(Prayer: Petition filed under Article 226 of the Constitution of India, for issuance of a Writ of Certiorari, calling for the records of the order passed by the 1st respondent Tribunal dated 11.02.2016 in I.A.No.321 of 2016 in S.A.No.54 of 2016 in so far as the conditional order to pay Rs.40 lakhs in two installments and quash the same.)
S. Manikumar, J.
1. Challenge in this writ petition, is to an order, made in I.A.No.321 of 2016 in S.A.No.54 of 2016, dated 11.02.2016, on the file of the Debts Recovery Tribunal, Madurai, by which, the Tribunal has granted stay of confirmation of the sale fixed on 12.02.2016, subject to the condition that the writ petitioner has to make payment of Rs.20,00,000/- to the 2nd respondent/Bank, directly on or before 11.03.2016, as first installment and another payment of Rs.20,00,000/- as the second installment on or before 11.04.2016.
2. Debts Recovery Tribunal, Madurai, has also made it clear that in the event of failure to make single payment, ad-interim order granted on 11.02.2016 would stand vacated automatically and that the bank is at liberty to proceed further with the secured assets. Debts Recovery Tribunal, Madurai, has directed its Registry to post the case on 12.04.2016.
3. Placing reliance on the decision of the Hon'ble Division Bench of the Andhra Pradesh High Court in Neel Madhav Mining P. Ltd., vs. Union Bank of India, reported in III (2006) BC 311 (DB), and contending inter alia that the secured asset is an agricultural property, Mr.M.Kumar, learned counsel for the petitioner submitted that the Debts Recovery Tribunal, Madurai, ought not to have passed a conditional interim order.
4. However, during the course of hearing, learned counsel for the petitioner submitted that as there were no bidders on 12.02.2016, auction was not held. Submission is placed on record.
5. Though the learned counsel for the petitioner has contended that the secured asset is an agricultural property, in which, the petitioner is running a Poultry Farm, and therefore, it is exempted under Section 31(i) of the SARFAESI Act., before the Debt Recovery Tribunal, it was the reply of the Bank that the secured asset is not an agricultural property and that the revenue records reflected that it was a barren land meant for construction of houses and that a pucca shed has been put up in the secured asset.
6. The issue as to whether the secured property is an agricultural property or not, is a question of fact and Writ Court could not delve into the said aspect and record a finding, solely on the basis of averments.
Reference can be made to few decisions:-
(a) In the decision reported in (2003) 4 SCC 317 (Rourkela Shramik Sangh v. Steel Authority of India Ltd. and Anr.) it is held that the disputed questions of fact could not be entertained in the writ proceedings.
At paragraph 19, the Hon'ble Supreme Court held as follows:
"19. The question as to whether the workmen concerned had been continuously working for a period of ten years so as to enable them to derive benefit of the judgment of this Court in R.K. Panda case (1994) 5 SCC 304 was essentially a question of fact...."
In paragraph 22, the Honourable Supreme Court further held as follows:
"22. ...a disputed question of fact normally would not be entertained in a writ proceeding. This aspect of the matter has also been considered by a Constitution Bench of this Court in Steel Authority of India Ltd. v. National Union Waterfront Workers (2001) 7 SCC 1...."
(b) In (2006) 9 SCC 256 (Himmat Singh v. State of Haryana and Ors.), the Honourable Supreme Court held that
'the statement of the appellant or the 5th respondent was correct or not could not ordinarily be tested in writ proceedings and it is well known that in writ petition ordinarily such a disputed question of fact could not be entertained'.
(c) In yet another decision reported in (2007) 7 MLJ 687 (Food Corporation of India v. Harmesh Chand), the Supreme Court held as follows:
"Since the facts were seriously disputed by the appellant and no factual finding could be recorded without consideration of evidence adduced by the parties, it was not an appropriate case in which the High Court ought to have exercised its writ jurisdiction. The parties could have approached a civil court of competent jurisdiction to adjudicate the matter."
7. Though reliance has been made on the Hon'ble Division Bench judgment of the Andhra Pradesh High Court in Neel Madhav Mining P. Ltd., vs. Union Bank of India, reported in III (2006) BC 311 (DB), this Court deems it fit to consider some of the decisions of the Hon'ble Supreme Court, as to whether a writ petition could be entertained in SARFAESI matters.
