Mansuri Nasimbanu Salimbhai vs Dena Bank Now Bank Of Baroda
2022 Latest Caselaw 4435 Guj

     C/SCA/4233/2020                                  ORDER DATED: 27/04/2022




           IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

             R/SPECIAL CIVIL APPLICATION NO. 4233 of 2020

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                        MANSURI NASIMBANU SALIMBHAI
                                   Versus
                       DENA BANK NOW BANK OF BARODA
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Appearance:
MR BHAVESH B SARODE(6454) for the Petitioner(s) No.
1,10,11,12,2,3,4,5,6,7,8,9
MR TRUPESH KATHIRIYA, AGP for the Respondent(s) No. 2,3
MR. MAHITOSH U SINGH(7015) for the Respondent(s) No. 1
NOTICE SERVED BY DS for the Respondent(s) No. 4
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 CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA

                                Date : 27/04/2022

                                 ORAL ORDER

1. Heard learned advocate Mr.Bhavesh B. Sarode for the petitioners, learned advocate Mr.Mahitosh U. Singh for the respondent No.1 and learned Assistant Government Pleader Mr.Trupesh Kathiriya for the respondent Nos.2 and 3.

2. By this petition under Article 226 of the Constitution of India, the petitioners have prayed for the quashing and setting aside the action of the respondent-Bank in taking symbolic possession of the respective residential houses of the petitioners on 9th January, 2018 and further also prayed to quash and set aside the order passed by the District Magistrate and Collector, Mehsana dated 10th September, 2019 and consequential action which may be taken by the

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Mamlatdar pursuant to the order passed by the Collector.

3. The brief facts of the case are not dealt with in detail as the petition is disposed of on the ground that the petitioners have alternative efficacious remedy as the petitioners fall into category of "any person" who are aggrieved by the action taken by the respondent No.1-Bank under the provisions of Section 13(2) of the Securitisation and Reconstructions of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the SARFAESI Act').

4. The law with regard to the alternative and efficacious remedy under the provisions of Section 17 of the SARFAESI Act is now well settled in view of the decision of the Apex Court in case of Phoenix Arc Private Limited versus Vishwa Bharati Vidya Mandir .

5. The Apex Court in the judgment of Phoenix Arc Private Limited (Supra) has held as under :

"12. Even otherwise, it is required to be noted that a writ petition against the private financial institution - ARC - appellant herein under Article 226 of the Constitution of India against the proposed action/actions under Section 13(4) of the SARFAESI Act can be said to be not maintainable. In the present case, the ARC proposed to take action/actions under the SARFAESI Act to recover the borrowed amount as a secured creditor. The ARC as such cannot be said to be performing public functions which are normally expected to be performed by the State authorities.

During the course of a commercial transaction and

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under the contract, the bank/ARC lent the money to the borrowers herein and therefore the said activity of the bank/ARC cannot be said to be as performing a public function which is normally expected to be performed by the State authorities. If proceedings are initiated under the SARFAESI Act and/or any proposed action is to be taken and the borrower is aggrieved by any of the actions of the private bank/bank/ARC, borrower has to avail the remedy under the SARFAESI Act and no writ petition would lie and/or is maintainable and/or entertainable. Therefore, decisions of this Court in the cases of Praga Tools Corporation (supra) and Ramesh Ahluwalia (supra) relied upon by the learned counsel appearing on behalf of the borrowers are not of any assistance to the borrowers.

13. Now, so far as the submission on behalf of the borrowers that in exercise of the powers under Article 226 of the Constitution, this Court may not interfere with the interim / interlocutory orders is concerned, the decision of this Court in the case of Mathew K.C. (supra) is required to be referred to.

13.1 In the case of Mathew K.C. (supra) after referring to and/or considering the decision of this Court in the case of Chhabil Dass Agarwal (supra), it was observed and held in paragraph 5 as under:-

"5. We have considered the submissions on behalf of the parties. Normally this Court in exercise of jurisdiction under Article 136 of the Constitution is loath to interfere with an interim order passed in a pending proceeding before the High Court, except in special circumstances, to prevent manifest injustice or abuse of the process of the court. In the present case, the facts are not in dispute. The discretionary jurisdiction under Article 226 is not absolute but has to be exercised judiciously in the given facts of a case and in accordance with law. The normal rule is that a writ petition under Article 226 of the Constitution ought not to be entertained if alternate statutory remedies are available, except in cases falling within the well-defined exceptions as observed in CIT v. Chhabil Dass Agarwal [CIT v. Chhabil Dass Agarwal, (2014) 1 SCC 603], as follows: (SCC p. 611, para 15)

"15. Thus, while it can be said that this Court has recognised some exceptions to the rule of

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alternative remedy i.e. where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, the proposition laid down in Thansingh Nathmal case [Thansingh Nathmal v. Supt. of Taxes, AIR 1964 SC 1419] , Titaghur Paper Mills case [Titaghur Paper Mills Co. Ltd. v. State of Orissa, (1983) 2 SCC 433] and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation."

13.2 Applying the law laid down by this Court in the case of Mathew K.C. (supra) to the facts on hand, we are of the opinion that filing of the writ petitions by the borrowers before the High Court under Article 226 of the Constitution of India is an abuse of process of the Court. The writ petitions have been filed against the proposed action to be taken under Section 13(4). As observed hereinabove, even assuming that the communication dated 13.08.2015 was a notice under Section 13(4), in that case also, in view of the statutory, efficacious remedy available by way of appeal under Section 17 of the SARFAESI Act, the High Court ought not to have entertained the writ petitions. Even the impugned orders passed by the High Court directing to maintain the status quo with respect to the possession of the secured properties on payment of Rs.1 crore only (in all Rs.3 crores) is absolutely unjustifiable. The dues are to the extent of approximately Rs.117 crores. The ad-interim relief has been continued since 2015 and the secured creditor is deprived of proceeding further with the action under the SARFAESI Act. Filing of the writ petition by the borrowers before the High Court is nothing but an abuse of process of Court. It appears that the High Court has initially granted an ex-parte ad-interim order mechanically and without assigning any reasons. The High Court ought to have appreciated

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that by passing such an interim order, the rights of the secured creditor to recover the amount due and payable have been seriously prejudiced. The secured creditor and/or its assignor have a right to recover the amount due and payable to it from the borrowers. The stay granted by the High Court would have serious adverse impact on the financial health of the secured creditor/assignor. Therefore, the High Court should have been extremely careful and circumspect in exercising its discretion while granting stay in such matters. In these circumstances, the proceedings before the High Court deserve to be dismissed.

14. In view of the above and for the reasons stated above, present appeals succeed. The Writ Petition Nos. 35564 to 35566 of 2015 before the High Court are dismissed. Consequently, the ex-parte ad-interim order dated 26.08.2015 further extended by orders dated 28.02.2017 and 27.03.2018 stand vacated."

6. In view of the above settled legal position, without entering into merits of the matter, the petitioners are relegated to avail the alternative efficacious remedy under Section 17 of the SARFAESI Act.

7. The petitioners are permitted to raise all the contentions which are raised in this petition before the Debt Recovery Tribunal. The Tribunal shall consider the application to condone the delay, if any, which may be filed by the petitioner by giving credit of the time spent by the petitioners before this Court.

8. With the aforesaid observations, the petition is disposed of. Notice is discharged.

(BHARGAV D. KARIA, J) PALAK