Madras High Court
Ramaiah vs M/S.Shriram Housing Finance Ltd on 14 December, 2022
W.P(MD)No.21120 of 2022
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 14.12.2022
CORAM :
THE HONOURABLE MR.JUSTICE D.KRISHNAKUMAR
and
THE HONOURABLE MR.JUSTICE R.VIJAYAKUMAR
W.P(MD)No.21120 of 2022
and
WMP(MD)No.15328 of 2022
Ramaiah ... Petitioner
vs.
M/s.Shriram Housing Finance Ltd.,
Represented by its
Authorised Officer,
Mr.V.Murugan
S/o. Mr.S.Velu,
Tirunelveli Branch,
Tirunelveli. ... Respondent
PRAYER : Writ Petition filed under Article 226 of the
Constitution of India, for issuance of a Writ of Certiorari, to call for the
records pertaining to the order passed by the learned Chief Judicial
Magistrate Court, Tirunelveli in Crmp.No.431 of 2022, dated
18.04.2022 based on the application filed by the respondent bank
under Section 14(1) & (2) of the Securitization and Reconstruction of
1/12
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W.P(MD)No.21120 of 2022
Financial Assets and Enforcement of Security Interest Act, 2002, and
quash the same as illegal.
For Petitioner : Ms.A.Banumathy
For Respondent : Mr.V.Sakthivel
ORDER
(Order of the Court was made by D.KRISHNAKUMAR, J.)
The prayer in the writ petition is for issuance of a Writ of
Certiorari, to call for the records pertaining to the order passed by the
learned Chief Judicial Magistrate Court, Tirunelveli in Crmp.No.431 of
2022, dated 18.04.2022 based on the application filed by the
respondent bank under Section 14(1) & (2) of the Securitization and
Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002, and quash the same as illegal.
2. Though there is availability of expeditious and effective
remedies under the SARFAESI Act, this writ petition has been filed,
since the Debts Recovery Tribunal, Madurai, is not functional.
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W.P(MD)No.21120 of 2022
Normally, the writ petition under Article 226 against the proceedings
under the SARFAESI Act, is not maintainable in view of the following
judgments:-
(i) In United Bank of India v. Satyawati Tondon, (2010)
8 SCC 110, the Hon'ble Supreme Court has held as follows:-
"42. There is another reason why the impugned order
should be set aside. If Respondent 1 had any tangible
grievance against the notice issued under Section 13(4) or
action taken under Section 14, then she could have availed
remedy by filing an application under Section 17(1). The
expression "any person" used in Section 17(1) is of wide
import. It takes within its fold, not only the borrower but
also the guarantor or any other person who may be
affected by the action taken under Section 13(4) or Section
14. Both, the Tribunal and the Appellate Tribunal are
empowered to pass interim orders under Sections 17 and
18 and are required to decide the matters within a fixed
time schedule. It is thus evident that the remedies
available to an aggrieved person under the SARFAESI Act
are both expeditious and effective.
43. Unfortunately, the High Court overlooked the
settled law that the High Court will ordinarily not entertain
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W.P(MD)No.21120 of 2022
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 giievance 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.''
(ii) In Kanaiyalal Lalchand Sachdev v. State of
Maharashtra(2011) 2 SCC 782, the Apex Court has held as
follows:-
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W.P(MD)No.21120 of 2022
''23. In our opinion, therefore, the High Court rightly
dismissed the petition on the ground that an efficacious
remedy was available to the appellants under Section 17 of
the Act. It is well settled that ordinarily relief under
Articles 226/227 of the Constitution of India is not available
if an efficacious alternative remedy is available to any
aggrieved person. (See Sadhana Lodh v. National
Insurance Co. Ltd. [(2003) 3 SCC 524 : 2003 SCC (Cri)
762] , Surya Dev Rai v. Ram Chander Rai [(2003) 6 SCC
675] and SBI v. Allied Chemical Laboratories [(2006) 9
SCC 252].)"
(iii) In ICICI Bank Ltd. v. Umakanta Mohapatra, (2019)
13 SCC 497 : (2018) 5 SCC (Civ) 812: 2018 SCC OnLine SC
2349, the Hon'ble Supreme Court has held as follows:-
"2. Despite several judgments of this Court, including
a judgment by Hon'ble Navin Sinha, J., as recently as on
30-1-2018, in State Bank of Travancore v. Mathew K.C.
[State Bank of Travancore v. Mathew K.C., (2018) 3 SCC
85 : (2018) 2 SCC (Civ) 41] , the High Courts continue to
entertain matters which arise under the Securitisation and
Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 (SARFAESI), and keep granting
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W.P(MD)No.21120 of 2022
interim orders in favour of persons who are non-performing
assets (NPAs)."
