TaxTMI 
TaxTMI 
2016 (4) TMI 964
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....nt views of the two Division Benches in W.A.No.6368/2011 decided on 21.11.2011, since reported in 2013 (1) AKR 370, (for short 'Hotel Vandana Palace case') and W.A.No.635/2013 decided on 18.03.2013, since reported in 2014 (1) AKR 40 (for short 'Smt. Lily Joseph case'). The conflict in the aforementioned two judgments centers round the availability of writ remedy against the order passed by the Tribunal. 3. The petitioners had filed S.A.No.688/2012 before the Tribunal, under S.17 of the Act, to set aside the sale notice dated 25.09.2012 issued in respect of secured asset mentioned in the petition, on the premise that the same is arbitrary and illegal. On 14.06.2013, the said appeal having been dismissed, this writ petition was filed to quash the aforesaid order and for issue of a writ of mandamus directing the respondent - Bank, to consider 'One Time Settlement' proposal of the petitioners, and for grant of the consequential reliefs. 4. As this Bench is only required to answer the aforesaid question and lay down the principle of law, it is unnecessary to state the facts of the case in detail. 5. The petitioners borrowed loan from the respondent No.1 (for s....
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....be read subject to the said statutory provision. He submitted that the learned Single Judge is bound by the judgment passed in the case of Hotel Vandana Palace and the judgment rendered in the case of Smt. Lily Joseph, having not noticed the judgment rendered in the case of Hotel Vandana Palace, the judgment rendered in the case of Smt. Lily Joseph, being per incuriam, an uncalled for reference was made. 8. Sri R. Ashok Kumar, learned advocate, on the other hand, contended that the Hon'ble Chief Justice has the absolute prerogative of constituting the Benches and allocation of the work to the learned Judges. He submitted that the powers of the Chief Justice to constitute Benches and allocate the work to the learned Judges is traceable under Articles 225 and 226 of the Constitution and, therefore, any provision in any statute concerning the High Court administration must yield to the powers of the Hon'ble Chief Justice, which flows from Constitution itself and, therefore, S.9(xii)(a) of the KHC Act, 1961 should yield to the prerogative of the Chief Justice. 9. In view of the rival contentions and there being no dispute that the reference to this Bench is not by the learned....
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....e Chief Justice. The Chief Justice of a Court may as a rule, out of deference to the views expressed by his colleague, refer the case; that does not mean, however, that the source of the authority is in the order of reference......" (emphasis supplied) 12. In Central Board Of Dawoodi Bohra Community v. State of Maharashtra [2005] 2 SCC 673, Apex Court having examined the law laid down by the Constitution Benches on the said question, has summed up the legal position and the relevant portion reads as follows: "12(3)........ (i) the abovesaid rules do not bind the discretion of the Chief Justice in whom vests the power of framing the roster and who can direct any particular matter to be placed for hearing before any particular Bench of any strength." (emphasis supplied) 13. In Narasimha Setty v. Padma Setty ILR 1998 Karn. 3230, with regard to the competency of a Single Judge to refer a case to a Full Bench is concerned, after having noticed the provisions contained in the Karnataka High Court Act, 1961 and the scope and ambit of the powers of the Chief Justice with regard to the posting of the cases before different Benches of the High Court and the decision of Apex Court, re....
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....thoritative pronouncements, noticed supra, and the position of law having been well settled, we are of the opinion that the course adopted by the learned Single Judge, directing the Registry to place the matter before the Hon'ble Chief Justice, to pass an order for constitution of an appropriate Bench to conclusively address the issue raised, cannot be said to be incorrect. Learned Single Judge has acted on healthy principles of judicial decorum and propriety and the order passed by the Hon'ble Chief Justice is in accordance with the settled principles of law laid down by the Apex Court and the Full Benches of this Court. Hence, the preliminary objection raised by Sri. R.L. Patil, being devoid of merit, we hold that the reference made is competent and constitution of the Special Bench on account of the facts and circumstances stated in para 2 supra, is justified. 17. Undisputedly, the respondent No.1-Bank advanced loan to the petitioners and the loan was secured by way of equitable mortgage executed in respect of the property bearing No.256, III Main, Banashankari III Stage, II Phase, VI Block, Bangalore-85. Original title deeds of the property was deposited with the Bank ....
