M/S Hindustan Developers And Another vs State Haryana And Another

This petition filed by petitioners – borrowers assails notice dated 04.02.2021 (Annexure P-1) and 27.05.2021 (Annexure P-2) issued by respondent No.2 Bank under Section 13 (2) and 13 (4) of the Securitisation and Reconstruction of Financial Assets annd Enforcement of Security Inteerest Act, 2002 (in short, ‘SARFAESI Act’) as well as order dated 15.12.2021 (Annexure P-4) passed by Chief Judicial Magistrate, Sonepat, under Secction 14 of SARFAESI Act.

This Court, vide interim order dated 08.02.2022, had protected the petitioners by restraining the respondents from taking possessionn of secured assset, subject to petitioners’ paying a sum of Rs.8,50,000/- to respondent No.2 Bank by day after the passing of said order. Thereafter, on 24.03.20222, following order was passed by this Court :-

“Counsel for the peetitioners states that the petitioners are willing to pay a sum of Rs. 3 Lakhs on or before 31.03.2022, and a further sum of Rs. 5 Lakhs on or before 15.04.2022.

The aforesaid statement of the counsel for the petitioners is placed on record.

List on 13.05.2022.”

It is informed by learned sennior counsel appearing on behallf of respondent No.2 Bank, which is not denied by learned counsel for the petitioners – borrowers, that the cut-off date fixed, i.e. 31.03.2022 and 15.04.20222, for deposit of Rs. 3 lakhs andd Rs. 5 lakhs, respectively, was not adhered to by the petitioners – borrowerss, as these amounts were depossited late, i.e. 22.04.2022 and 05.07.2022. This fact was brought to the notice of this Court on 14.07.2022, but this Court coontinued interim protection to the petitioners,, which continues till date.

The Apex Court has consisteently held that High Courts should refrain from interfering under Article 226 of the Constitution in SARFAESI proceedings. The SARFAESI Act is a complete code, which not only provides for a detaailed recovery mechanism but also remedies before the Debts Recovery Tribunal (DRT) and thereafter, Debts Recovery Appellate Tribunal (DRAT).

From the averments made in the petition, it does not appear that the petitionners have availed statutory alternative remedy of approaching the DRT and/oor DRAT.

In view of the petitioners noot having adhered to the time line fixed by thhis Court on 24.03.2022 and thee ratio laid down by Apex Court in United Bannk of India Vs. Satyawati Tondon, (2010) AIR SC 3413 (Parass 17, 27); Phoennix ARC Private Limited Vs. Vishwa Bharati Vidya Mandir and others, (20022) 5 SCC 345 (Paras 10, 21); and PHR Invent Educatioonal Society Versus UCO Bank and others, 2024 (6) SCC 579 (Paras 22 to 41), this Court refrains from exercising jurissdiction under Article 226 of the Constitutioon.

6.1 The petitioners are relegated to avail the appropriate statutory remedy under SARFAESI Act before DRRT and thereafter before DRAT. In case the peetitioners prefer an application under Section 17 of SARFAESI Act within a peeriod of 30 days from today alonng with copy of this order, the same shall be considered and decided on its own merits, without being dismissed on limitation alone.

6.2 Interim relief granted by this Court in favour of the petitioneers – borrowers on 08.02.2022 shall continue tiill DRT takes fresh decision on the question off interim relief, provided the petitioners – borrowers deposit anoother sum of Rs. 5 lacs within a period of 15 days, failing which the interim relief shall lose its effect, and the respondent Bank shall be free to proceed and liquidate thhe secured assets to recover the balance amount.

6.3 It is made clear that if petitiooners approach the Tribunal wiithin prescribed stipulated time, then this ordeer shall not prejudice the mindd of Tribunal while deciding the question of interim relief, if admissiblee to petitioners. We further make it clear that the Tribunal shall decide the request for interim relief strictly on merits of the matter, without being influencedd by the fact off petitioners having approached this Court or this Court having passed the present order.

Accordingly, the writ petitionn stands disposed of with aforesaid liberty, without commenting on merits, without cost.

7.1 All the pending applications also stand disposed of.