Hemlata Sahu vs Bank Of Baroda

Challenge in this writ petition is to the order passed by the District Magistrate, Bilaspur dated 19.7.2023 (Annexure P8) and the consequential notice issued by the Tahsildar, Bilaspur dated 11.10.2023 (Annexure P9).

At the outset, this Court is of the opinion that since Annexure P8 dated 19.7.2023 being an order passed by the District Magistrate on an application filed by respondent No.1 i.e., Bank of Baroda, Branch – Rajkishore Nagar, Bilaspur under Section 14 of the Securitisation and Reconstruction of Financial Assests and Enforcement of Security Interest Act, 2002 (in short, the Act, 2002), the writ petition would not be maintainable as there is statutory alternative remedy available to the petitioner under Section 17 of the Act, 2002 by challenging the same before the concerned Debts Recovery Tribunal, which the petitioner has already moved.

Recently, the Hon’ble Supreme Court in respect of the same has considered the issue in case of Phoenix RAC Private Limited Vs. Vishwa Bharti Vidya Mandir & Others, 2022 (5) SCC 345. In the said case, the Hon’ble Supreme Court in paragraphs 18, 20 and 21 has held as under:

“18. 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 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 (supra) and Ramesh Ahluwalia (supra) relied upon by the learned counsel appearing on behalf of the borrowers are not of any assistance to the borrowers.

In Mathew K.C. (supra) after referring to and/or considering the decision of this Court in the case of Chhabil Dass Agarwal (supra), it was observed and held in paragraph 5 as under:-

“5. We have considered the submissions on behalf of the parties. Normally this Court in exercise of jurisdiction under Article 136 of the Constitution is loath to interfere with an interim order passed in a pending proceeding before the High Court, except in special circumstances, to prevent manifest injustice or abuse of the process of the court. In the present case, the facts are not in dispute. The discretionary jurisdiction under Article 226 is not absolute but has to be exercised judiciously in the given facts of a case and in accordance with law. The normal rule is that a writ petition under Article 226 of the Constitution ought not to be entertained if alternate statutory remedies are available, except in cases falling within the well defined exceptions as observed in CIT v. Chhabil Dass Agarwal [CIT v. Chhabil Dass Agarwal, (2014) 1 SCC 603], as follows: (SCC p. 611, para 15)

“15. Thus, while it can be said that this Court has recognised some exceptions to the rule of alternative remedy i.e. where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, the proposition laid down in Thansingh Nathmal case [Thansingh Nathmal v. Supt. of Taxes, AIR 1964 SC 1419] , Titaghur Paper Mills case [Titaghur Paper Mills Co. Ltd. v. State of Orissa, (1983) 2 SCC 433] and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation.”

Applying the law laid down by this Court in the case of Mathew K.C. (supra) to the facts on hand, we are of the opinion that filing of the writ petitions by the borrowers before the High Court under Article 226 of the Constitution of India is an abuse of process of the Court. The writ petitions have been filed against the proposed action to be taken under Section 13(4). As observed hereinabove, even assuming that the communication dated 13.08.2015 was a notice under Section 13(4), in that case also, in view of the statutory, efficacious remedy available by way of appeal under Section 17 of the SARFAESI Act, the High Court ought not to have entertained the writ petitions. Even the impugned orders passed by the High Court directing to maintain the status quo with respect to the possession of the secured properties on payment of Rs.1 crore only (in all Rs.3 crores) is absolutely unjustifiable. The dues are to the extent of approximately Rs.117 crores. The ad-interim relief has been continued since 2015 and the secured creditor is deprived of proceeding further with the action under the SARFAESI Act. Filing of the writ petition by the borrowers before the High Court is nothing but an abuse of process of Court. It appears that the High Court has initially granted an ex-parte ad-interim order mechanically and without assigning any reasons. The High Court ought to have appreciated that by passing such an interim order, the rights of the secured creditor to recover the amount due and payable have been seriously prejudiced. The secured creditor and/or its assignor have a right to recover the amount due and payable to it from the borrowers. The stay granted by the High Court would have serious adverse impact on the financial health of the secured creditor/assignor. Therefore, the High Court should have been extremely careful and circumspect in exercising its discretion while granting stay in such matters. In these circumstances, the proceedings before the High Court deserve to be dismissed.”

Considering the facts of the instant case and issue involved, which petitioner has already raised before the Debts Recovery Tribunal, Jabalpur as he has pleaded in paragraph 8.7 of the petition, therefore, pursuant to that proceedings initiated by the Collector, Bilaspur if any order is passed then the petitioner may challenge the same before the Debts Recovery Tribunal.

In view of aforesaid fact of the case and further in view of authoritative decision of the Hon’ble Supreme Court which has earlier also been taken by the Hon’ble Supreme Court on various occasions, this Court is of the opinion that the present writ petition for the same reason is not maintainable. The right of the petitioner stands reserved to challenge the same before the appropriate forum under Section 17 of the Act, 2002.

The writ petition therefore stands disposed of as not maintainable. Subject to petitioner’s furnishing photocopy of the impugned order, the certified copy of the same can be returned to the petitioner.