Vishal Pengoriya And vs Reserve Bank Of India And 3 Others
2021 Latest Caselaw 3109 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 


 
							      Reserved on :29.01.2021
 
						            Date of delivery:03.03.2021
 
In Chamber
 
Case :- WRIT - C No. - 982 of 2021
 
Petitioner :- Vishal Pengoriya 
 
Respondent :- Reserve Bank Of India And 3 Others
 
Counsel for Petitioner :- In Person
 
Counsel for Respondent :- Krishna Mohan Asthana
 
                    AND 
 
Case :- WRIT - C No. - 353 of 2021
 
Petitioner :- M/S Modern Industries And Another
 
Respondent :- Reserve Bank Of India And 3 Others
 
Counsel for Petitioner :- In Person
 
Counsel for Respondent :- Krishna Mohan Asthana
 

 
Hon'ble Naheed Ara Moonis, J.

Hon'ble Dinesh Pathak,J.

(Delivered by Hon'ble Dinesh Pathak, J.)

1. Heard the petitioner - Sri Vishal Pengoriya in person in Writ - 982 of 2021, Sri Sachin Gupta in person (petitioner no.2) in WRIT - C No. - 353 of 2021 and Sri Krishna Mohan Asthana, learned counsel for the contesting respondent bank.

2. Both the aforesaid writ petitions have been filed for common issue beseeching common prayer, therefore, both captioned petitions are being decided by this common judgment. WRIT - C No. -982 of 2021 has been filed on behalf of Sri Vishal Pengoriya, who is one of the partner of the firm namely, M/s Modern Industries whereas another WRIT -C No. -353 of 2021 has been filed on behalf of the firm itself i.e. M/s Modern Industries along with one of the partner namely, Sri Sachin Gupta.

3. Prayer clause as mentioned in both captioned petitions are being reproduced herein below :-

"(i) Issue, an appropriate writ, order or direction, directing the RBI to constitute a state level empowered committee, include the participation of senior officials (competent to take decisions) from all departments of the State Government responsible for rehabilitation of sick MSEs.

(ii) Issue, an appropriate writ, order or direction, directing the RBI to constitute a state level empowered committee, include the participation of senior officials (competent to take decisions) from all departments of the State Government responsible for rehabilitation of sick MSEs.

(iii) Issue, an appropriate writ, order or direction, directing the RBI for issuing the guidelines for all Banks to set up a separate rehabilitation cell for MSE's, other than the recovery wing, which will be responsible only for the rehabilitation (recovery through rehabilitation) of MSE's.

(iv) Issue, an appropriate writ, order or direction, directing the RBI to provide the moratorium period upto 2 years and repayment of loan upon to 7 to 10 years for a deserving MSE, until the wiful defaults take place.

(v) Issue, an appropriate writ, order or direction, directing the RBI to issue the guidelines to all Banks to provide at least one opportunity of rehabilitation (recovery through rehabilitation) to all deserving MSE's before starting the coercive measures against them.

(vi) Issue, an appropriate writ, order or direction, directing the RBI to maintain its record as per the all parameters described in the said rehabilitation guideline dated 1 November, 2012.

(vii) Issue, an appropriate writ, order or direction, in the nature of certiorari quashing the Frame Work for Revival and Rehabilitation of MSME dated 17 March 2016.

(viii) Issue, an appropriate writ, order or direction, directing the Reserve Bank to quash the entire recovery proceedings against the petitioner and let to restart the unit of the petitioner for repayment of entire loan.

(ix) Issue, an appropriate writ, order or direction, in the nature of certiorari quashing the order dated 24.8.2020 passed by the Respondent Bank.

(x) Issue, an appropriate writ, order or direction, in the nature of certiorari quashing the order dated 23.11.2020 passed by the Respondent Bank.

(xi) Issue, an appropriate writ, order or direction, directing the Respondent Bank to remove the loan account of the petitioner from the list of Non-Performing Assets and correct the CIBIL status of the petitioner firm accordingly.

(xii) Issue, an appropriate writ, order or direction, directing the Respondents to vacate the Property of the Petitioner situated at 11B/76A, Foundry Nagar, Agra and residential property situated at 19, Monapuram Ganesh Nagar, Firozabad.

