Madhya Pradesh High Court
M/S Sunil Sponge Private Limited vs Asrec (India) Limited on 12 July, 2021
Author: Prakash Shrivastava
Bench: Prakash Shrivastava
HIGH COURT OF MADHYA PRADESH : JABALPUR
W.P. NO.9589/2021
(M/s Sunil Sponge Private Limited Vs. ASREC (India)
Limited & another)
Jabalpur, dated 12/07/2021
This matter is heard through Video-Conferencing.
Shri Sunil Kherdikar, learned counsel for the petitioner.
Shri Abhiji C. Thakur, learned counsel for respondent
No.1.
Shri Suyash Manjul, learned counsel for the proposed intervenor.
Heard.
The petitioner, who is an auction-purchaser under SARFAESI Act, has challenged the order dated 10/05/2021 whereby the initial deposit of 25% of the bid amount has been forfeited in terms of Rule 9(5) of the Security Interest (Enforcement) Rules, 2002.
There is a preliminary objection in respect of territorial jurisdiction of this Court, but, having regard to the fact that the auction property is located at Mandideep, within the territorial jurisdiction of this Court, the said objection is overruled.
Learned counsel for respondent No.1 has also raised another objection that the petitioner has remedy of filing an appeal under Section 17 of the Securitisation Act before the D.R.T. Having examined the matter, it is found that the preliminary objection is squarely covered by the judgment of Hon'ble Supreme Court in the matter of Agrawal Tracom Private Limited Vs. Punjab National Bank and others, 2 (2018) 1 SCC 626 wherein it has been held in paragraphs-28 & 29 as under :
"28. We also notice that Rule 9(5) confers express power on the secured creditor to forfeit the deposit made by the auction- purchaser in case the auction-purchaser commits any default in paying installment of sale money to the secured creditor. Such action taken by the secured creditor is, in our opinion, a part of the measures specified in Section 13(4) and, therefore, it is regarded as a measure taken under Section 13(4) read with Rule 9(5). In our view, the measures taken under Section 13(4) commence with any of the action taken in clauses (a) to (d) and end with measures specified in Rule 9.
29. In our view, therefore, the expression "any of the measures referred to in Section 13(4) taken by secured creditor or his authorized officer" in Section 17(1) would include all actions taken by the secured creditor under the Rules which relate to the measures specified in Section 13(4)."
It has further been held by the Hon'ble Supreme Court in paragraphs- 32, 33, 34 as under :
"32. In United Bank of India vs. Satyawati Tondon & Ors., this Court had the occasion to examine in detail the provisions of the SARFAESI Act and the question regarding invocation of the extraordinary power under Article 226/227 in challenging the actions taken under the SARFAESI Act. Their Lordships gave a note of caution while dealing with the writ filed to challenge the actions taken under the SARFAESI Act and made following 3 pertinent observations which, in our view, squarely apply to the case on hand:
"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 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 4 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.
44. While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self- imposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution.
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 5 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."
33. In the light of 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 SARFAESI Act before the Tribunal concerned to challenge the action of the PNB in forfeiting the appellant's deposit under Rule 9(5). We find no ground to interfere with the impugned judgment of the High Court.
34. The appellant is, accordingly, granted liberty to file an application before the concerned Tribunal (DRT) under Section 17(1) of the SARFAESI Act, which has jurisdiction to entertain such application within 45 days from the date of this order. In case, if the appellant files any such application, the Tribunal shall decide the same on its merits in accordance with law uninfluenced by any of the observations made by this Court and the High Court in the impugned judgment."
Since an alternative and efficacious remedy of appeal under Section 17 of the SARFAESI Act is available to the petitioner, therefore, we do not find any good ground to entertain this writ petition. Hence, the petition is, 6 accordingly, dismissed granting liberty to the petitioner to avail remedy of appeal. If the petitioner files an appeal along with application for stay, then the appellate authority will duly consider the said prayer expeditiously.
Certified copy as per rules.
(Prakash Shrivastava) (Satyendra Kumar Singh)
Judge Judge
ts
Digitally signed by TULSA SINGH
Date: 2021.07.14 10:49:12
+05'30'