(i) In Precision Fastenings v. State Bank of Mysore reported in 2010(2) LW 86, this Court held as follows:
"This Court has repeatedly held in a number of decisions right from the decision in Digvision Electronics Ltd. v. Indian Bank (DB) Markandey Katju, C.J., (2005 (3) C.T.C., 513), that the remedy of the aggrieved party as against the notice issued under Section 13(4) of SARFAESI Act is to approach the appropriate Tribunal and the writ petition is not maintainable. The same position has been succinctly stated by the Hon'ble the Supreme Court in Transcore v. Union Of India (2006 (5) C.T.C. 753) in paragraph No. 26 wherein the Supreme Court has held as under:
The Tribunal under the DRT Act is also the Tribunal under the NPA Act. Under Section 19 of the DRT Act read with Rule 7 of the Debts Recovery Tribunal (Procedure) Rules, 1993 (1993 Rules), the applicant bank or FI has to pay fees for filing such application to DRT under the DRT Act and, similarly, a borrower, aggrieved by an action under Section 13(4) of NPA Act was entitled to prefer an Application to the DRT under Section 17 of NPA.
(Emphasis added)
Therefore, when there is an efficacious remedy available in law to the petitioner and the petitioner having stated in uncontraverted terms that he has invoked the SARFAESI Act by filing necessary appeal before the Debts Recovery Tribunal, the claim of the petitioner to seek for the very same relief in this writ petition cannot be entertained."
(ii) In Union Bank of India v. Satyawati Tondon reported in 2010 (5) LW 193, it is held as follows:
17. There is another reason why the impugned order should be set aside. If respondent No. 1 had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14, then she could have availed remedy by filing an application under Section 17(1). The expression any person used in Section 17(1) is of wide import. It takes within its fold, not only the borrower but also guarantor or any other person who may be affected by the action taken under Section 13(4) or Section 14. Both, the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective. 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 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.
18. While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self-imposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for re-dressal of his grievance. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad AIR 1969 SC 556, Whirlpool Corporation v. Registrar of Trade Marks, Mumbai (1998) 8 SCC 1=1999-2-L.W. 200 and Harbanslal Sahnia and another v. Indian Oil Corporation Ltd. and others (2003) 2 SCC 107 and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass appropriate interim order.
27. 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 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.
28. Insofar as this case is concerned, we are convinced that the High Court was not at all justified in injuncting the appellant from taking action in furtherance of notice issued under Section 13(4) of the Act.
29. In the result, the appeal is allowed and the impugned order is set aside. Since the respondent has not appeared to contest the appeal, the costs are made easy."
(iii) In Saraspathy Sundararaj v. Authorised Officer and Assistant General Manager, State Bank of India reported in (2010) 5 LW 560, it is held as follows:
6. .......... When a specific forum has been created which enables the borrower to challenge the action of the financial institution by filing necessary petition under Section 17, the petitioner is not entitled to invoke the writ jurisdiction of this Court. What could not be achieved by the petitioner by filing a petition before the appropriate Forum, which is at present barred by period of limitation, could not be permitted to be achieved by extending the jurisdiction conferred to this Court under Article 226 of The Constitution of India. Above all, since the petitioner has violated the terms and conditions of the loan by transferring the property in favour of her son, this Court is not inclined to entertain the petition.
7. In this connection, we are fortified by the decision of the Honourable Supreme Court reported in ( United Bank of India v. Satyawati Tondon and others ) III (2010) BC 495 (SC) = 2010-5-L.W. 193, wherein in para Nos. 17 and 18, it was held thus:?
17. Both, the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective. 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 t he 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 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.
18. While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self-imposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad AIR 1969 SC 556, Whirlpool Corporation v. Registrar of Trade Marks, Mumbai (1998) 8 SCC 1 and Harbanslal Sahnia and another v. Indian Oil Corporation Ltd. and others (2003) 2 SCC 107 and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass appropriate interim order, (underlining added).
9. In the light of the above decision of the Honourable Supreme Court, the writ petition filed by the petitioner seeking to set aside the possession notice issued to her long back is legally not sustainable. We are of the considered view that this petition has been filed only to drag on the proceedings and to evade repayment of the loan. That be so, the petitioner has no legal right to compel the bank to accept the one time settlement offer made by her.
