Madhya Pradesh High Court
M/S Gurukripa Milk And Milk Product ... vs Bank Of India on 23 July, 2024
Author: Sushrut Arvind Dharmadhikari
Bench: Sushrut Arvind Dharmadhikari
1 WP-20424-2024
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
HON'BLE SHRI JUSTICE DUPPALA VENKATA RAMANA
ON THE 23rd OF JULY, 2024
WRIT PETITION No. 20424 of 2024
M/S GURUKRIPA MILK AND MILK PRODUCT THROUGH ITS
PROPRIETOR MR. LALIT CHOUDHARY AND ANR.
Versus
BANK OF INDIA AND OTHERS
Appearance:
Shri Ashutosh Nimgaonkar, counsel for the petitioners.
Shri Bhuwan Gautam, counsel for the respondents No. 2 and 3/State.
ORDER
Per: Justice Sushrut Arvind Dharmadhikari Heard on the question of admission and interim relief. By this writ petition under Article 226 of the Constitution of India, the petitioners are assailing the impugned e-auction dated 09.07.2024 (Annexure P/1) issued by the Bank and order dated 28.08.2019 (Annexure P/2) passed by the Additional District Magistrate, Dewas claiming for the following reliefs :
(a) Direct the respondent Bank not to confirm the auction sale if the auction has been successfully conducted; and/or
(b) Direct the respondent Bank not to issue sale certificate if the auction is confirmed; and/or
(c) Direct the respondent Bank not to execute and register sale certificate, if issued; and/or Signature Not Verified Signed by: SREEVIDYA Signing time: 24-07- 2024 19:02:33
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(d) To direct the respondent Bank to keep in abeyance any execution of order passed by the Ld. Additional Magistrate, Dewas under Section 14 of the Act, 2002.
(e) To grant stay on any coercive action being taken by the respondent bank in pursuance of the order issued by the Ld. Additional District Magistrate, Dewas under Section 14 of the Act, 2002 till the time the petitioner approaches the Hon'ble DRT, Jabalpur which at present in non-functioning.
(f) Alternatively grant breathing time to the petitioners to obtain Ad- Interim protection in Securitization Application under Section 17 of the Act, 2002 before the Hon'ble DRT-Jabalpur against the impugned order.
(g) To direct the Ld. DRT, Jabalpur to take the Securitization Application filed by the petitioner on priority and dispose the same expeditiously.
(h) Any other relief(s), which this Hon'ble Court may deem fit to be granted to the petitioners under the facts and circumstances of the present case.
02. Shorn of unnecessary details, the relevant facts are that the petitioners took financial assistance of Rs. 7,20,00,000/- from the respondents / Bank by way of equitable mortgage of properties situated at Survey Nos. 925/1, 1009/1, 1087, 1085, 1025 and 1024/1, PH No. 8, village Pipliyasadak Dewas, Mazi NH-52 Road, Tehsil Tonkkhurd, District Dewas, (MP). Thereafter, the respondent Bank issued notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the 'SARFAESI Act') which allegedly has not been served upon the petitioners. The Signature Not Verified Signed by: SREEVIDYA Signing time: 24-07- 2024 19:02:33 3 WP-20424-2024 respondent Bank also took symbolic possession of the property and proceeded to file application under Section 14 of the Act before the ADM, Dewas. The Ld. ADM passed impugned order dated 28.08.2019 for delivery of physical possession of the subject property. The bank has proceeded for e-auction of the property on 09.07.2024.
03. Learned counsel for the petitioners contended that against the aforesaid act of the respondent/Bank, petitioners have approached the learned Debts Recovery Tribunal, Jabalpur by way of Securitization Application No. 681/2024 under Section 17 of the Act of 2002. However, the application as well as the stay application is still pending before the DRT due to non-functioning of the Tribunal on from 18.07.2024 to 26.07.2024. Hence, this petition.
04. Heard learned counsel for the petitioners.
05. In series of cases, this Court is of the consistent view that the writ petitions cannot be entertained when there is an efficacious statutory remedy of appeal available to petitioner. The Apex Court in case of M/s South Indian Bank Ltd. & Ors. vs. Naveen Mathew Philip & Anr. Etc. Etc., 2023 SCC Online SC 435 has reiterated the settled position of law on the interference of the High Court invoking Article 226 of the Constitution of India in commercial matters when an effective and efficacious alternative forum has been constituted through the statute. The Apex Court even went on to say that we are also constrained to take judicial notice of the fact that certain High Courts continue to interfere in such matters, leading to a regular supply of cases before this Court. One such High Court is that of Punjab & Signature Not Verified Signed by: SREEVIDYA Signing time: 24-07- 2024 19:02:33 4 WP-20424-2024 Haryana.
