2015 (9) TMI 82 - HC - Indian Laws

Court dismisses petition challenging DRT order, highlights importance of statutory remedies

KANCO ENTERPRISES LIMITED Versus AUTHORISED OFFICER OF STATE BANK OF INDIA & 1

KANCO ENTERPRISES LIMITED Versus AUTHORISED OFFICER OF STATE BANK OF INDIA & 1 - TMI Issues Involved:1. Maintainability of the petition under Article 226 of the Constitution of India.2. Alleged violation of principles of natural justice by the Debt Recovery Tribunal (DRT).3. Availability and efficacy of alternative remedies under Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).Issue-Wise Detailed Analysis:1. Maintainability of the Petition under Article 226:The petitioner filed a writ petition under Article 226 of the Constitution of India challenging the interim order passed by the DRT, Ahmedabad. The respondent bank raised a preliminary objection regarding the maintainability of the petition, arguing that the petitioner had an efficacious alternative remedy under Section 18 of the SARFAESI Act. The court emphasized that while the power under Article 226 is plenary and not limited by other Acts, it should be exercised with restraint, especially when an alternative statutory remedy is available. The court cited several judgments, including Punjab National Bank v. O.C. Krishnan and United Bank of India v. Satyawati Tondon, which underscore the principle that the High Court should refrain from exercising its jurisdiction under Article 226 when an effective alternative remedy is available.2. Alleged Violation of Principles of Natural Justice by the DRT:The petitioner contended that the DRT's order violated principles of natural justice as it did not consider all contentions raised by the petitioner and lacked detailed reasoning. The court examined whether the DRT provided adequate reasons for its decision. It referred to several judgments, including Siemens Engineering & Manufacturing Co. of India Ltd. v. Union of India and S.N. Mukherjee v. Union of India, which establish that quasi-judicial orders must be supported by reasons to ensure transparency and fairness. The court found that the DRT had indeed provided reasons, albeit briefly, and had not merely dismissed the application without consideration. Therefore, it concluded that there was no breach of natural justice.3. Availability and Efficacy of Alternative Remedies under Section 18 of the SARFAESI Act:The court noted that the SARFAESI Act provides a comprehensive mechanism for addressing grievances, including the right to appeal under Section 18. It emphasized that the petitioner should have availed this statutory remedy instead of directly approaching the High Court. The court reiterated the principle that the existence of an alternative remedy is a significant factor in deciding whether to exercise jurisdiction under Article 226. The court cited the judgment in Kanaiyalal Lalchand Sachdev v. State of Maharashtra, which held that the High Court should not entertain a writ petition when an efficacious alternative remedy is available.Conclusion:The court dismissed the petition, holding that the petitioner should have availed the alternative remedy of filing an appeal under Section 18 of the SARFAESI Act. The court found that the DRT had provided adequate reasons for its decision and that there was no violation of principles of natural justice. The court emphasized the need for judicial prudence in exercising jurisdiction under Article 226 when an effective statutory remedy is available. The petitioner was directed to approach the appellate authority, and the court requested the appellate authority to consider any delay sympathetically.