Madhya Pradesh High Court
Preety Pandiya vs Punjab National Bank on 13 December, 2023
Author: Sushrut Arvind Dharmadhikari
Bench: Sushrut Arvind Dharmadhikari, Pranay Verma
1
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
HON'BLE SHRI JUSTICE PRANAY VERMA
ON THE 13 th OF DECEMBER, 2023
WRIT PETITION No. 22178 of 2022
BETWEEN:-
1. PREETY PANDIYA W/O LATE SAMPAT PANDIYA
OCCUPATION: HOUSEWIFE R/O H.NO. 2790,
SECTOR E SUDAMA NAGAR DISTT. INDORE
(MADHYA PRADESH)
2. DEEPAK PANDIYA S/O LATE SAMPAT PANDIYA
OCCUPATION: BUSINESS HOUSE NO 2790,
SECTOR-E, SUDAMA NAGAR DISTRICT INDORE
(MADHYA PRADESH)
.....PETITIONERS
(SHRI BHAVESH TIWARI, LEARNED COUNSEL FOR THE PETITIONERS)
AND
1. PUNJAB NATIONAL BANK AUTHORIZED OFFICER
HEAD OFFICE PLOT NO. 4 SECOT 10 DWARKA
NEW DELHI PIN 110075 BRANCH OFFICE CIRCLE
SASTRA CENTRE 20 SHEH NAGAR SAPANA
SANGEETA ROAD DISTT. INDORE (MADHYA
PRADESH)
2. ADDITIONAL DISTRICT MAGISTRATE INDORE
(MADHYA PRADESH)
3. SHRI CHANDRASHEKHAR YADAV S/O SHRI
SANTU PRASAD YADAV OCCUPATION: C/O
PUNJAB NATIONAL BANK BRANCH OFFICE AT
CIRCLE SASTRA CENTRE, 20 SNEH NAGAR,
SAPANA SANGEETA ROAD INDORE (MADHYA
PRADESH)
.....RESPONDENTS
( SHRI SHREY RAJ SAXENA, LEARNED COUNSEL FOR THE
RESPONDENT [R-1].
Signature Not Verified
Signed by: SEHAR HASEEN
Signing time: 12/15/2023
3:52:40 PM
2
(SHRI GOPAL YADAV, LEARNED COUNSEL FOR THE RESPONDENT [R-3].
This petition coming on for admission this day, Justice Sushrut Arvind
Dharmadhikari passed the following:
ORDER
Heard on the question of admission and interim relief.
This petition under Article 226 of the Constitution of India assails the
order dated 23.09.2022 passed in S.A.No. 544/2022 by the Debt Recovery
Tribunal (DRT), Jabalpur by which application filed by the petitioners seeking
time to clear outstanding amount of bank was dismissed.
2. Brief facts of the case are that late husband of petitioner no.1 obtained
loan from the respondent bank who in order to secure the repayment of the
said loan created equitable mortgage/security interest in respect of property
situated at Plot No. 2790, Sector E, Sudama Nagar, Tehsil and Distt
Indore(referred to as "property in question"). Due to outbreak of Covid-19
Pandemic, there were defaults in repayment of loan as during the said period
husband of the petitioner no.1 has died. The respondents thereafter initiated
proceedings under the provisions of Securitization and Reconstruction of
Financial Assets and Enforcement of Security Interest Act 2002(referred to as
'SARFAESI Act' hereinafter) by issuing demand notice u/S 13(2) of
SARFAESI Act which was not duly served upon the petitioners. Thereafter,
respondent/bank made an application before the ADM, Indore u?S 14 of the
SARFAESI Act which was allowed vide order dated 16.05.2022. The bank
then issued an auction notice dated 08.06.2022 for auction of the property in
question on 29.06.2022. The said action of respondent/bank was challenged
before the Debt Recovery Tribunal, Jabalpur by the petitioners by filing
securitization application No. 544/2022. Since the auction was not materialized
as no bidder came forward, the bank again issued a demand notice dated
28.07.2022 and another auction was scheduled for 29.08.2022. Pursuant to the
said auction notice, petitioners approached respondent/bank for making the
entire payment of outstanding amount and it has been brought to their notice
that property in question has already been sold by the respondent/bank. The
said subsequent development is again challenged by the petitioners by filing
amendment application before the DRT, Jabalpur. The Presiding Officer while
deciding the said application on 13.09.2022 directed the respondent/bank to
maintain status-quo with regard to property in question and the matter is listed
on 19.09.2022. On the said date, respondent/bank has filed reply wherein it has
been stated that sale certificate has been issued to the successful bidder. The
petitioner thereafter moved another application before the DRT, Jabalpur
seeking further time to clear the outstanding amount which was dismissed by
the DRT, Jabalpur by holding that sale certificate has been issued by the
respondent/bank. Hence, the present petition has been filed.
