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Delhi High Court - Orders

Anupama Gupta vs Canara Bank And Ors on 12 November, 2021

Author: Prateek Jalan

Bench: Prateek Jalan

                    $~47 (2021 Cause List)
                    *     IN THE HIGH COURT OF DELHI AT NEW DELHI

                    +           W.P.(C) 12728/2021

                                ANUPAMA GUPTA                                         ..... Petitioner
                                            Through:              Mr. Bheem Sain Jain, Advocate.

                                                   versus

                                CANARA BANK AND ORS                    ..... Respondents
                                            Through: Mr. PBA Srinivasan, Mr. Parth
                                                     Tandon & Ms. P.S. Chandralekha,
                                                     Advocates for Canara Bank.
                                                     Mr. Prabodh Gupta, Proforma
                                                     Respondent No. 3.

                    CORAM:
                    HON'BLE MR. JUSTICE PRATEEK JALAN

                                             ORDER

% 12.11.2021 The proceedings in the matter have been conducted through video conferencing.

CM APPL. 40090/2021 (exemption) Exemption allowed, subject to all just exceptions. The application is disposed of.

W.P.(C) 12728/2021 & CM APPL. 40089/2021 (interim stay)

1. Issue notice. Mr. PBA Srinivasan, learned counsel, accepts notice on behalf of respondent no. 1-Canara Bank ["the Bank"]. Mr. Prabodh Gupta, the proforma respondent no. 3, who is the husband of the petitioner herein, is present in the video-conference hearing and accepts Signature Not Verified Digitally Signed By:SHITU NAGPAL Signing Date:13.11.2021 06:57:28 W.P.(C) 12728/2021 Page 1 of 8 notice on his own behalf and in his capacity as a partner of the respondent no. 2-firm.

2. The petitioner has approached this Court against a notice dated 30.10.2021 by which the Bank has proposed to take possession of her property [D-13, Dayanand Nagar, Ghaziabad, Uttar Pradesh-201002]. The possession notice has been issued pursuant to an order dated 01.04.2021, issued by the District Magistrate, Ghaziabad, under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ["SARFAESI Act"] at the instance of the Bank.

3. Mr. Bheem Sain Jain, learned counsel for the petitioner, states that against the aforesaid order, the petitioner has filed an application before the Debts Recovery Tribunal ["DRT"]-III, Delhi under Section 17 of the SARFAESI Act under Diary No. 1612/2021 dated 10.11.2021. However, the application has not been taken up for hearing in view of the fact that the DRTs in Delhi are, at present, non-functional for want of Presiding Officers.

4. Mr. Srinivasan states that the property has already been sold by the Bank in an auction in March, 2021 and the only step remaining is for the physical possession of the property to be taken by the Bank, and handed over to the auction purchaser.

5. Be that as it may, the petitioner has invoked her statutory remedies under Section 17 of the Act but her application has not yet been heard for the reasons beyond her control. In these circumstances, where the Debts Recovery Appellate Tribunal ["DRAT"] and DRTs in Delhi are at present non-functional, this Court has considered several petitions under Article Signature Not Verified Digitally Signed By:SHITU NAGPAL Signing Date:13.11.2021 06:57:28 W.P.(C) 12728/2021 Page 2 of 8 226 of the Constitution. Although some petitions under Article 226 of the Constitution were entertained, it was thereafter brought to the notice of the Court that the DRAT is empowered to transfer the applications/petitions to another functional DRT within the jurisdiction of the DRAT on the ground of urgency, in exercise of the powers conferred by Section 17(7) of the SARFAESI Act read with Section 17A(2) of the Recovery of Debts and Bankruptcy Act, 1993 ["RDB Act"]. Several orders were passed by the DRAT, Delhi transferring proceedings from the DRTs in Delhi to DRT, Jaipur, which is the only functional DRT within the jurisdiction of the DRAT, Delhi. This Court also disposed of petitions under Article 226 of the Constitution with liberty to the petitioners to approach the DRAT, Delhi for such relief.

6. However, the aforesaid course has now been rendered impossible by virtue of the fact that the learned Chairperson of the DRAT, Delhi has also demitted office on 30.10.2021 in terms of a notification dated 29.10.2021, issued by the Department of Financial Services, Ministry of Finance, Government of India.

7. The question to be considered in these circumstances is whether it would be appropriate to entertain the present proceedings on merits, or for this Court to exercise the power under Section 17(7) of the SARFAESI Act read with Section 17A(2) of the RDB Act, which read as follows:-

Section 17(7) of the SARFAESI Act -

"17- Right to Appeal-

(7) Save as otherwise provided in this Act, the Debts Recovery Tribunal shall, as far as may be, dispose of application in accordance with the provisions of the Signature Not Verified Digitally Signed By:SHITU NAGPAL Signing Date:13.11.2021 06:57:28 W.P.(C) 12728/2021 Page 3 of 8 Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and the rules made thereunder."

