Calcutta High Court
Mackeil & Company Private Limited vs State Bank Of India & Ors on 17 May, 2018
Equivalent citations: AIR 2018 CALCUTTA 201, (2018) 2 CALLT 281, (2018) 3 CAL HN 706, (2019) 1 BANKCAS 206, (2019) 2 NIJ 751, AIRONLINE 2018 CAL 258
Author: Arijit Banerjee
Bench: Arijit Banerjee
In The High Court At Calcutta
Constitutional Writ Jurisdiction
Original Side
WP 388 of 2015
Mackeil & Company Private Limited
-Vs.-
State Bank of India & Ors.
With
WP 416 of 2015
Shri Pranab Chakraborty
-Vs.-
State Bank of India & Ors.
Before : The Hon'ble Justice Arijit Banerjee
For the petitioner : Mr. Ritzu Ghosal, Adv.
Ms. Sunita Shaw, Adv.
Mr. Saubhik Chowdhury, Adv.
Ms. Priyata Chakrabarty, Adv.
For the respondents : Mr. S. C. Shrivastava, Adv.
Mr. Pradeep Kumar, Adv.
Mr. Hemant Sharma, Adv.
Mr. Srinibas Mishra, Adv.
For the State : Mrs. Sipra Majumder, Adv.
Mrs. Sumita Biswas Chowdhury, Adv.
Heard On : 07.05.2015, 14.05.2015, 19.06.2015,
16.07.2015,
19.08.2015, 09.09.2015, 16.09.2015,
28.09.2015,
16.10.2015, 18.11.2015, 27.11.2015,
11.12.2015,
17.12.2015, 05.01.2016, 10.03.2016,
07.04.2016,
19.07.2016, 03.01.2017, 31.01.2017,
10.02.2017,
13.04.2017, 28.04.2017, 23.08.2017,
06.09.2017.
CAV On : 03.05.2018
Judgment On : 17.05.2018
Arijit Banerjee, J.:-
(1)Common questions of fact and law are involved in these two writ petitions. Hence, the two matters have been taken up together for hearing and disposal.
Contention of the petitioners:-
(2) The main challenge in the two writ petitions is to the possession notice dated 10 December, 2014 issued by the respondent Bank and taking over actual physical possession of the property in question under Sec. 13(3) of the Securitization And Reconstruction of Financial Asset & Enforcement of Security Interest Act, 2002 (in short the 'SARFAESI Act'). The case of the petitioner is that Shri Pranab Kumar Chakraborty, (hereinafter referred to as 'Pranab') the petitioner in WP No. 416 of 2015 was the sole proprietor of Mackeil & Co. who availed of credit facilities from the respondent Bank in the year 1993 and for that purpose created mortgage in respect of three properties by deposit of title deeds with the bank. The particulars of the said properties are as follows:-
(a) Mouza-Baltikuri, J.L. No. 1, Khatian Nos. 1888, 1893, 1895, 1965, 1970 in Dag/Plot No. 1366 (being Deed No. 1179 dated 21st March, 1992).
(b) Mouza-Baltikuri, J.L. No. 1, Khatian Nos. 1888, 1893, 1895, 1965, 1970 in Dag/Plot No. 1366 (being Deed No. 1180 dated 21st March, 1992).
(c) Mouza-Baltikuri, J.L. No. 1, Khatian Nos. 1888, 1893, 1895, 1965, 1970 in Dag/Plot No. 1365 (being Deed No. 2868 dated 11th May, 1983).
The loan obtained was repaid by Pranab in the very same year. (3) In 1993, Mackeil & Co. Private Limited, the petitioner in WP 388 of 2015 was incorporated. In 2005 Mackeil Ispat & Forging Limited (in short 'Mackeil Ispat') was incorporated. Pranab is a director in both the present petitioner company and in Mackeil Ispat. Mackeil Ispat obtained a term loan aggregating Rs. 94.83 crores from a consortium of banks with State Bank of India, (in short 'SBI') Durgapur Branch, as the lead Bank in the year 2008. The present petitioner company is the corporate guarantor in respect of such term loan and executed an unattested memorandum of hypothecation in favour of SBI, Durgapur Branch, whereby the plant and machinery of the present petitioner company located at Mouza Baltikuri, District Howrah were furnished as collateral security. On 6 March, 2010 the petitioner company executed a deed of guarantee in favour of the consortium of Banks which advanced loan to Mackeil Ispat.
