Karnataka High Court
M/S Raju Enterprises vs The Authorised Officer on 16 March, 2022
Author: S.G. Pandit
Bench: S.G. Pandit
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 16TH DAY OF MARCH, 2022
BEFORE
THE HON' BLE MR. JUSTICE S.G. PANDIT
WRIT PETITION No.2387/2022 (GM-RES)
BETWEEN:
1. M/S. RAJU ENTERPRISES
NO.10/B, TAMAKA INDUSTRIAL AREA
BETHAMANGALA ROAD
KOLAR - 563101
REP. BY ITS PROPRIETOR
SRI S N RAJU.
2. SRI S N RAJU S/O SOMAPPA
AGED 55 YEARS
3. SMT. SUJATHAMMA
AGED 46 YEARS
W/O SRI S.N.RAJU
4. MISS. RAMYA H.R.
AGED 21 YEARS
D/O SRI S.N.RAJU
5. MR.RAKESH RAJ H.R.
AGED 25 YEARS
S/O SRI S.N.RAJU
ALL ARE R/AT NO.12
7TH CROSS, JAYANAGAR
REKAL ROAD, KOLAR-563 101.
...PETITIONERS
(BY SRI M A RAJENDRA, ADV.)
2
AND:
1. THE AUTHORISED OFFICER
SIR M VISVESHWARAYA CO-OPERATIVE
BANK LIMITED, NO.109
CORPORATE OFFICE, 2ND FLOOR
SHANKARMUTT ROAD
SHANKARAPURAM
BANGALORE-560004.
2. SRI C.S.NARAYANA SWAMY
(AUCTION PURCHASER)
S/O SRI SONNAPPA
MAJOR
CHADAMANAHALLI VILLAGE
KEMBODI POST
KOLAR TALUK, KOLAR DISTRICT.
...RESPONDENTS
(BY SRI K.V.LOKESH, ADV. FOR C/R)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE
ENTIRE AUCTION HELD AS ON 31.12.2020, BASED ON THE
AUCTION SALE NOTICE DATED 27.11.2020, BY PUBLISHING
THE IMPUGNED AUCTION SALE NOTICE AS ON 20.12.2020 IN
INDIAN EXPRESS AND IN KANNADA PRAHA VIDE ANNEX-P AND
PRAYS TO SET ASIDE THE AUCTION SALE CERTIFICATE DATED
06.11.2021, REGISTERED AS ON 26.11.2021, AS A
CONSEQUENTIAL RELIEF, SINCE AUCTION HELD AS ON
31.12.2020 IS ITSELF ABINITIO VOID AND NON-EST IN THE
EYES OF LAW.
THIS PETITION COMING ON FOR PRELIMINARY HEARING
THIS DAY, THE COURT MADE THE FOLLOWING:-
3
ORDER
The petitioners are before this Court under Article 226 of the Constitution of India praying to set aside the entire auction held on 31.12.2020, based on the auction sale notice dated 27.11.2020, by publishing the impugned auction sale notice as on 20.12.2020 in Indian Express and in Kannada Prabha (Annexures-P and Q) and prays to set aside the 'Auction Sale Certificate' dated 06.11.2021 registered on 26.11.2021.
2. Heard Sri M.A. Rajendra, learned counsel for the petitioners and Sri K.V. Lokesh learned counsel for caveator/1st respondent-Sir M. Visveshwaraya Co- operative Bank Limited. Perused the writ petition papers.
3. Learned counsel for the petitioners would submit that sale conducted by the 1st respondent-Bank is in total violation of Rule 9(1) of the Security Interest (Enforcement) Rules, 2002 (for short 'the Rules'). It is his submission that Bank provided 30 days time as 4 notified for the first time and in subsequent notification 15 days clear time shall be given between the date of notification and the date of sale. It is his submission that the sale notice was published on 20.12.2020 and sale was conducted on 31.12.2020 i.e., within 11 days, therefore, mandatory provision of Rule 9(1) of the Rules is violated. Thus he submits that the writ Court could exercise jurisdiction under Article 226 of the Constitution of India to set aside the sale.
4. Per contra, Sri K.V. Lokesh, learned counsel for the 1st respondent-Bank points out that petitioners were before this Court challenging the sale notice dated 27.11.2020 in W.P.No.15510/2020. This Court by order dated 01.02.2020 on the memo filed by the petitioners for withdrawal, disposed of the writ petition with cost of Rs.10,000/-. It is his submission that in the memo for withdrawal, the petitioners had undertaken to challenge the sale before the Debt Recovery Tribunal, but contrary to the undertaking 5 given in the memo, the petitioners are before this Court again challenging the same sale notice.
