Madras High Court
M.Balamurugan vs The Chief Manager/Authorized ... on 31 January, 2023
W.P.(MD) No.1847 of 2023
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 31.01.2023
CORAM:
THE HONOURABLE MR.JUSTICE D.KRISHNAKUMAR
and
THE HONOURABLE MR.JUSTICE R.VIJAYAKUMAR
W.P.(MD)No.1847 of 2023
and
W.M.P.(MD)Nos.1632 & 1633 of 2023
M.Balamurugan ... Petitioner
Vs.
The Chief Manager/Authorized Officer,
Indian Overseas Bank,
North Vadampokki Street,
Madurai. ... Respondent
PRAYER : Petition filed under Article 226 of the Constitution of India, to issue a
Writ of Certiorari, calling for the entire records pertaining to the impugned E-
Auction sale notice dated 03.01.2023 issued by the respondent E-Auction sale is
scheduled to be held on 31.01.2023 and quash the same.
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W.P.(MD) No.1847 of 2023
For Petitioner : Mr.M.Pitchai Muthu
For Respondent : Mr.M.Senthil Kumar,
Standing Counsel
ORDER
[Order of the Court was made by D.KRISHNAKUMAR, J.]
Challenging the impugned E-Auction sale notice dated 03.01.2023 issued
by the respondent, dated 03.01.2023, the petitioner has filed this Writ Petition.
2. Heard Mr.M.Pitchai Muthu, learned counsel for the petitioner and
Mr.M.SenthilKumar, learned Standing Counsel, who takes notice for the
respondent.
3. By consent, this Writ Petition is taken up for final disposal at the
admission stage itself.
4. The learned counsel appearing for the petitioner submitted that the
petitioner has been granted a loan by way of financial assistance by the
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W.P.(MD) No.1847 of 2023
respondent bank and agreed to repay the principal and interest through EMI and
the petitioner has been paying the EMI regularly. However, the respondent bank
has declared the petitioner's account as NPA. Thereafter, the respondent bank
issued the demand notice on 27.09.2022 under Section 13(2) of the SARFAESI
Act and issued the possession notice on 05.02.2022 under Section 13(4) of the
SARFAESI Act. As against the possession notice, the petitioner has filed an
appeal before the DRT, Madurai. Thereafter, since the respondent bank had
taken steps for e-auction sale on 09.05.2022, the petitioner has filed a Writ
Petition in W.P.(MD)No.10216 of 2022 and a conditional order has been passed
in the said writ petition. The petitioner has not complied the said conditional
order and thereafter, the petitioner has filed a Writ Petition in W.P.(MD)No.
19896 of 2022. In the said writ petition also, conditional order has been passed
and the petitioner has not complied the said conditional order also. While that
being so, the respondent bank issued E-Auction sale notice on 03.01.2023.
Hence, the petitioner has filed this Writ Petition.
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W.P.(MD) No.1847 of 2023
5. The learned Government Pleader appearing for the respondents
submitted that the petitioner has not complied with the conditions imposed by
this Court in the earlier writ petitions and he has not shown any bona fide to
repay the said amount. Therefore, this Writ Petition is liable to be dismissed.
6. Considering the facts and circumstances of the case, we are of the view
the petitioner has already approached this Court and conditional orders have
been passed. The petitioner has not shown any bona fide for re-payment of the
said amount to the respondent bank and now the petitioner has approached this
Court at the eleventh hour and therefore, we are not inclined to entertain this
Writ Petition and the petitioner has to approach the Debts Recovery Tribunal by
filing an appeal and work out his remedy in accordance with law.
7. At this Juncture, it would be relevant to refer the following decisions:
(i) In United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110,
the Hon'ble Supreme Court has held as follows:-
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W.P.(MD) No.1847 of 2023
"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 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
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W.P.(MD) No.1847 of 2023
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:-
''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
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W.P.(MD) No.1847 of 2023
entertain matters which arise under the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002 (SARFAESI), and keep granting 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.1847 of 2023
(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. 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.
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W.P.(MD) No.1847 of 2023
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.
(vii) As regards the non-maintainability of the writ petition against
Private financial institutions like asserts re-construction companies in respect of
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W.P.(MD) No.1847 of 2023
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 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,
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W.P.(MD) No.1847 of 2023
(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."
8. In view of the aforesaid decisions, we are not inclined to entertain this
writ petition. Therefore, the Writ Petition is dismissed with liberty to the
petitioner to approach the Debts Recovery Tribunal, for appropriate remedy. No
costs. Consequently, connected miscellaneous petitions are closed.
[D.K.K., J.] [R.V., J.]
31.01.2023
NCC : Yes / No
Index : Yes / No
vsm
To
The Chief Manager/Authorized Officer,
Indian Overseas Bank,
North Vadampokki Street,
Madurai.
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W.P.(MD) No.1847 of 2023
D.KRISHNAKUMAR, J.
and
R.VIJAYAKUMAR, J.
vsm
W.P.(MD)No.1847 of 2023
31.01.2023
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