3. Learned counsel for the petitioners submitted that petitioner no.1 is a
widow lady and the property in question is a dwelling house in which she is
living with her son. It is further submitted that petitioners are ready and willing
to make payment of entire outstanding dues alongwith entire cost incurred by
the bank. If property in question is not restored in the name of petitioners, the
same would cause irreparable loss to them. It is further submitted that as per
Sec 13(8) of the SARFAESI Act provides that when the amount has been
tendered with all the cost,the secured creditor shall not take any further step for
sale of the property. The petitioners herein are also ready to make payment of
all the outstanding dues, they should not be deprived of the opportunity to do
the same and the property in question may be restored in their names. Moreso,
the sale certificate is issued in favour of the highest bidder in gross violation of
the status-quo order passed by the DRT, Jabalpur on 13.09.2022. Hence, the
order dated 23.09.2022 be quashed and petitioners may be given time to
depsoit the entire outstanding amount due on the petitioners.
4 . On the other hand, learned counsel appearing for respondents
vehemently opposed the prayer and contended that the petitioners are having
efficacious statutory remedy of filing an appeal under Section 18 of SARFAESI
Act before the Debts Recovery Appellate Tribunal (DRAT), Allahabad.
Therefore, in the aforesaid facts and circumstances, this petition deserves to be
dismissed with liberty to the petitioners to avail the said alternative remedy.
5. Heard learned counsel for the parties and perused the record.
6. In series of cases, this Court is of the consistent view that the writ
petitions cannot be entertained when there is an efficacious statutory remedy of
appeal available to petitioner. The Apex Court in case of South Indian Bank
Ltd. & Ors. vs. Naveen Mathew Philip & Anr., 2023 SCC Online SC 435
has reiterated the settled position of law on the interference of the High Court
invoking Article 226 of the Constitution of India in commercial matters when an
effective and efficacious alternative forum has been constituted through the
statute. The Apex Court even went on to say that, "We are also constrained
to take judicial notice of the fact that certain High Courts continue to
interfere in such matters, leading to a regular supply of cases before this
Court. One such High Court is that of Punjab & Haryana.''
7. In paragraph 14 of the judgment in case of South Indian Bank
Ltd. & Ors (supra), the Apex Court has held as under :
''14. A writ of certiorari is to be issued over a decision when the Court
finds that the process does not conform to the law or statute. In other
words, courts are not expected to substitute themselves with the
decision-making authority while finding fault with the process along
with the reasons assigned. Such a writ is not expected to be issued to
remedy all violations. When a Tribunal is constituted, it is expected to
go into the issues of fact and law, including a statutory violation. A
question as to whether such a violation would be over a mandatory
prescription as against a discretionary one is primarily within the
domain of the Tribunal. So also, the issue governing waiver,
acquiescence, and estoppel.....
15. .......
16. Approaching the High Court for the consideration of an offer by
the borrower is also frowned upon by this Court. A writ of mandamus
is a prerogative writ. In the absence of any legal right, the Court
cannot exercise the said power. More circumspection is required in a
financial transaction, particularly when one of the parties would not
come within the purview of Article 12 of the Constitution of India.
When a statute prescribes a particular mode, an attempt to circumvent
shall not be encouraged by a writ court. A litigant cannot avoid the
noncompliance of approaching the Tribunal which requires the
prescription of fees and use the constitutional remedy as an
alternative. ...........''
8. The Apex Court, in case of State Bank of Travancore vs. Mathew
K.C., (2018) 3 SCC 85, has held 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 loathe 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 Commissioner of Income Tax and Others vs.
Chhabil Dass Agarwal, 2014 (1) SCC 603, as follows:
''15. Thus, while it can be said that this Court has recognised
some exceptions to the rule of 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 vs. Supt. of
Taxes, AIR 1964 SC 1419, Titaghur Paper Mills Co. Ltd. vs.
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.''
6. ......
7. ......
8 . 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.
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.
9. 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
f ro m 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.''
9. Admittedly, the petitioners have not availed the efficacious statutory
remedy under Section 18 of the SARFAESI Act. There is no bar for the
petitioners to raise all the grounds raised in this petition before the appellate
forum. Therefore, this Court is not inclined to entertain the writ petition.
Accordingly, the same is hereby dismissed.
10. However, the petitioners would be at liberty to approach the
appropriate forum in appeal, if so advised, within a period of 15 days from
today.
11 . Since, the interim order of status-quo dated 13.09.2022 with
regard to property in question was passed protecting the petitioners, it is
directed that the status-quo order shall continue for a further period of 06(six)
weeks from today. The same shall stand vacated automatically after expiry of
06(six) weeks from today.
(S. A. DHARMADHIKARI) (PRANAY VERMA)
JUDGE JUDGE
sh
