2016 (5) TMI 384 - HC - Indian Laws

High Court dismisses petition challenging SARFAESI Act property possession order, directs appeal to Debt Recovery Tribunal.

JERAMBHAI SAVJIBHAI GOYANI AND 2 Versus DISTRICT MAGISTRATE - SURAT AND 1

JERAMBHAI SAVJIBHAI GOYANI AND 2 Versus DISTRICT MAGISTRATE - SURAT AND 1 - TMI Issues:Challenge against order for taking possession of property under SARFAESI Act, 2002.Analysis:The petition challenged an order for taking possession of a property issued by the Mamlatdar & Executive Magistrate, following an order by the District Magistrate under Section 14 of the SARFAESI Act, 2002. The petitioners had stood as guarantors for a loan taken by the borrower from a bank. The loan account turned into a Non Performing Asset due to defaults in repayment, leading the bank to initiate recovery proceedings. The bank had already taken symbolic possession of the mortgaged property and sought physical possession through the impugned order. The petitioners were directed to pay the dues within 14 days. The petitioners approached the High Court under Article 226 of the Constitution seeking to set aside the impugned order.The High Court noted that the bank's actions had reached a stage beyond Section 13(4) of the SARFAESI Act, providing the petitioners with an alternative statutory remedy through an appeal before the Debt Recovery Tribunal under Section 17 of the Act. Citing the Supreme Court's decision in United Bank of India vs. Satyawati Tondon and Others, the High Court emphasized the need for exhausting statutory remedies before seeking relief under Article 226 of the Constitution. The Court highlighted that legislations for recovery of public dues provide comprehensive procedures and quasi-judicial bodies for grievance redressal. Referring to Punjab National Bank and Another vs. Imperial Gift House and Others, the Court reiterated that the High Court should not entertain writ petitions when alternative remedies are available under the Act.In light of the legal principles and the availability of an alternative remedy under Section 17 of the Act, the High Court declined to entertain the petition under its writ jurisdiction. The petitioners were advised to approach the Tribunal for their appeal within the prescribed 45-day time limit. The Court clarified that the pendency of the present petition could be raised as a ground for explaining any delay in filing the appeal before the Tribunal. Without delving into the merits of the petitioners' case, the High Court dismissed the petition, emphasizing the need to exhaust statutory remedies before seeking relief through writ jurisdiction.