06. In paragraph 14 of the judgment in case of South Indian Bank Ltd. & Ors (supra), the Apex Court has held as under :
''14. A writ of certiorari is to be issued over a decision when the Court finds that the process does not conform to the law or statute. In other words, courts are not expected to substitute themselves with the decision-making authority while finding fault with the process along with the reasons assigned. Such a writ is not expected to be issued to remedy all violations. When a Tribunal is constituted, it is expected to go into the issues of fact and law, including a statutory violation. A question as to whether such a violation would be over a mandatory prescription as against a discretionary one is primarily within the domain of the Tribunal. So also, the issue governing waiver, acquiescence, and estoppel.....
15. .......
16. Approaching the High Court for the consideration of an offer by the borrower is also frowned upon by this Court. A writ of mandamus is a prerogative writ. In the absence of any legal right, the Court cannot exercise the said power. More circumspection is required in a financial transaction, particularly when one of the parties would not come within the purview of Article 12 of the Constitution of India. When a statute prescribes a particular mode, an attempt to circumvent shall not be encouraged by a writ court.
A litigant cannot avoid the noncompliance of approaching the Tribunal which requires the prescription of fees and use the constitutional remedy as an alternative. ...........''
07. The Apex Court, in case of State Bank of Travancore vs. Mathew K.C., (2018) 3 SCC 85, has held as under :
''5. We have considered the submissions on behalf of the parties. Normally this Court in exercise of jurisdiction under Article 136 of the Constitution is loathe to interfere with an interim order passed in a pending proceeding before the High Court, except in special circumstances, to prevent manifest injustice or abuse of the process of the court. In the present case, the facts are not in dispute. The discretionary jurisdiction under Article 226 is not absolute but has to be exercised judiciously in the given facts of a case and in accordance with law. The normal rule is that a writ petition under Article 226 of the Constitution ought not to be entertained if alternate statutory remedies are available, except in cases falling within the well defined exceptions as observed in Commissioner of Income Tax and Others vs. Chhabil Dass Agarwal, 2014 (1) SCC 603, as follows:
''15. Thus, while it can be said that this Court has recognised some exceptions to the rule of alternative remedy i.e. where the statutory Signature Not Verified Signed by: SREEVIDYA Signing time: 24-07- 2024 19:02:33 5 WP-20424-2024 authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, the proposition laid down in Thansingh Nathmal vs. Supt. of Taxes, AIR 1964 SC 1419, Titaghur Paper Mills Co. Ltd. vs. State of Orissa, (1983) 2 SCC 433 and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation.''
6. ......
7. ......
8. The statement of objects and reasons of the SARFAESI Act states that the banking and financial sector in the country was felt not to have a level playing field in comparison to other participants in the financial markets in the world. The financial institutions in India did not have the power to take possession of securities and sell them. The existing legal framework relating to commercial transactions had not kept pace with changing commercial practices and financial sector reforms resulting in tardy recovery of defaulting loans and mounting non-performing assets of banks and financial institutions. Narasimhan Committee I and II as also the Andhyarujina Committee constituted by the Central Government Act had suggested enactment of new legislation for securitisation and empowering banks and financial institutions to take possession of securities and sell them without court intervention which would enable them to realise long term assets, manage problems of liquidity, asset liability mismatches and improve recovery. The proceedings under the Recovery of Debts due to Banks and Financial Institutions Act, 1993, (hereinafter referred to as 'the DRT Act') with passage of time, had become synonymous with those before regular courts affecting expeditious adjudication.
All these aspects have not been kept in mind and considered before passing the impugned order.
9. Even prior to the SARFAESI Act, considering the alternate remedy available under the DRT Act it was held in Punjab National Bank vs. O.C. Krishnan and others, (2001) 6 SCC 569, that :-
''6. The Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial institutions. There is a hierarchy of appeal provided in the Act, namely, filing of an appeal under Section 20 and this fast-track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision under an Act cannot expressly oust the Signature Not Verified Signed by: SREEVIDYA Signing time: 24-07- 2024 19:02:33 6 WP-20424-2024 jurisdiction of the court under Articles 226 and 227 of the Constitution, nevertheless, when there is an alternative remedy available, judicial prudence demands that the Court refrains from exercising its jurisdiction under the said constitutional provisions.
This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have directed the respondent to take recourse to the appeal mechanism provided by the Act.''
08. Admittedly, petitioners have already availed the statutory remedy under Section 17 of the SARFAESI Act. Therefore, in the light of the aforesaid pronouncements of the Apex Court and in view of the fact that the Securitization Application No.681/2024 is already pending before the learned DRT, Jabalpur and no parallel proceedings for the redressal of the same grievance can be continued, this Court is not inclined to entertain the writ petition. Accordingly, the present petition being bereft of merit and substance is hereby dismissed.
No order as to cost.
(SUSHRUT ARVIND DHARMADHIKARI) (DUPPALA VENKATA RAMANA)
JUDGE JUDGE
vidya
Signature Not Verified
Signed by: SREEVIDYA
Signing time: 24-07-
2024 19:02:33