5. Replying to the submission of the learned counsel for the respondents, learned counsel for the petitioners submit, inspite of several representations, since the 1st Respondent-Bank had not furnished any details with regard to the sale conducted, the petitioners had again approached this Court in W.P.No.19863/2021 and this Court by order dated 13.12.2021 disposed off the writ petition recording the assurance of the respondent- Bank to consider petitioners' request for furnishing details of sale. It is his submission that except providing details with regard to sale certificate, no other details with regard to depositing bid amount is made available to the purchaser.
6. On hearing the learned counsel for the parties and a perusal of the writ petition papers, the only point that arise for consideration is as to 'Whether the petitioner could approach this Court repeatedly under Article 226 6 of the Constitution of India challenging the sale notice published by the respondent-Bank under Section 13(4) of the SARFAESI Act (for short 'the Act') read with Rules 8 and 9 of the Rules.
7. Admittedly the petitioner was before this Court in W.P.No.15510/2020 praying to set aside the sale notice dated 27.11.2020 published by the respondent-Bank. On 23.12.2020 this Court had granted conditional stay of sale of properties. Since the petitioners failed to comply the conditional interim order the 1st respondent- Bank proceeded with the sale of mortgaged properties. Therefore, when the writ petition was listed on 01.02.2021, the petitioners filed memo dated 29.01.2021 to withdraw the writ petition, which reads as follows :-
"MEMO FOR WITHDRAWAL The above named petitioner states that it has challenged the Sale Notice dated 27.11.2020. However, the respondent Bank has went ahead and sold the schedule property on 31.12.2020. Hence as the above writ petition 7 has become infructuous, the petitioner may be permitted to challenge the sale before the Debts Recovery Tribunal, Bangalore and the matter may be disposed off as withdrawn in the interest of justice and equity."
In terms of the memo, petitioner withdrew the writ petition, seeking permission to challenge the sale before the Debts Recovery Tribunal, Bangalore. As indicated in the memo, instead of approaching the Debts Recovery Tribunal, challenging the sale notice, the petitioners are again before this Court, in this writ petition seeking the above prayers. It is also to be noted that the above said writ petition was dismissed with cost of Rs.10,000/- on the petitioner. The conduct of the petitioners amounts to abuse of process of Court. The petitioners having got writ petition dismissed as withdrawn with liberty to approach the Debt Recovery Tribunal could not have filed present writ petition for the same prayer. Moreover, the petitioners are provided with alternate remedy under Section 17 of the Act. 8 Since the petitioners are provided with alternate remedy under the Act, I decline to entertain the writ petition.
8. The above view is supported by the decision of the Hon'ble Apex Court in PHOENIX ARC PRIVATE LIMITED VS VISHWA BHARATI VIDYA MANDIR AND OTHERS reported in (2022 SCC Online SC 44). Considering Section 17 of the Act and earlier decisions, the Hon'ble Apex Court held that ordinarily relief under Articles 226 and 227 of the Constitution of India is not available, if an efficacious alternate remedy is available to any aggrieved person. The relevant portion at paragraphs 33, 34 and 35 reads as follows :-
"33. In the case of City and Industrial Development Corpn. Vs. Dosu Aardeshir Bhiwandiwala, (2009) 1 SCC 168, it was observed by this Court in paragraph 30 that the Court while exercising its jurisdiction under Article 226 is duty bound to consider whether ...............(c) the petitioner has any 9 alternative or effective remedy for the resolution of the dispute.
34. In the case of Kanaiyalal Lalchand Sachdev and Ors. (supra) after referring to the earlier decisions of this Court in the cases of Sadhana Lodh Vs. National Insurance Co. Ltd. and Anr., (2003) 3 SCC 524; Surya Dev Rai Vs. Ram Chander Rai (2003) 6 SCC 675 and State Bank of India Vs. Allied Chemical Laboratories, (2006) 9 SCC 252 while upholding the order passed by the High Court dismissing the writ petition on the ground that an efficacious remedy is available under Section 17 of the SARFAESI Act, it was observed that ordinarily relief under Articles 226/227 of the Constitution of India is not available if an efficacious alternative remedy is available to any aggrieved person.
35. Similar view has been expressed by this Court in subsequent decisions in the case of General Manager, Sri Siddeshwara Cooperative Bank Limited & Anr. (supra) as well as in the case of Agarwal Tracom Private Limited (supra)."10
9. This writ petition deserves to be dismissed with cost, but since the petitioners are already in financial difficulty, I refrain myself from imposing cost.
10. For the reasons recorded above, the writ petition stands dismissed. In view of dismissal of the writ petition, I.A.No.1/2022 filed for stay does not survive for consideration.
Sd/-
JUDGE NG* CT:bms