Madras High Court
R.Jayakumar vs The Authorized Officer on 3 January, 2023
W.P.(MD) No.27223 of 2022
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 03.01.2023
CORAM:
THE HONOURABLE MR.JUSTICE D.KRISHNAKUMAR
AND
THE HONOURABLE MR.JUSTICE R.VIJAYAKUMAR
W.P.(MD)No.27223 of 2022
and
W.M.P.(MD)No.21361 of 2022
R.Jayakumar ... Petitioner
-Vs-
1.The Authorized Officer,
Indian Overseas Bank,
Regional Office, 552/2, M.S.Road,
Vettoornnimadam, Nagercoil,
Kanyakumari District.
2.The Branch Manager,
Indian Overseas Bank,
Eraniel Branch, 1-101E, Colachel Road,
Monday Market-629 802, Kanyakumari District. ... Respondents
Page 1 of 12
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W.P.(MD) No.27223 of 2022
PRAYER: Petition filed under Article 226 of the Constitution of India, to issue a
Writ of Certiorarified Mandamus, to call for the records of the impugned
e-auction sale notice issued by the 1st respondent issued under Rules 8(6) and
9(1) of Security Interest (Enforcement) Rules, 2002, dated 31.10.2022 and to
quash the same as illegal and consequently, to direct the 2nd respondent Bank to
consider the petitioner's request for one time settlement based on the petitioner's
representation dated 01.06.2022.
For Petitioner : Mr.D.Srinivasaragavan
For Respondents : Mr.N.Dilipkumar
Standing Counsel
ORDER
[Order of the Court was made by D.KRISHNAKUMAR, J.]
Challenging the e-auction sale notice dated 31.10.2022 issued by the
1st respondent, this Writ Petition is filed with a consequential direction to direct
the 2nd respondent Bank to consider the petitioner's request for one time
settlement, based on his representation dated 01.06.2022.
2.The learned Standing Counsel appearing for the respondent Bank, on
instructions, submitted that the petitioner is having effective alternate appeal
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W.P.(MD) No.27223 of 2022
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.
3.In view of the above submission of the learned Standing Counsel
appearing for the respondent Bank, we are of the view that the petitioner has to
approach the Debts Recovery Tribunal by filing an appeal and workout his
remedy in accordance with law.
4.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:-
"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
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W.P.(MD) No.27223 of 2022
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 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
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W.P.(MD) No.27223 of 2022
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)
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W.P.(MD) No.27223 of 2022
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
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
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W.P.(MD) No.27223 of 2022
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 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
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W.P.(MD) No.27223 of 2022
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.
(vii)As regards the non-maintainability of the writ petition against
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W.P.(MD) No.27223 of 2022
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 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,
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W.P.(MD) No.27223 of 2022
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."
5.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 petition is closed.
[D.K.K., J.] & [R.V., J.]
03.01.2023
NCC : Yes / No
Index : Yes / No
Internet : Yes / No
MYR
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W.P.(MD) No.27223 of 2022
https://www.mhc.tn.gov.in/judis
W.P.(MD) No.27223 of 2022
D.KRISHNAKUMAR, J.
AND
R.VIJAYAKUMAR, J.
MYR
W.P.(MD)No.27223 of 2022
03.01.2023
https://www.mhc.tn.gov.in/judis
