Madras High Court
S.Dawood Sikkandar vs The Authorized Officer on 16 February, 2023
Author: D.Krishnakumar
Bench: D.Krishnakumar
W.P(MD)No.20954 of 2022
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 16.02.2023
CORAM :
THE HONOURABLE MR.JUSTICE D.KRISHNAKUMAR
and
THE HONOURABLE MRS.JUSTICE L.VICTORIA GOWRI
W.P(MD)No.20954 of 2022
and
WMP(MD)No.15199 of 2022
S.Dawood Sikkandar ... Petitioner
vs.
1. The Authorized Officer,
Canara Bank,
A.R.M Branch,
St. Mary's Circle Office,
1st Floor, East Veli Street,
Madurai-625 001.
2. The Branch Manager,
Canara Bank,
Dindigul Main Branch,
Saalai Road,
Dindigul.
3. M.Vikraman ... Respondents
PRAYER : Writ Petition filed under Article 226 of the
Constitution of India, for issuance of a Writ of Certiorari, calling for the
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W.P(MD)No.20954 of 2022
records relating to impugned sale held on 31.05.2022 and sale
certificate dated 12.07.2022 issued by the 1st respondent Bank under
SARFAESI Act in Doc.No.4324/2022 in favour of the 3rd respondent
and quash the same.
For Petitioner : Mr.P.Venkatesan
For R1 & R2 : Mr.R.Pandivel, Standing Counsel
For R3 : Mr.P.Muthu Vijaya Pandian
ORDER
(Order of the Court was made by D.KRISHNAKUMAR, J.) Challenging the sale held on 31.05.2022 and the sale certificate dated 12.07.2022 issued by the 1st respondent Bank under SARFAESI Act in Doc.No.4324/2022 in favour of the 3rd respondent, this writ petition is filed.
2. Learned standing counsel for the respondent Bank, submitted that at the time of admission, this Court has not granted any interim order. He further submitted that the petitioner is having effective alternate appeal remedy before the Debts Recovery Tribunal 2/12 https://www.mhc.tn.gov.in/judis W.P(MD)No.20954 of 2022 and the Debts Recovery Tribunal, Coimbatore, is in-charge of the Debts Recovery Tribunal, Madurai. Hence, the petitioner has to approach the Debts Recovery Tribunal for getting further orders.
3. At this juncture, it would be relevant to refer the following decisions:-
(i) In United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110, the Hon'ble Supreme Court has held as follows:-
"42. There is another reason why the impugned order should be set aside. If Respondent 1 had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14, then she could have availed remedy by filing an application under Section 17(1). The expression "any person" used in Section 17(1) is of wide import. It takes within its fold, not only the borrower but also the guarantor or any other person who may be affected by the action taken under Section 13(4) or Section
14. Both, the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies 3/12 https://www.mhc.tn.gov.in/judis W.P(MD)No.20954 of 2022 available to an aggrieved person under the SARFAESI Act are both expeditious and effective.
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 Constitution, a person must exhaust the remedies available under the relevant statute.'' 4/12 https://www.mhc.tn.gov.in/judis W.P(MD)No.20954 of 2022
(ii) In Kanaiyalal Lalchand Sachdev v. State of Maharashtra(2011) 2 SCC 782, the Apex Court has held as follows:-
''23. In our opinion, therefore, the High Court rightly dismissed the petition on the ground that an efficacious remedy was available to the appellants under Section 17 of the Act. It is well settled 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. (See Sadhana Lodh v. National Insurance Co. Ltd. [(2003) 3 SCC 524 : 2003 SCC (Cri) 762] , Surya Dev Rai v. Ram Chander Rai [(2003) 6 SCC 675] and SBI v. Allied Chemical Laboratories [(2006) 9 SCC 252].)"
(iii) In ICICI Bank Ltd. v. Umakanta Mohapatra, (2019) 13 SCC 497 : (2018) 5 SCC (Civ) 812: 2018 SCC OnLine SC 2349, the Hon'ble Supreme Court has held as follows:-
"2. Despite several judgments of this Court, including a judgment by Hon'ble Navin Sinha, J., as recently as on 30-1-2018, in State Bank of Travancore v. Mathew K.C. [State Bank of Travancore v. Mathew K.C., (2018) 3 SCC 5/12 https://www.mhc.tn.gov.in/judis W.P(MD)No.20954 of 2022 85 : (2018) 2 SCC (Civ) 41] , the High Courts continue to entertain matters which arise under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI), and keep granting interim orders in favour of persons who are non-performing assets (NPAs)."
3. The writ petition itself was not maintainable, as a result of which, in view of our recent judgment, which has followed earlier judgments of this Court, held as follows:
(SCC p. 94, para 17) "17. We cannot help but disapprove the approach of the High Court for reasons already noticed in Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engineering Works (P) Ltd. [Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engineering Works (P) Ltd., (1997) 6 SCC 450] , observing: (SCC p. 463, para 32)
32. When a position, in law, is well settled as a result of judicial pronouncement of this Court, it would amount to judicial impropriety to say the least, for the subordinate courts including the High Courts to ignore the settled decisions and then to pass a judicial order which is clearly contrary to the settled legal position. Such judicial adventurism cannot be permitted and we strongly deprecate the tendency of the subordinate courts in not 6/12 https://www.mhc.tn.gov.in/judis W.P(MD)No.20954 of 2022 applying the settled principles and in passing whimsical orders which necessarily has the effect of granting wrongful and unwarranted relief to one of the parties. It is time that this tendency stops.''
