondent-financial institution while undertaking proceedings under SARFAESI Acct. It is specifically submitted that in the application under Section 14 of SARFAESI Act, there is no mention as to whether property in question is registered with Central Registry of Securitization Asset Reconstruction and Security Interest. Said registration, it is contended was carried out at a later stage. It is further contended that title deeds of two of properties are being illegally retained by respondent-financial institution whereas these properties were neither mortgaged with respondent-financial institution nor any charge taken.
4. We have heard learned counsel for petitioner and have gone through the file with his able assistance, however, we do not find any ground to interfere in this matter at this stage in exercise of jurisdiction under Article 226 of the Constitution of India, keeping in view the categoric provisions of SARFAESI Act. SARFAESI Act is admittedly a complete code in itself. It is a settled position that interference in proceedings under SARFAESI Act in exercise of jurisdiction under Article 226 of the Constitution of India has to be minimal and it is only in exceptional or extraordinary circumstances that intervention should be there. In the case of Union Bank of India vs. Satyawati Tandon and others, 2010(8) SCC 110, it was held by Hon'ble the Supreme Court as:-
2024.04.26 10:08 | attest to the accuracy and authenticity of this document CWP No. 8700 of 2024 -3- SUNIL 2024.04.26 10:08 | attest to the accuracy and authenticity of this document "V7, eee Both, the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and_ effective. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute.
18. While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self-imposed restraint CWP No. 8700 of 2024 -4- SUNIL 2024.04.26 10:08 | attest to the accuracy and authenticity of this document evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad AIR 1969 SC 556, Whirlpool Corporation v.
Registrar of Trade Marks, Mumbai (1998) 8 SCC 1 and Harbanslal Sahnia and another v. Indian Oil Corporation Ltd. and others (2003) 2 SCC 107 and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass appropriate interim order."
SUNIL CWP No. 8700 of 2024 -5-
6. This view has also been reiterated by Hon'ble the Supreme Court in number of cases including that of M/s South Indian Bank Ltd. and others vs. Naveen Mathew Philip and others, 2023 (2) R.C.R. (Civil)
771. Learned counsel for petitioner is unable to point out any exceptional or extra ordinary circumstance which calls for interference by this Court at this stage. All pleas and arguments as raised qua proceedings under SARFAESI Act initiated against petitioner being unjustified, are very well within the realm of consideration by the appropriate Forum/Tribunal under Act.
7. Writ petition is accordingly dismissed with liberty to petitioner to avail remedy(ies) as are available to it in accordance with law while taking up all pleas as may be available.
8. There is no expression of opinion on the merits of the matter. (LISA GILL) JUDGE (AMARJOT BHATTI) JUDGE 22.04.2024 Sunil Whether speaking/reasoned: Yes/No Whether reportable: Yes/No 2024.04.26 10:08 | attest to the accuracy and authenticity of this document