(xiii) Issue, an appropriate writ, order or direction, directing the Respondent Bank to call back the letter dated 01.07.2015 for recovery from salary.

(xiv) Issue, an appropriate writ, order or direction, directing the Respondent Bank for compensating the Petitioner for its loses due to the incorrect action of the Respondent Bank overtime.

(xv) Pass any other appropriate writ, order or direction, which this Hon'ble Court may deem fit and proper in the ends of justice.

(xvi) To award costs in favour of the Petitioners."

4. Record reveals that Sri Vishal Pengoriya along with Sri Sachin Gupta and two other partners had started partnership firm on 19.07.2007 in the name and style " M/S Modern Industries" situated at 11-B/76A, Foundry Nagar, Agra, Uttar Pradesh. The aforesaid firm had got license from the District Industries Centre, Agra for manufacturing of glass products, like bulb shells, thermos refills, chimneys, bangles etc. The aforesaid license was granted under the category of "Micro Enterprises". To run the manufacturing unit, the firm had applied for financial assistance before the respondent bank. The bank had assessed the valuation of the factory, land and building, which were offered to be placed before the bank, through its valuer namely Sri V.D. Mathur, who submitted his report dated 28.06.2011 assessing the total market value of the land and construction to be Rs.3,53,87,136.09. After assessing the valuation of the assets, the respondent bank had sanctioned loan amounting to Rs.306.80 Lakh in favour of the petitioner firm by issuing sanction letter dated 19.10.2011. As the time passed, the petitioner has failed to owe the secured debt to the bank. Consequently, his account was declared as Non Performing Assets (NPA) on 02.04.2014 and notice dated 28.04.2014 under Section 13(2) of the Securitisation And Reconstruction of Financial Assets And Enforcement of Security Interest Act, 2002 (hereinafter referred to as "SARFAESI Act") had been issued against the petitioner firm. But unfortunately no objection/representation has been filed by the petitioner firm within the stipulated period as mentioned in the notice. Subsequently, possession notice dated 17.10.2014 had also been issued under Section 13(4) of the SARFAESI Act. But, again, within the stipulated period as prescribed under the law, no objection/representation has been filed by the petitioner firm to stop the recovery proceedings under the SARFAESI Act. To get the outstanding amount back, the secured creditor issued sale notice dated 09.11.2017 and put the movable and immovable secured assets on sale in terms of the Security Interest (Enforcement) Rules, 2002.

5. Perusal of order dated 27.04.2018 passed by Debt Recovery Tribunal (hereinafter referred to as "DRT") reveals that the firm had already given physical possession of the secured asset to the bank. Relevant paragraph 9 of the aforesaid order is quoted below :-

"9. The partner of the Applicant firm who is present in person, submit that he has voluntarily given that physical possession of the factory and hypothecated plant & machinery to the Respondent Bank on 17.10.14 vide Panchnama and Inventory at page 190-193 of the SA. He further submits that the inventory at page 188 is the list of goods, which were not hypothecated with the Bank."

6. Feeling aggrieved, the petitioner firm filed Writ Petition No.1641 of 2018 challenging the letter dated 02.04.2014, by which the account of petitioner had been declared NPA and also the notices by which auction proceedings had been initiated. The aforesaid writ petition was dismissed on the ground of alternative remedy, vide order dated 16.04.2018. Later on to ventilate its grievances, the petitioner firm had moved an application dated 24.04.2018 under Section 17 of the SARFAESI Act, registered as S.A. No. 117 of 2018, challenging the entire action of the respondent bank initiated against the movable and immovable secured assets and the impugned auction sale notice dated 09.11.2017 whereby movable and immovable assets were put to auction. Along with the said application, the petitioner firm had also moved a delay condonation application which was registered as I.A. No. 416/2018. The aforesaid application was partly allowed only with respect to the sale notice dated 09.11.2017 but was partly rejected with respect to challenging the demand notice and possession notice. Thereafter, the Debt Recovery Tribunal (hereinafter referred to as "DRT") heard the matter qua legality and validity of the sale notice dated 09.11.2017 and on finding no merit in the submission made on the petitioner firm, rejected the application under Section 17 of the SARFAESI Act vide order dated 26.11.2018. Review petition filed by the petitioner firm against the order dated 26.11.2018 was also rejected by the DRT. Feeling aggrieved, the petitioner firm filed Writ Petition No.42856 of 2018 challenging the auction sale notice and both the orders passed by the DRT by which the application under Section 17 of the SARFAESI Act and the review petition were dismissed. Having considered the earlier order dated 16.04.2018, by which grievance of the petitioner firm had been negated on the ground of alternative remedy, this Court had again rejected subsequent Writ Petition No.42856 of 2018 vide order dated 17.01.2019. Feeling aggrieved, the petitioner firm filed Special Leave Petition (SLP) before the Hon'ble Supreme Court assailing the order dated 17.01.2019 but the same was also dismissed vide order dated 06.09.2019. Against the order dated 06.09.2019, one review petition dated 30.09.2019 was filed which was also dismissed vide order dated 03.03.2020.

