Shakuntala Devi Jan Kalyan Samiti ... vs State Of U.P. Through Prin.Secy. Home ... on 28 January, 2020

[Cites 34, Cited by 4]

Allahabad High Court

Shakuntala Devi Jan Kalyan Samiti ... vs State Of U.P. Through Prin.Secy. Home ... on 28 January, 2020

1. This petition has been filed challenging the order dated 1.11.2019 passed by the Chief Judicial Magistrate, Lucknow in Misc. Case no.2620 of 2019 (Bank of Baroda vs. M/s. Shakuntala Devi), and also praying for a direction to the respondents to remove the seal from the lock of the petitioner no.3 on the house and to restore possession of the secured asset to the petitioners and to refrain from taking coercive measures against the petitioners.

2. I have heard Sri Akhilesh Kalra, learned counsel for the petitioners and Sri Prashant Kumar Srivastava for the Bank.

3. Sri Prashant Kumar Srivastava has raised a preliminary objection as to the maintainability of the writ petition under Articles 226 and 227 of the Constitution of India, as he has relied upon several judgments of the Supreme Court and of this Court and also of various High Courts, to say that against an action taken under Section 14 by the District Magistrate or his authorized officer, the remedy of appeal under Section 17 of the SARFAESI Act is available to the aggrieved person.

4. Learned counsel for the respondents has relied upon the judgment in Kanaiyalal Lalchand Sachdev and others vs. State of Maharashtra and others, 2011 (2) SCC 782 and Paras 19 and 20 thereof. It has been submitted on the basis of the said judgment that an action under Section 14 of the Act constitute an action taken after the stage of Section 13(4) of the Act and, therefore, the same would fall within the ambit of Section 17(1) of the Act and the efficacious remedy for the borrower or any person aggrieved by an action under Section 13(4) of the Act is to file an appeal before the Debts Recovery Tribunal. It has been submitted that in the judgment in Kanaiyalal Lalchand Sachdev (supra), the Supreme Court held that Section 14 action is a continuation of action taken under Section 13 of the Act and, therefore, they should be considered as one action.

5. Learned counsel for the respondents has placed reliance upon the judgment in United Bank of India vs. Satyawati Tandon and others 2010 (8) SCC 110, to state that in the judgment rendered in Satyawati Tandon, the Supreme Court considered more specifically action taken under Section 14 of the Act and he has referred Para 17 of the judgment, wherein it has been observed by the Supreme Court that if respondent no.1 had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14 of the Act, then she should have availed remedy by filing an application under Section 17(1) of the Act. The expression "any person" used in Section 17(1) if 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 of the Act. In Satyawati Tandon (supra), the Supreme Court observed that an action taken under Section 14 of the Act would be challenged in appeal before the Tribunal and that the High Court had overlooked the settled position in law that it will not ordinarily entertain a petition under Article 226 of the Constitution of India if any effective remedy is available to the aggrieved person and that this Rule applies with greater rigour in matters involving recovery of the public dues. The Supreme Court had observed that the High Court must keep in mind that the legislations enacted by Parliament and the 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.

6. Learned counsel for the petitioners has submitted that both the aforesaid judgments were rendered by the Supreme Court before the proviso to Section 14 was added by way of amendment in the Act in January, 2013.

7. Sri Prashant Kumar Srivastava on the other hand, has placed reliance upon the judgment in Standard Chartered Bank vs. V. Noble Kumar and others (2013) 9 SCC 620, which was decided on 22.8.2013 by the Supreme Court, where the Supreme Court also considered the amended provisions of Section 14 of the Act. Learned counsel for the respondents has placed reliance upon Para 8 of the judgment, where the Supreme Court considered the grounds taken by the High Court for allowing the writ petition filed by the respondent to the civil appeal. The High Court had observed that the Bank cannot bye-pass Section 13(4) of the Act and invoke the provision of Section 14. Before invoking Section 14, notice under Section 13(4) is necessary as the proceedings under Section 14 cannot be questioned by filing an appeal before the Tribunal or before a Court. The second ground taken by the High Court was that the procedure contemplated under Rule 8 of the Security, Interest (Enforcement) Rules, 2002 was not followed before Section 14 was invoked and therefore, the order passed by the Chief Judicial Magistrate was contrary to the Rules and therefore, liable to be set aside.