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....ecurity. Default in the matter of repayment having been committed, the loan account of the respondent was declared as 'non performing asset'. O.A. was filed before the DRT. During the pendency of the O.A., the Bank issued a notice under S.13(2) of the SARFAESI Act and the same was followed by a notice under S.13(4). The Tribunal passed decree in favour of the Bank. The respondent challenged the proceedings initiated under the Act by filing a writ petition and during its pendency, approached the Bank for 'one time settlement'. The Bank agreed for settlement but the respondent failed to abide by the conditions of the settlement. Consequently, Bank issued notice for possession of the secured assets which was challenged by filing another writ petition, which was disposed of directing the loanee to pay the amount in instalments for liquidating the dues of the Bank. The Bank having assailed the said order, the Apex Court while allowing the appeal and setting aside the impugned order, has held as follows: " 7. .... there was no justification for the High Court to entertain the writ petition and that too by ignoring the fact that a statutory alternative remedy was availab....
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.... to the matters specified in Section 17....." 23. The SARFAESI Act was enacted to regulate securitisation and reconstruction of financial assets and enforcement of security interest and for matters connected therewith or incidental thereto. Inter alia, one of the main objects of the SARFAESI Act is to clothe the Banks and financial institutions with power to take possession of securities and sell them. The significant provisions of the SARFAESI Act have been noted by the Apex Court, in the case of MARDIA CHEMICALS LTD. Vs. UNION OF INDIA, (2004) 4 SCC 31, wherein, the vires of the Act was examined and upheld. After referring to the statement of objects and reasons and while upholding the constitutional validity, it has been held as follows: "81. In view of the discussion held in the judgment and the findings and directions contained in the preceding paragraphs, we hold that the borrowers would get a reasonably fair deal and opportunity to get the matter adjudicated upon before the Debt Recovery Tribunal. The effect of some of the provisions may be a bit harsh for some of the borrowers but on that ground the impugned provisions of the Act cannot be said to be unconstitutional in ....
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....secured creditor for enforcement of security interest are in accordance with the provisions of the Act and the Rules made thereunder. If the Tribunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that the measures taken by the secured creditor are not in consonance with sub-section (4) of Section 13, then it can direct the secured creditor to restore management of the business or possession of the secured assets to the borrower. On the other hand, if the Tribunal finds that the recourse taken by the secured creditor under sub-section (4) of Section 13 is in accordance with the provisions of the Act and the Rules made thereunder, then, notwithstanding anything contained in any other law for the time being in force, the secured creditor can take recourse to one or more of the measures specified in Section 13(4) for recovery of its secured debt. 24. Sub-section (5) of Section 17 prescribes the time-limit of sixty days within which an application made under Section 17 is required to be disposed of. The proviso to this sub-section envisages extension of time, but the outer limit for adjudication of an application....
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....on. 29. In L. CHANDRA KUMAR Vs. UNION OF INDIA, (1997) 3 SCC 261,, Apex Court, while dealing with the essential and basic feature of the constitution - power of review under Articles 226 and 227 by the High Courts and of the Supreme Court under Article 32, has held as follows: 75. In Keshav Singh, Re (1965) 1 SCR 413, while addressing this issue, Gajendragadhkar, CJ stated as follows: (SCC at pp. 493-494) "If the power of the High Courts under Article 226 and the authority of this Court under Article 32 are not subject to any exceptions, then it would be futile to contend that a citizen cannot move the High Courts or this Court to invoke their jurisdiction even in cases where his fundamental rights have been violated. The existence of judicial power in that behalf must necessarily and inevitably postulate the existence of a right in the citizen to move the Court in that behalf; otherwise the power conferred on the High Courts and this Court would be rendered virtually meaningless. Let it not be forgotten that the judicial power conferred on the High Courts and this Court is meant for the protection of the citizens' fundamental rights, and so, in the existence of the said j....
