Madras High Court
262 vs The Authorized Officer on 2 January, 2023
W.P(MD)No.29183 of 2022
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 02.01.2023
CORAM:
THE HONOURABLE MR.JUSTICE D. KRISHNAKUMAR
and
THE HONOURABLE MR.JUSTICE R.VIJAYAKUMAR
W.P(MD)No.29183 of 2022
and
W.M.P(MD)Nos.23119 & 23120 of 2022
M/s.Manavathi Gold & Diamond Jewelry,
Represented by its Managing Partner,
M.Mahadevan Achari,
1st Floor, Door No.II,
1.262, PKM Building,
Panachamoodu,
Mancode Panchayat,
Kanyakumari District – 695 502. ... Petitioner
vs.
1.The Authorized Officer,
Karur Vysya Bank Limited,
Divisional Office No.16, A.A.Road,
Gnanaolivupuram,
Madurai – 625 016.
2.The Branch Manager,
Karur Vysya Bank Limited,
Divisional Office No.16,
A.A.Road, Gnanaolivupuram,
Madurai – 625 016. ... Respondents
1/12
https://www.mhc.tn.gov.in/judis
W.P(MD)No.29183 of 2022
PRAYER : Writ Petition filed under Article 226 of the Constitution of India
praying for issuance of a Writ of Certiorarified Mandamus, to call for the
records of the respondents in pursuant to the impugned sale notice dated
03.12.2022 and quash the same as illegal and devoid of merits.
For Petitioner : Mr.M.Varun Pandian
ORDER
(Order of the Court was made by D. KRISHNAKUMAR, J.)
Challenging the impugned sale notice issued by the first
respondent dated 03.12.2022, the petitioner has filed the present Writ
Petition.
2. According to the petitioner, he has filed an application in
S.A.No.605 of 2019 on the file of the Debts Recovery Tribunal, Madurai and
the same is pending. In the meantime, the petitioner approached the
respondents Bank for OTS settlement for a sum of Rs.3 crores on
04.07.2022 and remitted only part of the sum of Rs.70,00,000/- on
30.07.2022. Since the petitioner has not paid the entire OTS proposal
amount, the respondent Bank had cancelled the OTS proposal and issued
the impugned sale notice, dated 03.12.2022 informing that the sale to be
conducted on 30.12.2022.
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W.P(MD)No.29183 of 2022
3. Today, when the matter is taken up for hearing, the learned counsel
appearing for the petitioner submitted that the respondent Bank conducted
the sale on 30.12.2022.
4. Further the petitioner is having effective alternate appeal remedy
before the Debts Recovery Tribunal and the Debts Recovery Tribunal,
Coimbatore is in-charge of the Debts Recovery Tribunal, Madurai. Hence,
the petitioner has to approach the Debts Recovery Tribunal for appropriate
relief.
5. In view of the above, we are of the view that the petitioner has to
approach the Debts Recovery Tribunal by filing an appeal and work out his
remedy in accordance with law.
6. 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.29183 of 2022
"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
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W.P(MD)No.29183 of 2022
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:-
''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
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W.P(MD)No.29183 of 2022
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 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
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W.P(MD)No.29183 of 2022
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.''
(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
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W.P(MD)No.29183 of 2022
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. 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
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W.P(MD)No.29183 of 2022
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 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
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W.P(MD)No.29183 of 2022
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, (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."
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W.P(MD)No.29183 of 2022
7. 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.]
02.01.2023
NCC : Yes / No
Index : Yes / No
Internet : Yes
ps
To
1.The Authorized Officer,
Karur Vysya Bank Limited,
Divisional Office No.16, A.A.Road,
Gnanaolivupuram,
Madurai – 625 016.
2.The Branch Manager,
Karur Vysya Bank Limited,
Divisional Office No.16,
A.A.Road, Gnanaolivupuram,
Madurai – 625 016.
https://www.mhc.tn.gov.in/judis
W.P(MD)No.29183 of 2022
D. KRISHNAKUMAR,J.
and
R.VIJAYAKUMAR,J.
ps
ORDER MADE IN
W.P(MD)No.29183 of 2022
DATED : 02.01.2023
https://www.mhc.tn.gov.in/judis
