Statutory remedy under the Securitisation Act limits writ relief at notice stage and against enforcement measures.

The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was generally upheld, with section 17(2) treated as invalid in light of the Supreme Court ruling on the 75% pre-deposit requirement. A writ challenge to a section 13(2) notice was held premature because the notice is only a show-cause step and the borrower must first pursue statutory objections before the secured creditor. For post-11-11-2004 action, permission of the Debts Recovery Tribunal was required where a bank application was already pending. The prescribed fee under section 17 was not found arbitrary, and measures under section 13(4) were held to be subject to the statutory remedy before the Tribunal rather than direct writ interference.

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Issues: (i) Whether the constitutional validity of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, including section 17(2), could still be challenged; (ii) whether a writ petition challenging a notice under section 13(2) was maintainable before the borrower's objections were considered by the secured creditor; (iii) whether, where an application by the bank was already pending before the Debts Recovery Tribunal, permission of that Tribunal was required before issuing a notice under section 13(2) after 11-11-2004; (iv) whether the fee prescribed for an application under section 17 was arbitrary or illegal; and (v) whether action taken under section 13(4) could be challenged in writ jurisdiction despite the statutory remedy under section 17.

Issue (i): Whether the constitutional validity of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, including section 17(2), could still be challenged;

Analysis: The validity of the Act had already been upheld by the Supreme Court, except that section 17(2), which imposed a pre-deposit of 75 per cent of the demand as a condition for entertainment of an appeal, had been struck down as unreasonable and violative of Article 14. The remaining provisions of the Act had been sustained, and the High Court could not re-open the general constitutional challenge.

Conclusion: The constitutional challenge was rejected, save that section 17(2) stood excluded in view of the Supreme Court's ruling.

Issue (ii): Whether a writ petition challenging a notice under section 13(2) was maintainable before the borrower's objections were considered by the secured creditor;

Analysis: A notice under section 13(2) is only a statutory show-cause notice and does not itself affect rights or liabilities. The borrower may raise all objections in reply, and the secured creditor must consider them and communicate reasons if they are rejected. Since the statute provides for this internal consideration before coercive measures are taken, direct writ interference at the notice stage is premature.

Conclusion: The challenge to the section 13(2) notice was not maintainable and was rejected as premature, the borrower being relegated to the statutory reply process.

Issue (iii): Whether, where an application by the bank was already pending before the Debts Recovery Tribunal, permission of that Tribunal was required before issuing a notice under section 13(2) after 11-11-2004;

Analysis: The proviso to section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 was construed to mean that if a section 13(2) notice is sought to be issued after 11-11-2004, and an application is pending before the Tribunal, permission to withdraw that application is necessary before proceeding under the Securitisation Act. A contrary interpretation would render the proviso meaningless. If the notice had been issued before that date, such permission was not required.

Conclusion: For post-11-11-2004 section 13(2) action, Tribunal permission was held necessary before action under the Securitisation Act could proceed.

Issue (iv): Whether the fee prescribed for an application under section 17 was arbitrary or illegal;

Analysis: Section 17 itself contemplates a fee, and the prescribed fee was linked by reference to the procedure under the Debts Recovery Tribunal rules. The use of the expression "mutatis mutandis" answered the contention that the provision was unworkable. Ad valorem fee was not unknown to Indian legal procedure, and the amount prescribed was not shown to be oppressive or unconstitutional.

Conclusion: The challenge to the fee under section 17 was rejected.

Issue (v): Whether action taken under section 13(4) could be challenged in writ jurisdiction despite the statutory remedy under section 17;

Analysis: Once measures under section 13(4) are taken, the Act provides a direct statutory remedy before the Debts Recovery Tribunal under section 17. The existence of that alternative remedy ordinarily bars writ interference. In the same vein, other statutory objections, including those founded on section 22 of the Sick Industrial Companies Act, 1985, could be raised before the creditor in reply or before the Tribunal, not directly in writ proceedings.

Conclusion: The challenge to section 13(4) action was rejected on the ground of alternative remedy.

Final Conclusion: The statutory framework was upheld as a whole, the writ challenges were held to be premature or barred by alternative remedies wherever applicable, and the borrowers were directed to work out their remedies under the Act and before the Debts Recovery Tribunal.

Ratio Decidendi: Where the Securitisation Act provides a specific statutory mechanism for objections and an efficacious remedy before the Debts Recovery Tribunal, writ jurisdiction should not be invoked at the notice stage or against measures taken under the Act, except within the narrow limits recognised by law.

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