Section 17A(2) of the RDB Act -

"17A - Power of Chairperson of Appellate Tribunal xxxx xxxx xxxx (2) The Chairperson of an Appellate Tribunal having jurisdiction over the Tribunals may, on the application of any of the parties or on his own motion after notice to the parties, and after hearing them, transfer any case from one Tribunal for disposal to any other Tribunal"

8. It is clear from the above that the Chairperson of the DRAT has jurisdiction to transfer a case from one DRT under his/her jurisdiction to another DRT. In the present situation where the office of the Chairperson of DRAT, Delhi is also vacant, this Court has taken the view that exercise of such power by this Court would be the appropriate course, as the petitioner's ordinary statutory remedy has been rendered unavailable for reasons beyond its control. Enabling a party to invoke that remedy is preferable to entertaining the case on merits in writ proceedings. Orders to this effect have been passed inter alia in W.P.(C) 12125/2021 [Shrim Industries And Ors. vs. Bank of Baroda And Anr.] and W.P.(C) 12595/2021 [Smt. Kamlesh vs. Indian Overseas Bank] on 10.11.2021.

9. Although the existence of an alternative remedy is not an absolute bar to the exercise of jurisdiction under Article 226 of the Constitution, this Court has relied upon the judgments of the Supreme Court which make it clear, particularly in the context of proceedings under the SARFAESI Act, that the writ jurisdiction should rarely be exercised.

10. In United Bank of India vs. Satyawati Tondon and Others (2010) 8 SCC 110, the Court held as follows:-

"43. 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 a 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, the 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.

xxxx xxxx xxxx

45. 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.

46. 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 Signature Not Verified Digitally Signed By:SHITU NAGPAL Signing Date:13.11.2021 06:57:28 W.P.(C) 12728/2021 Page 5 of 8 financial health of such bodies/institutions, which (sic will) 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 Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 1] and Harbanslal Sahnia v. Indian Oil Corpn. Ltd. [(2003) 2 SCC 107] and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass an appropriate interim order."

(Emphasis supplied.)

11. The observations in Satyawati Tondon (supra) have been followed by the Supreme Court inter alia in Authorized Officer, State Bank of Travancore and Another vs. Mathew K.C. (2018) 3 SCC 85 [paragraphs 5, 9 to 15], and the recent judgment in C. Bright vs. District Collector and Others (2021) 2 SCC 392 [paragraph 22].

12. I am of the view that the transfer of proceedings in the present case also to a functional DRT would be consistent with this approach of the Supreme Court, rather than entertaining the proceedings under Article 226 of the Constitution. Mr. Jain and Mr. Prabodh Gupta both state that they have no objection to the transfer of their Securitisation Application to DRT, Jaipur in the aforesaid facts and circumstances.

13. Mr. Srinivasan states that although the possession of the property was scheduled to be taken today, i.e., 12.11.2021, it has not been taken as the concerned Tehsildar was unavailable. In these circumstances, the Bank will have to approach the Tehsildar for fixation of a date for taking over the possession.

14. For the aforesaid reasons, the writ petition is disposed of with the following directions:

a. The Securitisation Application No. 108/2020, filed by the petitioner and respondent nos. 2 and 3, pending before the DRT-III, Delhi, alongwith the pending Interlocutory Applications therein, are transferred from DRT-III, Delhi to DRT, Jaipur.

b. The Registrar, DRT-III, Delhi, is directed to transmit the records of the said Securitisation Application and pending Interlocutory Applications to DRT, Jaipur digitally. c. Learned counsel for the petitioner is also directed to coordinate with the Registrar DRT, Jaipur, to transmit the digital records of the aforesaid case to the DRT, Jaipur, if so permitted.

d. The proceedings be listed before the DRT, Jaipur for directions/hearing on 24.11.2021 at 2:00 PM. DRT, Jaipur will permit the parties to appear online [through video conference], if they so request.

e. DRT, Jaipur is directed to hear the petitioner's case at least on the question of interim relief, and pass appropriate orders, as expeditiously as possible, and latest by 03.12.2021. f. Subject to any other orders passed by the DRT, Jaipur in terms of the aforesaid directions, the Bank is directed to defer the proceedings for taking physical possession of the property until 07.12.2021 or any date thereafter, as may be fixed by the Tehsildar.

g. As the property has already been sold and the amount recovered by the Bank, no orders for deposit are being made at this stage.

h. The petitioner is directed not to create any third-party interests in the title or possession of the property, and to maintain status quo with regard to the character of the property.

15. It is made clear that this Court has not entered into the merits of the controversy, which is to be decided by the DRT in accordance with law.

16. The writ petition, alongwith the pending application, is disposed of in these terms.

PRATEEK JALAN, J NOVEMBER 12, 2021 'hkaur' Signature Not Verified Digitally Signed By:SHITU NAGPAL Signing Date:13.11.2021 06:57:28 W.P.(C) 12728/2021 Page 8 of 8