Secured creditor remedies during BIFR proceedings are preserved where statutory alternatives exist and writ relief is unwarranted.

A secured creditor could invoke measures under the securitisation law during pending BIFR proceedings, because the proviso to the sick industrial companies framework permitted action under section 13(4) and the creditor's appointment as operating agency did not extinguish that right. The Court also found no mala fides on that basis alone. The writ petition was not maintainable because effective statutory remedies were available under both enactments, and writ jurisdiction could not be used to bypass them absent a jurisdictional defect or other compelling reason. The dismissal of the writ petition was therefore upheld, along with the declaration that the BIFR proceedings had abated.

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Issues: (i) Whether a secured creditor could invoke measures under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 during pendency of proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985, notwithstanding appointment of that creditor as operating agency; (ii) Whether the writ petition was maintainable in view of the statutory remedies under the two enactments.

Issue (i): Whether a secured creditor could invoke measures under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 during pendency of proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985, notwithstanding appointment of that creditor as operating agency.

Analysis: The proviso introduced in section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 permits a secured creditor to proceed under section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 during the continuance of BIFR proceedings. The mere fact that one of the secured creditors had been appointed as operating agency did not extinguish the creditor's right to invoke the securitisation remedy. The Court also noted the overriding effect of the securitisation enactment and held that the action could not be branded mala fide on that ground alone.

Conclusion: The invocation of measures under section 13(4) was held to be permissible and not mala fide.

Issue (ii): Whether the writ petition was maintainable in view of the statutory remedies under the two enactments.

Analysis: The Court found that the appellants had adequate alternative remedies: an appeal against the BIFR order under section 25 of the Sick Industrial Companies (Special Provisions) Act, 1985 and recourse to the Debt Recovery Tribunal under section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. In the absence of any want of jurisdiction or other compelling reason, the writ jurisdiction was not to be invoked to bypass those remedies.

Conclusion: The writ petition was held to be not maintainable.

Final Conclusion: The appeal failed, and the dismissal of the writ petition was upheld, with no interference with the order declaring the BIFR proceedings abated.

Ratio Decidendi: Where a secured creditor is expressly permitted by the statutory scheme to proceed under the securitisation law during BIFR proceedings, and effective alternative statutory remedies exist, writ intervention is unwarranted absent demonstrable jurisdictional defect or legal prohibition.

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