7. After becoming unsuccessful up to the stage of Hon'ble Supreme Court, the petitioner firm has initiated this third round of litigation before this Court by filing the present writ petitions. Unfortunately, the vexed question for consideration in all the three writ petitions, including present one, are one and common, which relate to the recovery proceedings initiated by the bank against the petitioner firm under the SARFAESI Act on being its failure owe secured debt to the secured creditor. It will be appropriate to reproduce prayer clause of both the aforesaid writ petition, which were filed earlier, as mentioned above.

8. In Writ Petition No.1641 of 2018, decided on 16.04.2018, petitioner firm had sought the following reliefs:

"(i) Issue, an appropriate writ, order or direction, calling of records and quashing the letter dated 02.04.2014 which the loan account of the petitioner was declared as Non-Performing Asset.

(ii) Issue, an appropriate writ, order or direction, directing the respondents to remove the loan account of the petitioner from the list of Non-Performing Assets.

(iii) Issue, an appropriate writ, order or direction, calling of records and quashing the order dated 28.11.2017 passed by the respondent no.3.

(iv) Issue, an appropriate writ, order or direction, to quash the entire auction proceeding arising out of order dated 28.11.2017.

(v) Issue, an appropriate writ, order or direction, directing the respondents to vacate the property of the petitioner situated at 11-B/76-A, Foundary Nagar, Agra.

(vi) Issue, an appropriate writ, order or direction, directing the respondents to consider the rehabilitation proposal of the petitioner.

(vii) Pass any other appropriate writ, order or direction, which this Hon'ble Court may deem fit and proper in the ends of justice.

(viii) To award costs in favour of the petitioner."

9. In subsequent Writ Petition No.42856 of 2018, which was dismissed vide order dated 17.01.2019, following prayers were made :

"(i) Issue, an appropriate writ, order or direction, in the nature of certiorari quashing the order dated 26.11.2018 and 30.11.2018 passed by the respondent no.6 in S.A. No. 117 of 2018 i.e. M/s Modern Industries v. Canara Bank and Others.

(ii) Issue, an appropriate writ, order or direction, directing the respondents to remove the loan account of the petitioner from the list of Non-Performing Assets and correct the CIBIL status of the petitioner firm accordingly.

(iii) Issue, an appropriate writ, order or direction, in the nature of certiorari quashing the auction notices dated 09.11.2017 and 28.11.2017 passed by the respondent no.3.

(iv) Issue, an appropriate writ, order or direction, directing the respondents to quash the entire auction proceeding arising out of notices dated 09.11.2017 and 28.11.2017.

(v) Issue, an appropriate writ, order or direction, directing the respondents to vacate the property of the petitioner situated at 11-B/76-A, Foundry Nagar, Agra and residential property situated at 19, Monapuram Ganesh Nagar, Firozabad.

(vi) Issue, an appropriate writ, order or direction, directing the respondents to consider the rehabilitation proposal of the petitioner under the RBI Circular dated 01.11.2012.

(vii) Issue, an appropriate writ, order or direction, directing the respondents to call back the letter dated 01.07.2015 for recovery from salary.

(viii) Issue, an appropriate writ, order or direction to the respondent-Bank for compensating the petitioner for its losses due to the incorrect action of the respondent-Bank overtime.

(ix) Pass any other appropriate writ, order or direction, which this Hon'ble Court may deem fit and proper in the ends of justice.

(x) To award costs in favour of the petitioners."

