Madhya Pradesh High Court
Vetrex Spining Limited vs General Manager Cenara Bank (Formally ... on 31 May, 2024
Author: Sushrut Arvind Dharmadhikari
Bench: Sushrut Arvind Dharmadhikari
1
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
HON'BLE SHRI JUSTICE GAJENDRA SINGH
ON THE 31 st OF MAY, 2024
WRIT PETITION No. 15621 of 2024
BETWEEN:-
1. VETREX SPINING LIMITED 1011, EMBASSY
CHAMBERS, NARIMAN POINT MUMBAI ,
FACTORY ADDRESS- 809-A TO E, PITHAMPUR,
DIST. DHAR (MADHYA PRADESH)
2. PANKAJ VAIDYA S/O LATE HARINARAYAN
VAIDYA, AGED ABOUT 52 YEARS, OCCUPATION:
DIRECTOR 182, SAIKRIPA COLONY, NEAR
BOMBAY HOSPITAL INDORE (MADHYA
PRADESH)
3. SACHIN SHARMA S/O SURESH SHARMA, AGED
ABOUT 44 YEARS, OCCUPATION: DIRECTOR 210,
GIRIKUNJ, 2 TM FLOOR, MARINE DRIVE,
MUMBAI (MAHARASHTRA)
4. MANDAR VIYALA S/O LATE KAILASH VIYALA,
AGED ABOUT 45 YEARS, OCCUPATION:
DIRECTOR 29, UNITED CHAMBER M.S. ALI ROAD,
MUMBAI (MAHARASHTRA)
5. GAUTAM JHA S/O LATE RAMCHARAN, AGED
ABOUT 52 YEARS, OCCUPATION: DIRECTOR ADD.
334, MADHUVAN APARTMENT, FLAT NO. 301,
SAKET NAGAR, INDORE (MADHYA PRADESH)
.....PETITIONER
(BY SHRI ASHISH GUPTA, ADVOCATE)
AND
1. GENERAL MANAGER CENARA BANK (FORMALLY
KNOWN AS SYNDICATE BANK) KANADIYA ROAD
INDORE (MADHYA PRADESH)
Signature Not Verified
Signed by: RAVI PRAKASH
Signing time: 03-06-2024
13:27:43
2
2. BRANCH MANAGER CENERA BANK (FORMALLY
KNOWN AS SYNDICATE BANK ) KANADIYA ROAD,
INDORE (MADHYA PRADESH)
.....RESPONDENTS
(NONE FOR THE RESPONDENT)
This petition coming on for admission this day, Justice Sushrut Arvind
Dharmadhikari passed the following:
ORDER
Heard on the question of admission.
By this writ petition under Article 226 of the Constitution of India, the
petitioners are assailing the impugned e-auction notice dated 03.05.2024 issued
by the Debt Recovery Tribunal, Jabalpur by claiming following reliefs:-
1. That, the petitioner filed by the petitioners may be allowed;
2. That, the impugned E auction notice dated 03.05.2024 (P/4) may
kindly be directed to be quashed;
3. That, by way of issuing writ order the respondent bank may kindly
directed to close the loan account and release the original deed and also
directed to issued NOC in favour of petitioners;
4. Any other relief which this Hon'ble Court deems fit looking to the
facts and circumstances of the case.
02. Shorn of unnecessary details, the relevant facts are that the petitioners
took financial assistance of Rs.30,00,00,000/- from the respondents / Bank for
startup of the company, but due to certain loss, the company could not run
properly, therefore, the Bank took possession of the company and locked the
premises and handed over to a recovery agency. The respondents had also
recovery rent of Rs.1,12,500/- per month.
03. The petitioners approached the Bank for one time settlement and the
respondents agreed for the same but directed to deposit some amount.
Thereafter, the petitioners deposited an amount of Rs.50,00,000/- by cheque for
one time settlement, but the respondents refused the offer of the petitioners and
filed an application before the DRT for recovery of the loan amount. The
grievance of the petitioners is the they paid all the dues but the respondents are
still recovery the amount from the petitioners. The DRT vide order dated
03.05.2024 ordered to put the property in e-auction. Hence, the present writ
petition is before this Court.
04. Learned counsel for the petitioner submits that the petitioners have
already paid all the dues, but the respondent / Bank has not adjusted the amount
and closed his loan account. This fact was never brought before the DRT,
hence, the e-auction notice dated 03.04.2024 is bad in law and liable to be
quashed.
05. Heard learned counsel for the appellant.
06. 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.
07. 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. ...........''
08. 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
o f 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 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.''
09. 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.
10. In view of the aforesaid, Writ Petition stands dismissed. However,
the petitioners shall be at liberty to approach the appropriate forum in appeal, if
so advised.
(S. A. DHARMADHIKARI) (GAJENDRA SINGH)
JUDGE JUDGE
Ravi
