Punjab-Haryana High Court
Umesh Kumar vs Central Bank Of India on 20 April, 2024
Author: Lisa Gill
Bench: Lisa Gill
Neutral Citation No:=2024:PHHC:053254-DB
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CWP-25335-2022 (O&M)
2024:PHHC:053254-DB
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP-25335-2022 (O&M)
Date of Decision: April 20, 2024
UMESH KUMAR ..... Petitioner
Versus
CENTRAL BANK OF INDIA ..... Respondent
CORAM:- HON'BLE MRS. JUSTICE LISA GILL
HON'BLE MS. JUSTICE AMARJOT BHATTI
Present: Mr. Sanjeev Sharma, Advocate for the petitioner.
Mr. Saurav Goyal, Advocate for the respondent.
****
LISA GILL, J.
1. Prayer in this writ petition is for setting aside notice dated
18.07.2022 (Annexure P3) under Section 13 (4) of Securitization and
Reconstruction of Financial Assets and Enforcement of Security Interest Act,
2002 (for short - 'SARFAESI Act'). It is also prayed that rejection of
petitioner's proposal for One Time Settlement (OTS) be set aside being illegal
and arbitrary.
2. Availing of financial facility by petitioner from respondent, as is
detailed in para 3 of writ petition, by mortgaging the property in question is a
matter of record. Admittedly, there was financial indiscipline on the part of
petitioner for reasons as may be, leading to his account being declared Non
Performing Asset (NPA) and proceedings under SARFAESI Act being initiated.
Notice under Section 13(2) of SARFAESI Act was issued on 14.03.2022 and
notice under Section 13(4) of SARFAESI Act on 18.07.2022. Present writ
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petition was filed by petitioner challenging said proceedings as well as rejection
of his proposal for OTS.
3. Learned counsel for petitioner submits that proceedings under
SARFAESI Act are absolutely illegal, arbitrary and in complete violation of
applicable provisions of law. Moreover, once petitioner had come forward for
OTS, it was incumbent upon the bank to have accepted the same. Rejection of
petitioner's proposal is stated to be absolutely illogical. It is, thus, prayed that
this petition be allowed.
4. Learned counsel for respondent - Bank has opposed this writ
petition while raising preliminary objection qua entertainability of this writ
petition itself. It is further submitted that proceedings under SARFAESI Act
have been initiated against petitioner in complete consonance with applicable
provisions. It is asserted that petitioner has not come forward till today to deposit
outstanding amount. It is, thus, prayed that this petition be dismissed.
5. Having heard learned counsel for parties and perusing the file, we
do not find any ground to interfere in this writ petition in exercise of jurisdiction
under Article 226 of the Constitution of India. Interference by High Court in
such like matters has to be minimal and actuated only in extra-ordinary and
exceptional circumstances as has been detailed by Hon'ble the Supreme Court in
Union Bank of India v. Satyawati Tandon and others, 2010(8) SCC 110 as
under:-
"18. 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
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wide and there is no express 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. 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. It must be remembered that stay of an
action initiated by the State and/or its agencies/instrumentalities for
recovery of taxes, cess, fees, etc. seriously impedes execution of
projects of public importance and disables them from discharging
their constitutional and legal obligations towards the citizens. In
cases relating to recovery of the dues of banks, financial
institutions and secured creditors, stay granted by the High Court
would have serious adverse impact on the financial health of such
bodies/institutions, which ultimately prove detrimental to the
economy of the nation. Therefore, the High Court should be
extremely careful and circumspect in exercising its discretion to
grant stay in such matters. Of course, if the petitioner is able to
show that its case falls within any of the exceptions carved out in
Baburam Prakash Chandra Maheshwari v. Antarim Zila
Parishad AIR 1969 SC 556, Whirlpool Corporation v.
Registrar of Trade Marks, Mumbai (1998) 8 SCC 1 and
Harbanslal Sahnia and another v. Indian Oil Corporation Ltd.
and others (2003) 2 SCC 107 and some other judgments, then the
High Court may, after considering all the relevant parameters and
public interest, pass appropriate interim order.
xxx xxx xxx
25. In Raj Kumar Shivhare v. Assistant Director, Directorate
of Enforcement and another (2010) 4 SCC 772, the Court was
dealing with the issue whether the alternative statutory remedy
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available under the Foreign Exchange Management Act, 1999 can
be bypassed and jurisdiction under Article 226 of the Constitution
could be invoked. After examining the scheme of the Act, the Court
observed:
"31. When a statutory forum is created by law for
redressal of grievance and that too in a fiscal statute, a
writ petition should not be entertained ignoring the
statutory dispensation. In this case the High Court is a
statutory forum of appeal on a question of law. That
should not be abdicated and given a go-by by a litigant
for invoking the forum of judicial review of the High
Court under writ jurisdiction.
xxx xxx xxx"
6. Said decision has been reiterated by Hon'ble the Supreme Court in
the case of M/s South Indian bank Ltd. and others v. Naveen Mathew Philip
and another, 2023(2) RCR (Civil) 771, wherein it was held that:-
"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.
xxx xxx xxx
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.
xxx xxx xxx xxx
15. The object and reasons behind the Act 54of 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 or 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.
xxx xxx xxx
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
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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."
7. It is to be noted, at this stage, that learned counsel for respondent -
Bank on 14.12.2023 had submitted that minimum indicative amount in April,
2023 for settlement/regularization was conveyed to petitioner to be about Rs.16
lakhs. Learned counsel for petitioner on 20.12.2023 had stated that petitioner is
ready and willing to deposit a sum of Rs.16 lakhs by 31.03.2024. However, till
date, no such amount has been deposited and neither does learned counsel for
petitioner have any instructions in this regard.
8. Learned counsel for the petitioner is unable to point out any
extraordinary or exceptional circumstances which call for interference in
exercise of jurisdiction under Article 226 of the Constitution of India.
9. Keeping in view the facts and circumstances as above, this writ
petition is dismissed with liberty to the petitioner to avail remedy/remedies
available to him in accordance with law. It is always open to parties to arrive at
any mutually acceptable settlement.
10. It is clarified that there is no expression of opinion on the merits of
matter.
11. Pending application(s), if any, stand(s) disposed of.
(LISA GILL)
JUDGE
(AMARJOT BHATTI)
April 20, 2024 JUDGE
rts
Whether speaking/reasoned: Yes/No Whether reportable: Yes/No
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