Guruchaithany Charitable Trust vs Chief Manager on 2 June, 2025

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Kerala High Court

Guruchaithany Charitable Trust vs Chief Manager on 2 June, 2025

The appellant filed W.P.(C)No.19703 of 2024, invoking the writ jurisdiction of this Court under Article 226 of the Constitution of India, seeking a writ of mandamus commanding the respondents to keep in abeyance all further proceedings pursuant to Ext.P6 auction notice dated 13.05.2024 issued by the 1st respondent Chief Manager (Authorised Officer), South Indian Bank Ltd., Regional Office, Ernakulam, under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), pending consideration of Ext.P5 representation dated 25.02.2023 made before the Branch Manager, South Indian Bank Ltd., Perumbavoor. The further reliefs sought for in the writ petition are a writ of mandamus commanding the respondents to consider the requests made by the appellant- petitioner for settlement, after providing them a reasonable time till the admission process to various courses of the college run by the petitioner Trust are over, for the academic year 2024-25; and a writ of mandamus commanding the respondents to keep in abeyance taking of physical possession of the building and the college premises, pending consideration of Ext.P5 representation. 4 WA NO.1231 of 2025 2025:KER:38459 The averments in the writ petition would show that the petitioner had availed certain credit facilities from the Perumbavoor Branch of the 2nd respondent South Indian Bank Ltd. and those accounts have been classified as Non Performing Assets (NPA). Ext.P6 auction notice is one issued under the provisions of the SARFAESI Act read with the provisions of the Security Interest (Enforcement) Rules, 2002.

2. The appellant had approached this Court in W.P. (C)No.36884 of 2022 challenging the proceedings initiated under Section 13(8) of the SARFAESI Act. That writ petition was disposed of by Ext.P3 judgment dated 17.11.2022 directing the appellant to move the Debts Recovery Tribunal by filing a Securitisation Application, since the Bank had already approached the Debts Recovery Tribunal by filing an Original Application under Section 17 of the SARFAESI Act. In Ext.P3 judgment, the learned Single Judge noticed that there is no reason as to why that Court should entertain the said writ petition, notwithstanding the availability of an alternate remedy. In Ext.P3 judgment this Court directed that the proceedings for taking physical possession of the secured asset of the appellant shall be deferred till 02.12.2022, to enable the appellant to move the Debts Recovery Tribunal.

WA NO.1231 of 2025 2025:KER:38459

3. After the disposal of the aforesaid writ petition by Ext.P3 judgment, the appellant filed S.A.No.570 of 2022 before the Debts Recovery Tribunal-1, Ernakulam. In that Securitisation Application, the appellant filed I.A.No.2909 of 2022 seeking stay of all further proceedings under the SARFAESI Act, including the notice issued by the Advocate Commissioner. That interlocutory application ended in dismissal by Ext.P4 order dated 11.01.2023 of the Debts Recovery Tribunal. In the said order the Tribunal noticed that nothing has been stated either in the affidavit filed along with I.A.No.2909 of 2022 or in S.A.No.570 of 2022 as to whether the order passed by the Chief Judicial Magistrate Court, Ernakulam is not in consonance with the provisions under Section 14(1) of SARFAESI Act. As on the date of filing of S.A.No.570 of 2022, the outstanding amount, according to the Bank, is Rs.5,46,90,219.42. The petitioner Trust has not made out any prima facie case so as to seek the indulgence of the Tribunal in granting the relief sought for in I.A.No.2909 of 2022.

4. S.A.No.570 of 2022 filed by the appellant is pending consideration before the Debts Recovery Tribunal-1, Ernakulam, along with O.A.No.93 of 2023 filed by the 2 nd respondent Bank, invoking the provisions under Section 17 of the SARFAESI Act for recovery of the loan amount. The appellant submitted Ext.P5 6 WA NO.1231 of 2025 2025:KER:38459 representation dated 25.02.2023 before the Branch Manager of the Perumbavoor Branch of the 2nd respondent Bank with a request to settle the liabilities by availing One Time Settlement facility (OTS). The 1st respondent, who is the authorised officer of the 2nd respondent Bank, issued Ext.P6 auction notice dated 13.05.2024 and on receipt of the same the appellant had approached this Court in W.P.(C)No.19703 of 2024 seeking the aforesaid reliefs.

