Delhi High Court - Orders
Sunita Devi vs Iifl Home Finance Ltd. & Anr on 22 November, 2021
Author: Prateek Jalan
Bench: Prateek Jalan
$~2547 (2021 Cause List)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 13107/2021
SUNITA DEVI ..... Petitioner
Through: Mr. Prashant Singh Yadav,
Advocate.
versus
IIFL HOME FINANCE LTD. & ANR. ..... Respondents
Through: Mr. Pallav Saxena with Ms. Bindu
Das, Advocates for R-1.
CORAM:
HON'BLE MR. JUSTICE PRATEEK JALAN
ORDER
% 22.11.2021 The proceedings in the matter have been conducted through hybrid mode [physical and virtual hearing].
CM APPL. 41327/2021 (for exemption) Exemption allowed, subject to all just exceptions. This application stands disposed of.
W.P.(C) 13107/2021 & CM APPL. 41326/2021 (for stay)
1. The petitioner has approached this Court for the following reliefs:-
"a.) It is therefore most respectfully and humbly prayed that this Hon'ble Court be pleased to Direct the respondent /Court Receiver to not to seal and take possession of entire built up below mentioned property bearing First Floor of Plot No. A-4, area measuring 80 Sq. Yards, out of Khasra No. 46, area abadi known as Subash Park, Uttam Nagar, New Delhi-110059 b.) Set aside order dated 03/09/21 by Sh. Vinod kumar Meena, Ld. CMM, South-West Dwarka Court New Delhi. In the interest of justice Signature Not Verified Digitally signed By:SHITU NAGPAL Signing Date:23.11.2021 10:54:55 W.P.(C)13107/2021 Page 1 of 8 c.) Pass any further order as may deem fit and proper."
2. The respondent No.1-IIFL Home Finance Limited ["IIFL"] has taken recourse to proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ["SARFAESI Act"] in respect of the property of the petitioner [mentioned in prayer (a) of the writ petition].
3. The petitioner was earlier served with a notice dated 05.10.2021, proposing to take possession of the petitioner's property on 27.10.2021. She filed W.P.(C) 12164/2021, which was disposed of by this Court on 27.10.2021 with the following directions:-
"3. It has been brought to the notice of the Court in several matters that the DRTs in Delhi are at present without Presiding Officers and this Court had, in fact, in these circumstances entertained several petitions under Article
226. However, I have been informed that in respect of urgent matters filed before the DRTs in Delhi, parties can also approach the Chairperson of the Debts Recovery Appellate Tribunal ["DRAT"] under Section 17(7) of the SARFAESI Act read with Section 17A(2) of the Recovery of Debts and Bankruptcy Act, 1993 for transfer of their petitions to another DRT within the jurisdiction of the DRAT. A copy of the order dated 13.10.2021 passed by DRAT in Misc. Application No. 97/2021 arising out of S.A. No. 86/2020 has also been brought to my attention, wherein proceedings were transferred from the DRT-I, Delhi to the DRT, Jaipur on the ground of urgency.
4. Mr. Prashant Singh Yadav, learned counsel for the petitioner, submits that the petitioner will invoke the aforesaid procedure in this case also. As the possession of the property is scheduled to be taken today, Mr. Yadav seeks some interim protection. He states that the mortgage was entered into by the respondent no. 2, from whom the petitioner has subsequently purchased the property in Signature Not Verified Digitally signed By:SHITU NAGPAL Signing Date:23.11.2021 10:54:55 W.P.(C)13107/2021 Page 2 of 8 question on the strength of a general power of attorney. He emphasis that the petitioner is neither the borrower nor the guarantor in respect of the loan in question.
5. Ms. Bindu Das, learned counsel for respondent no.1- IIFL, who appears on advance notice, states that the dues to be claimed by the respondent no.1 in respect of the mortgaged property today stand at approximately ₹24 lakhs.
6. In view of the fact that the statutory remedy is available to the petitioner, as stated above, I am of the view that the appropriate course is for the petitioner to avail of the said remedy, rather than for this Court to entertain this petition under Article 226 of the Constitution. Having regard to the submissions recorded above, the Receiver appointed in terms of the order of the CMM dated 03.09.2021 is directed to defer the proceedings for possession of the property in question until 22.11.2021, subject to the petitioner depositing a sum of ₹2 lakhs with the respondent no.1 by 15.11.2021. The deposit may be made and accepted without prejudice to the rights and contentions of the parties. The petitioner is directed to maintain status quo in the meantime regarding the title, possession and character of the said property. Subject to any orders that may be passed by the DRT/DRAT in the proceedings instituted by the petitioner, the Receiver will not be required to give any further notice to the petitioner for taking possession of the property on 22.11.2021 at 2.30 PM.
7. The DRAT and the DRT are requested to consider the petitioner's application expeditiously keeping the aforesaid schedule in mind."
