Fazil P vs Axis Bank Ltd on 21 August, 2025

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Kerala High Court

Fazil P vs Axis Bank Ltd on 21 August, 2025

This writ appeal arises out of the order dated 11.08.2025 of the learned Single Judge in I.A.No.3 of 2025 in W.P.(C)No.14201 of 2025. The said writ petition was one filed by the appellants- petitioners, invoking the writ jurisdiction of this Court under Article 226 of the Constitution of India, seeking instalment facility to clear the dues in respect of a proceedings initiated by the 1st respondent Axis Bank Ltd. through its Authorized Officer, who is arrayed as the 2nd respondent, invoking the provisions under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The reliefs sought for in that writ petition read thus;

i) Issue a writ of certiorari or any other appropriate writ, order, or direction quashing the possession proceedings initiated by the 1st respondent and Exhibit P2 notice dated 15.03.2025 issued by the Advocate Commissioner.

ii) To declare that Exhibit P2 is illegal, arbitrary and opposed to the principles of natural justice.

iii) Issue a writ of mandamus directing the Respondents not to proceed with the possession proceedings and permit the Petitioners to settle the outstanding amount through an agreeable restructuring plan."

W.A.No.2039 of 2025 4

2025:KER:63744

2. The said writ petition was disposed of by the judgment dated 08.04.2025 of the learned Single Judge. Paragraph 5 and also the last paragraph of the judgment dated 08.04.2025 read thus;

"5. Accordingly, there will be a direction to the respondent bank to accept repayment of the entire outstanding amount of Rs.97,48,442/- (Rupees ninety seven lakhs forty eight thousand four hundred and forty two only) along with any accrued interest, costs and charges from the petitioners in the following manner:-

(i) The petitioners shall pay the outstanding amount of Rs.97,48,442/- (Rupees ninety seven lakhs forty eight thousand four hundred and forty two only) along with any accrued interest, costs and charges in 12 equated monthly instalments;

(ii) The first instalment shall be paid on or before 15.05.2025 and the subsequent instalments shall be paid on or before the 15th day of every succeeding months;

(iii) In the event of default of any one instalment, the respondent bank shall be entitled to proceed in accordance with the law;

(iv) In order to enable the petitioners to repay the entire amounts, all coercive proceedings shall be kept in abeyance.

The writ petition is disposed of as above."

3. The appellants-petitioners, who failed to effect any payment in terms of the directions contained in the judgment dated 08.04.2025 in W.P.(C)No.14201 of 2025, originally filed I.A.No.2 of W.A.No.2039 of 2025 5 2025:KER:63744 2025 seeking extension of time, which was granted by the order dated 17.06.2025. The said order reads thus;

"Having heard the learned counsel appearing for the petitioners and the learned counsel appearing for the respondent bank, the time for payment of intstalments payable on 15.05.2025 and 15.06.2025 in terms of the directions contained in the judgment will stand extended till 05.07.2025."

4. It is thereafter that the appellants filed I.A.No.3 of 2025 seeking further extension of time, which ended in dismissal by the order dated 11.08.2025. The said order reads thus;

"This is the second application for extension of time. Considering the fact that no amounts have been paid by the petitioners even after the earlier extension of time granted in terms of the order of this Court in I.A.No.2/2025, this second application for extension of time cannot be entertained. The application will therefore stand dismissed."

5. Heard the learned counsel for the appellants-petitioners and the learned counsel for the respondents.

6. The learned counsel for the appellants-petitioners would contend that the order dated 11.08.2025 of the learned Single Judge in I.A.No.3 of 2025 in W.P.(C)No.14201 of 2025 is per se arbitrary and illegal, which warrants interference in this writ appeal. On the other hand, the learned counsel for the respondents would W.A.No.2039 of 2025 6 2025:KER:63744 contend that no interference is warranted in the order dated 11.08.2025 of the learned Single Judge. The learned counsel would raise the question of maintainability of the writ petition, since the 1st respondent is a private company carrying on banking business as a scheduled bank.

7. In South Indian Bank Ltd. v. Naveen Mathew Philip [(2023) 17 SCC 311], 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, 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 W.A.No.2039 of 2025 7 2025:KER:63744 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 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.