5. When the writ petition came up for admission, the learned Single Judge passed an interim order directing the petitioner (appellant herein) to remit an amount of Rs.50 lakhs within a period of three weeks from 03.06.2024 and to make a proposal for One Time Settlement. On 27.05.2025, when the writ petition came up for consideration, the learned counsel on both sides submitted that the above interim order has not been complied with. The learned counsel for the 2 nd respondent Bank submitted that despite sanctioning of OTS facility on 21.03.2023 for an amount of Rs.4,15,00,000/-, the petitioner has not made any payment. Further, the application made by the petitioner seeking stay of all further proceedings under the SARFAESI Act had already been rejected by the Debts Recovery Tribunal vide Ext.P4 order dated 11.01.2023. Therefore, the learned Single 7 WA NO.1231 of 2025 2025:KER:38459 Judge, by the judgment dated 27.05.2025, dismissed the writ petition. Paragraph 2 to 5 of that judgment read thus;

"2. Through Ext.P4, the application filed by the petitioner to stay all further proceedings under the SARFAESI Act was rejected as per the order dated 11.01.2022 [Sic:

11.01.2023]. Upon admission of the writ petition, an interim order was passed directing the petitioner to remit an amount of Rs.50 lakhs within three weeks from 03.06.2024 and also make a proposal for One Time Settlement.

3. It is submitted by both sides that the above interim order was not complied with.

4. The learned counsel appearing for the Bank submits that OTS was sanctioned by the respondent Bank for an amount of Rs.4,15,00,000/- on 21.3.2023, despite which the petitioner has not made any payment.

5. It is to be noted that the legality of the action measures taken under the SARFAESI Act is pending consideration before the Debts Recovery Tribunal in S.A. No.570/2022.

The petitioner also has an alternate and efficacious remedy against the interim order passed by the Tribunal. Under the said circumstances, I am not inclined to grant any relief sought in the writ petition. Writ petitions of the kind filed have been held to be not entertainable by various judgments of the Hon'ble Supreme Court. Accordingly, without prejudice to the contentions of the petitioner in the matter pending before the Debts Recovery Tribunal, this writ petition is dismissed."

6. Challenging the aforesaid judgment of the learned Single Judge, the appellant-petitioner is before this Court in this 8 WA NO.1231 of 2025 2025:KER:38459 writ appeal, invoking the provisions under Section 5(i) of the Kerala High Court Act, 1958.

7. Heard the learned counsel for the appellant-writ petitioner and the learned counsel for respondents 1 and 2.

8. In the writ petition, I.A.No.1 of 2024 was filed by third parties for getting themselves impleaded as additional respondents 3 and 4. That application has already been dismissed by the learned Single Judge. Therefore, in the cause title of the memorandum of writ appeal or in this judgment, the applicants in that interlocutory application need not be arrayed as additional respondents 3 and 4 'sought to be impleaded'. Therefore, the cause title is corrected suo motu, by deleting the name of additional respondents 3 and 4 sought to be impleaded. Registry to carry out necessary corrections.

9. The issue that requires consideration in this writ appeal is as to whether any interference is warranted on the judgment dated 27.05.2025 of the learned Single Judge in W.P. (C)No.19703 of 2024.

10. The proceedings initiated by the 2nd respondent Bank under the provisions of the SARFAESI Act is under challenge in the Securitisation Application filed by the appellant-petitioner, which is now pending consideration as S.A.No.570 of 2022 9 WA NO.1231 of 2025 2025:KER:38459 before the Debts Recovery Tribunal-1, Ernakulam. I.A.No.2909 of 2022 filed by the appellant seeking stay of further proceedings under the SARFAESI Act ended in dismissal by Ext.P4 order dated 11.01.2023 of the Debts Recovery Tribunal. The appellant has not chosen to challenge Ext.P4 order, by approaching the Debts Recovery Appellate Tribunal.

