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Kamla Grover And Ors vs Authorized Officer Indiabulls Housing ... on 12 November, 2021

Author: Prateek Jalan

Bench: Prateek Jalan

                    $~35 (2021 Cause List)
                    *     IN THE HIGH COURT OF DELHI AT NEW DELHI
                    +     W.P.(C) 12306/2021
                        KAMLA GROVER AND ORS                              ..... Petitioners
                                          Through: Mr. Vishal Arun Mishra, Ms.Nisha
                                                       Garg,   Mr.    Pawan        Kumar,
                                                       Advocates.
                                                 versus
                        AUTHORIZED OFFICER INDIABULLS
                        HOUSING FINANCE LIMITED                         ..... Respondent
                                          Through: Mr. Sunil Dalal, Senior Advocate
                                                       with Ms. Sangeeta Sondhi & Mr.
                                                       Devashish Bhadauria, Advocates.
                    CORAM:
                    HON'BLE MR. JUSTICE PRATEEK JALAN
                                   ORDER

% 12.11.2021 The proceedings in the matter have been conducted through video conferencing.

CM APPL. 40015/2021(for stay)

1. The petitioners had filed the captioned writ petition challenging a proposed auction of their property [First Floor, Second Floor and Third Floor with its terrace/roof rights, comprised in Khasra No. 2244/1215/1140, Gali No. 2, Block QQ, Situated at Naiwala, Karol Bagh, New Delhi-110005] ["the property"], by the respondent-Indiabulls Housing Finance Limited, pursuant to a sale notice dated 07.09.2021 under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ["SARFAESI Act"]. The writ petition was filed in view of the fact that the petitioners' application to the Debts Recovery Tribunal ["DRT"] under Section 17 of the SARFAESI Act was not taken up for hearing for want of Presiding Officers Signature Not Verified in all the three DRTs in Delhi. Digitally Signed By:SHITU NAGPAL Signing Date:13.11.2021 06:57:28 W.P.(C) 12306/2021 Page 1 of 6

2. On 28.10.2021, this Court passed the following order:-

"4. Ms. Sondhi states at the outset that the auction scheduled for 13.10.2021 has been unsuccessful, and the respondent has now given notice for a further auction on 15.11.2021.

5. Although several petitions under Article 226 of the Constitution of India have been entertained in view of the fact that the DRTs in Delhi are not functioning, I have since been informed that the Debts Recovery Appellate Tribunal ["DRAT"] in cases of urgency is entertaining applications for transfer of petitions to a functional DRT in exercise of powers under Section 17(7) of the SARFAESI Act read with Section 17A(2) of Recovery of Debts and Bankruptcy Act, 1993. A copy of the order dated 13.10.2021 passed by the DRAT in Misc. Application No. 97/2021, arising out of S.A. No. 86/2020 has also been brought to my attention, wherein proceedings were transferred from the DRT-I, Delhi to the DRT, Jaipur on the ground of urgency.

6. In view of the fact that the sale by the respondent is now scheduled for 15.11.2021, the writ petition is disposed of with liberty to the petitioners to invoke their statutory remedies in terms of the aforesaid procedure. The DRAT/DRT are requested to consider the petitioners' request for an expeditious hearing of their application in view of the aforesaid submissions.

7. Mr. Vishal Arun Mishra, learned counsel for the petitioners, further states that the petitioners wish to regularise their loan account, and make a proposal to the respondent for this purpose. Ms. Sondhi submits that the amount required for regularisation of the account is to the tune of approximately ₹15,00,000/- [Rupees fifteen lakhs only]. The petitioners may approach the respondent with a proposal in this regard which the respondent may consider in its own discretion."

3. The present application has been necessitated by the fact that the learned Chairperson of the Debts Recovery Appellate Tribunal ["DRAT"] has also Signature Not Verified demitted office on 30.10.2021 by virtue of a notification dated Digitally Signed By:SHITU NAGPAL Signing Date:13.11.2021 06:57:28 W.P.(C) 12306/2021 Page 2 of 6 29.10.2021 passed by the Department of Financial Services, Ministry of Finance, Government of India. The petitioners have, therefore, been unable to approach the DRAT for transfer of the pending Securitisation Application to a functional DRT.

