Punjab-Haryana High Court
Vaibhav Bhandari vs State Of Punjab And Ors on 21 October, 2024
Author: Lisa Gill
Bench: Lisa Gill
SUNIL CWP No. 28449 of 2024 (O&M) -1- 139 4224 PRAG 137329-D6 : IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP-28449-2024 (O&M) Date of Decision: 21.10.2024 VAIBHAV BHANDARI seeees Petitioner(s) Versus STATE OF PUNJAB AND OTHERS sees Respondent(s) CORAM:- HON'BLE MRS. JUSTICE LISA GILL HON'BLE MRS. JUSTICE SUKHVINDER KAUR Present: Mr. Narinder Kumar Banka, Advocate for petitioner. 3K KK LISA GILL, J.
1. Prayer in this writ petition is for quashing notice dated 27.06.2022 (Annexure P-2) issued under Section 13(2) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the SARFAESI Act), notice dated 21.12.2023 (Annexure P-5) issued under Section 13(4) of SARFAESI Act as well as notice dated 16.08.2024 (Annexure P-6), issued by Duty Magistrate- cum-Tehsildar, Amritsar, pursuant to order dated 26.04.2024, passed by District Magistrate, Amritsar under Section 14 of SARFAESI Act. There is a further prayer for directing respondents to accept overdue amount in installments in response to their e-mail dated 12.09.2024 and withdraw proceedings initiated against petitioner under SARFAESI Act besides stay of dispossession of petitioner from mortgaged property.
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2. Learned counsel for petitioner submits that financial facility as mentioned in para 2 of writ petition was availed by petitioner from respondent-Bank. Residential house of petitioner was mortgaged with the bank. It is submitted that financial discipline was being maintained by petitioner post the outbreak of pandemic COVID-19, Circular dated 05.05.2021 (Annexure P1) was issued by Reserve Bank of India providing benefit to the account holders where the account was standard. Petitioner was afforded benefit under the said circular. However, in an illegal manner, notice under Section 13(2) of SARFAESI Act was issued on 27.06.2022 recording that petitioner's account was classified Non-Performing Asset (NPA) on 11.04.2021 whereas benefit under Notification, Annexure P1, had been afforded to petitioner thereafter. Possession notice dated 21.12.2023 was also issued besides order dated 26.04.2024 under Section 14 of SARFAESI Act was passed pursuant to which notice dated 16.08.2024 was issued by the Duty Magistrate-cum-Tehsildar, Amritsar-II, District Amritsar. Entire proceedings undertaken against petitioner, it is submitted, are illegal and arbitrary as notice under Section 13(2) of SARFAESI Act itself is defective. Once notice under Section 13(2) of SARFAESI Acct itself is illegal, remedy provided under SARFAESI Acct is not an efficacious remedy available to petitioner and present writ petition should be entertained and allowed.
3. We have heard learned counsel for petitioner and have gone through the file with his able assistance, however, we do not find any ground to interfere in this matter at this stage in exercise of jurisdiction under Article 226 of the Constitution of India, keeping in view the categoric provisions of SARFAESI Act, which is admittedly a complete code in itself. It is a settled 2024.10.25 17:17 | attest to the accuracy and integrity of this document CWP No. 28449 of 2024 (O&M) -3- position that interference in proceedings under SARFAES] Acct in exercise of jurisdiction under Article 226 of the Constitution of India has to be minimal and actuated only in exceptional or extraordinary circumstances. In the case of Union Bank of India vs. Satyawati Tandon and others, 2010(8) SCC 110, it was held by Hon'ble the Supreme Court as:-
SUNIL 2024.10.25 17:17 | attest to the accuracy and integrity of this document ae 0 re Both, the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a 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 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, 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.
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 CWP No. 28449 of 2024 (O&M) -4- SUNIL 2024.10.25 17:17 | attest to the accuracy and integrity of this document 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."
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4. This view has also been reiterated by Hon'ble the Supreme Court in number of cases including that of M/s South Indian Bank Ltd. and others vs. Naveen Mathew Philip and others, 2023 (2) R.C.R. (Civil) 771 and PHR Invent Educational Society Vs. UCO Bank and others 2024 AIR (SO 1893.
5. Learned counsel for petitioner is unable to point out any exceptional or extra ordinary circumstance which calls for interference by this Court at this stage. All pleas and arguments as raised qua proceedings under SARFAESI Act initiated against petitioner being unjustified, illegal or arbitrary are very well within the realm of consideration by the appropriate Forum/Tribunal under Act.
6. Writ petition is accordingly dismissed with liberty to petitioner to avail remedy(ies) as are available to it in accordance with law while taking up all pleas as may be available.
7. There is no expression of opinion on the merits of the matter. (LISA GILL) JUDGE (SUKHVINDER KAUR) JUDGE 21.10.2024 Sunil Whether speaking/reasoned: Yes/No Whether reportable: Yes/No SUNIL 2024.10.25 17:17 | attest to the accuracy and integrity of this document