(4) Disputes and differences arose between Mackeil Ispat and the respondent Bank. The consortium of Banks classified the bank account of Mackeil Ispat as non-performing asset (NPA) sometime in December, 2013. Mackeil Ispat filed a suit in this Court being CS No. 302 of 2014 claiming damages of Rs. 342.26 crores. However, I do not wish to go into the same since that is an independent proceeding and not germane for the purpose of disposing of the present writ petitions. (5) Learned Counsel submitted that the respondent Bank wrongly debited diverse amounts to the cash credit account held in the name of the petitioner company. The petitioner had lodged a First Information Report. Although, there are prayers in the writ petition for reversing such debit entry and completion of criminal investigation expeditiously, such prayers were not pressed at the hearing of the applications. In any event, I am of the view that the writ court should not go into the allegation of wrongful or fraudulent debiting of a bank account and the petitioner is at liberty to agitate such points before the appropriate forum in an appropriately constituted action. (6) On or about 9 December, 2014 the respondent bank pasted a notice under Sec. 13 (4) of the SARFAESI Act at the main entrance of the premises of Mackeil Ispat. On 10 December, 2014, the Bank took over possession of the properties belonging to Pranab covered by deed no. 1179 dated 21 March, 1992, deed no. 1180 dated 21 March, 1992 and deed no. 2868 dated 11 May, 1983.
(7) Learned Counsel submitted that the properties of which the respondent Bank took possession are owned by Pranab. The petitioner company is not the owner of such properties. The petitioner company is a tenant in respect of the said properties and pay rent to the petitioner. Such relationship does not empower the Bank authorities to take over possession of the said properties and/or to initiate proceedings under the SARFAESI Act in respect of the said properties.
(8) It was next submitted that the said properties were never mortgaged in favour of consortium of Banks for the credit facilities advanced to Mackeil Ispat. No Security Agreement within the meaning of Sec. 2 (zb) of SARFAESI Act was executed in respect of such properties and as such there are no secured assets within the meaning of Sec. 2(zc) of the Act. The respondent Bank is not a secured creditor within the meaning of Sec. 2(zd) of the Act. There is no secured debt within the meaning of Sec. 2(ze) and there is no security interest within the meaning of Sec. 2(zf) of the Act. Hence, the pre- conditions for initiating proceeding under the SARFAESI Act are not satisfied and no proceeding could be initiated.
(9) It was then submitted that the petitioner company did not make any default regarding its cash credit account with the Bank. No proceedings under the SARFAESI Act have been initiated against the petitioner company or against Pranab. Hence, the respondent Bank could not take over possession of the said properties. (10) Learned Counsel then submitted that the SME-8 Forms relied upon by the Bank to establish mortgage of the said properties have been brought into existence by the Bank. Pranab had been made to sign on blank SME-8 Forms in the year 1991 which were subsequently filled up by the Officers of the respondent Bank without notice to Pranab. Copies of such Forms were not handed over to the petitioner company or to Pranab. The said Forms came to the knowledge of the petitioner and Pranab only in the course of the present hearing when learned Counsel for the respondent Bank produced copies thereof before this Court. The petitioner company not being the owner of the said properties could not have mortgaged the same. Further, it would appear from the said Forms that Title Deed No. 2668 was allegedly deposited on 28 March, 1991 when neither the petitioner company nor Mackeil Ispat was in existence. In some of the said Forms the petitioner company has been shown as borrower which is incorrect. Mackeil Ispat was the borrower. The said SME-8 Forms cannot be relied upon.