8. In Naveen Mathew Philip [(2023) 17 SCC 311] the Apex Court noticed that, in matters under the SARFAESI Act, W.A.No.2039 of 2025 8 2025:KER:63744 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 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 W.A.No.2039 of 2025 9 2025:KER:63744 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.

9. In S. Shobha v. Muthoot Finance Ltd. [2025 (2) KHC 229], on the question of maintainability of writ petitions under Article 226 of the Constitution of India against a private non- banking financial company/a private company carrying on banking business as a Scheduled Bank, the Apex Court laid down as follows;

(1) For issuing a writ against a legal entity, it would have to be an instrumentality or agency of a State or should have been entrusted with such functions as are Governmental or closely associated therewith by being of public importance or being fundamental to the life of the people and hence Governmental.

(2) A writ petition under Article 226 of the Constitution of India may be maintainable against (i) the State Government;

(ii) Authority; (iii) a statutory body; (iv) an instrumentality W.A.No.2039 of 2025 10 2025:KER:63744 or agency of the State; (v) a company which is financed and owned by the State; (vi) a private body run substantially on State funding; (vii) a private body discharging public duty or positive obligation of public nature; and (viii) a person or a body under liability to discharge any function under any Statute, to compel it to perform such a statutory function. (3) Although a non-banking finance company like the Muthoot Finance Ltd. with which we are concerned is duty bound to follow and abide by the guidelines provided by the Reserve Bank of India for smooth conduct of its affairs in carrying on its business, yet those are of regulatory measures to keep a check and provide guideline and not a participatory dominance or control over the affairs of the company. (4) A private company carrying on banking business as a Scheduled bank cannot be termed as a company carrying on any public function or public duty.

(5) Normally, mandamus is issued to a public body or authority to compel it to perform some public duty cast upon it by some statute or statutory rule. In exceptional cases, a writ of mandamus or a writ in the nature of mandamus may issue to a private body, but only where a public duty is cast upon such private body by a statute or statutory rule and only to compel such body to perform its public duty. (6) Merely because a Statute or a rule having the force of a statute requires a company or some other body to do a particular thing, it does not possess the attribute of a statutory body.

(7) If a private body is discharging a public function and the denial of any rights is in connection with the public duty W.A.No.2039 of 2025 11 2025:KER:63744 imposed on such body, the public law remedy can be enforced. The duty cast on the public body may be either statutory or otherwise and the source of such power is immaterial but, nevertheless, there must be a public law element in such action.

(8) According to Halsbury's Laws of England, 3rd Ed. Vol.30, p.682, "a public authority is a body not necessarily a county council, municipal corporation or other local authority which has public statutory duties to perform, and which performs the duties and carries out its transactions for the benefit of the public and not for private profit". There cannot be any general definition of public authority or public action. The facts of each case decide the point.

10. In view of the law down by the Apex Court in S. Shobha [2025 (2) KHC 229] the appellants-petitioners cannot invoke the writ jurisdiction of this Court under Article 226 of the Constitution of India seeking interference in the proceedings initiated by the 1st respondent Axis Bank Ltd. under the provisions of the SARFAESI Act, since the said Bank is a private company carrying on banking business as a scheduled bank, which cannot be termed as a company carrying on any public function or public duty. Further in view of the law laid down by the Apex Court in Naveen Mathew Philip [(2023) 17 SCC 311] the appellants cannot seek interference of this Court in the proceedings initiated under the W.A.No.2039 of 2025 12 2025:KER:63744 SARFAESI Act, on the grounds raised in the writ petition or in the writ appeal. The appellants, who have not chosen to comply with the direction contained in the judgment dated 08.04.2025 of the learned Single Judge, even within the extended time granted in the order dated 17.06.2025, cannot raise a valid challenge against the order dated 11.08.2025 in I.A.No.3 of 2025. This writ appeal is nothing but an abuse of process of Court, which is liable to be dismissed.

In the result, this writ appeal fails and the same is accordingly dismissed.

Sd/-

ANIL K. NARENDRAN, JUDGE Sd /-

MURALEE KRISHNA S., JUDGE MSA

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Kerala High Court