Karnataka High Court
Shri.Amol S/O Vidyadhar Mohandas vs The Chief Manager & on 3 June, 2019
Author: S G Pandit
Bench: S.G. Pandit
IN THE HIGH COURT OF KARNATAKA,
DHARWAD BENCH
DATED THIS THE 3 R D DAY OF JUNE 2019
BEFORE
THE HON'BLE MR.JUSTICE S.G. PANDIT
W.P. NOS. 108703-108705/2019 (GM-RES)
BETWEEN:
1. SHRI AMOL S/O VIDYADHAR MOHANDAS,
AGE: 34 YEARS, OCCUPATION: BUSINESS,
R/O: PLOT NO: 1202, SAHAYADRI NAGAR,
BELAGAVI - 591 108.
2. SMT. SIYONA AMOL S/O VIDYADHAR
MOHANDAS, AGE: 35 YEARS,
OCCUPATION: BUSINESS, R/O: PLOT
NO.1202, SAHAYADRI NAGAR,
BELAGAVI- 591 108.
- PETI TIONERS
(BY SRI. SANTOSH PUJARI, ADVOCATE)
AND:
THE CHIEF MANAGER & AUTHORIZED OFFICER,
BANK OF BARODA, MARUTI GALLI,
BELAGAVI-590 002.
- RESPONDENT
THESE WRI T PETI TIONS ARE FI LED UNDER
ARTICLES 226 AND 227 OF THE CONSTI TUTION OF
INDIA PRAYING TO QUASH POSSESSION NOTICES
DATED 08.02.2019 ISSUED BY RESPONDENT VIDE
ANNEXURE-D, D1 & D2 AND ETC.
THESE WRI T PETITIONS COMING ON FOR
PRELIMINARY HEARING THIS DAY, THE COURT
MADE THE FOLLOWING:
2
ORDER
The petitioners are before this Court under Article 226 of the Constitution of India praying for the following relief.
a) Issue a wr it in the nature of Certio rari or any o ther wr it, quashing the impugned possess ion notices: 08.02.2019, issued by the respondent vide Annexure-D, D-1 & D-2.
2. The petitioners are the partners of the firm M/s Shrushti Agro & Cold Storage which runs a cold storage business,. They availed loan from the respondent-bank and they are due in a sum of Rs.2,57,95,797/-. The respondent-bank, for non payment of the loan availed by the petitioner, has initiated action for recovery by issuing notice under Section 13 of Securitisation & Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act), 2002 (for short 'SARFAESI Act'). The respondent-bank issued possession notices 3 under Sec. 13(4) of the SARFASAI Act as per Annexures-D, D1 and D2. The said possession notices issued by the respondent-bank are under challenge in these writ petitions.
3. Heard the learned counsel for the petitioners and perused the writ papers.
4. The learned counsel for the petitioners would submit that the cold storage run by the petitioners is seized and the petitioners had no income for the last 13 months and they would not be able to repay the loan amount. Hence, if some time is granted, they will be able to pay the amount to the respondent-bank. The alternate remedy available under the Act is not an efficacious remedy.
5. Admittedly, the petitioner has challenged the possession notices issued by the 4 respondent-bank under Section 13(4) of SARFAESI Act vide Annexures D, D1 and D2. The petitioners have availed loan from the respondent Bank and the petitioners are at present due in a sum of Rs.2,57,95,797/-. As the petitioners failed to repay the loan and became defaulters, the respondent Bank initiated recovery proceedings under the provisions of the SARFAESI Act. The respondent Bank issued possession notices under Section 13(4) of the Act, which are under challenge. The Act, under which recovery proceedings are initiated provides for remedy of filing application before the Debts Recovery Tribunal under Section 17 of the Act. Section 17(1) of the Act, reads as follows:
17. Right to appeal - (1) Any person (including borrower), aggrieved by any of the measures ref erred to in sub-section (4) of section 13 taken by the secured creditor or 5 his authorized off icer under this Chapter, (may make an application along with such fee, as may be prescribed) to the Debts Recovery Tribunal having jurisdiction in the matter within f orty-f ive days f rom the date on which such measures had been taken.
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Reading of the above provision makes it clear that any person including the borrower aggrieved by any action under Section 13(4) of the Act could make an application to the Debts Recovery Tribunal.
7. In the present case, on issuance of possession notice under Section 13(4) of the Act, the petitioners are before this Court without availing the alternate remedy provided under the Act. Normally, a Writ Petition under Article 226 of the Constitution of India ought not to be entertained when there is a statutory alternate remedy, unless an extraordinary case is made 6 out. If effective remedy is available to the aggrieved party, more importantly where recovery proceedings are initiated by the financial institutions, ordinarily Writ Petition would not be entertained. The Hon'ble Supreme Court in a case reported in (2001) 6 SCC 569 (Punjab National Bank Vs. O.C. Krishnan), at paragraph No. 6, while dealing with a case arising under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, has held as follows:
"6. The Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial institutions. There is a hierarchy of appeal provided in the Act, namely, filing of an appeal under Section 20 and this fast-track procedure cannot be allowed to be derailed either by taking recourse to proceedings under 7 Articles 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 Articles 226 and 227 of the Constitution, nevertheless, when there is an alternative remedy available, judicial prudence demands that the Court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have directed the respondent to take recourse to the appeal mechanism provided by the Act."
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8. In the case on hand the petitioners have stated that their unit is seized and they have no income for the last 13 months. The said reason would not enable the petitioners to bypass the alternate remedy available to them. There is no 8 averment why the alternate remedy available under Section 17 of the Act is not efficacious and the reasons for bypassing the same. Accordingly, I decline to entertain the writ petitions. Hence, the writ petitions are rejected with liberty to the petitioners to approach the appropriate forum for redressal of their grievances.
Sd/-
JUDGE bv v