(iv) In Agarwal Tracom (P) Ltd. v. Punjab National Bank (2018) 1 SCC 626, the Apex Court has held as follows:-
"33. In the light of the foregoing discussion, we are of the considered opinion that the writ court as also the appellate court were justified in dismissing the appellant's writ petition on the ground of availability of alternative statutory remedy of filing an application under Section 17(1) of the SARFAESI Act before the Tribunal concerned to challenge the action of PNB in forfeiting the appellant's deposit under Rule 9(5). We find no ground to interfere with the impugned judgment."
(v) In C. Bright v. Distt. Collector (2021) 2 SCC 392, the Hon'ble Supreme Court has held as follows:-
"22. Even though, this Court in United Bank of India v. Satyawati Tondon [United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110 (2010) 3 SCC (Civ) 260] held 7/12 https://www.mhc.tn.gov.in/judis W.P(MD)No.20954 of 2022 that 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 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. Hindon Forge (P) Ltd. [Hindon Forge (P) Ltd. v. State of U.P., (2019) 2 SCC 198 : (2019) 1 SCC (Civ) 551] has held that the remedy of an aggrieved person by a secured creditor under the Act is by way of an application before the Debts Recovery Tribunal, however, borrowers and other aggrieved persons are invoking the jurisdiction of the High Court under Articles 226 or 227 of the Constitution of India without availing the alternative statutory remedy. The Hon'ble High Courts are well aware of the limitations in exercising their jurisdiction when effective alternative remedies are available, but a word of caution would be still necessary for the High Courts that interim orders should generally not be passed without hearing the secured creditor as interim orders defeat the very purpose of expeditious recovery of public money."8/12
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(vi) In S.Ganesamoorthi Vs. The Branch Manager & Ors., W.P.(MD).No.22536 of 2021, dated 20.12.2021, the Hon'ble First Bench of this Court has held that though Presiding officer is not available in DRT, Madurai, incharge is given to Coimbatore and therefore, liberty is given to writ petitioner to move DRT, Coimbatore.
(vii) As regards the non-maintainability of the writ petition against Private financial institutions like asserts re-construction companies in respect of their action under SARFAESI Act, it is relevant to consider the decision of the Hon'ble Supreme Court in Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir, (2022) 5 SCC 345 : 2022 SCC OnLine SC 44, wherein, it has been held as follows:-
''18. Even otherwise, it is required to be noted that a writ petition against the private financial institution — ARC — the appellant herein under Article 226 of the Constitution of India against the proposed action/actions under Section 13(4) of the SARFAESI Act can be said to be not maintainable. In the present case, the ARC proposed to take action/actions under the SARFAESI Act to recover the borrowed amount as a secured creditor. The ARC as such 9/12 https://www.mhc.tn.gov.in/judis W.P(MD)No.20954 of 2022 cannot be said to be performing public functions which are normally expected to be performed by the State authorities. During the course of a commercial transaction and under the contract, the bank/ARC lent the money to borrowers herein and therefore the said activity of the bank/ARC cannot be said to be as performing a public function which is normally expected to be performed by the State authorities. If proceedings are initiated under the SARFAESI Act and/or any proposed action is to be taken and the borrower is aggrieved by any of the actions of the private bank/bank/ARC, borrower has to avail the remedy under SARFAESI Act and no writ petition would lie and/or is maintainable and/or entertainable. Therefore, decisions of this Court in Praga Tools Corpn. [Praga Tools Corpn. v. C.A. Manual, (1969) 1 SCC 585] and Ramesh Ahiuwalia [Ramesh Ahluwalia v. State of Punjab, (2012; 12 SCC 331 : (2013) 3 SCC (L&S) 456: 4 SCEC 715] relied upon by the learned counsel appearing on behalf of the borrowers are not of any assistance to the borrowers."
4. In the light of the aforesaid decisions, we are not inclined to entertain this writ petition. Thus, the Writ Petition is disposed of with liberty to the petitioner to approach the Debts Recovery Tribunal 10/12 https://www.mhc.tn.gov.in/judis W.P(MD)No.20954 of 2022 to work out his remedy. No costs. Consequently, connected miscellaneous petition is closed.
NCC : Yes / No [D.K.K.,J.] & [L.V.G.,J.]
Index : Yes / No 16.02.2023
Internet : Yes
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W.P(MD)No.20954 of 2022
D.KRISHNAKUMAR, J.
and
L.VICTORIA GOWRI, J.
bala
ORDER MADE IN
W.P(MD)No.20954 of 2022
DATED : 16.02.2023
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