(11) Even assuming that the petitioner company created a security interest in favour of the Bank, the same was compulsorily registrable under Sec. 125 of the Companies Act, 1956. This was not done. Hence, no valid charge was created.
(12) Though no security was created, without any notice, the respondent Bank took over possession of the said properties which belonged to Pranab treating the same as the properties of the petitioner company, in purported exercise of powers under Sec. 13(4) of the SARFAESI Act. By doing so, the respondent Bank has acted without authority of law. This action of the respondent Bank is without jurisdiction and hence, the petitioner company or Pranab is not required to avail of the alternative remedy provided under Sec. 17 of the SARFAESI Act. In this connection learned Counsel relied on the decision of this Court in the case of Debasree Das-vs.-State of West Bengal & Ors., (2011) 1 CHN 10.
(13) Learned Counsel also relied on the following decisions:-
(i) Standard Chartered Bank-vs.-V. Nobel Kumar & Ors., (2013) 9 SCC 620. Learned Counsel referred to paragraph 15 of the reported judgment wherein it was observed that for the secured creditor to take possession of the secured assets, there must be a security agreement which creates the liability of the borrower to the secured creditor of the secured debt. Learned Counsel submitted that in the present case there is no security agreement, no secured asset, no secure debt and no secured creditor and hence, the provisions of the SARFAESI Act do not apply.
(ii) Calcutta National Bank Ltd. (in Liquidation)-vs.-Rangaroon Tea Co. Ltd. & Ors., AIR 1969 CAL 578. This case was relied upon in support of the proposition that without registration of a charge sought to be created in favour of a creditor, the creditor would rank as an unsecured creditor.
(iii) Official Liquidator, Manasura And Co. (Private) Ltd.-vs.-
Commissioner of Police, Madras, & Ors., 38 Company Cases 884 and Kerala State Financial Enterprises Ltd.-vs.-Official Liquidator, High Court of Kerala, (2006) 10 SCC 709. Learned counsel relied on these decisions in support of his submission that if the charges created were not registered under the Companies Act, they are void. Contention of the respondents:-
(14) Appearing for the respondent Bank Mr. Shrivastava, learned Counsel submitted that these writ petitions should not be entertained since an alternative efficacious remedy is available to the petitioners under the SARFAESI Act by way of an application before the Debts Recovery Tribunal under Sec. 17.
(15) Learned Counsel then submitted that several disputed questions of fact are involved in these writ petitions and the Court should not decide such questions in exercise of jurisdiction under Art. 226 of the Constitution of India.
(16) On merits, learned Counsel submitted that Mackeil Ispat was granted substantial financial accommodation by a consortium of Banks of which the respondent Bank was the lead Bank. The petitioner company was a sister concern of Mackeil Ispat and executed corporate guarantee in respect of the loan given to Mackeil Ispat. The petitioner also mortgaged its land by depositing title deeds in respect of 9 kottahs 5 chittacks of land situated at Mouza Baltikuri, Dag No. 1365, 1888, 1893, 1895, 1965 and 1970 at Howrah and the same is registered with the Registrar of Companies, Calcutta. In this connection he drew my attention to Annexure R-1 to the affidavit in opposition filed on behalf of the respondent Bank which is a Xerox copy of the search report from the Charge register maintained in the office of Registrar of Companies, Calcutta in respect of the petitioner company. He submitted that Mackeil Ispat failed and neglected to repay the loan advanced by the consortium of Banks. The respondent Bank being the lead Bank issued the notice under Sec. 13(2) of the SARFAESI Act to Mackeil Ispat, Pranab, Ishita Halder and the petitioner company. Subsequently, after dealing with the contentions of the petitioner and others, the respondent Bank issued notice under Sec.
13(4) of the SARFAESI Act and took possession of the secured properties.
