Tamil Nadu Mercantile Bank Vs. the Registrar Drt - Court Judgment

SooperKanoon Citationsooperkanoon.com/1168619
CourtChennai High Court
Decided OnJun-26-2014
JudgeS.RAJESWARAN
AppellantTamil Nadu Mercantile Bank
RespondentThe Registrar Drt
Excerpt:
in the high court of judicature at madras dated2606.2014 coram the honourable mr.justice s.rajeswaran and the honourable mr.justice s.vaidyanathan wp.no.13104/2014 & mp.no.1/2014 the authorised officer tamil nadu mercantile bank ltd., no.233-236, palladam road, [kamarajar road]., tirupur 641 004.petitioner versus 1.the registrar debt recovery tribunal coimbatore. 2.r.dakshinamoorthy .respondents prayer: writ petition filed under article 226 of the constitution of india praying for a writ of certiorari calling for the records relating to the order passed by the 1st respondent in sa.no.165/2008 dated 26.12.2012 and quash the same. for petitioner : mr.v.chandrasekaran r1 : tribunal for r2 : mr.s.parthasarathy order [order of the court was made by s.rajeswaran, j.,].the above writ petition has been filed by the petitioner challenging the order of the drt/1st respondent herein dated 26.12.2012 made in sa.no.165/2008, with a prayer to quash the same. 2.the case of the petitioner/bank as given in the affidavit filed in support of this writ petition is that the 2nd respondent herein is the borrower and he had created mortgage to secure the debt. since he had committed default in paying the debts due, his account was classified as npa with effect from september 2004 and the petitioner/bank initiated proceedings under the sarfaesi act as against the 2nd respondent herein. since the 2nd respondent/borrower did not come forward to settle the dues, possession notice u/s.13[4].of the sarfaesi act, 2002, dated 18.02.2005 after following due process of law. an appeal was filed by the 2nd respondent herein [borrower].in sa.no.165/2008 before the debts recovery tribunal/1st respondent herein. a counter affidavit was filed by the bank therein resisting the averments made in the affidavit filed in support of the appeal by the borrower. the said appeal was filed three years after the issuance of the possession notice. though the petitioner/bank raised all these issues before the drt, the said sa.no.165/2008 was allowed by the drt2612.2012, directing the borrower/2nd respondent herein to deposit a sum of rs.2 lakhs within a period of sixty days from 26.12.2012 and consequently frozen the accounts and released the secured assets. since the said order was illegal, without jurisdiction, as the outstanding amount as on 31.12.2012 was rs.11,41,814.40p., and huge public money has not been collected and secured by the drt, the bank is before this court by way of filing the present writ petition with the aforesaid prayer. the reasons for not approaching the appellate authority, viz., the drat, as against the order passed by the drt/1st respondent herein, is also explained by the petitioner/bank in the writ petition. 3.this court, while admitting the writ petition on 06.06.2014, granted an order of interim stay as prayed for by the petitioner, for a period of three weeks. the 2nd respondent herein/borrower has also entered appearance through counsel and filed a counter affidavit before this court, stating that by-passing the appeal remedy available under the act, the petitioner has filed the present writ petition. according to the 2nd respondent/borrower, the order passed by the drt, directing him to deposit a sum of rs.2 lakhs is a reasoned one and it cannot be interfered with at the instance of the bank/petitioner herein. 4.heard the learned counsel for the petitioner/bank and the learned counsel appearing for the 2nd respondent/borrower. we have also gone through the documents made available on record including the counter affidavit filed by the 2nd respondent herein. 5.at the outset, it is to be stated that though the petitioner/bank has not filed an appeal before the drat, the appellate authority, as against the order passed by the drt in sa.no.165/2008 dated 26.12.2012, which is impugned herein, the reasons adduced by the petitioner/bank in the affidavit filed in support of this writ petition are taken into consideration by this court. the hon'ble apex court has time and again reiterated that whenever there is an alternative and effective remedy available, filing of writ petitions under article 226 of the constitution of india, by-passing the provisions of the statutory law, more particularly, in sarfaesi proceedings, should not be entertained. the hon'ble supreme court in united bank of india versus satyawati tondon and others reported in [2010].8 scc110has held as follows:- ".....45.it is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but there can be no 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 that the particular legislation contains a detailed mechanism for redressal of his grievance........55.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 advers.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.". in view of the above settled principle laid down by the apex court, we are of the considered view that this petition is too premature and the petitioner/bank can very well raise all the grounds, raised before this court, before the appellate authority/drat by filing appropriate appeal as provided under the act. 6.however, an appeal u/s.18 of the sarfaesi act, 2002, as against the order of the drt should be filed within a period of thirty days from the date of receipt of the order copy of the drt and in the instant case, the order of the drt in sa.no.165/2008 came to be passed on 26.12.2012 and certainly the period of limitation would have expired already. the hon'ble firs.bench at the madurai bench of this court in wp. [md].no.3167/2010 etc., batch, [b.saravanan versus the authorised officer, syndicate bank, 105-106, ponnurangam road [west]., r.s.puram, coimbatore and another].dated 21.11.2013 has held in paragraph 7 as follows:- ".......7.in view of the above, the aggrieved parties are permitted to move the appropriate forum provided under the securitisation and reconstruction of financial assets and enforcement of security interest act, 2002, within a period of eight weeks from today, failing which, it would be open to the respondent banks concerned to proceed further, as per the relevant provisions of law, including the provisions contained in securitisation and reconstruction of financial assets and enforcement of security interest act, 2002. if the aggrieved parties approach the appropriate forum in time, as specified in this order, the appropriate forum shall entertain such matters.on merits and in accordance with law and dispose of the same, without raising the issue of delay, in the filing of the matters.......". in view of the above said order of the hon'ble firs.bench of this court, the petitioner/bank is hereby directed to prefer an appeal u/s.18 of the sarfaesi act before the appellate tribunal, viz., the drat, within a period of fifteen days from the date of receipt of a copy of this order, as we find that the matter has to be heard in detail by the drat as the order passed by the drt directing the borrower/2nd respondent to deposit a sum of rs.2 lakhs as against rs.11,41,814.40p., is required to be adjudicated. on such appeal being preferred, the drat shall take the same on file, hear the appeal on merits after affording due opportunity to the borrower/2nd respondent herein and pass appropriate orders on merits and in accordance with law as expeditiously as possible. 7.the writ petition is disposed of in the above terms.no costs. consequently, connected miscellaneous petition is closed. [s.r., j.,].[s.v.n., j.].26.06.2014 index :yes/no internet :yes/no ap to 1.the authorised officer tamil nadu mercantile bank ltd., no.233-236, palladam road, [kamarajar road]., tirupur 641 004. 2.the registrar debt recovery tribunal coimbatore. s.rajeswaran, j., and s.vaidyanathan, j., ap wp.no.13104/2014 26.06.2014
Judgment:

