M/S New Deluxe Ice Cream, ... vs Debts Recovery Tribunal, ...
2017 Latest Caselaw 6165 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

Reportable.
 

 
Court No. - 36
 

 
Case :- WRIT - C No. - 45975 of 2017
 

 
Petitioner :- M/S New Deluxe Ice Cream, Allahabad And Another
 
Respondent :- Debts Recovery Tribunal, Allahabad And 4 Others
 
Counsel for Petitioner :- Sanjay Kumar Gupta
 
Counsel for Respondent :- Krishna Mohan Asthana,Siya Ram Pandey
 

 
Hon'ble Mrs. Sunita Agarwal,J.

Heard learned counsel for the parties.

The present petition is directed against the order dated 18.9.2017 passed by the Debt Recovery Tribunal, Allahabad whereby the Securitisation Application No.205 of 2016 filed by the petitioners under Section 17(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short 'the SARFAESI Act, 2002') has been rejected being not maintainable. The petitioners are also challenging the directions issued by the respondent No.2 namely the Chairperson/In-Charge of Debt Recovery Appellate Tribunal (in short 'the DRAT') dated 13.9.2017 whereby guidelines have been issued by the Appellate Authority in exercise of power of superintendence to the Debt Recovery Tribunals in the matter of applications under Section 17(1) of the SARFAESI Act, 2002.

In short, the dispute being raised herein is regarding the rejection of the Securitisation Application on the ground that the said application was maintainable only after one of the measures under Section 13(4) is taken by the Secured Creditor (respondent-Bank) is complete and actual physical possession of the Secured Assets is taken by it.

Before the Court dwell upon the controversy at hand certain facts of the case are relevant to be narrated here. The petitioners were granted two credit facilities for aggregated amount of Rs.7,60,000/- as Cash Credit Limit and Rs.1,61,5000/- as Term Loan on 19.2.2010 under the Prime Minister Employment Generation Programme. The loan accounts of the petitioners were declared Non Performing Assets (NPA) by the Secured Creditor on 30.6.2013. The demand notice under Section 13(2) of the SARFAESI Act, 2002 read with Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 (in short the Rules, 2002) was issued on 5.10.2014.

The contention of the petitioners is that the proceedings under Rule 8(4) of the Rules, 2002 had been undertaken by the Secured Creditor before service of notice under Section 13(2) read with Rule 8(1) as aforesaid.

The possession notice under Rule 8(2) of the Rules, 2002 was published in two daily newspaper on 10.4.2014 without compliance of the Rule 8(1). The E-auction notice was, thereafter, published by the Secured Creditor. The petitioners filed Securitisation Application No.364 of 2014 before the Debt Recovery Tribunal, Allahabad on 30.9.2014 under Section 17 of the SARFAESI Act, 2002 seeking quashing of the entire recovery proceedings initiated by the Bank as also the notice for E-auction sale published in the daily newspaper. The aforesaid application was dismissed on 28.8.2015. The dismissal order was challenged in appeal filed under Section 18 of the SARFAESI Act, 2002 before the Appellate Tribunal, which according to the petitioners, is still pending.

In the meantime, the date for E-auction was fixed on 21.6.2016 by a notice dated 10.5.2016 and, as such, the petitioners filed Securitisation Application No.205 of 2016 on 21.5.2016. It appears that the Appellate Tribunal in the above noted pending appeal passed a restraint order on 21.6.2016 subject to the condition of deposit of 25% of the debt. It is contended by the petitioners that the officers of the Secured Creditor auctioned the Secured Assets in an arbitrary manner to respondent No.5 at a throw-away price of Rs.23.65 Lakhs. Contention is that as per the report of the Authorized Valuer, the valuation of the Secured Assets on the date of sanction of the loan i.e. 19.2.2010 was approximately 30 Lakhs. The Secured Creditor (the respondent-Bank), on the other hand, fixed reserve price of the property to the tune of Rs.27.50 Lakhs.

It is stated that the Secured Creditor moved an application under Section 14 of the SARFAESI Act, 2002 on 15.6.2016 before the District Magistrate for providing assistance to take possession of the Secured Assets under Section 14 of the SARFAESI Act, 2002. It is contended that the application under Section 14 of the SARFAESI Act, 2002 filed by the Secured Creditor was not supported by an affidavit as required under the SARFAESI Act, 2002.