(17) Learned Counsel submitted that the account of the petitioner company held with the respondent Bank was also declared as non- performing asset since the petitioner failed to discharge its liability as corporate guarantor in respect of the loan advanced to Mackeil Ispat. (18) It was submitted that the fact that the petitioner is the owner of the properties in question and duly deposited the title deeds in respect thereof as security is recorded in the memorandum for recording extension of mortgage by deposit of title deeds covering enhanced credit limits and/or creation of equitable mortgage on additional properties for existing limits/enhanced limits and additional facilities and this was also confirmed by the petitioner by issuing letters. In this connection learned Counsel drew my attention to letters issued by the petitioner and the said memorandum.
(19) Mr. Shrivastava relied on the following decisions:-
(i) United Bank of India-vs.-Satyawati Tondon & Ors., AIR 2010 SC 3413 and Kanaiyalal Lalchand Sachdev & Ors.-vs.-State of Maharashtra & Ors., 2011 AIR SCW 1194. These decisions were relied upon in support of the submission that in view of the alternative statutory remedy available to the petitioner, the present writ petitions should not be entertained.
(ii) M/s. Shivam Trading Co. & Anr.-vs.-Allahabad Bank & Anr., (2015) 3 CLJ (Cal) 341. In this decision a learned Judge of this court held that the word 'whatsoever' in Sec. 2(zf) of the SARFAESI Act enlarges the ambit of the definition of 'security interest'. Under the SARFAESI Act security interest can be created under an arrangement including the creation of mortgage by deposit of title deeds with the secured creditor and such mortgage does not require registration.
(iii) CCT Orissa & Ors.-vs.-Indian Explosives Ltd., AIR 2008 SC 1631. A three Judge bench of the Apex Court observed that the High Court seemed to have completely lost sight of the parameters highlighted by the Apex Court in large number of cases relating to exhaustion of alternative remedy.
(iv) Authorised Officer, Indian Overseas Bank And Anr.-vs.-M/s.
Ashok Saw Mill, AIR 2009 SC 2420. The Apex Court held that the legislature by including Sec. 17(3) in the SARFAESI Act has gone to the extent of vesting the DRT with authority to even set aside a transaction including sale and to restore possession to the borrower in appropriate cases. It cannot be said that the DRT has no jurisdiction to deal with a post-Section 13(4) situation.
(v) Jagdish Singh-vs.-Heeralal and Ors., AIR 2014 SC 371. The Apex Court held that if any person is aggrieved by any action taken by the secured creditor under Sec. 13(4) of SARFAESI, the remedy open to him is to approach the DRT. The Civil Court's jurisdiction is barred by Sec. 34 of the SARFAESI.
(vi) M/s. Vision Comptech Integrators Ltd.-vs.-State Bank of India & Ors., AIR 2014 Cal 161. A learned Judge of this Court held that in a case where the aggrieved person claims to be a bona fide lessee or a tenant from whom possession is yet to be taken over but a sale notice has been issued in respect of the property in question, even without losing possession of the operation of the secured asset under lease or tenancy, the lessee or the tenant, being a non-borrower, would have the right to approach the DRT as soon as the sale notice is issued in terms of the Rule 8 (6) of the DRT Rules.
(vii) Unreported judgment delivered on 10 April, 2015 by me in CO 4268 of 2013 (Gobinda Kumar Nag-vs.-Ranjit Kuma). In that case the petitioner filed an application under Art. 227 of the Constitution challenging the order of the State Consumers Disputes Redressal Commission, West Bengal refusing to condone the delay in filing appeal against the order of the District Consumer Disputes Redressal Forum, Siliguri. I referred to various decisions and held that in view of a statutory alternative remedy being available to the petitioner by way of an appeal to the National Commission, revisional application should not be entertained.
(viii) Unreported judgment dated 6 May, 2014 delivered by Dipankar Datta, J. in WP 353 of 2014 (M/s. Mercury Exporters And Manufacturing Pvt. Ltd. & Anr.-vs.-Punjab National Bank & Anr.). The learned Judge held that Sec. 17(3) of the SARFAESI Act empowers the DRT to direct restoration of possession of the secured asset in favour of the borrower if the secured creditor is found to have violated the provisions of the Act. The Act provides an efficacious alternative remedy to the aggrieved borrower which he can pursue at the right time i.e. after physical possession of the secured asset is taken over by the Bank.