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED2606.2014 CORAM THE HONOURABLE Mr.JUSTICE S.RAJESWARAN AND THE HONOURABLE Mr.JUSTICE S.VAIDYANATHAN WP.No.13104/2014 & MP.No.1/2014 The Authorised Officer Tamil Nadu Mercantile Bank Ltd., No.233-236, Palladam Road, [Kamarajar Road]., Tirupur 641 004.Petitioner Versus 1.The Registrar Debt Recovery Tribunal Coimbatore.

2.R.Dakshinamoorthy .Respondents Prayer: Writ petition filed under Article 226 of the Constitution of India praying for a writ of certiorari calling for the records relating to the order passed by the 1st respondent in SA.No.165/2008 dated 26.12.2012 and quash the same.

For Petitioner : Mr.V.Chandrasekaran R1 : Tribunal For R2 : Mr.S.Parthasarathy ORDER

[Order of the Court was made by S.RAJESWARAN, J.,].The above writ petition has been filed by the petitioner challenging the order of the DRT/1st respondent herein dated 26.12.2012 made in SA.No.165/2008, with a prayer to quash the same.

2.The case of the petitioner/Bank as given in the affidavit filed in support of this writ petition is that the 2nd respondent herein is the borrower and he had created mortgage to secure the debt.

Since he had committed default in paying the debts due, his account was classified as NPA with effect from September 2004 and the petitioner/Bank initiated proceedings under the SARFAESI Act as against the 2nd respondent herein.

Since the 2nd respondent/borrower did not come forward to settle the dues, Possession Notice u/s.13[4].of the SARFAESI Act, 2002, dated 18.02.2005 after following due process of law.

An appeal was filed by the 2nd respondent herein [borrower].in SA.No.165/2008 before the Debts Recovery Tribunal/1st respondent herein.

A counter affidavit was filed by the Bank therein resisting the averments made in the affidavit filed in support of the appeal by the borrower.

The said appeal was filed three years after the issuance of the Possession Notice.

Though the petitioner/Bank raised all these issues before the DRT, the said SA.No.165/2008 was allowed by the DRT2612.2012, directing the borrower/2nd respondent herein to deposit a sum of Rs.2 lakhs within a period of sixty days from 26.12.2012 and consequently frozen the accounts and released the secured assets.

