Madras High Court

Cafe Ecstasy vs The Chief Manager on 6 June, 2025

Author: S.M.Subramaniam

Bench: S.M.Subramaniam

                                                                                    W.P.(MD).No.6460 of 2025

                          BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

                                              DATED: 06.06.2025

                                                      CORAM

                            THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM
                                               AND
                             THE HONOURABLE DR.JUSTICE A.D.MARIA CLETE

                                         W.P.(MD).No.6460 of 2025
                                                   and
                                        W.M.P.(MD).No.4745 of 2025

                Cafe Ecstasy,
                Represented by its Proprietor, S.Abisheik,
                Counter 9, Vishal De Mal,
                Gokhale Road, Chinna Chokkikulam,
                Madurai - 625 002.                                                     ... Petitioner

                                                           Vs.

                1.The Chief Manager,
                  Corporate Office,
                  HDB Financial Services Limited,
                  Zenith House (Opposite Race Course),
                  KK Marg, Mahalaxmi,
                  Mumbai - 400 011.

                2.HDB Financial Services Limited,
                  Registered Office Radhika 2nd Floor,
                  Law Garden Road, Navarangpura,
                  Ahmedabad - 380 009.

                3.The Grievance Redressal Officer,
                  HDB Financial Services Limited,
                  New No. 128/4F, Old No: Door No.53A,
                  4th Floor, M.N.Office Complex, Greams Road,
                  Chennai - 600 006.


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                                                                                             W.P.(MD).No.6460 of 2025

                4.The Authorized Officer,
                  HDB Financial Services Limited,
                  68/2-4th Floor, Loyal Tower,
                  Greams Road, Thousand Light,
                  Chennai - 600 006.

                5.The Branch Manager,
                  HDB Financial Services Limited,
                  Madurai Thiruppalai Branch,
                  438/1, New Nattam Road, First Floor,
                  Naganakulam, Tiruppalai Group,
                  Madurai District – 625 014.                                                   ... Respondents

                PRAYER: Writ Petition filed under Article 226 of the Constitution of India to
                issue a writ of Mandamus, directing the respondents herein to remove the
                Non-Performing Asset Classification from the petitioner's loan Account
                No.7015783 on the file of the 5th respondent by regularizing the petitioner's
                loan account as standard asset to enable the petitioner to pay the remaining
                amount as monthly installment by considering his representation dated
                17.07.2024.
                                  For Petitioner          : Mrs.T.Sathya Selvi
                                                             for Mr.V.B.Sundhareshwar
                                  For R-3 & R-4           : No Appearance
                                  For R-5                 : Mr.M.Kannan


                                                               ORDER

(Order of the Court was made by S.M.SUBRAMANIAM, J.)

The Writ on hand has been instituted seeking direction to the respondents

herein to remove the Non-Performing Asset Classification from the petitioner's

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loan Account No.7015783 on the file of the 5th respondent by regularizing the

petitioner's loan account as standard asset to enable the petitioner to pay the

remaining amount as monthly installment by considering his representation

dated 17.07.2024.

2. It is not in dispute that the action initiated against the petitioner is

under the SARFAESI Act. Thus, the remedy lies before the Debts Recovery

Tribunal and a Writ Petition under Article 226 of the Constitution of India is

not maintainable in view of the legal principles settled by the Hon'ble Supreme

Court in the case of Celir LLP Vs. Bafna Motors (Mumbai) Private Limited

and others reported in (2024) 2 SCC 1. Paragraph Nos.97, 98, 110 and 110.1

would be relevant in this context and have been extracted herein:-

“97.This Court has time and again, reminded the High Courts that they should not entertain petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person under the provisions of the SARFAESI Act. This Court in Satyawati Tondon [United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110 : (2010) 3 SCC (Civ) 260] made the following observations : (SCC pp. 123 & 128, paras 43-45 & 55)

“43. Unfortunately, the High Court [Satyawati Tondon v. State of U.P., 2009 SCC OnLine All 2608] overlooked the settled law that the High Court will ordinarily not entertain a petition under

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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 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.

44. While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express

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limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self-

imposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution.

45. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance.

***

55. It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the Sarfaesi Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection.”

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98.In CIT v. Chhabil Dass Agarwal [CIT v. Chhabil Dass Agarwal, (2014) 1 SCC 603] , this Court in para 15 made the following observations : (SCC p. 611, para 15) “15. Thus, while it can be said that this Court has recognised some exceptions to the rule of alternative remedy i.e. where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, the proposition laid down in Thansingh Nathmal case [Thansingh Nathmal v. Supdt. of Taxes, 1964 SCC OnLine SC 13] , Titaghur Paper Mills case [Titaghur Paper Mills Co. Ltd. v. State of Orissa, (1983) 2 SCC 433 : 1983 SCC (Tax) 131] and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation.”

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110.We summarise our final conclusion as under:

110.1. The High Court was not justified in exercising its writ jurisdiction under Article 226 of the Constitution more particularly when the borrowers had already availed the alternative remedy available to them under Section 17 of the SARFAESI Act.”

3. The learned counsel for the fifth respondent states that the petitioner

has already approached the Debts Recovery Tribunal.

4. In view of the above legal position, granting liberty to the petitioner to

approach the competent forum for redressal of grievances, this Writ Petition

stands dismissed. The period during which the Writ Petition was pending before

this Court is to be considered for the purpose of condoning the delay in the

event of filing any petition before the competent forum. There shall be no order

as to costs. Consequently, connected miscellaneous petition is closed.





                                                                         (S.M.S.,J.) (A.D.M.C.,J.)
                                                                               06.06.2025
                NCC      : Yes / No
                Index    : Yes / No
                Internet : Yes / No
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                                                                       S.M.SUBRAMANIAM,J.
                                                                                       and
                                                                      DR.A.D.MARIA CLETE,J.

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                                                                                         06.06.2025