8. It has been submitted by Sri Prashant Kumar Srivastava that both these aforesaid grounds taken by the contesting respondents therein and found to be feasible by the High Court were not found justified by the Supreme Court. The Supreme Court observed in Para-11 while referring to the arguments raised by the learned counsel for the Bank that the Act provided for two alternative procedures for taking possession of the secured assets under Sections 13(4) and 14 respectively. While Section 13(4) authorises the creditor himself to take possession of the secured assets without the aid of the State's coercive power, Section 14 enables the secured creditor to seek the assistance of the State's coercive power for securing the possession of the secured assets. It was always open to the secured creditor to choose one of the abovementioned two procedures in a given case to obtain possession of the secured asset depending upon his own assessment of the situation regarding the possibility of resistance (by the debtor or guarantor as the case may be) for taking possession of the secured assets. The Supreme Court observed that it is not necessary that the procedure under Section 13(4) should be undertaken before action under Section 14 can be initiated.

9. In V. Noble Kumar (supra), the Supreme Court also considered the amendments made under Section 13 of the Act after the judgment rendered in Mardia Chemicals Ltd. vs. Union of India (2004) 4 SCC 311, but held thereafter that under the scheme of Section 14, a secured creditor who desires to seek the assistance of the State's coercive power for obtaining possession of the secured asset is required to make a request in writing to the District Magistrate or the officer authorized in that behalf. By way of amendment to the said Section, a proviso was added with nine sub-clauses and these amendments were made to provide safeguard to the interest of the borrower. Under the proviso, the secured creditor is required to file an affidavit, furnishing the information contemplated under various sub-clauses (1) to (9) of the said proviso and obligates the Magistrates to pass suitable orders regarding taking of possession of secured asset only after being satisfied with the contents of the affidavit. The satisfaction of the Magistrate contemplated under the second proviso to Section 14(1) of the Act necessarily requires the Magistrate to examine the factual correctness of the assertions made in such an affidavit, but it does not require any adjudication as such on the basis of legal niceties.

10. In Para 27 of the judgment rendered in V. Noble Kumar (supra), the Supreme Court further observed that under Section 14, the Magistrate is authorized only to take possession of the property and forward the connected documents to the secured creditor. Therefore, the borrower is always entitled to prefer an appeal under Section 17 after the possession of the secured asset is handed over to the secured creditor. It further observed that by whatever manner the secured creditor obtains possession, either through the process contemplated under Section 14 or without resorting to such a process obtaining of the possession of a secured asset is always a measure against which a remedy under Section 17 is available. With regard to observation of the High Court in its judgment under appeal, that Rule 8 of the Rules of 2002 provided for certain procedure to be followed by the secured creditor taking possession of the secured asset, the Supreme Court observed that the High Court was incorrect in observing that while taking action under Section 14 of the Act, compliance of Rule 8 is mandatory.

11. It has also been submitted by the learned counsel for the respondents that a Division Bench of this Court in Anuradha Singh and another vs. Chief Metropolitan Magistrate, Kanpur Nagar and two others: Writ-C No.13445 of 2018, decided on 13.4.2018, was considering a similar case where an auction notice was challenged by the petitioners on the ground that no notice was given by the Magistrate before passing the order under Section 14 of the Act. It was observed by the Division Bench that the petitioners had a remedy of filing an appeal against the action taken under Section 13 of the Act, which they had already availed of. There was no interim order granted in appeal and, therefore, the Bank had sought possession in terms of Section 14 of the Act. They rejected the contention of the writ petitioners that opportunity should have been given to them before passing the order under Section 14 of the Act by the Magistrate, by observing that there was no statutory provision under the Act for providing an opportunity to the borrower at the stage of passing of an order under Section 14 of the Act nor any decision, either of this Court at Allahabad or the Apex court that may enable the Court to read such principles of administrative law into the statutory provisions of Section 14 of the Act. The Division Bench reiterated that the remedy under Section 17 was available even against an action taken under Section 14 of the Act and the borrower or any other person aggrieved can approach the Tribunal to protect his rights.