(ix) Unreported judgment of a Division Bench of this Court delivered on 20 May 2014 in APO No. 177 of 2014 (M/s. Mercury Exporters And Manufacturing Pvt. Ltd. & Anr.-vs.-Punjab National Bank & Anr.). In this appeal which was filed against the order of Dipankar Datta, J., referred to in the immediately preceding paragraph, the Division Bench held that even if a secured creditor wants to proceed against the assets which are not covered by the SARFAESI Act, the DRT under the said Act would have the authority to undo any wrong that may have been committed by the Bank. The appeal was dismissed. Petitioner in reply:-
(20) In reply, Mr. Ghosal submitted that in the judgments cited on behalf of the respondent Bank, the borrower had admitted having executed a security agreement. In the present case, the petitioners' specific case is that there is no security agreement. The Bank's case that title deeds have been deposited to create security interest in the properties in question is a fraudulent case. The petitioners could not approach DRT because that would amount to admitting the existence of a security agreement.
Court's view:-
(21) Although learned Counsel for both the parties argued at length over a number of days, the issue involved is a short one, i.e., whether or not the Bank could proceed under Sec. 13 of the SARFAESI Act against the properties in question. The answer would depend on whether or not Pranab offered the said properties as security for the financial accommodation granted by the Bank in favour of Mackeil Ispat. It is not in dispute that Pranab is at the helm of affairs of both the petitioner company and Mackeil Ispat. He is in control of the affairs of both the companies. Learned Counsel for Pranab argued that no mortgage was created in favour of Bank in respect of the said properties. In any event, even assuming a charge was created the same is bad and ineffective in law for want of registration. On the other hand, learned Counsel for the Bank contended that an equitable mortgage was created in respect of the said properties by deposit of title deeds. The same amounts to creation of security interest in favour of the Bank within the meaning of Sec. 2(zf) of the SARFAESI Act. Learned Counsel has relied on documents in respect of creation of such security interest and also to establish that the charge has been duly registered. Learned counsel for the petitioner has questioned the authenticity of such documents and has submitted that the document showing creation of charge has been brought into existence by the Bank fraudulently. These are disputed questions of fact which the writ court is ill-equipped to decide. Prima facie, the said properties appear to have been mortgaged in favour of the Bank. Undisputedly, the title deeds in respect of the said properties are with the Bank. It is also not in dispute that moneys are due and payable from Mackeil Ispat to the Bank. Whether or not the charge in respect of the said properties was created as security for the moneys advanced by the Bank to Mackeil Ispat is a question of fact and is a disputed question.
The dispute can be resolved only by a detailed enquiry into the matter and if necessary by examining witnesses in an appropriately constituted action. The writ court is not the proper or convenient forum for resolving such a dispute. The appropriate remedy for the petitioners would be to approach the Debts Recovery Tribunal with an application under Sec. 17 of the SARFAESI Act.
(22) Admittedly, the Bank has taken possession of the properties in question in exercise of power under Sec. 13(4) of the DRT Act. Sec. 17(1) of the DRT Act provides that any person (including the borrower), aggrieved by any of the measures referred to in Sec. 13(4) taken by the secured creditor or his authorised officer may make an application to the DRT having jurisdiction in the matter within 45 days from the date on which such measures had been taken. Sec. 17(2) of the DRT Act provides that the DRT shall consider whether the measure taken by the secured creditor under Sec. 13(4) for enforcement of security is in accordance with the provisions of the Act and the Rules made thereunder. Sec. 17(3) provides that if the DRT, after examining the facts and circumstances of the case, and evidence produced by the parties, comes to the conclusion that the measure taken by the secured creditor under Sec. 13(4) is not in accordance with the provisions of the SARFAESI Act and the Rules made thereunder, it may declare the measure taken by the creditor as invalid and restore the possession of the secured assets to the borrower and pass any other appropriate order as it may deem necessary. Sec. 17(5) provides that an application under Sub-Sec. (1) shall be disposed of within 60 days from the date of such application but such period may be extended upto 4 months for reasons to be recorded in writing by the DRT. In the event, the application is not disposed of within 4 months, any party to the application may apply to the Appellate Tribunal for directing the DRT to dispose of the application expeditiously and the Appellate Tribunal may make an order to that effect.