10. After comparative study of prayer clause of all the three petitions, it is evidently clear that intention of petitioner firm is to anyhow stop the recovery proceeding as resorted to by the bank under SARFAESI Act. Prayer no.(viii), (ix), (x), (xi), (xii), (xiii) and (xiv) of the present writ petition involving the relief claimed against the pending auction proceeding and for vacation of the property in possession of the bank and for consideration of the rehabilitation proposal of the petitioner, are practically the same as had been sought in the earlier Writ Petition No.42856 of 2018. The only difference between two is that in the earlier writ petition, auction notice dated 09.11.2017 and 28.11.2017 were challenged along with the order dated 26.11.2018 passed by DRT whereas in the present writ petition subsequent auction sale notice dated 24.08.2020 and 23.11.2020 have been challenged.

11. Even, prayer no.(iii), (iv), (v) and (vi) as made in Writ Petition No.42856 of 2018 (second writ petition) are practically the same as had been sought in Writ Petition No.1641 of 2018 (first writ petition) by way of prayer no.(iii) (iv), (v) and (vi).The only difference in all three writ petitions are with respect to the date of sale notices, demand notice and order passed by DRT. In pith and substance trio petitions, as mentioned above, are filed for the one and common cause.

12. Record reveals that vide auction sale notice dated 24.08.2020 (Annexure-94), as challenged in instant writ petitions, two properties were put up to sale i.e. (i) property situated at 11-B/76-A Foundry Nagar, Agra measuring 2575.42 sq.m. and (ii) Double storied residential house measuring 2078 sq.ft. i.e. House no.19 Monapurm, Karesh Nagar, Firozabad.

13. Learned counsel for the bank has submitted that in pursuance of aforesaid notice dated 24.08.2020, immovable property as mentioned at Serial no.1 situated at 11-B/76-A Foundry Nagar, Agra has been auctioned in favour of M/s B.K. Trading Company and M/s Surajbhan Vimal Kumar and Company and in pursuance of aforesaid sale, sale certificate dated 30.09.2020 has also been issued in favour of the purchasers. The possession of aforesaid property had been delivered to the purchasers and order dated 17.10.2020 for delivery of possession has been issued. Photocopy of the sale certificate dated 30.09.2020 and order dated 17.10.2020 for delivery of possession has been produced by counsel for the bank in the Court, which is taken on record. Petitioner has also challenged the subsequent sale notice dated 23.11.2020 (Annexure-96), by which residential House No.19, Manapuran, Karesh Nagar, Firozabad, has been put to auction. Learned counsel for the bank states that in pursuance of the earlier notice dated 24.08.2020 only manufacturing unit situated at 11-B/76-A Foundry Nagar, Agra had been sold out but the residential house could not be auctioned which was again put to auction sale by subsequent notice in question dated 23.11.2020. It is submitted by learned counsel for the bank that auction proceeding initiated against the petitioner firm has already been finalized up to Hon'ble Supreme Court confirming the order dated 26.11.2018 passed by DRT in application under Section 17 of SARFAESI Act, therefore, in the light of aforesaid fact, present petitioner has no legal right to re-agitate the same issue in third round litigation before this Hon'ble Court without assailing the earlier order dated 26.11.2018 passed by DRT before the competent court. It is open for the petitioner firm to challenge the aforesaid order under Section 18 of the SARFAESI Act in appeal before competent court.

14. Later on, petitioner, appearing in person, has emphasized his argument with respect to rehabilitation of his unit and prayed for issuing a direction to Reserve Bank of India (hereinafter referred to as "RBI") and other authorities as mentioned in prayer nos.1 to 7 in both the writ petitions.

15. Learned counsel for the bank has submitted that prayer from Serial Nos.1 to 7 are general in nature which could utmost be considering in PIL and any finding on these issues could effect the merits of the auction proceeding initiated by the secured creditor under the SARFAESI Act, which became final vide order dated 26.11.2018 passed by DRT subject to the provision of appeal. Learned counsel for the bank further submits that issue relating to rehabilitation of manufacturing unit (secured asset), on which petitioner firm is emphasizing, has already been considered by this Hon'ble Court in Writ Petition No.42856 of 2018 in paragraphs 3, 4, 5, 6 and 7 and negated the claim of petitioner. For the ready reference aforesaid paragraphs are quoted below :-

"3. Learned counsel for the petitioner has submitted that though some of the assets of the petitioner have been sol, the business venture of the petitioner is still viable provided the bank grants the petitioner breathing space as also provided the respondent-bank acts in conformity with the circular issued by the Reserve Bank of India and its own circular.

