Khem Chand vs Hdfc Bank Ltd And Ors
2023 Latest Caselaw 3998 P&H

                                                   Neutral Citation No:=2023:PHHC:051462-DB




           IN THE HIGH COURT OF PUNJAB AND HARYANA
                         AT CHANDIGARH

123                                                   2023:PHHC:051462-DB

                                                        CWP No. 2231 of 2023
                                                   Date of Decision: 13.04.2023

Khem Chand                                                          .....Petitioner(s)

                                          Versus

HDFC Bank Ltd. and others                                         ....Respondent(s)

CORAM: HON'BLE MR. JUSTICE G.S.SANDHAWALIA
       HON'BLE MS. JUSTICE HARPREET KAUR JEEWAN

Present:     Mr. P.S. Jammu, Advocate,
             for the petitioner.

G.S.SANDHAWALIA, J. (Oral)

1. The present writ petition has been filed under Articles 226 and

227 of the Constitution of India challenging the securitization proceedings

initiated including the initial notice issued on 15.02.2022 (Annexure P-1)

under Section 13(2) of The Securitization and Reconstruction of Financial

Assets and Enforcement of Security Interest Act, 2002 (in short '2002' Act).

Thereafter, auction was also fixed for 20.10.2022.

2. A perusal of the same would go on to show that the petitioner

was mentioned at Sr. No.3 as a guarantor and a mortgager for the cash credit

facility of Rs.35,00,000/- and Rs.6,85,000/- and there were outstandings of

Rs.40,94,584/- as on 11.02.2022 . Objections were apparently raised in view

of the fact that the loanee Jagdish Chander, the proprietor of Banarsi Dass had

died on 25.11.2021 and the notice had been issued without following the

proper legal procedure. Apparently, thereafter fresh notice under Section

13(2) of the 2002 Act was issued on 06.06.2022 (Annexure P-3) and

eventually the possession notice has been issued on 16.11.2022 under Section

13(4) of the 2002 Act wherein, claim has been made of Rs.51,13,663/-.

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3. Apparently, the petitioner has remedy before the Tribunal against

the Section 13(4) notice. The issue of alternate remedy as provided under

Section 17 of the Securitisation and Reconstruction of Financial Assets and

Enforcement of Security Interest Act, 2002 has been subject matter of debate

time and again. Reliance can be placed upon the judgment passed in G.M.,

Sri Siddeshwara Co-operative Bank Ltd. & another Vs. Sri Ikbal & others,

2013 (10) SCC 83. In the said case, the mortgaged property had been

auctioned and the sale certificate had been quashed by the learned Single

Judge of the Karnataka High Court which was upheld by the Division Bench

on the ground that the mandatory requirements of the rules were not

followed. Resultantly, it was held that though the said rule is mandatory but

there was a remedy provided under Section 17 of the 2002 Act which had

been brushed aside and once there was alternative and efficacious remedy

available, the High Court was not justified to allow the same to be

circumvented. Resultantly, the appeals were allowed and the orders were set

aside.

4. Similarly, in Authorized Officer, State Bank of Travancore &

another Vs. Mathew K.C., 2018 AIR (SC) 676, challenge before the Apex

Court was to the interim order passed in a writ petition staying further

proceedings under Section 13(4) of the 2002 Act on the deposit of

Rs.3,50,000/- within 2 months. The appeal against the same had been

dismissed by the Division Bench. Resultantly, the Apex Court set aside the

said orders by the following observations:

"17. The writ petition ought not to have been entertained and the interim order granted for the mere asking without assigning special reasons, and that too without even granting opportunity

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to the Appellant to contest the maintainability of the writ petition and failure to notice the subsequent developments in the interregnum. The opinion of the Division Bench that the counter affidavit having subsequently been filed, stay/modification could be sought of the interim order cannot be considered sufficient justification to have declined interference.

18. We cannot help but disapprove the approach of the High Court for reasons already noticed in Dwarikesh Sugar Industries Ltd. vs. Prem Heavy Engineering Works (P) Ltd. and Another, 1997 (6) SCC 450, observing :-

"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."

19. The impugned orders are therefore contrary to the law laid down by this Court under Article 141 of the Constitution and unsustainable. They are therefore set aside and the appeal is allowed."

5. A Three Judge Bench of the Apex Court in Punjab National

Bank & another Vs. Imperial Gift House & others, 2013 (14) SCC 622, set

aside the order whereby the writ petition had been entertained which was

against the notice issued under Section 13(2) which had been rejected while

passing an order under Section 13(3)(A) of the 2002 Act.

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6. In Phoenix ARC Private Limited Vs. Vishwa Bharati Vidya

Mandir & others, 2022 (5) SCC 345, the notice under Section 13(2) of the

2002 Act had been issued and the credit facilities were assigned by the Bank

in favour of the appellant. The restructuring had also been done but borrower

failed to pay the outstanding due amount. The demand for the outstanding

amount was treated as under Section 13(4) notice and an ex-parte interim

order was passed regarding status quo to be maintained subject to the

borrower paying Rs.1 crore. The application for vacation of the stay was not

decided and the interim order was extended. Resultantly, the Apex Court,

while discussing the law in issue, held as under:

"The writ petitions have been filed against the proposed action to be taken under Section 13(4). As observed hereinabove, even assuming that the communication dated 13.08.2015 was a notice under Section 13(4), in that case also, in view of the statutory, efficacious remedy available by way of appeal under Section 17 of the SARFAESI Act, the High Court ought not to have entertained the writ petitions. Even the impugned orders passed by the High Court directing to maintain the status quo with respect to the possession of the secured properties on payment of Rs.1 crore only (in all Rs.3 crores) is absolutely unjustifiable. The dues are to the extent of approximately Rs.117 crores. The ad-interim relief has been continued since 2015 and the secured creditor is deprived of proceeding further with the action under the SARFAESI ACT. Filing of the writ petition by the borrowers before the High Court is nothing but an abuse of process of Court. It appears that the High Court has initially granted an ex-parte ad-interim order mechanically and without assigning any reasons. The High Court ought to have appreciated that by passing such an interim order, the rights of the secured creditor to recover the amount due and payable have been seriously prejudiced. The secured creditor and/or its assignor have a right

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to recover the amount due and payable to it from the borrowers. The stay granted by the High Court would have serious adverse impact on the financial health of the secured creditor/assignor. Therefore, the High Court should have been extremely careful and circumspect in exercising its discretion while granting stay in such matters. In these circumstances, the proceedings before the High Court deserve to be dismissed."

7. Thus, from the above discussion, it would be clear that time and

again the Apex Court has held that writ petitions are not to be entertained

once possession has been taken under Section 13(4) of the 2002 Act and the

remedy would thus lie under Section 17 of the 2002 Act before the Tribunal.

Needless to say that only in exceptional cases, the Writ Court would exercise

its jurisdiction. The facts and circumstances of the present case do not make

out any such exceptions which would entail the invoking of the extraordinary

writ jurisdiction.

                                                       (G.S. SANDHAWALIA)
                                                               JUDGE


13.04.2023                                       (HARPREET KAUR JEEWAN)
shivani                                                   JUDGE


Whether reasoned/speaking                        Yes
Whether reportable                               No




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