11. As already noticed by the learned Single Judge in the impugned judgment dated 27.05.2025, despite the interim order granted in the writ petition, the appellant failed to remit the amount of Rs.50 lakhs within a period of three weeks from 03.06.2024 and to make a proposal for One Time Settlement. Moreover, despite the sanctioning of OTS facility on 21.03.2023 for an amount of Rs.4,15,00,000/-, the appellant has not made any payment. It is after taking note of the aforesaid facts, the learned Single Judge dismissed the writ petition by the impugned judgment dated 27.05.2025, for the reasons stated therein.

12. In South Indian Bank Ltd. v. Naveen Mathew Philip [(2023) SCC online (SC) 435], in the context of the challenge made against the notices issued under Section 13(4) of the SARFAESI Act, the Apex Court reiterated the settled position of law on the interference of the High Court invoking Article 226 of the Constitution of India in commercial matters, 10 WA NO.1231 of 2025 2025:KER:38459 where an effective and efficacious alternative forum has been constituted through a statute. In the said decision, the Apex Court took judicial notice of the fact that certain High Courts continue to interfere in such matters, leading to a regular supply of cases before the Apex Court. The Apex Court reiterated that 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 the 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. The issues governing waiver, acquiescence and estoppel are also primarily within the domain of the Tribunal. The object and reasons behind the SARFAESI Act are very clear as observed in Mardia Chemicals Ltd. v. Union of India [(2004) 4 SCC 311]. While it facilitates a faster and smoother mode of recovery sans any interference from the court, it does provide a fair mechanism in the form of the Tribunal being manned by a 11 WA NO.1231 of 2025 2025:KER:38459 legally trained mind. The Tribunal is clothed with a wide range of powers to set aside an illegal order, and thereafter, grant consequential reliefs, including repossession and payment of compensation and costs. Section 17(1) of the SARFAESI Act gives an expansive meaning to the expression 'any person', who could approach the Tribunal.

13. In Naveen Mathew Philip [(2023) SCC online (SC) 435] the Apex Court noticed that, in matters under the SARFAESI Act, approaching the High Court for the consideration of an offer by the borrower is also frowned upon by the Apex Court. A writ of mandamus is a prerogative writ. The court cannot exercise the said power in the absence of any legal right. 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 that mode shall not be encouraged by a writ court. A litigant cannot avoid the non-compliance of approaching the Tribunal, which requires the prescription of fees, and use the constitutional remedy as an alternative. In paragraph 17 of the decision, the Apex Court reiterated the position of law regarding the interference of the High Courts in matters pertaining to the 12 WA NO.1231 of 2025 2025:KER:38459 SARFAESI Act by quoting its earlier decisions in Federal Bank Ltd. v. Sagar Thomas [(2003) 10 SCC 733], United Bank of India v. Satyawati Tondon [(2010) 8 SCC 110], State Bank of Travancore v. Mathew K.C. [(2018) 3 SCC 85], Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir [(2022) 5 SCC 345] and Varimadugu Obi Reddy v. B. Sreenivasulu [(2023) 2 SCC 168] wherein the said practice has been deprecated while requesting the High Courts not to entertain such cases. In paragraph 18 of the said decision, the Apex Court observed that the powers conferred under Article 226 of the Constitution of India are rather wide, but are required to be exercised only in extraordinary circumstances in matters pertaining to proceedings and adjudicatory scheme qua a statute, more so in commercial matters involving a lender and a borrower, when the legislature has provided for a specific mechanism for appropriate redressal.

14. The law is well settled that a writ of certiorari can be issued if an error of law is apparent on the face of the record. In Central Council for Research in Ayurvedic Sciences v. Bikartan Das [2023 SCC OnLine SC 996 : 2023 (5) KHC SN 8] the Apex Court reiterated that a writ of certiorari, being a high prerogative writ, should not be issued on mere asking. For 13 WA NO.1231 of 2025 2025:KER:38459 the issue of a writ of certiorari, the party concerned has to make out a definite case for the same and is not a matter of course.