4. In this regard, reference has been made to the circular issued by the RBI dated 24.07.2017 being Master Direction-Reserve Bank of India [Lending to Micro Small & Medium Enterprises (MSME) Sector]-Direction, 2017 and the consequential circular issued by the respondent bank dated 28.01.2013.

5. By the last order dated 20.12.2018, Sri K.M. Asthana, learned counsel for the respondent-bank had been required to obtain instructions with respect tot he aforesaid submissions advanced by learned counsel for the petitioner.

6. Today, upon instructions, Sri K.M. Asthana, learned counsel for the respondent-bank had submitted that in the first place, the present writ petition is not maintainable inasmuch as the petitioner had earlier filed Writ-C No.1641 of 2018, which was dismissed by order dated 16.04.2018. It has therefore been submitted that the present writ petition practically for the same cause of action is not maintainable.

7. Also with respect to the instructions that were specifically called for, Sri K.M. Asthana, learned counsel for the respondent-bank would submit that a similar application had been earlier filed by the petitioner, which came to be rejected by the respondent-bank by its decision dated 15.06.2015 and 24.06.2015 which were duly communicated to the petitioner at the relevant time. In any case, it has been submitted that these being commercial decision, the respondent-bank is not willing to expose itself to any further risks in the process of rehabilitation sought by the petitioner."

16. Order dated 17.01.2019 evinces consideration of rehabilitation issue which was negated by this Court, now agitating the same rehabilitation issue is not permitted in the eyes of law, unless the observation made by this Court in earlier writ petition is reversed or altered by Superior Court.

17. Record reveals that the discussions as made above, evinces the evading tactics of present petitioners not to owe secured debt to the secured creditor. Present petitioners had full knowledge about recovery proceeding under the SARFAESI Act since 2014 and they have voluntarily given possession of the secured asset to the secured creditor, which evinces that they were fully aware about the auction proceedings initiated against them. Now, they are trying to take shelter under the rehabilitation policy of RBI, where said issued had already been dealt with by this Court in the earlier writ petition.

18. At this stage, in these writ petitions, in the third round litigation before this Court arising out of same loan transaction between petitioners and the bank, wherein validity of the auction proceeding had already been finalized in a proceeding under Section 17 of SARFAESI Act, we do not think it appropriate to address the issue qua recovery proceeding initiated by the secured creditor, whereas it is open for the petitioner firm to approach the higher court for redressal of its grievance assailing the order passed by DRT under Section 17 of SARFAESI Act by the DRT.

19. Multiplicity of proceedings, as resorted to by the present petitioners to evade the payment of secured debt, amounts to abuse of process of law. The aim of the Courts should be to avoid multiplicity of unnecessary legal proceedings. Therefore, the petitioners could not be allowed to split up their claim and file writ petitions in piecemeal. The approach of the petitioners to go on filing successive writ petitions in respect of the same matter if would be encourages, it would result in giving full scope and encouragement to an unscrupulous litigant to abuse the process of the High Cour exercising its writ jurisdiction under Article 226 of the Constitution of India. Filing of successive petitions interferes with the purity of administration of law and such a litigant must be dealt with harshly. The issue of filing successive writ petitions has been considered by Hon'ble Supreme Court time and again in catena of judgments.

20. In M/s Sarguja Transport Service Vs. state Transport Appellate Tribunal, M.P., Gwalior and Others, AIR 1987 SC 88, Hon'ble Supreme Court held that even if the earlier writ petition has been dismissed as withdrawn without permission of the Court, public policy which is reflected in the principle enshrined in Order XXIII Rule 1 C.P.C., mandates that successive writ petition cannot be entertained for the same relief.

21. In State of Uttar Pradesh and Another vs. Labh Chand, AIR 1994 Pg.754, Hon'ble Apex Court has observed thus :

"This would only lead to introduction of disorder, confusion and chaos relating to exercise of writ jurisdiction by Judges of the High Court for there could be no finality for an order of the Court refusing to entertain a Writ Petition. It is why, the Rule of judicial practice and procedure that a second Writ Petition shall not be entertained by the High Court on the subject-matter respecting which the first Writ Petition of the same person was dismissed by the same Court even if the Order of such dismissal was in limine, be it on the ground of laches or on the ground of non-exhaustion of alternate remedy, has come to be accepted and followed as salutary Rule in exercise of writ jurisdiction of Courts."

