Gauhati High Court
Page No.# 1/6 vs The Bank Of Baroda And 5 Ors on 20 July, 2022
Page No.# 1/6
GAHC010140152022
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/4666/2022
M/S GABHARU ENTERPRISE AND 3 ORS
HALESWAR, GOROIMARI, P.O. HALESWAR, DIST. SONITPUR, ASSAM, PIN-
784104, A PROPRIETORSHIP FIRM, REP. BY ITS PROPRIETOR SRI SIMANTA
SAIKIA.
2: M/S S.M. ASSOCIATES
HALESWAR
GOROIMARI
P.O. HALESWAR
P.S. TEZPUR
DIST. SONITPUR
ASSAM
PIN-784104
PARTNERSHIP FIRM
REP. BY ITS PARTNERS SRI SIMANTA SAIKIA AND SMT. MEENA SAIKIA.
3: SIMANTA SAIKIA
S/O. SRI KESHAB SAIKIA
R/O. HALESWAR
GOROIMARI
P.O. HALESWAR
PIN-784104
DIST. SONITPUR
ASSAM.
4: SMT. MEENA SAIKIA
W/O. SRI SIMANTA SAIKIA
R/O. HALESWAR
GOROIMARI
P.O. HALESWAR
PIN-784104
DIST. SONITPUR
ASSAM
Page No.# 2/6
VERSUS
THE BANK OF BARODA AND 5 ORS
HAVING ITS H.O. AT BARODA BHAVAN, RC DUTT ROAD, ALKAPURI,
BARODA-390007, GUJARAT, REP. BY CHAIRMAN.
2:THE AUTHORISED OFFICER
BANK OF BARODA
TEZPUR BRANCH M.D. ROAD NEAR IDD GAAH FIELD
TEZPUR-784001
DIST. SONITPUR
ASSAM.
3:THE BRANCH MANAGER
BANK OF BARODA
TEZPUR BRANCH M.D. ROAD NEAR ODD GAAH FIELD
TEZPUR-784001
DIST. SONITPUR
ASSAM.
4:THE DISTRICT MAGISTRATE
SONITPUR DISTRICT
TEZPUR-784001.
5:THE CIRCLE OFFICER CUM EXECUTIVE MAGISTRATE
TEZPUR REVENUE CIRCLE TEZPUR-784001
DIST. SONITPUR.
6:THE CIRCLE OFFICER CUM EXECUTIVE MAGISTRATE
THELAMARA REVENUE CIRCLE
THELAMARA
DIST. SONITPUR
Advocate for the Petitioner : MR. B D GOSWAMI
Advocate for the Respondent : GA, ASSAM
Page No.# 3/6
-B E F O R E-
HON'BLE THE CHIEF JUSTICE MR. R.M. CHHAYA
HON'BLE MR. JUSTICE ACHINTYA MALLA BUJOR BARUA
20.07.2022
(R.M. Chhaya, CJ)
Heard Mr. B.D. Goswami, learned counsel for the petitioners. Also heard Mr. B.
Sarma, learned counsel for the respondent Nos. 1 to 3.
The challenge in this petition under Article 226 of the Constitution of India is to
the action taken against the petitioners by the respondent Bank under Section 14 of
the Securitisation and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 (for short, hereinafter referred to as 'the SARFAESI Act').
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- 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
Page No.# 4/6
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 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
Page No.# 5/6
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 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
Page No.# 6/6
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.
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.
The writ petition is dismissed.
JUDGE CHIEF JUSTICE
Comparing Assistant