(23) Thus, Sec. 17 of the SARFAESI Act provides a comprehensive and effective remedy to the petitioners. The disputed questions of fact which are involved in the present case can be effectively resolved by the DRT on an application under Sec. 17 of the SARFAESI Act. The High Court exercising jurisdiction under Art. 226 of the Constitution is not the appropriate forum for deciding such disputed questions of fact. (24) The other reason for not entertaining these writ applications is the existence of an alternative statutory remedy to which the petitioners can take recourse. The SARFAESI Act is a complete code in itself. Banks and financial institutions deal with public money and are accountable to the public for such money. It is of utmost importance that the moneys lent by the Banks and the financial institutions are recovered from the borrowers with interest within the agreed time period. To strengthen the hands of the Banks and financial institutions in dealing with defaulting borrowers, some of whom are unscrupulous, the SARFAESI Act was promulgated. It empowers the secured creditor to take certain measures for recovering the moneys lent by enforcing the security against which such moneys were lent without recourse to a Court of Law. However, the Act itself provides for a remedy to a borrower who is aggrieved by any illegal act on the part of the secured creditor including an act of the secured creditor in proceeding wrongfully against an asset of the borrower.
(25) It is true that availability of an efficacious alternative remedy does not oust the jurisdiction of the High Court under Art. 226 of the Constitution. However, the law is equally settled that when a statute itself provides a remedy against any wrongful or illegal act done by the authorities in exercise of power granted under that statute, such remedy should first be exhausted before approaching the writ court. (26) In Satyawati Tondon (supra), at paragraph 17 of the judgement the Apex Court referred to several of its earlier decisions and reiterated that the High Court will ordinarily not entertain a writ petition if an effective alternative 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 the Banks and financial institutions (emphasis is mine). It was 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 code unto themselves since 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. In all such cases, the High Court must insist that before availing of the remedy under Art. 226 of the Constitution, a person must exhaust the remedies available under the relevant statute. At paragraph 18 of the judgment the Apex Court observed as follows:-
"18. 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. 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. 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 ultimately prove detrimental to the economy of the nation. Therefore, the 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 Corporation v. Registrar of Trade Marks, Mumbai (1998) 8 SCC 1 and Harbanslal Sahnia and another v. Indian Oil Corporation Ltd. and others (2003) 2 SCC 107 and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass appropriate interim order."
At paragraph 27 of the judgment, the Apex Court sounded a note of caution to the following effect:-
"27. It is a matter of serious concern that despite repeated pronouncements of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection."
(27) In Authorised Officer, Indian Overseas Bank-vs.-M/s. Ashok Saw Mill (supra), the Apex Court observed that in order to prevent misuse of the wide powers granted to the Banks and financial institutions by the SARFAESI Act and to prevent prejudice being caused to a borrower on account of error on the part of the banks or financial institutions, certain checks and balances have been introduced in Sec. 17 of the SARFAESI Act which allow any person aggrieved by any of the measures referred to in Sec. 13(4) to make an application to the DRT. The intention of the legislature is that while the banks and financial institutions have been vested with stringent powers for recovery of their dues, safeguards have also been provided for rectifying any error or wrongful use of such powers by vesting the DRT with authority after conducting an adjudication in the matter to declare any such action invalid and also to restore possession of the asset in question even though possession may have been made over to transferee. The Apex Court opined that in that case the High Court had rightly dismissed the writ petition on the ground that an efficacious remedy was available to the writ petitioners under Sec. 17 of the SARFAESI Act. It was reiterated that it is well settled that ordinarily relief under Arts. 226 and 227 of the Constitution is not available if an efficacious alternative remedy is available to any aggrieved person. This case was referred to and followed in Kanaiyalal Lalchand Sachdev-vs.-State of Maharashtra (supra).