12. Learned counsel for the respondents has also placed reliance upon another Division Bench judgment of this Court rendered on 3.4.2017 in Writ Petition No.6816 (MB) of 2017: Smt. Asmaa vs. District Magistrate, Faizabad and others.

13. Almost similar observations have been made by two Division Benches of this Court in Writ-C No.27473 of 2017: M/s. Glorious Enterprises and others vs. District Magistrate, Agra and others, decided on 20.6.2017, and Writ-C No.30002 of 2018: Khalid vs. State of U.P. and others, decided on 5.9.2018.

14. A judgment rendered by the High Court of Madras in M/s. Deccan Chronical Holdings Limited vs. Canara Bank, decided on 12.6.2015 has also been relied upon by the learned counsel for the respondents.

15. Learned counsel for the petitioners, on the other hand, has placed reliance upon a Division Bench judgment of this Court rendered in Writ-C No.38578 of 2018: Kumkum Tentiwal vs. State of U.P. and others, decided on 11.12.2018, reported in 2019 (2) ADJ 125, where the writ petitioner had challenged the orders passed by the ADM (Finance and Revenue), Mathura, directing taking of possession of the property of the petitioner under Section 14 of the Act. Learned counsel for the Bank had argued that the writ petition was not maintainable as the remedy of appeal under Section 17 of the Act was provided. Learned counsel for the Bank had relied upon the judgment rendered in V. Noble Kumar (supra) and Para-27 of the said report, which has been referred to, hereinabove. The Bank had also relied upon the judgment rendered in Writ-C No.11706 of 2018: Dheerendra Kumar and another vs. Authorized Officer, Aadhar Housing Finance Ltd. and another, decided on 2.4.2018, where this Court relying upon various judgments of the Supreme Court had held that the remedy to the borrower was available under Section 17 of the Act.

16. The Division Bench in Kumkum Tentiwal (supra) however, observed that the Division Bench in Dheerendra Kumar (supra) did not consider the scope of procedure to be adopted while passing orders under Section 14 of the SARFAESI Act as well as the remedy available against the order passed under Section 14 of the SARFAESI Act. It was observed by the Division Bench in Kumkum Tentiwal (supra) that the judgment rendered by the Supreme Court in Harsh Govardhan Sondagar v. International Assets Reconstruction Company Ltd., (2014) 6 SCC 1, was not considered by the Division Bench in Dheerendra Kumar (supra). In the case of Harsh Govardhan Sondagar (supra), the Supreme Court was considering the rights of a person emanating from the validly created lease and had observed that the District Magistrate or the officer authorized would have to give a notice and an opportunity of hearing to the person claiming to be a lessee, consistent with the principles of natural justice, and then take a decision. In the said judgment of Harsh Govardhan Sondagar (supra), the Supreme Court observed that the decision of the Chief Metropolitan Magistrate or the District Magistrate can be challenged before the High Court under Articles 226 and 227 of the Constitution of India by any aggrieved person.

