Statutory remedy and DRT jurisdiction control security enforcement challenges, while sick-company references abate after creditor threshold action.

A writ petition challenging measures under the security enforcement law was held not maintainable because the statute provides an efficacious remedy before the Debts Recovery Tribunal, and the High Court should ordinarily not interfere at the stage of a demand notice. The Tribunal's jurisdiction was treated as wide enough to examine objections to the validity of debt assignment and compliance with the secured-creditor threshold under the Act and Rules. A pending sick-company reference was also held to abate once secured creditors representing at least three-fourths in value took enforcement measures, and the appeal therefore failed.

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Issues: (i) whether a writ petition challenging action under the security enforcement law was maintainable in view of the statutory remedy before the Debts Recovery Tribunal; (ii) whether objections regarding the validity of assignment of debt and compliance with the creditor threshold under the security enforcement law could be examined by the Debts Recovery Tribunal; and (iii) whether the pending sick-company reference survived in view of the subsequent measures taken by secured creditors.

Issue (i): whether a writ petition challenging action under the security enforcement law was maintainable in view of the statutory remedy before the Debts Recovery Tribunal.

Analysis: The remedy under the security enforcement law provides a complete mechanism against measures taken by the secured creditor. Where the statutory appellate remedy is available, the High Court ought not to entertain a writ petition merely against the initial demand notice. The later taking of possession under enforcement measures further reinforced the availability and efficacy of the statutory remedy.

Conclusion: The writ petition was not maintainable, and the appellant was required to pursue the statutory remedy.

Issue (ii): whether objections regarding the validity of assignment of debt and compliance with the creditor threshold under the security enforcement law could be examined by the Debts Recovery Tribunal.

Analysis: The appellate forum under the security enforcement law is empowered to examine whether the measures taken by the secured creditor are in accordance with the Act and the Rules. That jurisdiction is wide enough to examine objections relating to the creditor threshold and the legality of the assignment relied upon by the secured creditor.

Conclusion: Those objections could be examined by the Debts Recovery Tribunal.

Issue (iii): whether the pending sick-company reference survived in view of the subsequent measures taken by secured creditors.

Analysis: The statutory scheme governing sick-company references provides that a pending reference abates once secured creditors representing not less than three-fourths in value take measures under the security enforcement law. On the facts, the secured creditor action and the value threshold indicated that the statutory condition for abatement was attracted.

Conclusion: The sick-company reference stood abated.

Final Conclusion: The appeal failed in the light of the statutory remedy, the breadth of the tribunal's jurisdiction, and the abatement consequence flowing from the secured creditors' enforcement action.

Ratio Decidendi: Where an efficacious statutory remedy exists under the security enforcement law, the writ court should ordinarily decline interference, and the Debts Recovery Tribunal can examine the legality of the secured creditor's measures including threshold compliance and related objections; a pending sick-company reference abates once the statutory secured-creditor threshold acts under the enforcement law.

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