3. The writ petition itself was not maintainable, as a
result of which, in view of our recent judgment, which has
followed earlier judgments of this Court, held as follows:
(SCC p. 94, para 17)
"17. We cannot help but disapprove the
approach of the High Court for reasons already noticed in
Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engineering
Works (P) Ltd. [Dwarikesh Sugar Industries Ltd. v. Prem
Heavy Engineering Works (P) Ltd., (1997) 6 SCC 450] ,
observing: (SCC p. 463, para 32)
32. When a position, in law, is well settled as a
result of judicial pronouncement of this Court, it would
amount to judicial impropriety to say the least, for the
subordinate courts including the High Courts to ignore the
settled decisions and then to pass a judicial order which is
clearly contrary to the settled legal position. Such judicial
adventurism cannot be permitted and we strongly
deprecate the tendency of the subordinate courts in not
applying the settled principles and in passing whimsical
orders which necessarily has the effect of granting wrongful
and unwarranted relief to one of the parties. It is time that
this tendency stops.''
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W.P(MD)No.21120 of 2022
(iv) In Agarwal Tracom (P) Ltd. v. Punjab National Bank
(2018) 1 SCC 626, the Apex Court has held as follows:-
"33. In the light of the foregoing discussion, we are of
the considered opinion that the writ court as also the
appellate court were justified in dismissing the appellant's
writ petition on the ground of availability of alternative
statutory remedy of filing an application under Section
17(1) of the SARFAESI Act before the Tribunal concerned to
challenge the action of PNB in forfeiting the appellant's
deposit under Rule 9(5). We find no ground to interfere
with the impugned judgment."
(v) In C. Bright v. Distt. Collector (2021) 2 SCC 392, the
Hon'ble Supreme Court has held as follows:-
"22. Even though, this Court in United Bank of India
v. Satyawati Tondon [United Bank of India v. Satyawati
Tondon, (2010) 8 SCC 110 (2010) 3 SCC (Civ) 260] held
that 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 will
ultimately prove detrimental to the economy of the nation.
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W.P(MD)No.21120 of 2022
Therefore, the High Court should be extremely careful and
circumspect in exercising its discretion to grant stay in such
matters. Hindon Forge (P) Ltd. [Hindon Forge (P) Ltd. v.
State of U.P., (2019) 2 SCC 198 : (2019) 1 SCC (Civ) 551]
has held that the remedy of an aggrieved person by a
secured creditor under the Act is by way of an application
before the Debts Recovery Tribunal, however, borrowers
and other aggrieved persons are invoking the jurisdiction of
the High Court under Articles 226 or 227 of the
Constitution of India without availing the alternative
statutory remedy. The Hon'ble High Courts are well aware
of the limitations in exercising their jurisdiction when
effective alternative remedies are available, but a word of
caution would be still necessary for the High Courts that
interim orders should generally not be passed without
hearing the secured creditor as interim orders defeat the
very purpose of expeditious recovery of public money."
(vi) In S.Ganesamoorthi Vs. The Branch Manager & Ors.,
W.P.(MD).No.22536 of 2021, dated 20.12.2021, the Hon'ble First
Bench of this Court has held that though Presiding officer is not
available in DRT, Madurai, incharge is given to Coimbatore and
therefore, liberty is given to writ petitioner to move DRT, Coimbatore.
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W.P(MD)No.21120 of 2022
(vii) As regards the non-maintainability of the writ petition
against Private financial institutions like asserts re-construction
companies in respect of their action under SARFAESI Act, it is relevant
to consider the decision of the Hon'ble Supreme Court in Phoenix
ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir, (2022) 5 SCC 345
: 2022 SCC OnLine SC 44, wherein, it has been held as follows:-
''18. Even otherwise, it is required to be noted that a
writ petition against the private financial institution — ARC
— the 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 under the contract, the bank/ARC lent the money to
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
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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 SARFAESI Act and no writ petition would lie and/or is
maintainable and/or entertainable. Therefore, decisions of
this Court in Praga Tools Corpn. [Praga Tools Corpn. v. C.A.
Manual, (1969) 1 SCC 585] and Ramesh Ahiuwalia
[Ramesh Ahluwalia v. State of Punjab, (2012; 12 SCC
331 : (2013) 3 SCC (L&S) 456: 4 SCEC 715] relied upon
by the learned counsel appearing on behalf of the
borrowers are not of any assistance to the borrowers."
3. In view of the aforesaid decisions, we are not inclined to
entertain this writ petition. At this juncture, learned counsel for the
petitioner submitted that it is suffice, if the respondent is directed to
consider and pass orders on the OTS proposal that will be made by
the petitioner, within a time frame, for which, learned counsel for the
respondent is agreeable.
4. Recording the above submissions, without going into the
merits of the case, the Writ Petition is disposed of directing the
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W.P(MD)No.21120 of 2022
petitioner to submit OTS proposal to the respondent within a period of
two weeks from today and on receipt of such proposal, the respondent
shall pass appropriate orders thereon on merits and in the light of the
RBI guidelines, as expeditiously as possible without any delay. No
costs. Consequently, connected miscellaneous petition is closed.
[D.K.K.,J.] & [R.V.,J.]
14.12.2022
Index : Yes / No
Internet : Yes
bala
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W.P(MD)No.21120 of 2022
D.KRISHNAKUMAR, J.
and
R.VIJAYAKUMAR, J.
bala
ORDER MADE IN
W.P(MD)No.21120 of 2022
DATED : 14.12.2022
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