22. Even if a party does not pray for the relief in the earlier writ petition, which he ought to have claimed in the said writ petition, he cannot file a successive writ petition claiming that a relief as it would be barred by the Principle of constructive res judicata enshrined in Explanation IV to Section 11 and Order 2 Rule 2 C.P.C. as has been explained by Hon'ble Supreme Court in unambiguous and crystal clear language in the cases of Commissioner of Income Tax, Bombay vs. T.P. Kumaran, 1996 (1)) SCC 561, Union of India and others vs. Punnilal and others, 1996 (11) SCC 112 and M/s D. Cawasji and Co. and others Vs. State of Mysore and another, AIR 1975 SC 813.

23. No litigant has a right to unlimited drought on the Court time and public money in order to get his affairs settled in the manner he wishes and access of justice should not be misused as a licence to file misconceived and frivolous petitions.

24. The Hon'ble Supreme Court in the case of United Bank of India vs. Satyawati Tandon and others, reported in (2010) 8 SCC 110 in paragraph 42, 43 & 55 has held as under:

"42. There is another reason why the impugned order should be set aside. If Respondent 1 had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14, then she could have availed remedy by filing an application under Section 17(1). The expression "any person" used in Section 17(1) is of wide import. It takes within its fold, not only the borrower but also the guarantor or any other person who may be affected by the action taken under Section 13(4) or Section 14. Both, the Tribunal and the Appellate Tribunal are empowered to pas 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.

43. 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 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.

***

55. It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the 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."

25. The aforesaid decision in Satyawati Tandon (Supra) has been reiterated and followed in various decision by the Hon'ble Apex Court. The reasons for not entertaining the petition where there is efficacious and alternative remedy available has been recently dealt with in extenso by the Hon'ble Apex Court in Authorized Officer, State Bank of Travancore and another Vs. Mathew K.C., (2018) 3 SCC 85, of which the relevant extract is reproduced as here under:

"9. The statement of objects and reasons of the SARFAESI Act states that the banking and financial sector in the country was felt not to have a level playing field in comparison to other participants in the financial markets in the world. The financial institutions in India did not have the power to take possession of securities and sell them. The existing legal framework relating to commercial transactions had not kept pace with changing commercial practices and financial sector reforms resulting in tardy recovery of defaulting loans and mounting non-performing assets of banks and financial institutions. The Narasimhan Committee I and II as also the Andhyarujina Committee constituted by the Central Government Act had suggested enactment of new legislation for secularization and empowering banks and financial institutions to take possession of securities and sell them without court intervention which would enable them to realise long term assets, manage problems of liquidity, asset liability mismatches and improve recovery. The proceedings under the Recovery of Debts due to Banks and Financial Institutions Act, 1993, (hereinafter referred to as 'the DRT Act') with passage of time, had become synonymous with those before regular courts affecting expeditious adjudication. All these aspects have not been kept in mind and considered before passing the impugned order.

"10. Even prior to the SARFAESI Act, considering the alternate remedy available under the DRT Act it was held in Punjab National Bank vs. O.C. Krishnan and others, (2001) 6 SCC 569, that:-

"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 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."

26. In the case of Standard Chartered Bank Vs. V. Noble Kumar and others, (2013) 9 SCC 620, the Supreme Court in paragraph 27 has held as under:

"27.The "appeal" under section 17 is available to the borrower against any measure taken under section 13(4). Taking possession of the secured asset is only one of the measures that can be taken by the secured creditor. Depending upon the nature of the secured asset and the terms and conditions of the security agreement, measures other than taking the possession of the secured asset are possible under section 13(4). Alienating the asset either by lease or sale, etc. and appointing a person to manage the secured asset are some of those possible measures. On the other hand, section 14 authorises the Magistrate only to take possession of the property and forward the asset along with the connected documents to the borrower (sic the secured creditor). Therefore, the borrower is always entitled to prefer an "appeal" under section 17 after the possession of the secured asset is handed over to the secured creditor. Section 13(4)(a) declares that the secured creditor may take possession of the secured assets. It does not specify whether such a possession is to be obtained directly by the secured creditor or by resorting to the procedure under section 14. We are of the opinion that by whatever manner the secured creditor obtains possession either through the process contemplated under section 14 or without resorting to such a process obtaining of the possession of a secured asset is always a measure against which a remedy under section 17 is available."