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.... on the ground of existence of an alternative remedy, under S.17 of the SARFAESI Act, Apex Court has held as follows: "23. In our opinion, therefore, the High Court rightly dismissed the petition on the ground that an efficacious remedy was available to the appellants under Section 17 of the Act. It is well settled that ordinarily relief under Articles 226/227 of the Constitution of India is not available if an efficacious alternative remedy is available to any aggrieved person. (See Sadhana Lodh v. National Insurance Co. Ltd., Surya Dev Rai v. Ram Chander Rai and SBI v. Allied Chemical Laboratories.) 24. In City and Industrial Development Corpn. v. Dosu Aardeshir Bhiwandiwala this Court had observed that: "30. The Court while exercising its jurisdiction under Article 226 is duty- bound to consider whether: (a) adjudication of the writ petition involves any complex and disputed questions of facts and whether they can be satisfactorily resolved; (b) the petition reveals all material facts; (c) the petitioner has any alternative or effective remedy for the resolution of the dispute; (d) the person invoking the jurisdiction is guilty of unexplained delay and laches; (e....
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....or consideration on merits by the competent authority? Again, it is somewhat difficult to state with absolute clarity any principle governing such exercise of jurisdiction. It always will depend upon the facts of a given case. We are of the considered view that interest of administration of justice shall be better subserved if the cases of the present kind are heard by the courts only where they involve primary questions of jurisdiction or the matters which go to the very root of jurisdiction and where the authorities have acted beyond the provisions of the Act. However, it should only be for the specialised tribunal or the appellate authorities to examine the merits of assessment or even the factual matrix of the case." (emphasis supplied) 35. In Cicily Kallarackal Vs. Vehicle Factory, (2012) 8 SCC 524, Apex Court has issued a direction of caution, that it will not be a proper exercise of the jurisdiction by the High Court to entertain a writ petition against such orders against which statutory appeal lies. The relevant portion of the Judgment reads as follows: "4. Despite this, we cannot help but state in absolute terms that it is not appropriate for the High Courts to entert....
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....ctness or otherwise of the orders passed by the Tribunal. The Excise Law is a complete code in order to seek redress in excise matters and hence may not be appropriate for the writ court to entertain a petition under Article 226 of the Constitution. Therefore, the learned Single Judge was justified in observing that since the assessee has a remedy in the form of a right of appeal under the statute, that remedy must be exhausted first. The order passed by the learned Single Judge, in our opinion, ought not to have been interfered with by the Division Bench of the High Court in the appeal filed by the respondent assessee." (emphasis supplied) 38. Sri R.L.Patil, contended that the view expressed in Hotel Vandana Palace case (supra) with regard to the maintainability of writ petition i.e., without filing the appeal before the DRAT, under S.18 of the Act being the correct position of law, the decision in the case of Smt.Lily Joseph (supra), expressing a contrary view is unsound and is liable to be declared as per incuriam. 39. Sri R. Ashok Kumar, on the other hand supported the conclusion arrived at in Smt.Lily Joseph case and contended that the finding recorded on point (ii), in the....
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....e Rules before selling the property". (iv) In the special circumstances of the case i.e., the property worth several crores was sold in public auction, without following the procedure, and in such a case, the person who has lost the property in a sale conducted by the Bank for non payment of more than 5 crores of rupees, it is difficult for a person like appellant to approach the Tribunal to file an appeal by depositing 50% or 25% of the amount due. In the peculiar facts and circumstances of the case, with the aforesaid reasoning, the writ petition was held as maintainable. 42. In Smt. Lily Joseph case (supra), the challenge in the writ petition was to an order passed by the Tribunal under S.17 of the SARFAESI Act. The writ petition was dismissed by the learned Single Judge on the ground of availability of alternative remedy of appeal to the DRAT. By referring to the decision of the Apex Court in Kanaiyalal Lalchand Sachdev (supra), the Division Bench has dismissed the writ appeal, by stating that the law is well settled on the issue. It is to be pointed out that without raising a point for consideration and assigning reasons, the conclusion has been arrived at. There is no exp....
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....owing the appeal and setting aside the impugned orders and by taking note of the law laid down in SATYAWATI TONDON'S case, it was held as follows: "23. There is one more aspect in the matter which has troubled us. Against the action of the Bank under Section 13(4) of the SARFAESI Act, the borrower had a remedy of appeal to the Debts Recovery Tribunal (DRT) under Section 17. The remedy provided under Section 17 is an efficacious remedy. The borrower did not avail of that remedy and further remedies from that order and instead directly approached the High Court in extraordinary jurisdiction under Article 226 of the Constitution of India. *** *** *** 27. No doubt an alternative remedy is not an absolute bar to the exercise of extraordinary jurisdiction under Article 226 but by now it is well settled that where a statute provides efficacious and adequate remedy, the High Court will do well in not entertaining a petition under Article 226. On misplaced considerations, statutory procedures cannot be allowed to be circumvented." (emphasis supplied) 47. In NARAYAN CHANDRA GHOSH VS. UCO BANK AND OTHERS, (2011) 4 SCC 548, the material facts were, that the appellant/borrower, filed....