In the meantime, the respondent-Bank filed Writ Petition No.35868 of 2016 (Union Bank of India & Anr. v. State of U.P. & Ors.) challenging the restraint order dated 26.6.2016 passed by the DRAT, Allahabad. Vide judgment and order dated 10.8.2016, this Court allowed the writ petition of the Bank on the ground that the subsequent sale could not have been challenged in the pending appeal before DRAT. The Special Appeal No.588 of 2016 (M/S New Deluxe Ice-Cream & 2 Ors. v. State of U.P. & 3 Ors.) filed by the petitioners was dismissed on 21.9.2016 with the observation that the petitioners may challenge the auction before the appropriate Authority. It appears that after dismissal of the Special Appeal, the petitioners moved Amendment Application No.1. A. 1549 of 2016 in the Securitisation Application No.205 of 2016, pending before the Debt Recovery Tribunal. During the pendency of the said application, the District Magistrate passed an order under Section 14 of the SARFAESI Act, 2002 on 31.7.2017.

It is contended that the pleadings had already been exchanged in the pending Securitisation Application before the order dated 31.7.2017 was passed by the District Magistrate, Allahabad. The amendment application filed by the petitioners had also been allowed on 7.9.2017. But the City Magistrate, Allahabad passed an order illegally on 7.9.2017 issuing direction to take physical possession of the Secured Assets by 18.9.2017.

It is vehemently contended that the Debt Recovery Tribunal, Allahabad vide order dated 18.9.2017 had illegally dismissed the Securitisation Application No.205 of 2016 filed by the petitioners under Section 17 (1) of the SARFAESI Act, 2002 on mis-interpretation and mis-construction of Apex Court judgment in Standard Chartered Bank v. V. Noble Kumar reported in (2013) 9 SCC 620 as also the judgment and order of this Court dated 23.4.2014 passed in Special Appeal No.415 of 2014 (Sushila Steels v. Union Bank of India & 2 Ors.) reported in 2014 (5) ADJ 678. The order dated 18.9.2017 is the result of non-application of mind by the Debt Recovery Tribunal and is liable to be set aside being illegal exercise of jurisdiction. It is further contended that the DRAT vide order dated 13.9.2017 in its purported supervisory jurisidiction under Section 17-A of RDB Act, 1993, had illegally issued general directions to the Debt Recovery Tribunal not to entertain the Securitisation Application under Section 17 of the SARFAESI Act, 2002 unless and until the borrower or the guarantor looses possession i.e. the actual physical possession of the Secured Assets is taken by the Secured Creditor.

Submission is that it was not open for the DRAT to issue general directions while exercising administrative powers in a matter to be dealt on the judicial side. The Debt Recovery Tribunal has rejected the Securitisation Application blindly following the said direction. The Tribunal is bound by the provisions of SARFAESI Act, 2002 and the Securitisation Application No.205 of 2016 filed by the petitioners under Section 17(1) of the SARFAESI Act, 2002 being perfectly maintainable against the proceedings initiated by the Secured Creditor under Section 13(4) of the said Act, it could not have been dismissed. As a result of it, the petitioners would be left remedy-less as they cannot approach any other Court of law in view of prohibition of Section 34 of the SARFAESI Act, 2002. No such situation is contemplated by the Apex Court in its pronouncement in Standard Chartered Bank (Supra). The directions of the Apex Court in the above noted case and the Division Bench of this Court have been misconstrued.

Learned counsel for the petitioners would further submit that a Co-ordinate Bench of this Court in the judgment and order dated 19.9.2017, having noticed the conflict between two Division Benches of this Court in Sushila Steels and Aum Jewels (supra) has referred to matter for determination by the Larger Bench. It is not known to learned counsel for the petitioners that a Larger Bench has been constituted pursuant to the said order. However, he submits that in view of the said reference, this Court may not take any adverse view.

Further reference is made to the judgment of Division Bench of this Court in Dilip Kumar Singh & Anr. v. State of U.P. Thru Secretary reported in 2013 (1) ADJ 91 to submit that the proceedings initiated by the Secured Creditor under Rule 8 of the Rules, 2002 and the order passed by the District Magistrate under Section 14 of the Act would clearly demonstrate that symbolic/constructive possession of the Secured Assets had been taken by the Secured Creditor. The Division Bench of this Court in the aforesaid case has observed that the Bank may proceed for auction of the Secured Assets even in case where no actual physical possession has been taken. The effect would be that even if actual physical possession of the Secured Assets has not been taken or petitioners have not lost their possession, the Securitisation Application challenging the proceedings undertaken by the Secured Creditor under Section 13(4) of the SARFAESI Act, 2002 would be perfectly maintainable.

