B.P. Model School And Ors vs M/S Varthana Finance Pvt. Ltd. And ...
2023 Latest Caselaw 12450 P&H

CM-12614 & 12700-CWP-2023 in/and 2023:PHHC:103367-DB_ = 1
CWP-23262-2022

IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH

(106) CM-12614 & 12700-CWP-2023 in/and
CWP-23262-2022
Date of Decision: 09.08.2023

B.P. Model School and Ors. ...Petitioners
Versus
M/s Varthana Finance Pvt. Ltd. and anr. ... Respondents

CORAM: HON'BLE MRS. JUSTICE LISA GILL HON'BLE MRS. JUSTICE RITU TAGORE

Present: Mr. Anoop Singh Sheoran, Advocate for the applicant/petitioners.

Mr. Nitin Thatai, Advocate for the non-applicant/respondents.

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LISA GILL, J (ORAL)

CM-12614-CWP-2023 in CWP-23262-2022

1. Prayer in the application is for recalling order dated 24.07.2023 whereby writ petition was dismissed in default and for non-prosecution.

2. Notice of the application.

3. Mr. Nitin Thatai, Advocate accepts notice on behalf of the non-

applicant/respondents and raises no objection thereto.

4. For the reasons mentioned in the application and arguments addressed as well as specific stand of learned counsel for non- applicant/respondents, order dated 24.07.2023 is recalled and writ petition is restored to its original number. At request and with consent of learned counsel for the parties, writ petition is taken up for hearing today itself.

5. Application is, accordingly, disposed of.

CWP-23262-2022

1. Petitioner is aggrieved of notice dated 22.07.2022 (Annexure P-2) under Section 13 (2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short

canprcer snes SREAESI Act'). Petitioners seek quashing of said notice as well as 2023.08.16 17:09

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proceedings before the learned Metropolitan Magistrate, 3" Court, Calcutta under Section 25 of the Payment and Settlement System Act, 2007 (for short 'the 2007 Act'). There is further prayer in the writ petition to direct respondent-Company to settle the account of the petitioner No.1 in terms of One Time Settlement (OTS) as proposed by it.

2. Learned counsel for the petitioners has raised a number of arguments to submit that proceedings under the SARFAESI Act initiated by respondent-Company are illegal and arbitrary and therefore liable to be set aside. Moreover, the respondent-company, it is submitted should be directed to accept One Time Settlement (OTS) amount as proposed by it.

3. We have heard learned counsel for the parties.

4. It is undeniable that petitioners have an alternate efficacious remedy under the SARFAESI Act for redressal of their grievance. It has been held by Hon'ble the Supreme Court in a number of cases that except in exceptional or extra-ordinary circumstance, there should be no interference in these matters by the High Courts in exercise of jurisdiction under Article 226 of Constitution of India. Gainful reference in this regard can be made to judgments of Hon'ble the Supreme Court in Union Bank of India vs. Satyawati_ Tandon and others, 2010 (8) SCC 110, Varimadgugu Obi Reddy vs. B. Sreenivasulu and others, 2023 (1) R.C.R. (Civil) 34, M/s South Indian Bank Ltd. and others vs. Naveen Mathew Philip and others, 2023 (2) R.C.R. (Civil) 771, and Division Bench judgment of this High Court in CWP No.10738 of 2022 (M/s. Harinder Fabrics vs. Shriram City Union Finance Ltd.) decided on 04.05.2023. Hon'ble the Supreme Court in the case of M/s South Indian Bank (supra) held as under :-

13. ....... We may, however, reiterate the settled position of law on the interference of the High Court invoking Article 226 of the Constitution of India in commercial matters, where an effective and efficacious alternative forum has been constituted through a statute.

14. A writ of certiorari is to be issued over a decision when the Court finds that the process does not conform to the law or statute. In other words, courts are not expected to substitute themselves with the decision-making authority while finding fault with the process along with the reasons assigned. Such a writ is not expected to be issued to remedy all violations. When a Tribunal is constituted, it is expected to go into the issues of fact and law, including a statutory violation.

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MANPREET SINGH

2023.08.16 17:09

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CM-12614 & 12700-CWP-2023 in/and 2023:PHHC:103367-DB 3

CWP-23262-2022

15. The object and reasons behind the Act 54 of 2002 are very clear as observed by this Court in Mardia Chemicals Ltd. v. Union of India, (2004) 4 SCC 311. While it facilitates a faster and smoother mode of recovery sans any interference from the Court, it does provide a fair mechanism in the form of the Tribunal being manned by a legally trained mind. The Tribunal is clothed with a wide range of powers to set aside an illegal order, and thereafter, grant consequential reliefs, including re-possession and payment of compensation and costs. Section 17(1) of the SARFAESI Act gives an expansive meaning to the expression "any person", who could approach the Tribunal.

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18. While doing so, we are conscious of the fact that the powers conferred under Article 226 of the Constitution of India are rather wide but are required to be exercised only in extraordinary circumstances in matters pertaining to proceedings and adjudicatory scheme qua a statute, more so in commercial matters involving a lender and a borrower, when the legislature has provided for a specific mechanism for appropriate redressal."

5. No exceptional or extra-ordinary circumstance has been pointed

out by learned counsel for the petitioners which calls for interference by this

Court in exercise of jurisdiction under Article 226 of Constitution of India.

Moreover, it is pertinent to note at this stage that respondent is a private Non-

Banking Financial

Company, therefore, even otherwise there is no ground to

interfere in exercise of jurisdiction under Article 226 of Constitution of India

particularly keeping in view the judgment of Hon'ble the Supreme Court in Phoenix ARC Private Limited vs. Vishwa Bharti Vidya Mandir and others, 2022 (1) R.C.R. (Civil) 888 and State Bank of India vs. Arvindra Electronics Pvt. Ltd. (2021) 3 SCC 1. It has been held in Phoenix ARC

(supra) as under :-

MANPREET SINGH

2023.08.16 17:09

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"Even otherwise, it is required to be noted that a writ petition against the private financial institution - ARC - 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 the borrowers herein and therefore the said activity of the bank/ARC cannot be said to be as performing a public function which

CM-12614 & 12700-CWP-2023 in/and 2023:PHHC:103367-DB 4

CWP-23262-2022

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, borrower has to avail the remedy under the SARFAESI Act and no writ petition would lie and/or is maintainable and/or entertainable. Therefore, decisions of this Court in the cases of Praga Tools Corporation v. Shri C.A. Imanual and others, (1969) 1 SCC 585 and Ramesh Ahluwalia vs. State of Punjab, (2012) 12 SCC 331 relied upon by the learned counsel appearing on behalf of the borrowers are not of any assistance to the borrowers."

6. Keeping in view the facts and circumstances as above, this writ

petition is dismissed with liberty to the petitioners to avail their

remedy/remedies available to them in accordance with law.

7. It is clarified that there is no expression of opinion on the merits of the case.

8. Pending miscellaneous applications, if any, stand disposed of accordingly.

(LISA GILL) JUDGE (RITU TAGORE)

JUDGE August 09, 2023 Manpreet

Whether speaking/reasoned : Yes/No

Whether reportable : Yes/No

MANPREET SINGH

2023.08.16 17:09

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