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....e requirement of pre-deposit under sub-section (1) of Section 18 of the Act is mandatory and there is no reason whatsoever for not giving full effect to the provisions contained in Section 18 of the Act. In that view of the matter, no court, much less the Appellate Tribunal, a creature of the Act itself, can refuse to give full effect to the provisions of the Statute. We have no hesitation in holding that deposit under the second proviso to Section 18(1) of the Act being a condition precedent for preferring an appeal under the said section, the Appellate Tribunal had erred in law in entertaining the appeal without directing the appellant to comply with the said mandatory requirement." (emphasis supplied) 48. In the case of Parsn Medicinal Plants Private Limited And Another Vs. Indian Bank And Others, (2011) 15 SCC 253, the material facts were, the finding of the Debts Recovery Appellate Tribunal that the appellants / guarantors need not make any deposit to maintain the appeal was assailed by the Bank and also by the auction-purchaser by filing writ petitions and by contending that the amount paid / deposited by the auction-purchaser cannot be adjusted towards the deposit to be ma....
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....e should have effect. The legislature is deemed not to waste its words or to say anything in vain. By an interpretative process, the Court cannot reach a conclusion which makes it impossible for remedies provided for under the law to be worked out. The purposive interpretation requires that any interpretation which is unjust or absurd must be eschewed and the Court must adopt principles of reasonable and harmonious construction in consonance with the avowed statutory purpose. Hence, impugned order passed by the first respondent Appellate Tribunal is absolutely bereft of any power granted to it and therefore, the same needs to be set aside." (emphasis supplied) 49. In T.P.VISHNU KUMAR Vs. CANARA BANK, P.N. ROAD, TIRUPPUR AND OTHERS, (2013) 10 SCC 652, the material facts were that the Bank filed O.A. before the DRT to pass a decree directing the defendants, to pay the quantified sum along with interest. I.As. were filed to produce the extract of the accounts and the documents relating to the loan transactions. The applications having been contested were rejected by the Tribunal, against which, the writ petitions were filed and the same was opposed on the ground of availability of a....
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.... on all Courts within the territory of India. Therefore, the ratio decidendi declared in Satyawati Tondon's case was binding and ought to have been applied, when Hotel Vandana Palace case was decided. 52. The finding recorded on point No.(ii) in the case of Hotel Vandana Palace (supra),having been rendered, as is evident from para 23 of the judgment itself, on the special facts and circumstances of the said case, cannot be a binding precedent. In the case of Smt.Lily Joseph (supra),, the Division Bench has not assigned reasons, while holding the writ petition as not maintainable, except making reference to the decision in the case of KANAIYALAL LALCHAND SACHDEV,. 52.1. Sri R.L. Patil, submitted that the Judgment rendered in Hotel Vandana Palace case (supra) was questioned before the Apex Court and the appeal was dismissed, in the case of VASU P. SHETTY Vs. HOTEL VANDANA PALACE, (2014) 5 SCC 660 and hence the doctrine of merger applies. He further submitted that the decision in Hotel Vandana Palace case (supra), thus, having attained finality is a binding precedent. 52.2. Sri R. Ashok Kumar, on the other hand, submitted that, the mere fact that appeal preferred against the de....
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.... should at the threshold, examine, whether the petition can be entertained having regard to the pleading in the petition, more particularly, the reason(s) stated for bypassing of the alternative remedy. In a catena of decisions, it has been held by the Apex Court, that writ petition under Article 226 of the Constitution should not be entertained when the alternate remedy is available under the Act, unless exceptional circumstances are made out. The writ remedy cannot be permitted to be availed as a routine / matter of course, but only in exceptional circumstances. The Apex Court has recognized some exceptions to the rule of alternative remedy i.e., where the statutory body has not acted in accordance with the provisions of the enactment in question or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of principles of natural justice, or when the vires of the statute is under challenge. 54. Unless the Court is convinced that the case falls under the exceptional categories, the writ petition filed against the order of the Tribunal, passed in exercise of the....