Madras High Court
M/S.Sarathi Traders (Proprietor) vs The Branch Manager on 5 August, 2024
Author: D.Krishnakumar
Bench: D.Krishnakumar
W.P.No.21922 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.21922 of 2024
1.M/s.Sarathi Traders (Proprietor),
rep. by its Proprietor, K.Sarathi,
No.88/26/3, Puthumariyamman Kovil Street,
Durugam Road, Kallakurichi,
Villupuram District-606 202.
2.Sarathi
3.Dhanalakshmi .. Petitioners
vs
1.The Branch Manager,
Axis Bank Ltd.,
2nd Floor, Door No.31, Old No.14,
South Mada Street, Mylapore,
Chennai-600 004.
2.The Branch Manager,
Axis Bank Ltd.,
Trichy Main Road,
Opp Bus Stop, Villupuram. .. Respondents
Prayer: Petition filed under Article 226 of the Constitution of India
seeking issuance of a writ of certiorari calling for the records of the
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W.P.No.21922 of 2024
respondents and quash the possession notice dated 19.1.2024.
For the Petitioners : Mr.M.Manikandhan
For the Respondents : Mrs.Revathy Manivannan
ORDER
(Order of the Court was made
by the Hon'ble Acting Chief Justice)
Questioning the legality of the possession notice dated
19.1.2024 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 petitioners, who are borrowers, have filed this
writ petition.
2. Learned counsel for the petitioners submitted that, during
the pandemic period, the petitioners could not pay the dues
regularly and, therefore, the account of the petitioners was declared
as a Non-Performing Asset. It is further submitted that owing to the
deficiency in service provided by the respondents, the business of
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the petitioners was adversely affected.
3. It is beyond any cavil that as against the possession notice,
which is impugned in this writ petition, the petitioners have 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 proceedings initiated
under the SARFAESI Act 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
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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
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 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:
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"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
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
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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,
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 petitioners are
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.Nos.23908 and 23911 of
2024 are closed. Since the second petitioner is the proprietor of the
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first petitioner and the third petitioner is the wife of the second
petitioner, W.M.P.No.23907 of 2024 filed by the petitioners to file a
single writ petition is ordered.
(D.K.K., ACJ.) (P.B.B, J.)
05.08.2024
Index : No
NC : No
sasi
To:
1.The Branch Manager,
Axis Bank Ltd.,
2nd Floor, Door No.31, Old No.14,
South Mada Street, Mylapore,
Chennai-600 004.
2.The Branch Manager,
Axis Bank Ltd.,
Trichy Main Road,
Opp Bus Stop, Villupuram.
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THE HON'BLE ACTING CHIEF JUSTICE
AND
P.B.BALAJI, J.
(sasi)
05.08.2024
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