15. In the instant case, the appellant-petitioner is seeking stay of all further proceedings pursuant to Ext.P6 auction notice issued by the 1st respondent under the provisions of the SARFAESI Act read with the provisions under the Security Interest (Enforcement) Rules, 2002, pending consideration of Ext.P5 representation dated 25.02.2023 made before the Branch Manager, Perumbavoor Branch of the 2nd respondent Bank. Admittedly, Ext.P6 auction notice was not under challenge in W.P. (C)No.19703 of 2024. The said writ petition was the second round of the litigation, invoking the writ jurisdiction of this Court under Article 226 of the Constitution of India, against the proceedings initiated by the 2nd respondent Bank under the provisions of the SARFAESI Act. In the first round of litigation, i.e., W.P.(C)No.36884 of 2022, by Ext.P3 judgment dated 17.11.2022, the learned Single Judge noticed that there is no reason as to why this Court should entertain a writ petition, notwithstanding the availability of an alternate remedy of filing Securitisation Application before the Debts Recovery Tribunal. The Securitisation Application filed by the appellant as S.A.No.570 of 2022 is now pending before the Debts Recovery 14 WA NO.1231 of 2025 2025:KER:38459 Tribunal-1, Ernakulam along with O.A.No.93 of 2023 filed by the 2nd respondent Bank, invoking the provisions under Section 17 of the SARFAESI Act, for recovery of the loan amount. By Ext.P4 order dated 11.01.2023, the Debts Recovery Tribunal rejected I.A.No.2909 of 2022 filed by the appellant herein seeking stay of all further proceedings under the SARFAESI Act, including the proceedings pursuant to the notice issued by the Advocate Commissioner. Instead of challenging Ext.P4 order by approaching the Debts Recovery Appellate Tribunal, the appellant has chosen to file W.P.(C)No.19703 of 2024 before this Court, which is one filed on 30.05.2024, more than one year after the dismissal of I.A.No.2909 of 2022 in S.A.No.570 of 2022. In view of the law laid down by the Apex Court in the decisions referred to supra, the appellant cannot invoke the writ jurisdiction of this Court under Article 226 of the Constitution of India, seeking interference with the proceedings initiated by the 2 nd respondent Bank under the SARFAESI Act, including an order to keep in abeyance the recovery proceedings, pending consideration of Ext.P5 representation dated 25.02.2023 to avail OTS facility. In the impugned judgment, the learned Single Judge noticed that though OTS facility was sanctioned for an amount of 15 WA NO.1231 of 2025 2025:KER:38459 Rs.4,15,00,000/- on 21.03.2023, the appellant failed to make any payment.

16. In Airports Authority of India v. Pradip Kumar Banerjee [(2025) 4 SCC 111] a Two-Judge Bench of the Apex Court reiterated the law relating to the exercise of jurisdiction in an intra-court appeal. After taking note of the law laid down in Narendra and Co.(P) Ltd. v. Workmen [(2016) 3 SCC 340], the Two-Judge Bench has stated that the position is, thus, settled that in an intra-court writ appeal the appellate court must restrain itself and the interference into the judgment passed by the learned Single Judge is permissible only if the judgment of the learned Single Judge is perverse or suffers from an error apparent in law.

17. Viewed in the light of the law laid down in the decisions referred to hereinbefore, the reasoning of the learned Single Judge in the impugned judgment for dismissing the writ petition, without prejudice to the contentions of the appellant- petitioner in the matter pending before the Debts Recovery Tribunal-1, Ernakulam, cannot be said to be either perverse or patently illegal and it cannot also be said that the said judgment suffers from an error apparent in law.

WA NO.1231 of 2025 2025:KER:38459 In the result, this writ appeal fails and the same is accordingly dismissed.

Sd/-

ANIL K. NARENDRAN, JUDGE Sd/-

P.V. BALAKRISHNAN, JUDGE bng

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Kerala High Court