4. The petitioner claims to have filed an application before the Debts Recovery Appellate Tribunal ["DRAT"] in terms of the order dated 27.10.2021, on 16.11.2021. A copy of the application filed under diary no. 320/2021 dated 16.11.2021 has been annexed to the writ petition. However, the application has not been heard as the Chairperson of the Signature Not Verified Digitally signed By:SHITU NAGPAL Signing Date:23.11.2021 10:54:55 W.P.(C)13107/2021 Page 3 of 8 DRAT 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 petitioner has, therefore, filed this petition under Article 226 of the Constitution. As the Debts Recovery Tribunals ["DRT"] and DRAT in Delhi are presently non-functional, this Court has had occasion to consider several petitions seeking similar reliefs and has taken the view that it would be preferable to transfer the proceedings to a functional DRT rather than entertaining the petitions under Article 226 of the Constitution.
6. Section 17(7) of the SARFAESI Act read with Section 17A(2) of the Recovery Of Debts And Bankruptcy Act, 1993 ["RDB Act"], provides for transfer of proceedings from one DRT to another:-
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"
7. In the present situation, as the office of the Chairperson of DRAT, Delhi is also vacant, this Court has taken the view that exercise of such Signature Not Verified Digitally signed By:SHITU NAGPAL Signing Date:23.11.2021 10:54:55 W.P.(C)13107/2021 Page 4 of 8 power by this Court would be the appropriate course, as the petitioners' 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.
8. Although the existence of an alternative remedy is not an absolute bar to the exercise of jurisdiction under Article 226, 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.
9. 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 Digitally signed By:SHITU NAGPAL Signing Date:23.11.2021 10:54:55 W.P.(C)13107/2021 Page 5 of 8 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 itscase 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.)
10. 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 Signature Not Verified Digitally signed By:SHITU NAGPAL Signing Date:23.11.2021 10:54:55 W.P.(C)13107/2021 Page 6 of 8 5, 9 to 15], and the recent judgment in C. Bright vs. District Collector and Others (2021) 2 SCC 392 [paragraph 22].
11. 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.
12. Mr. Prashant Singh Yadav, learned counsel for the petitioner, seeks interim protection as the possession of the property is scheduled to be taken today at 2:30 PM in terms of the order of this Court dated 27.10.2021. However, the petitioner has, admittedly, not deposited the sum of ₹ 2 Lakhs by 15.11.2021, as directed by this Court. It is the case of the petitioner that she made an attempt to deposit the amount, but IIFL has refused to accept the deposit. No document or correspondence has been placed on record to substantiate this contention. The petitioner did not also make any application to this Court at that stage. Mr. Yadav submits that this is due to the intervening holidays. However, it may be noted that the Court was closed only from 01.11.2021 to 05.11.2021 and has been functioning from 08.11.2021. There was, therefore, ample opportunity for the petitioner to approach this Court if IIFL was acting in breach of the orders of the Court. The petitioner, in fact, filed the application before the DRAT only on 16.11.2021, almost three weeks after the order dated 27.10.2021 was passed, and has approached the Court by way of this writ petition only at this stage, when possession is scheduled to be taken today. In these circumstances, the petitioner's conduct does not entitle her to interim relief.
13. For the reasons aforesaid, the petition is disposed of with the Signature Not Verified Digitally signed By:SHITU NAGPAL Signing Date:23.11.2021 10:54:55 W.P.(C)13107/2021 Page 7 of 8 following directions:-
a. The securitisation application (SA No. 286/2021) pending before DRT-I, Delhi is transferred to DRT, Jaipur. b. The Registrar, DRT-I, Delhi, is directed to transmit the records of the said securitisation application to DRT, Jaipur digitally. c. Mr. Yadav is also directed to coordinate with the Registrar, DRT, Jaipur to transmit the digital records of the aforesaid case directly to the DRT, Jaipur, if so permitted. d. The proceedings be listed before DRT, Jaipur on 03.12.2021 at 2:00 PM for directions/hearing. DRT, Jaipur will permit the parties to appear online [through video conferencing], if they so request.
e. Any further action taken by IIFL will be subject to orders to be passed by DRT, Jaipur.
f. The physical possession, if taken in the interim, will also be subject to the orders to be passed by DRT, Jaipur.
14. It is made clear that this Court has not entered into the merits of the petitioner's case, which are to be decided by the DRT in accordance with law.
15. Learned counsel for the parties are at liberty to communicate this order to the Receiver as the possession of the property in question is scheduled to be taken today at 2:30 PM.
16. The writ petition, alongwith the pending application, is disposed of in terms aforesaid.
PRATEEK JALAN, J NOVEMBER 22, 2021/'vp' Signature Not Verified Digitally signed By:SHITU NAGPAL Signing Date:23.11.2021 10:54:55 W.P.(C)13107/2021 Page 8 of 8