Gujarat High Court
Ketanbhai Umedsinh Padhiar & vs Kotak Mahindra Bank Limited on 1 April, 2016
Author: N.V.Anjaria
Bench: N.V.Anjaria
C/SCA/11377/2015 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 11377 of 2015
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KETANBHAI UMEDSINH PADHIAR & 1....Petitioner(s)
Versus
KOTAK MAHINDRA BANK LIMITED....Respondent(s)
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Appearance:
MR ASPI M KAPADIA, ADVOCATE for the Petitioner(s) No. 1 - 2
MR VIVEK B GUPTA, ADVOCATE for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE N.V.ANJARIA
Date : 01/04/2016
ORAL ORDER
Heard learned advocate Mr. Aspi Kapadia for the petitioners and learned advocate Mr. Vivek Gupta appearing for the respondent Bank.
2. The challenge in this petition is directed against notice dated 06.06.2015 under Section 13(4) issued to the petitioners under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
3. In respect of the financial assistance taken by the petitioners from City Financial Consumer Finance India Ltd., the respondent Bank as assignee of the debt has initiated the proceedings under the SARFAESI Act against the petitioners for recovery of dues to the tune of Rs.23,05,770/- and issued notice under Section 13(4) of the Act.
4. On 22.03.2016, the Court passed following order, Page 1 of 4 HC-NIC Page 1 of 4 Created On Tue Apr 05 02:27:26 IST 2016 C/SCA/11377/2015 ORDER "The petition was filed on 25.06.2015. It appears that it was first posted on 07.08.2015 which still awaits issuance of notice. The matter has been adjourning from time to time on account of sick note or leave note and in view of statement subsequently made on subsequent dates that the Bank and the petitioners have been exploring settlement.
2. Notice to the Bank returnable on 29th March, 2016.
3. The Bank shall state and confirm about the statement of settlement made by learned advocate for the petitioners on the returnable date.
4. The petitioners shall serve the respondent Bank with direct service which is permitted today.
5. It is clarified that there is no stay operating in the matter."
4.1 Pursuant to aforesaid order, learned advocate for the respondent Bank has appeared and submitted that the cheques were given by the petitioners for repayment towards dues to the respondent Bank. Be as it may, they all have bounced.
5. It is not in dispute that the steps taken by the respondent Bank under the SARFAESI Act have travelled upto the stage of Section 13(4). The symbolic possession of the property being Nondh No.2957 (old), 111(new), C.S.4/2, Haveli Street, Mota Bazar, Navsari mortgaged with the Bank for the purpose of taking finance has been taken. Taking of symbolic possession by drawing panchnama and pasting notice on the property in question was not disputed.
5.1 At the stage of measures under Section 13(4) and/or the stage post-Section 13(4) of the SARFAESI Act, the remedy of appeal before the Debts Recovery Tribunal under Section 17 of the Act is available to Page 2 of 4 HC-NIC Page 2 of 4 Created On Tue Apr 05 02:27:26 IST 2016 C/SCA/11377/2015 ORDER the borrower. Since the statutory alternative remedy is available with the petitioners, this Court is not inclined to entertain this petition. It is trite that in the commercial matters, alternative remedy has to exhausted steadfast rather than invoking writ jurisdiction of High Court straightway.
5.2 In Kanaiyalal Lalchand Sachdev vs. State of Maharashtra [(2011) 2 SCC 782], the Supreme Court upheld the order of the High Court in not entertaining the petition and relegating the petitioner to the said remedy. It is trite principle to be followed steadfast.
5.3 The above principle was emphasised by the Apex Court in United Bank of India vs. Satyawati Tondon [(2010) 8 SCC 110]. The Supreme Court observed thus, "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 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, 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."
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6. Learned advocate for the petitioners however tried to submit that according to him, the issues arise as to whether the respondent herein is entitled to take steps under the SARFAESI Act or not and whether notice under Section 13(2) was rightly issued or not. Any and all such contentions be taken by the petitioners before the Debts Recovery Tribunal while pursuing the remedy of appeal under which the petitioners are being relegated. All the contentions for both the parties are kept open.
7. Accordingly, this petition is dismissed. The petitioners are relegated to pursue their remedy in appeal under Section 17 of the SARFAESI Act before the Debts Recovery Tribunal.
8. This Court has not gone into the merits of the case of either side. The Debts Recovery Tribunal shall decide the appeal, if filed, in accordance with law and on merits.
9. This petition is dismissed with observation as above.
(N.V.ANJARIA, J.) chandrashekhar Page 4 of 4 HC-NIC Page 4 of 4 Created On Tue Apr 05 02:27:26 IST 2016