PILs being filed by Parties with Oblique interests are wasting Precious Time of Courts, Read HC Order

The Delhi High Court has observed that while there exists liberal rules pertaining to locus vis-à-vis public interest litigation, the courts must also ensure that busybodies, meddlesome interlopers, wayfarers or officious interveners having oblique interests are not allowed to waste precious judicial time.

The Division Bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad in this view dismissed a PIL filed alleging misuse of SARFAESI Act to mortgage public land allotted to charitable societies under the Government Grants Act, 1895 as 'motivated through extraneous and oblique interests and frivolous in nature.'

Brief Facts of the Case

The Petitioner had came across a report dated 17.04.2023 published in the Times of India titled “Bank takes over school property for loan default” wherein it was stated that the Punjab National Bank (Respondent No. 5) had taken over the property of the Respondent No. 3, i.e., Laxmi Public School on account of default on repayment of a loan.

The Petitioner, being concerned about the plight of the students, teachers and staff of the school had filed the PIL stating that the use of provisions of SARFAESI Act against schools has become a device used by private institutions to convert the social infrastructure created for education for commercial purposes and this comes in the way of children’s fundamental right to education.

Counsel for the petitioner has contended that public land is allotted to private unaided schools under the provisions of the GG Act and the GG Act provides that the provisions of the Transfer of Property Act, 1882 (TP Act) do not apply to government grants.

It was his submission that by virtue of Section 2 of the GG Act, the provisions of the SARFAESI Act pertaining to mortgage of property for reconstruction of assets would be inapplicable on such land which has been allotted under the GG Act. He stated that the public land where the Respondent No. 3 school is situated is neither a residential plot nor a commercial one and the function of the school is not one in the nature of a business and the taking over of the property is governed by Section 24 of the Delhi School Education Act, 1973 (DSE Act). He submits that Section 3 of the GG Act is wide in its scope and therefore the tenor of the grant will have an overriding effect on the provisions of the SARFAESI Act and TP Act.

He went on to mention that the Central Government has framed Rules for the utilization, disposal, control and supervision of Nazul land under the Delhi Development Act, 1957 (DDA Act). He stated that under Rule 20(d) of the Delhi Development Authority (Disposal of Developed Nazul Land) Rules, 1981 (DDA Nazul Rules), Nazul land for a public institution is only to be allotted to those who have sufficient funds to meet the cost of land and for the construction of building. He further stated that the provision also provides that the land allotted for running an aided institution shall be allotted to charitable societies/trust which is to bear 5% expense of the salary of the staff.He has alleged that many individuals, institutions and societies, in connivance with officials of DDA are exploiting this Rule to obtain government land and then use the same to get loans from financial institutions and then mortgage the public land.He stated that the Delhi Development Authority (DDA) is only a custodian of Nazul land and not the owner, and the DDA cannot issue an NOC for mortgage of such land to financial institutions.

He also pointed out to a similar case settled by the Court wherein a similar situation had arisen that the land allotted to the Society-therein for the establishment of a school had been mortgaged under the SARFAESI Act on default of a loan by the Society-therein. He stated that in the said case, the Government of NCT of Delhi had decided to take over the school and had undertaken to make lumpsum payment of dues owed by the Society-therein.

It was thus his submission that the issue of allotment of land to societies/trusts by land owning agencies without verification of fact whether the society or trust have sufficient funds or have some regular source of income is a serious in nature.

High Court's Observation

The Court at the outset noted that the Respondent No. 1 Society, which manages Respondent No. 3 School has already filed a writ petition in which a single-judge bench noting that hat the students of the Respondent No. 3 School are on the streets due to the school being sealed off, had directed for removal of the lock which had been put on the school.

Therefore, the court remarked that the issue pertaining to the effect of the Bank’s action under SARFAESI Act upon the right of education of the school children is already pending before the Court and it would thus be inappropriate for the bench to take cognizance of this issue in a PIL when another bench is already seized of the matter.

The Court also clarified that it is well settled that the borrower, which in the present case is the Respondent No. 1 Society, has an efficacious and effective remedy under the SARFAESI Act to approach the Debt Recovery Tribunal (DRT) and can challenge the validity of the actions of the Bank under the SARFAESI Act before the DRT while referring to Mardia Chemicals Ltd. Vs. U.O.I. & Ors, 2004 Latest Caselaw 234 SC.

The Court was also of the view that the issue as to whether the action taken by the Bank against the Respondent No. 1 and Respondent No. 3 School under the SARFAESI Act is contrary to the aforesaid provisions of the GG Act and the TP Act is an issue that can be raised by the Respondent No. 1 before the DRT ought not to be raised by a third party by way of a PIL and certainly not an issue that ought to be decided by this Court in exercise of its powers under Section 226 of the Constitution of India.

The Court found the allegations levelled by the petitioner that individuals, institutions and societies are exploiting the DDA Nazul Rules to obtain public land and then use the said land to obtain large amount of loans from public institutions and upon failure to repay the said loans, they mortgage the said public land as mere 'bald allegations' since the Petitioner failed to establish the veracity of these allegations through documents or his averments. It would thus not be apposite for this Court to look into this issue in exercise of its writ jurisdiction.

The Court cited The Janata Dal & Ors Vs. H.S. Chowdhary & Ors, 1991 Latest Caselaw 215 SC to clarify on law concerning the issue of locus in a public interest litigation.

"The Petitioner, knowing fully well that the Respondent No. 1 society, has approached this Court and has other appropriate remedies available before it, has chosen to come before this Court on the basis of a news report published in the Times of India. The Petitioner has taken this report and attempted to paint a picture wherein the Banks are abusing the provisions of the SARFAESI Act and that the officials of the DDA are allotting Nazul land contrary to the provisions of the DDA Nazul Rules. The Petitioner has attempted to show that this is a systemic issue and not a single instance but has failed to establish the same through the documents presented before us," the court observed.

Case Title: Justice for All vs Laxmi Educational Society & Ors.
Case Details: W.P.(C) 5617/2023 & CM APPL. 22013/2023
Coram: Hon'ble Mr. Chief Justice Satish Chandra Sharma and Hon'ble Mr. Justice Subramonium Prasad
Advocates for Petitioner:Mr. Khagesh B Jha, Ms. Shikha Sharma Bagga, Advocates
Advocates for Respondent: Mr. Pramod Gupta, Ms. Pranjal, Advocates for R-1 to R-3 Mr. Sanjay Katyal, Standing Counsel for DDA with Mr. Nihal Singh, Advocate Mr. Yeeshu Jain, Standing Counsel with Ms. Jyoti Tyagi, Ms. Manisha, Advocates for R-3 & R-4 Mr. Santosh Kumar Rout, Standing Counsel for PNB/R-5 Mr. Santosh Kumar Tripathi, Standing Counsel for GNCTD with Mr.Arun Panwar, Ms. Mahak Rankawat, Mr. Pradyumn Rao, Ms. Aakriti Mishra, Mr. Kartik Sharma, Advocates for R-6 to R-8 Mr. Anurag Ahluwalia, CGSC with Mr.Abhigyan Siddhant, Mr. Rohit Kumar, Advocates for R-10

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