S S Impex vs Bank Of Maharashtra And Ors

This writ petition has been filed by the petitioner with the following prayer:-

"It is, therefore, most respectfully prayed that your lordship may graciously be pleased:- A. Issue an appropriate writ, order or direction quash and set aside the Notice dated 05.11.2018 i.e. Annexure -7 of the writ petition and all actions mentioned in the said notice may also be quash and set aside; B. Issue an appropriate writ, order or direction direct the Respondents not to take any coercive steps against the Petitioner; C. Issue an appropriate writ, order or direction direct the Respondents to consider the settlement in light of the Settlement Scheme launched by the Respondent-Bank; D. To issue any other writ, order or direction which this Hon'ble Court may deem fit and proper under the facts circumstances of the case, so that justice be met;

E. Cost of the Petition may also be awarded in favour of the petitioner."

While issuing notice to the respondents on 12.12.2018 the following order was passed:-

"Counsel for the petitioner has submitted that though the proceedings undertaken against the petitioner under the SARFAESI Act, 2002 are under challenge, however, there are extraordinary circumstances for approaching this Court as the Presiding Officer in DRT, Jaipur is said to be on leave for the next seven days. Learned counsel has submitted that proposed auction of property of the petitioner is fixed on 14.12.2018. Learned counsel for the petitioner has submitted that in case appropriate order is not passed and indulgence is not granted to entertain the petition, the land of the petitioner would be put on auction.

Learned counsel has submitted that any person cannot be rendered remediless in absence of the forum or a person occupying the forum. Learned counsel has submitted that the petitioner at one point of time had deposited the amount as agreed between the petitioner and Bank as One Time Settlement (OTS) scheme of the Bank. Learned counsel for the petitioner has submitted that the petitioner has all the intention to pay the money to the Bank as such he had paid Rs.13,75,000/-by way of Demand Draft in the month of February,2018. Learned counsel has further submitted that now the Bank has suddenly increased the outstanding amount against the petitioner from Rs. 2.66 Crores to Rs.3,13,50,000/-.

Learned counsel has submitted that the petitioner is prepared to deposit the amount of Rs.50,00,000/- by Demand Draft by tomorrow and this Court is required to protect the rights of the petitioner.

Issue notice to the respondents, returnable by 18.12.2018. Notices may be given 'dasti', as prayed.

This Court, considering the fact and believing the statement of counsel for the petitioner that there is no Presiding Officer for next seven days, deems it proper to permit the petitioner to deposit Rs.50,00,000/- by way of Demand Draft against One Time Settlement (OTS) in the respondent Bank by tomorrow i.e. 13.12.2018 and in case he does so, auction so proposed on 14.12.2018, shall not be finalized by the Bank."

Counsel for the petitioner submitted that although the remedy of appeal is available to the petitioner before the Debts Recovery Tribunal (hereinafter to be referred as 'DRT') under Section 17 of the SARFAESI ACT, 2002 (hereinafter to be referred as 'Act of 2002') but when the writ petition was filed the Presiding Officer of the Tribunal was on leave, therefore, the petitioner has approached this court. Counsel further submits that against the order dated 05.11.2018 the petitioner has filed the application which is still pending before the DRT and prayed for deciding the writ petition finally.

Counsel for the respondents has raised a preliminary objection that since the petitioner is having an alternative statutory remedy of appeal before the DRT under Section 17 of the Act of 2002, therefore, prayed for dismissal of the writ petition.

In support of his contention counsel relied upon the judgment passed by the Hon'ble Supreme Court in the matter of State Bank of Travancore and anr. Vs. Mathew K.C. reported in (2018) 3 SCC 85, wherein it has been held as under:-

"9. Even prior to the SARFAESI Act, considering the alternate remedy available under the DRT Act it was held in Punjab National Bank Vs. O.C. Krishnan and others, (2001) 6 SCC 569, that :-

"6. The Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial institutions. There is a hierarchy of appeal provided in the Act, namely, filing of an appeal under Section 20 and this fast-track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision under an Act cannot expressly oust the jurisdiction of the court under Articles 226 and 227 of the Constitution, nevertheless, when there is an alternative remedy available, judicial prudence demands that the Court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have directed the respondent to take recourse to the appeal mechanism provided by the Act."

In Satyawati Tandon (supra), the High Court had restrained further proceedings under Section 13(4) of the Act. Upon a detailed consideration of the statutory scheme under the SARFAESI Act, the availability of remedy to the aggrieved under Section 17 before the Tribunal and the appellate remedy under Section 18 before the Appellate Tribunal, the object and purpose of the legislation, it was observed that a writ petition ought not to be entertained in view of the alternate statutory remedy available holding :- "43. 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, the 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.

It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection."

Heard counsel for the parties and perused the record.

This writ petition filed by the petitioner deserves to be dismissed for the reasons; firstly, the petitioner is having alternative statutory remedy of appeal before the DRT under Section 17 of the Act of 2002; secondly, admittedly, the petitioner has submitted the application before the DRT and the same is pending, therefore, I deem it just and proper to direct the DRT to also take into consideration of the order dated 12.12.2018 passed by this court.

In that view of the matter, this writ petition stands disposed of. The Tribunal is directed to decide the application within a period of three months.