17. The Division Bench in Kumkum Tentiwal (supra), after placing reliance upon Harsh Govardhan Sondagar (supra), observed that the borrower is also entitled to right of hearing prior to any order being passed by the District Magistrate while exercising powers under section 14 of the Act. It observed that the District Magistrate has to record a satisfaction with regard to contents of the affidavits filed by the Bank under proviso to sub-section (1) of Section 14 of the Act and such satisfaction can only be recorded after hearing the parties. It further observed in Para-12 that from the scheme of the Act, it is implicit that the procedure of Sections 13(2) and 13(4) is mandatory before initiating action under Section 14 of the Act. The borrower on initiation of action under section 14 of the Act, may at times plead that he was not provided any opportunity of hearing as envisaged under Section 13(2) of the Act, entitling him to payment of the dues within 60 days and therefore, the action under section 14 is illegal and misconceived. Thus, notice or opportunity of hearing is also necessary to the borrower or guarantor, although it may be as a formality at times, before initiating action under Section 14 of the Act.

18. The Division Bench in Kumkum Tentiwal (supra) relied upon the observations made by the Supreme Court in Harsh Govardhan Sondagar (supra) that the only recourse available against an order passed under Section 14 of the Act is under Articles 226 and 227 of the Constitution of India.

19. It has been submitted by Sri Akhilesh Kalra that the judgment rendered by the Division Bench in Kumkum Tentiwal (supra) on 11.12.2018 was challenged in SLP by the Bank, which SLP has been dismissed by the Supreme Court on 6.5.2019 and the judgment of the Division Bench has been affirmed.

20. Sri Prashant Kumar Srivastava has argued that the Division Bench in the case of Kumkum Tentiwal (supra) did not consider the law as propounded by the Supreme Court in the case of V. Noble Kumar (supra) in the right perspective. He has also argued that Harsh Govardhan Sondagar (supra) was a judgment rendered by the Supreme Court in the facts of the case where a person, who was in possession of the secured asset on the basis of valid lease, was sought to be dispossessed by the action taken under Section 14 of the Act. He has also argued that the judgment rendered in Anuradha Singh (supra) by a Division Bench of this Court, which was a judgment by a coordinate Bench and much prior in time, was not considered in the judgment rendered in Kumkum Tentiwal (supra).

21. Sri Akhilesh Kalra has further relied upon the judgment rendered by the High Court of Uttarakhand at Nainital in Special Appeal No.901 of 2018: The Nainital Bank Ltd. vs. Naveen Kisan Rice Mill and others, decided on 10.1.2019, which relates to whether the power under Section 14 of the Act could have been delegated by the District Magistrate or the or the Chief Metropolitan Magistrate to any other officer. It relied upon the doctrine of "delegatus non potest delegare", which says that a delegatee cannot further delegate his powers, to come to a conclusion that the power under Section 14 of the Act could not have been exercised by the Additional District Magistrate.

22. The judgment rendered in the case of The Nainital Bank Ltd. (supra) cannot be said to be applicable in the case of the petitioners as it related to the question whether delegation in contravention of Statute of power under Section 14 of the Act would be legal or not.

23. Sri Akhilesh Kalra has also relied upon a judgment rendered by the Court of Appeal in Paisner and others vs. Goorich, [1955] 2 WLR 1071 and has relied upon the observations made by Lord Denning with regard to precedential value of the judgments and observations that when the Judges of the Court of Appeal gave a decision on the interpretation of an Act of Parliament, the decision itself was binding on them and their successors, but the words, which the Judges use in giving the decision are not binding. When interpreting a Statute, the sole function of the Court is to apply the words of the Statute to a given situation. Once a decision has been reached on that situation, the doctrine of precedent requires us to apply the statute in the same way in any similar situation, but not in a different situation. Whenever a new situation emerges, not governed by previous decisions, the Courts must be governed by the Statute and not by the words of the Judges.

24. In Sakshi vs. Union of India (2004) 5 SCC 518, the Supreme Court considered the precedential value of foreign precedents and held that such decisions must be construed in the context in which they are decided. In State of Madhya Pradesh vs. Narmada Bachao Andolan (2011) 7 SCC 639, the Supreme Court observed that a judgment cannot be read as a Statute as judicial utterances are made in the settings of facts of a particular case. A little difference in facts or additional facts may make a lot of difference to the precedential value of a decision.

