Delhi High Court - Orders
Mrs Sushma Khanna vs Punjab National Bank Ltd & Anr on 24 November, 2021
Author: Prateek Jalan
Bench: Prateek Jalan
$~204 (2021 Cause List)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 13180/2021
MRS SUSHMA KHANNA ..... Petitioner
Through: Ms. Amita Kumari, Advocate
versus
PUNJAB NATIONAL BANK LTD & ANR. ..... Respondents
Through: Mr. Mahesh Kumar Chaudhary,
Advocate
CORAM:
HON'BLE MR. JUSTICE PRATEEK JALAN
ORDER
% 24.11.2021 The proceedings in the matter have been conducted through hybrid mode [physical and virtual hearing].
CM APPL. 41589/2021 (exemption) Exemption allowed, subject to all just exceptions. The application stands disposed of.
W.P.(C) 13180/2021 & CM APPL. 41588/2021 (interim relief)
1. Issue notice. Mr. Mahesh Kumar Chaudhary, learned counsel, accepts notice on behalf of the respondent No. 1-Punjab National Bank ["the Bank"]. Notice to the respondent No. 2 is not required at this stage.
2. The petitioner was a guarantor of loans advanced by the Bank to the respondent No. 2. She had given her residential property, being 1650, 1st Floor, Outram Line, GTB Nagar, Delhi-110009 ["the property"], as security for the loans. She has been served with a notice dated 08.11.2021 Signature Not Verified SHITU W.P.(C) 13180/2021 Page 1 of 7 NAGPAL under Section 13(4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ["SARFAESI Act"], whereby the Bank intends to put four secured assets, including the petitioner's property, on auction sale on 26.11.2021. The petitioner has assailed these measures by filing a securitisation application under Section 17 of the SARFAESI Act before the Debts Recovery Tribunal ["DRT"]-III, Delhi, under Diary No. 248 dated 17.11.2021. However, the application has not been taken up for hearing as the DRTs in Delhi are, at present, without Presiding Officers. In these circumstances, the petitioner has approached this Court under Article 226 of the Constitution.
3. As all the three DRTs in Delhi are without Presiding Officers, several petitions have been filed in this Court seeking similar reliefs. Although some petitions under Article 226 of the Constitution were entertained, it was thereafter brought to the notice of the Court that the Debts Recovery Appellate Tribunal ["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.
4. However, the aforesaid course has now been rendered impossible Signature Not Verified SHITU W.P.(C) 13180/2021 Page 2 of 7 NAGPAL 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.
5. 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 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"
6. 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 Signature Not Verified SHITU W.P.(C) 13180/2021 Page 3 of 7 NAGPAL 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.
7. 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.
8. 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 Signature Not Verified SHITU W.P.(C) 13180/2021 Page 4 of 7 NAGPAL 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 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.)
9. The observations in Satyawati Tondon (supra) have been followed by the Supreme Court inter alia in Authorized Officer, State Bank of Signature Not Verified SHITU W.P.(C) 13180/2021 Page 5 of 7 NAGPAL 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].
10. 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.
11. As the auction in respect of four properties is scheduled for 26.11.2021, I am of the view that the petitioner's securitisation application is required to be heard by the DRT, Jaipur, which is the only functional DRT within the jurisdiction of the DRAT, Delhi, tomorrow, i.e. 25.11.2021, for the purpose of interim directions.
12. For the reasons aforesaid, the writ petition is disposed of with the following directions:
a. The securitisation application filed by the petitioner before the DRT-III, Delhi vide Diary No. 248 dated 17.11.2021 is transferred from the DRT-III, Delhi to the DRT, Jaipur.
b. The Registrar, DRT-III, Delhi, is directed to transmit the records of the said securitisation application to the 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 securitisation application to the DRT, Jaipur, if so permitted.
d. The proceedings be listed before the DRT, Jaipur for directions/hearing tomorrow, i.e. 25.11.2021, at 2:00 PM. The DRT, Jaipur will permit the parties to appear online [through video Signature Not Verified SHITU W.P.(C) 13180/2021 Page 6 of 7 NAGPAL conferencing], if they so request.
e. As the auction sale is scheduled for 26.11.2021, the DRT, Jaipur is requested to hear the petitioner's case and pass directions, latest by 26.11.2021.
13. This order may be communicated by learned counsel for the parties to the Registrar, DRT-III, Delhi and the Registrar, DRT, Jaipur.
14. The writ petition, alongwith the pending application, is disposed of with these directions.
PRATEEK JALAN, J NOVEMBER 24, 2021 'hkaur'/ Signature Not Verified SHITU W.P.(C) 13180/2021 Page 7 of 7 NAGPAL