13. The present case is identical in nature and it is covered by the judgment of the Supreme Court mentioned supra. In this case, the petitioner has violated the condition of mortgage by transferring the secured asset in favour of her son and therefore, as per clause 1.7 of the OTS Scheme offered by the bank, the petitioner has to be excluded from extending the benefits of the scheme which was rightly done by the bank. In any event, without exhausting the alternative remedy, the relief sought for by the petitioner by invoking the discretionary remedy under Article 226 of The Constitution of India cannot be granted."
(iv) In Hemabushan v. ICICI Bank Limited reported in (2010) 5 LW 567, at Paragraphs 1, 7, 14, 21 and 22, it is held as follows:
"This Writ Petition is filed seeking Writ of Certiorari to quash the orders of Chief Metropolitan Magistrate, Egmore in Crl. O.P. No. 2359 of 2010 dated 16.08.2010 appointing Advocate-Commissioner to take possession of the property of the Petitioner.
7. To decide the controversy, the provisions of Secs. 13(2), 13(3-A), 13(4), 14 and 17 of SARFAESI Act are to be considered. Perusal of Sec. 13 of the Act would reveal that if a notice under sub-sec.(2) is served on the borrower by the secured creditor when the said borrower makes a default in repayment of secured debt or any instalment thereof, and his account is classified by the secured creditor as non-performing asset, then, the borrower is required to discharge in full his liabilities to the secured creditor within sixty days from the date of notice, failing which, the secured creditor is entitled to exercise all or any of the rights under sub-sec. (4) of Sec. 13 it can also be seen that in case the borrower fails to discharge the liability in full within the period specified in sub-sec. (2) the secured creditor is entitled to take recourse to one or more measures stated in Section 13(4) to recover his secured debt. One of such measures to take possession of the secured assets of the borrower including the right to transfer by way of lease, assignment or sale for releasing the secured asset. It can thus clearly be seen that once a notice is issued to the borrower under Sec. 13(2) and he fails to comply with the notice within the stipulated period, in view of sub-clause (a) of sub-sec. (4) of Sec. 13, the secured creditor is entitled to take possession of the secured assets of the borrower.
14. Nature of powers that are exercised by the Chief Metropolitan Magistrate/District Magistrate under Sec. 14 of the Act are purely executionery in nature. At the time of passing order under Sec. 14 of NPA Act, the Chief Metropolitan Magistrate/District Magistrate will have to consider only two aspects. He must find out whether the secured assets fall within his territorial jurisdiction and whether notice under Sec. 13(2) of NPA Act is given or not. No adjudication of any kind at that stage.
21. The Judgment of the Division Bench of this Court in Noble Kumar's case [CD 2010 MHC 4627] is dated 27.07.2010 and the Judgment of the Supreme Court in Satyawati Tondon's case is dated 26.07.2010. If the borrower is dispossessed not in accordance with the provisions of the Act, then DRT is entitled to restore back the possession. When the secured creditor takes possession of the secured assets, right of appeal/representation is available to the aggrieved person under Sec. 17 of the Act and the same can be exercised as and when the secured creditor decides to take possession of the property. Applying the ratio of Satyawati Tondon's case , when statutory remedies are available, Article 226 of Constitution of India cannot be invoked short circuiting or circumventing the statutory procedure and the Writ Petition is liable to be dismissed.
22. In the result, the Writ Petition is dismissed. However, Petitioner is at liberty to exercise his right of appeal/representation under Sec. 17 of the Act as and when the secured creditor issues notice under Sec. 13(4) of SARFAESI Act and takes possession of the property. There is no order as to costs. Consequently, the connected Miscellaneous Petition is also dismissed."
8. Added further, during the course of hearing, learned counsel for the petitioner also submitted that sale fixed on 12.02.2016 was not conducted, as there were no bidders. The impugned order made in I.A.No.321 of 2016 in S.A.No.54 of 2016, dated 11.02.2016, is only to stay the confirmation of sale, subject to deposit of Rs.20,00,000/- to the 2nd respondent/Bank, directly on or before 11.03.2016, as a first installment and another payment of Rs.20,00,000/- as second installment on or before 11.04.2016 respectively. Sale itself has not been conducted.
9. In view of the above discussion, and the decisions, writ petition is dismissed. No costs. Consequently, W.M.P(MD)No.4827 of 2016 is closed.