AI Structured Summary
Not yet generated for this judgment
Judgment
S.J. Mukhopadhaya, C.J.—All these writ petitions arise out of common proceedings initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as, ''the S.A.R.F.A.E.S.I. Act'').
The Petitioners, aggrieved persons have preferred these writ petitions against the notice dated 1st June, 2005 issued by the Respondent-Bank u/s 13(2) of the S.A.R.F.A.E.S.I. Act.
The main plea taken was that the licence in favour of the Bank having cancelled by the Reserve Bank of India and the Liquidator having appointed, the Bank ceased to be a Bank for the purpose of definition under the S.A.R.F.A.E.S.I. Act, thereby, it has no jurisdiction to issue any notice u/s 13(2) of the S.A.R.F.A.E.S.I. Act.
From the grounds taken by the Petitioners, it appears that the Bank also issued notice u/s 13(4) of the S.A.R.F.A.E.S.I. Act and has taken the possession. In Special Civil Application No. 860 of 2005, the learned Single Judge passed interim order of stay on 25th January, 2005. In view of such interim order the Bank could not take the possession.
We have heard learned Counsel for the parties and perused the record.
The question relating to entertaining the petition under Articles 226 and 227 of the Constitution of India against recovery of dues by Bank is called for consideration before the Supreme Court from time to time.
In the case of Punjab National Bank Vs. O.C. Krishnan and Others, having noticed the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, the Supreme Court held that when there is an alternative remedy available, judicial prudence demands that the Court refrains from exercising its jurisdiction under the constitutional provisions.
In the case of United Bank of India Vs. Satyawati Tondon and Others, the Supreme Court noticed the provisions of S.A.R.F.A.E.S.I. Act. The Apex Court, on hearing the parties, held as follows:
Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of Banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues, but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. Therefore,'' in all such cases, High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute.
In view of the Supreme Court-s decisions, we are of the view that the learned Single Judge, instead of keeping the matter pending and passing interim order, ought to have allowed the Petitioners to prefer appeal u/s 17 of the S.A.R.F.A.E.S.I. Act, there being a remedy available once measures are taken u/s 13(4) of the S.A.R.F.A.E.S.I. Act.
We may only observe that even the writ petition at the stage of Section 13(2) of the S.A.R.F.A.E.S.I. Act was not maintainable because at that stage there was no cause of action to prefer such application.
For the reasons aforesaid and in view of the decisions of the Supreme Court as referred to above, without expressing any opinion on the question as to whether the Bank had jurisdiction or not, and the measures taken thereby are against the provisions of the S.A.R.F.A.E.S.I. Act or the Rules framed thereunder, we allow the Petitioner(s) to prefer appeal u/s 17 of the S.A.R.F.A.E.S.I. Act before the Debts Recovery Tribunal against the impugned measures taken u/s 13(4) of the S.A.R.F.A.E.S.I. Act or if the Bank intends to take measures for taking possession.
If an appeal u/s 17 is preferred by the Petitioners within a period of three weeks, before the Debts Recovery Tribunal, the Tribunal will, taking into consideration the fact that the Petitioners were pursuing the matter before this Court since 2005, entertain the appeal and after notice to the Bank, will decide the case on merits preferably within two months.
It will be open to the Petitioners to bring to the notice of the Debts Recovery Tribunal that the Petitioners were enjoying interim order of stay, and thereby, may request the Tribunal to pass appropriate interim order, which may consider the same in accordance with law.
The writ petition stands disposed of with the aforesaid observations. No cost.