Punjab-Haryana High Court
Jagtar Singh vs Punjab National Bank on 29 April, 2024
Author: Lisa Gill
Bench: Lisa Gill
Neutral Citation No:=2024:PHHC:058738-DB
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CWP-1080-2020 (O&M)
2024:PHHC:058738-DB
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP-1080-2020 (O&M)
Date of Decision: April 29, 2024
Jagtar Singh ..... Petitioner
Versus
Punjab National Bank ..... Respondent
CORAM:- HON'BLE MRS. JUSTICE LISA GILL
HON'BLE MS. JUSTICE AMARJOT BHATTI
Present: Mr. Ajit Singh, Advocate for
Mr. Harsh Chopra, Advocate for the petitioner.
Mr. Alankar Narula, Advocate for respondent - Bank.
****
LISA GILL, J.
1. Petitioner in this writ petition has challenged proceedings under
Securitization and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 (for short - 'SARFAESI Act') initiated against him.
2. Learned counsel for petitioner submits that term loan of Rs.30 lakhs
and Cash Credit Limit of Rs.10 lakhs was sanctioned in favour of M/s Guru
Nanak Industry and property as is detailed in para 3 of writ petition was
mortgaged. Petitioner stood guarantor for term loan facility and mortgaged his
residential house as detailed in para 4 of writ petition. It is submitted that loan
facility was serviced regularly till 2013 when one of the partners of Firm
committed fraud and stopped re-payment of loan. Notice(s) were issued by the
Bank for regularization of Cash Credit Limit as well as term loan but this fact
was not to the knowledge of petitioner, who was working at Delhi. Proceedings
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under SARFAESI Act were initiated by respondent - Bank in the year 2016 with
notice under Section 13(2) of SARFAESI Act and notice under Section 13(4) of
SARFAESI Act also being issued on 10.08.2017. Order dated 12.08.2016 under
Section 14 of SARFAESI Act was passed by learned District Magistrate,
Bathinda. Petitioner, on notice under Section 13(4) being pasted upon his
residential house, visited the respondent - Bank for account details on which it
was found that an amount of Rs.30 lakhs had already been recovered by selling
machinery as well as Rice Mill and certain amount had been deposited by a
partner of Guru Nanak Rice Industry. Learned counsel for petitioner submits that
nothing was pending against term loan, therefore, any action qua petitioner, who
had stood guarantee for term loan facility, is illegal and arbitrary. Proper
procedure as envisaged under SARFAESI Act, it is further submitted, was not
followed. It is, thus, prayed that this petition be allowed.
3. Learned counsel for respondent - Bank has opposed the writ
petition. Preliminary objection qua entertainability of writ petition itself is raised.
It is further submitted that petitioner had earlier filed SA-733-2017 titled Jagtar
Singh versus Punjab National Bank, which was dismissed vide order dated
08.03.2018 (Annexure R1). Prayer raised in the present writ petition and SA-
733-2017 (Annexure R2) are stated to be identical. Petitioner did not challenge
order dated 08.03.2018 passed by learned DRT-III Chandigarh. It is submitted
that action under SARFAESI Act was carried out in complete consonance with
applicable provisions. Learned counsel for respondent further submits that
petitioner has secured property not only against term loan but also qua Cash
Credit limit granted to borrower Firm. Reference is made to communication
dated 26.08.2013 (Annexure R3) by petitioner whereby property was duly
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mortgaged qua term loan facility as well as Cash Credit limit. Allegation that
bank has recovered the entire dues is denied being incorrect. It is submitted that
recovery proceedings are still pending before Recovery Officer DRT-III,
Chandigarh in RC No. 903 of 2018. Petitioner, it is submitted has concealed
material facts, therefore, this writ petition deserves to be dismissed on this
account itself.
4. Heard learned counsel for parties and have perused the file.
Availing of financial credit by the borrower Firm which is not the party to the
writ petition and subsequent financial indiscipline leading to proceedings under
SARFAESI Act being initiated is a matter of record.
5. Notice of motion was issued in this writ petition on 16.01.2020.
Vide order dated 15.09.2022 it was directed that sale scheduled to be held on
16.09.2022 would continue though sale certificate would not be issued till next
date hearing. It was further directed that it is open to petitioner to request for One
Time Settlement (OTS) with proposal to be considered sympathetically in case
of receipt of such request.
6. In the given factual matrix where petitioner has challenged
proceedings under SARFAESI Act seeking recovery of amount due, we do not
find any ground for interference especially in view of the fact that SARFAESI
Act is a complete code in itself providing for specific remedies for any grievance
which may arise in respect to proceedings taken thereunder. Interference by this
Court in exercise of jurisdiction under Article 226 of Constitution of India 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
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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 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 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
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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"
7. 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 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 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
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."
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.
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9. Another aspect to be noticed is that petitioner admittedly filed SA-
733-2017 with the same prayer which was dismissed by DRT-III, Chandigarh
vide order dated 08.03.2018 though abovesaid SA was dismissed on the ground
that Bank had not taken physical possession of property at that stage, therefore,
SA was not maintainable and liberty was afforded to petitioner to file afresh in
the eventuality of possession being taken. This order, which though may be in
the teeth of settled law now, does not even find mention in the writ petition and
was never challenged.
10. Be that as it may, all arguments as raised in the writ petition are
very well within the realm of consideration by appropriate authority/Tribunal as
provided under SARFAESI Act.
11. Keeping in view the facts and circumstances as above, this writ
petition is dismissed with liberty to the petitioner to avail remedy(ies) as may be
available to him in accordance with law.
12. There is no expression of opinion on the merits of matter.
13. Pending application(s), if any, stand(s) disposed of.
(LISA GILL)
JUDGE
(AMARJOT BHATTI)
April 29, 2024 JUDGE
rts
Whether speaking/reasoned: Yes/No
Whether reportable: Yes/No
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