Shri K.M Asthana, learned counsel for the respondent-Bank (Secured Creditor) placing the judgment of Apex Court in Standard Chartered Bank (supra) submits that the application under Section 17 of the SARFAESI Act, 2002 namely the Securitisation Application No.205 of 2016 was filed before the application under Section 14 of the SARFAESI Act, 2002 was moved before the District Magistrate. The proceeding under Section 14 is only a process for taking one of the measures i.e. taking possession of the Secured Assets of the borrower under Section 13(4)(a) of the Act. As the process undertaken by the bank for taking possession under Section 13(4) of the Act is not complete and the actual physical possession of the Secured Assets had not been handed over to the bank, the Securitisation Application No.205 of 2016 was rightly dismissed as not maintainable. It is submitted that the Apex Court in Standard Chartered Bank (supra) has categorically provided that the remedy under Section 17 of the SARFAESI Act, 2002 is available only after the Secured Creditor looses his position i.e. physical possession of the Secured Asset is handed over to the Secured Creditor. Reference is made to 'paragraph-28' of the said pronouncement to urge that the dispute being raised by the petitioners herein has been set at rest.

So far as the communication dated 13.9.2017 issued by the Appellate Authority namely DRAT, Allahabad, he submits that the said Circular is only in the nature of guidelines from the Chairperson of DRAT who is having supervisory control over the DRT under Section 17-A of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 as also the Recovery of Debts and Bankruptcy Act, 1993. By means of the said Circular, the direction has been issued to the Debt Recovery Tribunal to follow the dictum of the Apex Court and different High Courts in the matter of invoking powers under Section 17(1) of the SARFAESI Act, 2002 and in not granting interim orders against dis-possession from the mortgaged properties in the routine manner.

As far as the instant case is concerned, the submission of learned counsel for the respondent-Bank is that the petitioners having lost in several rounds of litigations upto this Court may not be granted any indulgence in the present petition. The proceedings for taking possession of the Secured Assets have already been undertaken by the respondent-Bank. The order of providing police force has been passed by the District Magistrate on 31.7.2017 and 7.9.2017. However, in view of the obstruction made by the petitioners who had succeeded in getting the interim order in the pending Securitisation Application and on account of pendency of the present petition since 22.9.2017, the bank namely the Secured Creditor could not take possession. The attention of the Court is invited to the various orders passed by this Court more particularly the observation of the learned Single Judge in the judgment and order dated 10.8.2016 and of the Special Appellate Bench in the judgment and order dated 21.9.2016 that the petitioners were not entitled to interim protection as they had committed default in repayment of loan and further to the effect that the Tribunal had noted in the order dated 7.6.2016 that the petitioners/respondents therein would not object to the auction of the Secured Assets.

Heard learned counsel for the parties and perused the record.

Before proceeding to sift the facts of the instant case to decide the controversy at hand, it would be apposite to note the legal position with regard to the matter. The proceedings out of which the present petition arises, are undertaken by the Secured Creditor under the SARFAESI Act, 2002. The purpose which is sought to be achieved by the said enactment has been discussed in various pronouncements by the Apex Court from time and again. It is observed in the matter of Standard Chartered Bank (supra) that Sections 13, 14 and 15 are enacted in order to achieve the object and purpose of the SARFAESI Act, 2002 which is to expedite the cases of recovery of defaulting loans and mounting levels of Non Performing Assets of Banks and financial institutions. Section 13(1) enables the Secured Creditor to enforce a Security Interest created in favour of the Secured Creditor, without intervention of the Court or Tribunal. The 'Security Interest' within the meaning of Section 2(z)(f) of the Act means the right, title and interest of any kind upon the property, created in favour of the Secured Creditor which includes mortgage, charge, hypothecation, assignment etc.

Sub-section (2) of Section 13 requires that the Secured Creditor shall issue a notice in writing to the borrower to pay his liability in full within the date specified in the said notice, failing which, the Secured Creditor would be entitled to proceed under sub-section (4) of Section 34 of the Act. The conditions which are required to be fulfilled for the purpose of proceeding under Section 13(2) are:-

(1) There must be a 'security agreement' creating loan of the borrower to make repayment to the Secured Creditor of the Secured Debt;

(2) The demand is raised by the Secured Creditor from the borrower by a notice in writing in order to discharge the full liability within the period mentioned therein.