(28) In GM, Sri Siddeshwara Co-Operative Bank Ltd.-vs.-Sri Ikbal, (2014) 1 CHN (SC) 94, a Division Bench of the High Court had brushed aside the argument of alternative remedy by observing that the writ petitioner had been victimized by fraudulent acts of the respondents who had deprived the writ petitioner of his property in a manner not known to law thereby violating Art. 21 of the Constitution of India. It was observed that when a constitutional right of an individual is affected by statutory authorities by trampling upon the mandatory requirements of law, the Court cannot be a silent spectator and existence of alternative remedy would not stand in the way of entertaining a writ petition. The Division Bench upheld the judgment of the Learned Single Judge. The Apex Court reversed the decision of the Division Bench and referred to its earlier decision in Satyawati Tondon (supra). The Apex Court went on to observe that although alternative remedy is not an absolute bar to the exercise of extraordinary jurisdiction under Art. 226, yet, it is well settled that where a statute provides efficacious and adequate remedy, the High Court will do well in not entertaining a petition under Art. 226. On misplaced consideration, statutory procedures cannot be allowed to be circumvented.
(29) In Punjab National Bank-vs.-OC Krishnan, AIR 2001 SC 3208, the Apex Court held that the DRT Act has been enacted with a view to provide a special procedure for recovery of debts due to Banks and the financial institutions. There is hierarchy of appeal provided in the Act and this fast track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Arts. 226 and 227 of the Constitution or by filing a civil suit which is expressly barred. Even though a provision under an Act cannot expressly oust the jurisdiction of the Court under Arts. 226 and 227 of the Constitution, nevertheless, when there is an alternative remedy available, judicial prudence demands that the court refrains from exercising its writ jurisdiction. (30) Even if the secured creditor proceeds against asset not covered by the SARFAESI Act, the DRT would have the authority to redress any wrong that may have been committed by the secured creditor. This was held by a Division Bench of this Court in M/s. Mercury Exporters And Manufacturing Pvt. Ltd. (supra).
(31) The law is thus absolutely settled. The petitioners should have approached the DRT having jurisdiction in the matter with an application under Sec. 17 of the SARFAESI Act for redressal of their grievances instead of filing the present writ petitions. (32) In so far as Debarsree Das (supra) relied upon by learned Counsel for the petitioners is concerned, the Division Bench observed that no disputed question of fact was involved and on the basis of the defence made out by the secured creditor, it was clear that it had no subsisting valid mortgage in respect of the property in question and, hence, it was a fit case for interference under Art. 226 of the Constitution. The facts of the said case are completely distinguishable. In the present case, disputed questions of facts are involved. Further the earlier judgments of the Apex Court including the decision in United Bank of India-vs.-Satyawati Tondon (supra) were not noticed in Debasree Das (supra). I am bound to follow the principles laid down by the Apex Court in Satyawati Tondon (supra) and other subsequent decisions which I have discussed above. (33) For the reasons aforestated, these writ applications fail and are dismissed, without, however, any order as to costs. The assurance given on behalf of the respondent Bank not to proceed against the petitioners during the pendency of these writ applications is discharged. However, if the writ petitioners approach the Debts Recovery Tribunal having jurisdiction in the matter within 4 weeks from date with their grievance which was sought to be ventilated in the present writ petitions, the learned Tribunal shall decide the same on merits in accordance with law without going in to the question of time-bar.
(34) WP No. 388 of 2015 and WP No. 416 of 2015 are accordingly disposed of.
(35) Urgent certified photocopy of this judgment and order, if applied for, be given to the parties upon compliance of necessary formalities.
(Arijit Banerjee, J.) Later:-
After delivery of judgment learned Counsel for the petitioner prays for stay of operation of the judgment and order. Such prayer is considered and refused.
(Arijit Banerjee, J.)