Gauhati High Court
Kamala Kanta Singha And Anr vs United Bank Of India And 6 Ors on 20 July, 2022
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GAHC010313162019
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/9413/2019
KAMALA KANTA SINGHA AND ANR
S/O LATE NETRO SINGHA, R/O DURGANAGAR, PART-III, P.O. GOSSAIPUR,
DIST. CACHAR, ASSAM, PIN 788030
VERSUS
UNITED BANK OF INDIA AND 6 ORS
REPRESENTED BY ITS MANAGING DIRECTOR AND CHIEF EXECUTIVE
OFFICER, HEAD OFFICE-11, HEMANTA BASU SARANI, KOLKATA-700001
2:THE CHIEF REGIONAL MANAGER
UNITED BANK OF INDIA
CACHAR REGIONAL BRANCH
CENTRAL ROAD
SILCHAR
DISTRICT CACHAR
ASSAM
PIN 788001
3:THE BRANCH MANAGER
UNITED BANK OF INDIA
SILCHAR BRANCH
CENTRAL ROAD
SILCHAR
DISTRICT CACHAR
ASSAM
PIN 788001
4:NUMAN CHOUDHURY
S/O GIAS UDDIN CHOUDHURY
R/O VILL DURGANAGAR PART-IV
P.O. AND P.S. UDHARBAOND
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DISTRICT CACHAR
ASSAM
PIN 788030
5:KHOIRUL BARBHUIYA
RESIDENT OF VILL CHANRAGUDAN
MADHURBOND
P.O. AND P.S. SILCHAR
DIST. CACHAR
ASSAM
PIN 788001
6:IQBAL AHMED LASKAR
RESIDENT OF VILL AND P.O. GOSSAIPUR
DISTRICT CACHAR
ASSAM
PIN 788030
7:AHMED CHOUDHURY
RESIDENT OF VILL AND P.O. GOSSAIPUR
DISTRICT CACHAR
ASSAM
PIN 78803
Advocate for the Petitioner : MR. R MAJUMDAR
Advocate for the Respondent : MR. A PARVEZ
BEFORE
HON'BLE THE CHIEF JUSTICE MR. R.M. CHHAYA
HON'BLE MR. JUSTICE ACHINTYA MALLA BUJOR BARUA
ORDER
20.07.2022
(R.M. Chhaya, CJ)
Heard Mr. R. Mazumdar, learned counsel for the petitioners. None
appears for the respondents.
The petitioner No.1 Sri Kamala Kanta Singha is a retired Army
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personnel aged about 72 years and the petitioner No.2 Smti. Kanchan Bala
Singha is the daughter of the petitioner No.1. Both the petitioners were served
with a notice dated 01.02.2019 under Section 13(2) of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 (for short, hereinafter referred to as 'the SARFAESI Act') in
respect of ODUPM Account No.0037210035510 for an amount of
Rs.24,76,035.12/-. In the notice, the description of the immovable properties
over which the respondent United Bank of India may exercise all or any of their
rights under Section 13(4) had also been provided. Consequent thereof, a notice
of intended sale under Rule 6(2) and 8(6) of the Security Interest (Enforcement)
Rules 2002 (for short, the Rules of 2002) were also served on the petitioners.
Further, with reference to the notice under Section 13(2) of the SARFAESI Act
dated 01.02.2019, the respondent United Bank of India issued a notice dated
30.10.2019 to the mortgagers for vacating and handing over of the properties in
respect of ODUPM Account No.0037210035510.
In the circumstance, the present writ petition is instituted for setting
aside the entire proceeding against the petitioners under the SARFAESI Act and
the Rules of 2002.
From the three notices referred above, it is discernible that the
proceeding against the petitioners under the SARFAESI Act has reached the
stage as provided under Section 13(4) of the Act.
In view of the above, the petitioners have an efficacious alternative
remedy by way of filing an appeal under Section 17 of the SARFAESI Act before
the Debts Recovery Tribunal and, therefore, no interference is called for in this
petition. We are fortified in our view by the binding decision of the Hon'ble Apex
Court in the case of Authorized Officer, State Bank of Travancore & Anr. -vs-
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Mathew K.C., reported in AIR 2018 SC 676, wherein it was observed as
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 securitisation 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 v. O.C. Krishnan and others, (2001) 6
SCC 569 : (AIR 2001 SC 3208), 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."
11. In Satyawati Tandon (AIR 2010 SC 3413)(supra), the High Court had restrained
further proceedings under Section 13(4) of the Act. Upon a detailed consideration of
the statutory scheme under the SARFAESI Act, the availability of remedy to the
aggrieved under Section 17 before the Tribunal and the appellate remedy under
Section 18 before the Appellate Tribunal, the object and purpose of the legislation, it
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was observed that a writ petition ought not to be entertained in view of the alternate
statutory remedy available holding:
"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."
16. It is the solemn duty of the Court to apply the correct law without waiting for an
objection to be raised by a party, especially when the law stands well settled. Any
departure, if permissible, has to be for reasons discussed, of the case falling under a
defined exception, duly discussed after noticing the relevant law. In financial matters
grant of ex parte interim orders can have a deleterious effect and it is not sufficient to say
that the aggrieved has the remedy to move for vacating the interim order. Loans by
financial institutions are granted from public money generated at the tax payers expense.
Such loan does not become the property of the person taking the loan, but retains its
character of public money given in a fiduciary capacity as entrustment by the public.
Timely repayment also ensures liquidity to facilitate loan to another in need, by circulation
of the money and cannot be permitted to be blocked by frivolous litigation by those who
can afford the luxury of the same. The caution required, as expressed in Satyawati
Tandon (AIR 2010 SC 3413, Para 18)(supra), has also not been kept in mind before
passing the impugned interim order:-
"46. 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
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secured creditors, stay granted by the High Court would have serious adverse
impact on the financial health of such bodies/institutions, which (sic 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. 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
Corpn. v. Registrar of Trade Marks (AIR 1999 SC 22) and Harbanslal
Sahnia v. Indian Oil Corpn. Ltd. (AIR 2003 SC 2120) and some other judgments,
then the High Court may, after considering all the relevant parameters and
public interest, pass an appropriate interim order."
17. The writ petition ought not to have been entertained and the interim order
granted for the mere asking without assigning special reasons, and that too
without even granting opportunity to the Appellant to contest the maintainability
of the writ petition and failure to notice the subsequent developments in the
interregnum. The opinion of the Division Bench that the counter-affidavit having
subsequently been filed, stay/modification could be sought of the interim order
cannot be considered sufficient justification to have declined interference."
Following the observations of the Hon'ble Apex Court in the case of
Authorized Officer, State Bank of Travancore (supra), we are of the view that
this writ petition is not maintainable on ground of availability of alternative
remedy and hence, not entertained.
We have also taken note of that the petitioners had raised allegations
of fraud against the respondents No.4, 5, 6 and 7 as regards the loan that may
have been obtained from the respondent United Bank of India and accordingly
an FIR dated 30.11.2019 had been lodged before the Officer-in-Charge, Silchar
Sadar Police Station which was registered as Silchar Police Station Case
No.4139/2019 under Sections 120(B)/420/468/447/506/34 of the Indian Penal
Code. It is clarified that non-entertainment of the present writ petition shall not
be construed to be a bar on the part of the authorities under the Silchar Police
Station to proceed as per law.
It goes without saying that as the petition is not entertained on the
ground of maintainability, no opinion on merits is expressed by this Court.
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The writ petition is dismissed.
JUDGE CHIEF JUSTICE
Comparing Assistant