25. The Supreme Court in the case of Bhavnagar University vs. Palitana Sugar Mills 2003 (2) SCC 111, has also made certain observations on the principles of "stare decisis" and binding precedent. It has been observed by the Supreme Court that a decision is an authority for that which it deduced and not what can logically be deduced therefrom. No doubt the ratio decidendi of a judgment rendered by a Bench of larger coram or even by a coordinate Bench is binding upon subsequent coordinate Benches. Each case has to be dealt with on the facts as mentioned therein and one additional fact by its mere presence or absence may change the very precedential value of an otherwise binding precedent.

26. This Court has considered also the judgments rendered by the Supreme Court in V. Noble Kumar (supra). The judgment of the Supreme Court deals clearly with the amended provisions of Section 14(1) of the Act and still observes that the remedy lies for an action taken under Section 14(1) of the Act to a person aggrieved under Section 17 of the Act. Also, under the language of Section 14(1) of the Act, the Supreme Court had observed that the procedure under Rule 8 of the Rules of 2002 cannot be read.

27. The Division Bench judgment in the case of Anuradha Singh (supra) deals sufficiently with the question of notice being issued to the borrower, after the Bank initiates action under Section 14 of the Act by filing affidavit before the officer authorized or the District Magistrate.

28. In the judgment rendered by the Division Bench in Anuradha Singh (supra), the facts of the case are similar to the facts of the petitioners' case inasmuch as proceedings under Sections 13(2) and 13(4) were challenged by the petitioners by filing Securitization Application No.530 of 2019 before the Debts Recovery Tribunal, Lucknow, praying for setting aside the recovery proceedings. A copy of the Securitization Application has been filed as Annexure-8 to the petition.

29. In Kumkum Tentiwal (supra), the petitioner had filed the writ petition against the order passed by the Additional District Judge (Finance and Revenue), Mathura under Section 14 of the Act. It was not the case of the petitioner that the petitioner had challenged the notice and auction under Section 13(4) of the Act before the Debts Recovery Tribunal in Securitization Application, which was pending and where no interim order was granted.

30. Faced with such a situation where there are two Division Benches of this Court; one prior in point of time having been rendered on 13.4.2018 and the other rendered on 11.12.2018, this Court has gone through the judgment rendered in Mardia Chemicals Ltd. (supra), where validity of the Act was challenged and while dealing with the question of violation of principles of natural justice with respect to an action taken under Section 13(4) of the Act, the supreme Court observed that no doubt, the borrower is entitled to file its objections, which objections have to be considered by the secured creditor and reasons stated briefly for rejecting the same, but that would not give borrower any right to challenge the reasons given by the Bank or the secured creditor as an independent cause of action.

31. In Mardia Chemicals Ltd. (supra), the Supreme Court was considering the validity of the SARFAESI Act and the main question that arose before the Supreme Court in civil appeals, writ petitions and transfer petitions, were as under:

"(i) Whether it is open to challenge the statute on the ground that it was not necessary to enact it in the prevailing background particularly when another statute was already in operation?

(ii) Whether provisions as contained under Sections 13 and 17 of the Act provide adequate and efficacious mechanism to consider and decide the objections/disputes raised by a borrower against the recovery, particularly in view of bar to approach the civil court under Section 34 of the Act?

(iii) Whether the remedy available under Section 17 of the Act is illusory for the reason it is available only after the action is taken under Section 13(4) of the Act and the appeal would be entertainable only on deposit of 75% of the claim raised in the notice of demand?

(iv) Whether the terms or existing rights under the contract entered into by two private parties could be amended by the provisions of law providing certain powers in a one-sided manner in favour of one of the parties to the contract?

(v) Whether provision for sale of the properties without intervention of the court under Section 13 of the Act is akin to the English mortgage and its effect on the scope of the bar of the jurisdiction of the civil court?