Since the said order was illegal, without jurisdiction, as the outstanding amount as on 31.12.2012 was Rs.11,41,814.40p., and huge public money has not been collected and secured by the DRT, the Bank is before this Court by way of filing the present writ petition with the aforesaid prayer.

The reasons for not approaching the Appellate Authority, viz., the DRAT, as against the order passed by the DRT/1st respondent herein, is also explained by the petitioner/Bank in the writ petition.

3.This Court, while admitting the writ petition on 06.06.2014, granted an order of interim stay as prayed for by the petitioner, for a period of three weeks.

The 2nd respondent herein/borrower has also entered appearance through counsel and filed a counter affidavit before this Court, stating that by-passing the appeal remedy available under the Act, the petitioner has filed the present writ petition.

According to the 2nd respondent/Borrower, the order passed by the DRT, directing him to deposit a sum of Rs.2 lakhs is a reasoned one and it cannot be interfered with at the instance of the Bank/petitioner herein.

4.Heard the learned counsel for the petitioner/Bank and the learned counsel appearing for the 2nd respondent/Borrower.

We have also gone through the documents made available on record including the counter affidavit filed by the 2nd respondent herein.

5.At the outset, it is to be stated that though the petitioner/Bank has not filed an appeal before the DRAT, the Appellate Authority, as against the order passed by the DRT in SA.No.165/2008 dated 26.12.2012, which is impugned herein, the reasons adduced by the petitioner/Bank in the affidavit filed in support of this writ petition are taken into consideration by this Court.

The Hon'ble Apex Court has time and again reiterated that whenever there is an alternative and effective remedy available, filing of writ petitions under Article 226 of the Constitution of India, by-passing the provisions of the statutory law, more particularly, in SARFAESI proceedings, should not be entertained.

The Hon'ble Supreme Court in UNITED BANK OF INDIA versus SATYAWATI TONDON AND OTHERS reported in [2010].8 SCC110has held as follows:- ".....45.It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but there can be no 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 that the particular legislation contains a detailed mechanism for redressal of his grievance........55.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 adveRs.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.".

In view of the above settled principle laid down by the Apex Court, we are of the considered view that this petition is too premature and the petitioner/Bank can very well raise all the grounds, raised before this Court, before the Appellate Authority/DRAT by filing appropriate appeal as provided under the Act.

6.However, an appeal u/s.18 of the SARFAESI Act, 2002, as against the order of the DRT should be filed within a period of thirty days from the date of receipt of the order copy of the DRT and in the instant case, the order of the DRT in SA.No.165/2008 came to be passed on 26.12.2012 and certainly the period of limitation would have expired already.

The Hon'ble FiRs.Bench at the Madurai Bench of this Court in WP.

[MD].No.3167/2010 etc., batch, [B.SARAVANAN versus THE AUTHORISED OFFICER, SYNDICATE BANK, 105-106, PONNURANGAM ROAD [WEST]., R.S.PURAM, COIMBATORE AND ANOTHER].dated 21.11.2013 has held in paragraph 7 as follows:- ".......7.In view of the above, the aggrieved parties are permitted to move the appropriate Forum provided under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, within a period of eight weeks from today, failing which, it would be open to the respondent Banks concerned to proceed further, as per the relevant provisions of law, including the provisions contained in Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

If the aggrieved parties approach the appropriate forum in time, as specified in this order, the appropriate forum shall entertain such matteRs.on merits and in accordance with law and dispose of the same, without raising the issue of delay, in the filing of the matters.......".

In view of the above said order of the Hon'ble FiRs.Bench of this Court, the petitioner/Bank is hereby directed to prefer an appeal u/s.18 of the SARFAESI Act before the Appellate Tribunal, viz., the DRAT, within a period of fifteen days from the date of receipt of a copy of this order, as we find that the matter has to be heard in detail by the DRAT as the order passed by the DRT directing the borrower/2nd respondent to deposit a sum of Rs.2 lakhs as against Rs.11,41,814.40p., is required to be adjudicated.

On such appeal being preferred, the DRAT shall take the same on file, hear the appeal on merits after affording due opportunity to the borrower/2nd respondent herein and pass appropriate orders on merits and in accordance with law as expeditiously as possible.

7.The writ petition is disposed of in the above terMs.No costs.

Consequently, connected miscellaneous petition is closed.

[S.R., J.,].[S.V.N., J.].26.06.2014 Index :Yes/No Internet :Yes/No AP To 1.The Authorised Officer Tamil Nadu Mercantile Bank Ltd., No.233-236, Palladam Road, [Kamarajar Road]., Tirupur 641 004.

2.The Registrar Debt Recovery Tribunal Coimbatore.

S.RAJESWARAN, J., AND S.VAIDYANATHAN, J., AP WP.No.13104/2014 26.06.2014