Sub-section (3) of Section 13 further stipulates that the notice shall give the details with regard to the amount payable by the borrower. Sub-section (4) enables the Secured Creditors to take recourse to one or more of the measures to recover his secured debts, in case, the borrower fails to discharge his liability within the period specified in the notice under Sub-section (2). The measures which can be resorted to by the Secured Creditor are:-

(1) Take possession of the Secured Assets;

(2) Taking over management of the business of the borrower.

Under Clause (a) of sub-section (4) of Section 13, the Secured Creditor can also resort to transfer of the Secured Assets by way of a lease, assignment or sale for the purpose of realising the secured debt.

In Mardia Chemicals Ltd. & Ors. v. Union of India & Ors. decided on 8.4.2004 reported in (2004) 4 SCC 311, the Apex Court had upheld the constitutionality of the Act and noticing the stringent provisions of the SARFAESI Act, 2002 had held in paragraph 80 that before proceeding to take any of the measures as provided under sub-section(4) of Section 13 of the SARFAESI Act, 2002, the service of notice under Section 13(2) of the SARFAESI Act, 2002 upon the borrower is necessary. After service of notice, in case, the borrower raises any objection or places some facts for consideration of the Secured Creditor, such reply to the notice must be considered and reasons, disclosing the due application of mind on said objections, must be communicated to the borrower. It was further provided that 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 the appeal/petition under Section 17 of the SARFAESI Act, 2002 before the Debt Recovery Tribunal. The Tribunal shall have jurisdiction to pass any interim order in an appropriate case.

Following the said pronouncement, by Amendment Act 30 of 2004, Sub-section (3-A) with proviso, to Section 13 was added w.e.f. 11.11.2004. The proviso to Sub-section (3-A) provides that the reason so communicated by the Secured Creditor would not be a ground or does not confer any right upon the borrower to prefer an application under Section 17 of the SARFAESI Act, 2002 to the Debt Recovery Tribunal.

It has further been observed by the Apex Court in Authorised Officer, Indian Overseas Bank & Anr. v. Ashok Saw Mill reported in (2009) 8 SCC 366 that in order to prevent misuse of such wide powers and the stringent measures which can be taken by the Secured Creditor for realisation of secured debt, certain checks and balances have been provided in Section 17, which allow any person, including the borrower, aggreived by any of the measures referred to in Sub-section (4) of Section 13 taken by the Secured Creditor, to make an application to the Debt Recovery Tribunal having jurisdiction in the matter. Upon such application being made, the Debt Recovery Tribunal is entitled under sub-section (3) of Section 17 to question the action taken by the Secured Creditor and the transactions entered into by virtue of Section 13(4-A) of the SARFAESI Act, 2002. The Debt Recovery Tribunal has been conferred power to even set aside a transaction including the sale and to restore possession to the borrower in an appropriate case. The relevant 'Paragraph-39' of the said judgment is relevant to be reproduced:-

"39. We are unable to agree with or accept the submissions made on behalf of the appellants that the DRT had no jurisdiction to interfere with the action taken by the Secured Creditor after the stage contemplated under Section 13(4) of the Act. On the other hand, the law is otherwise and it contemplates that the action taken by a Secured Creditor in terms of Section 13(4) is open to scrutiny and cannot only be set aside but even the status quo ante can be restored by the DRT."

The controversy as to the method and manner which can be adopted by the Secured Creditor for taking possession of the Secured Assets and the conditions precedent that are required to be specified for taking possession of the Secured Assets came to be considered by the Apex Court in Standard Chartered Bank (supra). It was held therein that after rejection of objection of the borrower under sub-section (3-A) of Section 13, the Secured Creditor can resort to the proceedings to take possession of the Secured Assets. It is open for the Secured Creditor either to take possession on its own by resorting to the procedure under Rule 8 of the Rules, 2002 or to seek assistance of the State's coercive powers for obtaining possession under Section 14 by making a request in writing to the District Magistrate or the Chief Metropolitan Magistrate, as the case may be. Upon such application being made, the Magistrate would be under obligation to take possession of the Secured Assets and the documents, if any, related thereof, without any further scrutiny of the matter.

It was held that in case the conditions of first proviso to Section 14(1) of the SARFAESI Act, 2002 are fulfilled, the Magistrate after recording his satisfaction under the second proviso to Section 14(1) of the SARFAESI Act, 2002 regarding the correctness of the assertions made in the affidavits filed by the Secured Creditor shall pass an order regarding taking of possession of the Secured Assets.