(vi) Whether the provisions under Sections 13 and 17(2) of the Act are unconstitutional on the basis of the parameters laid down in different decisions of this Court?

(vii) Whether the principle of lender's liability has been absolutely ignored while enacting the Act and its effect?"

32. In the said case, the Supreme Court while allowing the appeals, answered the questions framed by it in Paras 80 and 81 of the judgment as follows:

"80. Under the Act in consideration, we find that before taking action a notice of 60 days is required to be given and after the measures under Section 13(4) of the Act have been taken, a mechanism has been provided under Section 17 of the Act to approach the Debts Recovery Tribunal. The abovenoted provisions are for the purpose of giving some reasonable protection to the borrower. Viewing the matter in the above perspective, we find what emerges from different provisions of the Act, is as follows:

1. Under sub-section (2) of Section 13 it is incumbent upon the secured creditor to serve 60 days' notice before proceeding to take any of the measures as provided under sub-section (4) of Section 13 of the Act. After service of notice, if the borrower raises any objection or places facts for consideration of the secured creditor, such reply to the notice must be considered with due application of mind and the reasons for not accepting the objections, howsoever brief they may be, must be communicated to the borrower. In connection with this conclusion we have already held a discussion in the earlier part of the judgment. The reasons so communicated shall only be for the purposes of the information/knowledge of the borrower without giving rise to any right to approach the Debts Recovery Tribunal under Section 17 of the Act, at that stage.

2. As already discussed earlier, on measures having been taken under sub-section (4) of Section 13 and before the date of sale/auction of the property it would be open for the borrower to file an appeal (petition) under Section 17 of the Act before the Debts Recovery Tribunal.

3. That the Tribunal in exercise of its ancillary powers shall have jurisdiction to pass any stay/interim order subject to the condition as it may deem fit and proper to impose.

4. In view of the discussion already held in this behalf, we find that the requirement of deposit of 75% of the amount claimed before entertaining an appeal (petition) under Section 17 of the Act is an oppressive, onerous and arbitrary condition against all the canons of reasonableness. Such a condition is invalid and it is liable to be struck down.

5. As discussed earlier in this judgment, we find that it will be open to maintain a civil suit in civil court, within the narrow scope and on the limited grounds on which they are permissible, in the matters relating to an English mortgage enforceable without intervention of the court.

81. In view of the discussion held in the judgment and the findings and directions contained in the preceding paragraphs, we hold that the borrowers would get a reasonably fair deal and opportunity to get the matter adjudicated upon before the Debts Recovery Tribunal. The effect of some of the provisions may be a bit harsh for some of the borrowers but on that ground the impugned provisions of the Act cannot be said to be unconstitutional in view of the fact that the object of the Act is to achieve speedier recovery of the dues declared as NPAs and better availability of capital liquidity and resources to help in growth of the economy of the country and welfare of the people in general which would subserve the public interest." (Emphasis supplied)

33. Thereafter, the Supreme Court upheld the validity of the Act and its provisions except that of sub-section (2) of Section 17 of the Act, which was declared ultra vires of Article 14 of the Constitution of India.

While dealing with these questions and the arguments raised regarding the entitlement of the borrower to be heard before notice under sub-section (2) of Section 13 is issued, the Supreme Court in Paras 74 to 77 of the judgment in Mardia Chemicals Ltd. (supra) observed as under:

"74. A reference has also been made for similar observations in Srinivasa Enterprises v. Union of India [(1980) 4 SCC 507] at SCC pp. 513-14 and in Jalan Trading Co. (P) Ltd. v. Mill Mazdoor Sabha [AIR 1967 SC 691 : (1967) 1 SCR 15] at SCR p. 36. While referring to the observations made in Collector of Customs v. Nathella Sampathu Chetty [AIR 1962 SC 316 : (1962) 3 SCR 786 : (1962) 1 Cri LJ 364] at SCR pp. 829-30 it is submitted that the intent of Parliament shall not be defeated merely for the reason that it may operate a bit harshly on a small section of public where it may be necessary to make such provisions of achieving the desired objectives to ensure that the nefarious activities of smuggling, etc. had to be necessarily curbed. In Fatehchand Himmatlal [(1977) 2 SCC 670] where debts of the agriculturists were wiped off, this Court observed:

?44. Every cause claims its martyr and if the law, necessitated by practical considerations, makes generalizations which hurt a few, it cannot be helped by the Court. Otherwise, the enforcement of the Debt Relief Act will turn into an enquiry into scrupulous and unscrupulous creditors, frustrating through endless litigation, the instant relief to the indebted which is the promise of the legislature.? (SCC p. 689, para 44) Yet in another decision referred to, in Kishan Chand Arora v. Commr. of Police [AIR 1961 SC 705 : (1961) 3 SCR 135] it has been held that absence of appeal does not necessarily render the legislation unreasonable. Provision for appeal is not an absolute necessity. For same propositions a reference has also been made to Chinta Lingam v. Govt. of India [(1970) 3 SCC 768] , SCC at p. 772, where it has been observed that when the power has to be exercised by one of the highest officers the fact that no appeal has been provided is not material. In respect of the appellate provision once again our attention has been drawn to the observations made by this Court in SCC at pp. 582-83, paras 15 and 16 in Organo Chemical Industries v. Union of India [(1979) 4 SCC 573 : 1980 SCC (L&S) 92] to the effect that an appeal is a desirable corrective but not an indispensable imperative. It is, however, further observed in this decision that it may all depend upon the nature of the subject-matter, other available correctives and the possible harm flowing from the wrong orders.

75. In relation to the argument on behalf of the petitioners that they are entitled to be heard before a notice under sub-section (2) of Section 13 is issued failing which there is denial of the principles of natural justice, a reference has been made to certain decisions to submit that in every case, it is not necessary to make a provision for providing a hearing. For example, in the case of a licensing statute, see Kishan Chand Arora [AIR 1961 SC 705 : (1961) 3 SCR 135] . The other decisions referred to are: Lachhman Dass v. State of Punjab [AIR 1963 SC 222 : (1963) 2 SCR 353] , Chairman, Board of Mining Examination v. Ramjee [(1977) 2 SCC 256 : 1977 SCC (L&S) 226] , SCC at p. 262 and Haryana Financial Corpn. v. Jagdamba Oil Mills [(2002) 3 SCC 496] , SCC at p. 504, para 7 to submit that concept of natural justice is not a straitjacket formula. It, on the other hand, depends upon the facts of the case, nature of the enquiry, the rules under which the Tribunal is acting and what is to be seen is that no one should be hit below the belt. Relationship between the creditor and the debtor, it is submitted, is essentially in the realm of a contract.

76. In regard to the submission made by the parties as indicated in the preceding paragraphs, we would like to make it clear that issue of a notice to the debtor by the creditor does not attract the application of the principles of natural justice. It is always open to tell the debtor what he owes to repay. No hearing can be demanded from the creditor at this stage. So far as the provision of appeal is concerned, we have already discussed in the earlier part of the judgment that proceedings under Section 17 of the Act have been wrongly described as appeal before the Debts Recovery Tribunal. It is in fact a forum where proceedings are originally initiated in case of any grievance against the creditor in respect of any measure taken under sub-section (4) of Section 13 of the Act. Hence, the decisions on the point as to whether provision for an appeal is essential or not are not of any assistance in the facts of the present case.

