Madras High Court
Ramesh vs Authorised Officer on 5 August, 2024
Author: D.Krishnakumar
Bench: D.Krishnakumar
W.P.No.21799 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 05.08.2024
CORAM :
THE HON'BLE MR.D.KRISHNAKUMAR, ACTING CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE P.B.BALAJI
W.P.No.21799 of 2024
Ramesh .. Petitioner
vs
Authorised Officer,
State Bank of India,
SME Branch,
Villupuram,
Villupuram District. .. Respondent
Prayer: Petition filed under Article 226 of the Constitution of India
seeking issuance of a writ of certiorarified mandamus calling for the
records and quash the possession notice dated 13.5.2024 issued by
the respondent and direct the respondent to abandon the proceedings
initiated under SARFAESI Act till the pending disposal of the I.P.No.10
of 2023 on the file of the Principal District Judge, Pondicherry.
For the Petitioner : Ms.S.Suseela Devi
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W.P.No.21799 of 2024
ORDER
(Order of the Court was made
by the Hon'ble Acting Chief Justice)
Questioning the legality of the possession notice dated
13.5.2024 issued by the respondent/bank under Section 13(4) of
the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 [for brevity, “the
SARFAESI Act”], the petitioner, who is a borrower, has filed this writ
petition.
2. Learned counsel for the petitioner submitted that due to
financial crunch the petitioner was not in a position to pay the dues
to the respondent/bank. She further submitted that the petitioner
had already filed an insolvency petition in I.P.No.10 of 2023 on the
file of the Principal District Judge, Pondicherry, to declare him as an
insolvent and the same is pending as on date and without
considering the said aspect the respondent/bank had invoked the
provisions of the SARFAESI Act and issued the impugned notice.
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3. It is beyond any cavil that as against the possession notice,
which is impugned in this writ petition, the petitioner has an
efficacious alternative remedy to prefer an appeal before the Debts
Recovery Tribunal under Section 17 of the SARFAESI Act.
4. The Supreme Court in the case of The Authorized Officer,
State Bank of Travancore and another Vs. Mathew K.C., reported in
(2018) 3 SCC 85 and Agarwal Tracom Private Limited Vs. Punjab
National Bank and others, reported in (2018) 1 SCC 626 held that
the aggrieved parties cannot challenge the SARFAESI proceedings
directly by filing a writ petition under Article 226 of the Constitution
of India without exhausting the appeal remedy available to them.
5. In ICICI Bank Limited v. Umakanta Mohapatra, reported in
2018 SCC Online SC 2349, the Supreme Court has referred to the
decision in Mathew K.C. case, referred supra, and has observed that
despite several judgments, including the decision of Mathew K.C.,
supra, the High Courts continue to entertain matters which arise
under the SARFAESI Act and keep granting interim orders in favour
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of persons whose accounts are declared as Non-Performing Assets.
Further, the Supreme Court held that writ petition filed by the
aggrieved party without exhausting the statutory remedy available
under the SARFAESI Act is not maintainable.
6. In Phoenix ARC Private Limited v. Vishwa Bharati Vidya
Mandir and others, (2022) 5 SCC 345, after taking note of various
earlier decisions, the Apex Court held that writ petitions at the
instance of borrowers against the proposed action to be taken
under Section 13(4) of the SARFAESI Act, 2002 is an abuse of
process of the Court in view of the statutory, efficacious remedy
available by way of appeal under Section 17 of the SARFAESI Act. It
was further held that under such situation the High Court ought not
to have entertained the writ petitions. The relevant portion of the
said decision reads thus:
"10. In Union Bank of India v. Satyawati
Tandon, (2010) 8 SCC 110, it was observed and
held by this Court that the remedies available
to an aggrieved person against the action taken
under Section 13(4) or Section 14 of the
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SARFAESI Act, by way of appeal under Section
17, can be said to be both expeditious and
effective.
...
12. In the case of Kanaiyalal Lalchand Sachdev
v. State of Maharashtra, (2011) 2 SCC 782,
after referring to the earlier decisions of this
Court in the cases of Sadhana Lodh Vs. National
insurance Co. Ltd. and Anr., (2003) 3 SCC 524;
Surya Dev Rai Vs. Ram Chander Rai and Ors.,
(2003) 6 SCC 675 and State Bank of India Vs.
Allied Chemical Laboratories and Anr., (2006) 9
SCC 252 while upholding the order passed by
the High Court dismissing the writ petition on
the ground that an efficacious remedy is
available under Section 17 of the SARFAESI
Act, it was observed 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.”
[emphasis supplied]
7. Very recently, the Apex Court in the case of South Indian
Bank Ltd and others v. Naveen Mathew Philip and another,
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MANU/SC/0400/2023, deprecated the practice adopted by the High
Courts whereby the writ petitions are being entertained as against
proceedings initiated by the secured creditor under SARFAESI Act
and further held that when the statute prescribes a particular mode,
an attempt to circumvent should not be encouraged by the writ
Court.
8. In such view of the matter, we are not inclined to interfere
with the impugned possession notice and the petitioner is relegated
to the remedy of preferring appeal against the said notice.
The writ petition is, accordingly, dismissed. There shall be no
order as to costs. Consequently, W.M.P.No.23788 of 2024 is
closed.
(D.K.K., ACJ.) (P.B.B, J.)
05.08.2024
Index : Yes/No
NC : Yes/No
sasi
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To:
The Authorised Officer,
State Bank of India,
SME Branch,
Villupuram,
Villupuram District.
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THE HON'BLE ACTING CHIEF JUSTICE
AND
P.B.BALAJI, J.
(sasi)
05.08.2024
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