It was held that the measures taken under Section 14 of the SARFAESI Act, 2002 is only one of the measures under Section 13(4) of the SARFAESI Act, 2002 to be taken by the Secured Creditor. It is not mandatory for the Secured Creditor to make an attempt to obtain possession on his own before approaching the Magistrate under Section 14 of the SARFAESI Act, 2002. It was then held that the "appeal or application" under Section 17 of the SARFAESI Act, 2002 can be filed only after the possession i.e. actual physical possession is taken by the Secured Creditor, as in view of the language of proviso to sub-section (3-A) of Section 13, the application under Section 17 of the SARFAESI Act, 2002 is not maintainable for any likely action of the Secured Creditor. The conclusion drawn in "Paragraphs 28 and 29" in this regard are as under:-

"28 . It can be noticed from the language of the proviso to section 13(3A) and the language of section 17 that an "appeal" under section 17 is available to the borrower only after losing possession of the secured asset. The employment of the words "aggrieved by....................taken by the Secured Creditor" in section 17(1) clearly indicates the appeal under section 17 is available to the borrower only after losing possession of the property. To set at naught any doubt regarding the interpretation of section 17, the proviso[16] to sub-section (3A) of section 13 makes it explicitly clear that either the reasons indicated for rejection of the objections of the borrower or the likely action of the secured creditor shall not confer any right under section 17.

29. The same principle is re-emphasised with the newly added explanation in section 17(1) which came to be inserted by Act No.30 of 2004:

"Explanation : For the removal of doubts, it is hereby declared that the communication of the reasons to the borrower by the Secured Creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under sub-section 1 of section 17."

The Division Bench in Dilip Kumar Singh (supra) has held that it is not necessary for the Bank or the Secured Creditor to take actual physical possession of the Secured Assets as per sub-rules (3) and (4) of Rule 8 before proceeding for sale of the Secured Assets inasmuch as under the scheme of the SARFAESI Act, 2002 and the Rules, 2002 the Bank can proceed with the sale without entering into the actual physical possession and can take possession of the Secured Assets, thereafter.

Section 17(8) of the SARFAESI Act, 2002 further puts a check and balance by providing that if the secured debt together with the cost incurred therein is tendered by the borrower to the Secured Creditor before the date of auction or transfer, the Secured Assets shall not be transferred and no further steps shall be taken by the Secured Creditor in furtherance of the said action.

Having regard to the fact of the writ petitions filed by the petitioners and the orders passed by the Co-ordinate Benches and the Division Bench of this Court in the matter of interim order passed by the Tribunal and the order of the District Magistrate under Section 14 of the SARFAESI Act, 2002, it is evident that the petitioners have been running from the Tribunal to this Court for getting relief in the proceedings undertaken by the Secured Creditor/respondent-Bank for recovery of the borrowed money. The account of the petitioners had been declared as Non Performing Asset (NPA) in the year 2013. The Secured Creditor had issued notice in the year 2013 under Section 13(4) of the SARFAESI Act, 2002 read with Rule 8 of the Rules, 2002. E-auction was held on 21.6.2016 and the auction sale had been finalized. However, admittedly, the Secured Creditor has not been able to get actual physical possession of the Secured Assets. In order to seek assistance of the State's coercive machinery, the application dated 15.6.2016 was filed by the Secured Creditor which came to be allowed on 31.7.2017. The City Magistrate vide order dated 7.9.2017 has issued directions to the State machineries to ensure that the actual physical possession is delivered to the Bank while maintaining the law and order situation on the spot.

The DRAT, in appeal arising out of the previous Securitisation Application, decided to stay the auction proceedings which was scheduled on 21.6.2016. The respondent-Bank had to approach this Court by filing a writ petition which was allowed on 10.8.2016. The order passed by the learned Single Judge was affirmed in special appeal decided on 21.9.2016. The order passed by the District Magistrate under Section 14 of the SARFAESI Act, 2002 has also been challenged in a writ petition which has been dismissed on 24.8.2017.

Further having considered the scheme of the SARFAESI Act, 2002 and the pronouncements of the Apex Court as discussed hereinabove, the Court reaches at an irresistable conclusion that the application under Section 17 of the SARFAESI Act, 2002 can be filed by the borrower only after one of the measures taken by the Secured Creditor under Section 13(4) of the SARFAESI Act, 2002 is complete i.e. after the borrower looses possession over the Secured Assets. Even otherwise, after the notice of demand under Section 13(2) of the SARFAESI Act, 2002 is issued, the borrower is under obligation to meet the said demand or raise any objection.