77. It is also true that till the stage of making of the demand and notice under Section 13(2) of the Act, no hearing can be claimed for by the borrower. But looking to the stringent nature of measures to be taken without intervention of court with a bar to approach the court or any other forum at that stage, it becomes only reasonable that the secured creditor must bear in mind the say of the borrower before such a process of recovery is initiated so as to demonstrate that the reply of the borrower to the notice under Section 13(2) of the Act has been considered applying mind to it. The reasons, howsoever brief they may be, for not accepting the objections, if raised in the reply, must be communicated to the borrower. True, presumption is in favour of validity of an enactment and a legislation may not be declared unconstitutional lightly more so, in the matters relating to fiscal and economic policies resorted to in the public interest, but while resorting to such legislation it would be necessary to see that the persons aggrieved get a fair deal at the hands of those who have been vested with the powers to enforce drastic steps to make recovery." (Emphasis Supplied)

34. This Court taking into account the judgments rendered by three Division Benches of this Court, as referred to hereinabove, and the observations of the Supreme Court in the case of Mardia Chemicals Ltd. (supra), is of the opinion that nothing can be read into the language of Section 14 of the Act, which has not been provided specifically therein by the Parliament.

After the judgment was rendered in Mardia Chemicals Ltd. (supra), the Act was amended and the provisions for pre-deposit of 75% was done away with for approaching the Tribunal.

35. Since in the statute itself there is no provision for giving opportunity of hearing in an action under Section 14 of the Act, this Court cannot provide such opportunity of hearing to the writ petitioner. It is settled position in law that the Court ought to decide matters on the basis of law as it exists and declare the same instead on the basis of what law should be.

36. In this case, this Court finds that the observations made by the Supreme Court in Satyawati Tandon (supra) and V. Noble Kumar (supra) with regard to special Statutes like the SARFAESI Act and the limited jurisdiction of the High Court where statutory remedy is available, cannot be ignored by this Court.

37. This Court has considered the submissions made by the learned counsel for the parties, including the submissions made on merits of the order dated 01.11.2019 passed by the Chief Judicial Magistrate, Lucknow and the arguments raised that there is no recording of satisfaction as is required under Section 14 of the Act with regard to the contents of the affidavit by the secured creditor i.e. the Bank.

38. This Court has noticed that the Chief Judicial Magistrate in his order dated 01.11.2019 referred to the fact that the affidavit had been filed by the Bank on all the nine points/sub-clauses of the first proviso to Section 14(1) of the Act. Moreover, the Bank has also stated that a notice under Section 13(2) had been given to the borrower. The borrower choose not to reply to the same. Moreover, there was no order passed by any competent Court in favour of the borrower even after notice under Section 13(4) was issued. After recording such satisfaction, the order impugned has been passed with the caveat that in case it is found that the affidavit submitted by the Bank contains incorrect statement, the responsibility would lie on the Bank for any legal proceedings taken by the borrower.

Since the petitioners have already approached the Tribunal against the action taken by the Bank under Section 13(4) of the Act and there is no interim order of the Tribunal, the Bank could have and rightly proceeded by filing an application under Section 14 of the Act.

39. It cannot be said that there is no recording of satisfaction by the Chief Judicial Magistrate in the order impugned.

40. The petitioners have remedy against such action and the order passed by the Chief Judicial Magistrate concerned by filing an application before the Debts Recovery Tribunal under Section 17 of the Act. The Tribunal would have the benefit of pleadings already before it in the Securitization Application No.530 of 2019 and would be in a better position to appreciate all aspects of the matter.

41. Writ Jurisdiction is an extraordinary jurisdiction and as has been observed by the Supreme Court in Satyawati Tandon (supra), such extraordinary jurisdiction ought not to be exercised in matters where adequate statutory remedy is available.

42. The writ petition is dismissed as not maintainable on the grounds of availability of statutory remedy alone and the petitioners may, if they so advised, file an appeal before the appropriate forum.

43. Any observation made by this Court on the merits of the order passed by the Chief Judicial Magistrate may not be read against the petitioners as they may be able to satisfy the appellate authority that the order had been passed on misrepresentation of facts by the Bank.

Order Date :- 28.1.2020 Sachin

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