4. Mr. Sunil Dalal, learned Senior Counsel for the respondent, states that the petitioners have not approached the respondent for regularisation of their account in terms of paragraph 7 of the order dated 28.10.2021. This position is disputed by Mr. Vishal Arun Mishra, learned counsel for the petitioners. Be that as it may, Mr. Dalal submits that the total amount due on the credit facilities in question is to the tune of ₹1.39 crores, and the overdue amount today is in the region of ₹16 lakhs.

5. As all the three DRTs and the DRAT in Delhi are non-functional, this Court has considered several petitions for similar relief. This Court has taken the view inter alia in orders dated 10.11.2021 in W.P.(C) 12125/2021 [Shrim Industries And Ors. vs. Bank of Baroda And Another] and W.P.(C) 12595/2021 [Smt. Kamlesh vs. Indian Overseas Bank], that instead of entertaining the petitions under Article 226 of the Constitution on merits, it is preferable to exercise the power of transfer contemplated by the statutory scheme, and thus enable the parties to exercise their statutory remedies, which have been rendered unavailable for reasons beyond their control. I am of the view that such an approach is also consistent with the jurisprudence of the Supreme Court, that exercise of writ jurisdiction in challenges to proceedings under SARFAESI Act ought to be eschewed.

6. In United Bank of India vs. Satyawati Tondon and Others (2010) 8 SCC 110, the Court held as follows:-

Digitally Signed By:SHITU law that the High Court will ordinarily not entertain a NAGPAL Signing Date:13.11.2021 06:57:28 W.P.(C) 12306/2021 Page 3 of 6 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.

xxxx xxxx xxxx

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 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.

46. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. 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 (sic will) ultimately prove Signature Not Verified detrimental to the economy of the nation. Therefore, the Digitally Signed By:SHITU NAGPAL Signing Date:13.11.2021 06:57:28 W.P.(C) 12306/2021 Page 4 of 6 High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad [AIR 1969 SC 556], Whirlpool Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 1] and Harbanslal Sahnia v. Indian Oil Corpn. Ltd. [(2003) 2 SCC 107] and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass an appropriate interim order."

(Emphasis supplied.)

7. The observations in Satyawati Tondon (supra) have been followed by the Supreme Court inter alia in Authorized Officer, State Bank of Travancore and Another vs. Mathew K.C. (2018) 3 SCC 85 [paragraphs 5, 9 to 15], and the recent judgment in C. Bright vs. District Collector and Others (2021) 2 SCC 392 [paragraph 22].

8. For the aforesaid reasons, the application is disposed of with the following directions:-

a. The Securitisation Application filed by the petitioners before the DRT-III, Delhi, under Diary No. 209/2021 dated 11.10.2021, is transferred to the DRT, Jaipur, which is the only functional DRT under the jurisdiction of the DRAT, Delhi.

b. The Registrar, DRT-III, Delhi is directed to transmit the records of the aforesaid Securitisation Application to the Registrar, DRT, Jaipur in digitised form.

c. Mr. Mishra is also directed to coordinate with the DRT, Jaipur and transmit a copy of the pending application digitally to the DRT, Jaipur directly, if so permitted.

d. The DRT, Jaipur is directed to take up the proceedings for Signature Not Verified Digitally Signed By:SHITU hearing/directions on 23.11.2021 at 2:00 PM. The DRT, Jaipur will NAGPAL Signing Date:13.11.2021 06:57:28 W.P.(C) 12306/2021 Page 5 of 6 permit the parties to appear online [through video conference], if they so request.

e. The DRT, Jaipur will hear the parties and pass appropriate orders, at least on the petitioners' interim application, as expeditiously as possible and not later than 30.11.2021.

f. The respondent is directed to defer the auction proceedings in respect of the property until 06.12.2021, subject to the petitioners depositing a sum of ₹10 lakhs with the respondent by 15.11.2021 and a further sum of ₹5 lakhs by 30.11.2021. The deposits will be made and accepted without prejudice to the rights and contentions of the parties and subject to the orders passed by the DRT, Jaipur on the petitioners' application.

g. The petitioners are directed not to create any third party interest as far as the possession and title of the property are concerned, and to maintain status quo as far as the character of the property is concerned until the next date of hearing.

9. It is made clear that this Court has not rendered any findings on the merits of the petitioners' case, which are to be decided by the DRT, Jaipur in accordance with law.

10. The application stands disposed of in these terms.

PRATEEK JALAN, J NOVEMBER 12, 2021 'pv' Signature Not Verified Digitally Signed By:SHITU NAGPAL Signing Date:13.11.2021 06:57:28 W.P.(C) 12306/2021 Page 6 of 6