In the instant case, nothing has been brought on record that the petitioners had raised any objection to the said demand before the Secured Creditor. The contention of learned counsel for the petitioners that once the Secured Creditor had resorted to the steps under Rule 8 of the Rules, it was not open for it to make a request under Section 14 of the SARFAESI Act, 2002 is found devoid of force, in view of the discussions made above.

In so far as reference made by the Co-ordinate Bench dated 19.9.2017 to the Larger Bench is concerned, it is notworthy that the Division Bench in Writ C No.13476 of 2017 (Aum Jewels and Ors. v. Vijaya Bank) had dismissed the writ petition in view of the availability of alternative statutory remedy under Section 17 of SARFAESI Act, 2002. The said writ petition was filed against the possession notice under Section 13(4) of the Act. Whereas the Division Bench in Special Appeal No.415 of 2014 (Sushila Steels v. Union Bank of India & Ors.) was faced with the issue as to whether the application under Section 17 of SARFAESI Act, 2002 would be maintainable before the actual physical possession is taken. The arguments of the appellant therein was that in view of the pronouncement in the previous judgment in Indian Overseas Bank (supra) that the aggrieved person may raise a grievance against any of the measures under Section 13(4), whether or not actual possession is taken, having not been noticed by the Apex Court in the later judgment in Standard Chartered Bank (supra), the law laid down therein was not binding, was repelled.

As noticed above, in Indian Overseas Bank (supra) the Apex Court was faced with the conflict whether the Debt Recovery Tribunal had jurisdiction to interfere with the action taken by the Secured Creditor after the stage contemplated under Section 13(4) of the Act is over. The Apex Court had answered the said question in Affirmative and held that any action taken by the Secured Creditor under Section 13(4) is open to scrutiny by the DRT. The remedy against the auction sale is available after the possession is taken by the Secured Creditor i.e. the sale is complete. In the event the borrower succeeds, the possession can be restored to him after setting aside the auction sale.

Thus, apparently there is no conflict. Moreover, reference to Larger Bench by a Co-ordinate Bench on the doubts raised by it cannot be a ground to postpone the matter or to keep the writ petition pending.

Moreover, from the facts noted hereinabove regarding filing of the writ petitions and the applications under Section 17 of the SARFAESI Act, 2002 by the borrower, it is evident that the petitioners had succeeded in their efforts to stall the proceedings for about a period of more than three years since when the notice under Section 13(4) of the SARFAESI Act, 2002 was issued.

On account of the litigation before this Court and Tribunal, the Secured Creditor has not been able to take actual physical possesion of the Secured Assets, to realize the secured debt.

The borrower have not come forward to meet the demands raised by the Secured Creditor.

For all the above noted reasons, no infirmity is found in the order dated 18.9.2017 passed by the Debts Recovery Tribunal in rejection of the Securitization Application No.205 of 2016. The directions issued by the DRAT vide circular dated 13.9.2017 are only in the nature of guidelines to be followed in the facts and circumstances of the given case. The said guidelines having been issued under the supervisory jurisdiction of the Debt Recovery Appellate Tribunal, need not be interferred in exercise of discretionary jurisdiction under Article 226 of the Constitution of India.

Even otherwise, the Apex Court has issued a word of caution to the High Courts not to exercise jurisdiction under Article 226 of the Constitution for passing orders having adverse impact on the rights of the Banks and Financial Institutions to recover their dues, in the case of Union Bank of India v. Satyawati Tandon & Ors. reported in (2010) 8 SCC 110. Similar directions have been issued in Kanaiyalal Lalchand Sachdev & Ors. v. State of Maharashtra & Ors. reported in (2011) 2 SCC 782 wherein it has been held that the disputed questions of fact which has to be examined by the Statutory Tribunal under Section 17 of the SARFAESI Act, 2002 are not open to be questioned by the High Court in exercise of its jurisdiction under Articles 226 and 227 of the Constitution.

In view of the above, the present writ petition is found devoid of merits and hence dismissed. It would, however, be open for the petitioners to avail the statutory remedy of Section 17 of the SARFAESI Act, 2002 after the possession of the Secured Assets is taken by the Secured Creditor or the petitioners themselves hand over possession on their own.

(Sunita Agarwal, J.)

Order Date :- 2.11.2017

Jyotsana