27. In the case of Kanaiyalal Lalchand Sachdev & others vs. State of Maharashtra and others, 2011 (2) SCC 782, the Hon'ble Supreme Court in paragraph 20 has held as under:

"20. We are in respectful agreement with the above enunciation of law on the point. It is manifest that an action under Section 14 of the Act constitutes an action taken after the stage of Section 13(4), and therefore, the same would fall within the ambit of Section 17(1) of the Act. Thus, the Act itself contemplates an efficacious remedy for the borrower or any person affected by an action under Section 13(4) of the Act, by providing for an appeal before the DRT."

28. The Hon'ble Supreme Court in the case of ICICI Bank Ltd. v. Umakanta Mohapatra, 2019(13) SCC 497, has held as under:

"Delay condoned.

Leave granted.

Despite several judgments of this Court, including a judgment by Hon'ble Mr. Justice Navin Sinha, as recently as on 30.01.2018, in Authorized Officer, State Bank of Travancore and Another VS Mathew KC., (2018) 3 SCC 85, the High Courts continue to entertain matters which arise under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI), and keep granting interim orders in favour of persons who are Non-Performing Assets (NPAs).

The writ petition itself was not maintainable, as a result of which, in view of our recent judgment, which has followed earlier judgments of this Court, held as follows:-

"18. We cannot help but disapprove the approach of the High Court for reasons already noticed in Dwarikesh Sugar Industries Ltd. Vs Prem Heavy Engineering Works (P) Ltd and another, (1997) 6 SCC 450, observing:-

"32. When a position, in law, is well settled as a result of judicial pronouncement of this Court, it would amount to judicial impropriety to say the least, for the subordinate courts including the High Courts to ignore the settled decisions and then to pass a judicial order which is clearly contrary to the settled legal position. Such judicial adventurism cannot be permitted and we strongly deprecate the tendency of the subordinate courts in not applying the settled principles and in passing whimsical orders which necessarily has the effect of granting wrongful and unwarranted relief to one of the parties. It is time that this tendency stops."The writ petition, in this case, being not maintainable, obviously, all orders passed must perish, including the impugned order, which is set aside.

The appeals are allowed in the aforesaid terms.

Pending applications, if any, shall stand disposed of."

29. The Hon'ble Supreme Court in the case of C. Bright Vs. District Collector and others, Civil Appeal No. 3441 of 2020, decided on 05.11.2020, has held as under:

"21. Even though, this Court in United Bank of India v. Satyawati Tondon & Ors., (2010) 8 SCC 110, held that 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 will 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. Hindon Forge Private Limited has held that the remedy of an aggrieved person by a secured creditor under the Act is by way of an application before the Debts Recovery Tribunal, how- ever, borrowers and other aggrieved persons are invoking the jurisdiction of the High Court under Articles 226 or 227 of the Constitution of India without availing the alternative statutory remedy. The Hon'ble High Courts are well aware of the limitations in exercising their jurisdiction when effective alternative remedies are available, but a word of caution would be still necessary for the High Courts that interim orders should generally not be passed without hearing the secured creditor as interim orders defeat the very purpose of expeditious recovery of public money.

22. Thus, we do not find any error in the order passed by the High Court. Consequently, the appeal is dismissed."

30. Having considered the entire facts and circumstances of the case and in view of the principles enunciated by the Hon'ble Supreme Court as delineated above, we are of the considered view that present petitioners did not come with clean hands, bypassing the effective alternative remedy which is available to the petitioners for redressal of their grievances. We constraint ourselves from making any observation qua recovery proceedings initiated by bank under SARFAESI Act, which would effect the merits of the case before competent court. It would be an abuse of process of Court to allow any action, which would result in injustice and prevent promotion of justice.

31. Accordingly, both the writ petitions are dismissed on the ground of alternative remedy to approach before the competent court under the relevant provisions of SARFAESI Act.

Order date : 03.03.2021

nd/Manish Himwan