TaxTMI 
TaxTMI 
2016 (4) TMI 964
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....earned Single Judge, in view of the divergent 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 petition....
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....ute Benches and allocate the work should, therefore, 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 dispu....
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....titute a Full Bench for hearing the matter. Such a Bench is constituted by the 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....
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....ers. Discussing each of the decisions cited by the learned advocates will lead to making this order unavoidably prolix. 16. In view of the authoritative 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 bea....
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.... Panchanan Subudhi, (2010) 15 SCC 552, the appellant extended financial facility to the respondent upon deposit of the title deeds and the building as security. 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. ........
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....y of the amount determined by the Tribunal or the Appellate Tribunal but also bars the jurisdiction of all courts except the Supreme Court and the High Courts in relation 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....
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....urpose of bringing the SARFAESI Act and with regard to the role of Tribunal, has held as follows: "23. Sub-section (2) of Section 17 casts a duty on the Tribunal to consider whether the measures taken by the 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 t....
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....n there is a patent error or gross injustice in the view taken by the subordinate Court / Tribunal (See JASBIR SINGH Vs. STATE OF PUNJAB, (2006) 8 SCC 294) Judicial review under the said Articles is a basic feature of the Constitution. 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 thi....
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....) 32. In KANAIYALAL LALCHAND SACHDEV Vs. STATE OF MAHARASHTRA, (2011) 2 SCC 782, while considering the question of maintainability of the writ petition, when alternate remedy is available, while upholding the decision of the High Court, dismissing the writ petition filed 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....
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....r question that would inevitably come up for consideration before the Court even in such cases would be as to what extent the jurisdiction has to be exercised. 81. Should the courts determine on merits of the case or should they preferably answer the preliminary issue or jurisdictional issue arising in the facts of the case and remit the matter for 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....
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....Whirlpool Corpn. Vs. Registrar of Trade Marks, [1998] 8 SCC 1 and S.35-G of the Central Act, 1944 providing for appeal to the High Court from the order passed in an appeal by the Appellate Tribunal, while allowing the appeal, it has been held as follows: "15. In our opinion, the assessee ought not to have filed a writ petition before the High Court questioning the correctness 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 t....
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....llenging the sale notice had been dismissed. (ii) Without deposit of either 50% or 25%, as required under S.18 of the SARFAESI Act, an appeal cannot be filed. (iii) Decision of Apex Court rendered in KANAIYALAL LALCHAND SACHDEV has no application, on account of the fact that there is no disputed questions of fact and the question arising for decision is only "whether the Bank has followed the 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 S....
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....tificate issued in favour of the auction-purchaser. The learned Single Judge held that the mandatory requirement of Rule 9 was not followed and that therefore despite the remedy of appeal to the borrower, provided under S.17 of the SARFAESI Act, a case was made out under S.226 of the Constitution and the same was affirmed by the Division Bench. Feeling aggrieved, the Bank and the auction- purchaser approached the Apex Court. While allowing 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 extr....
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....iso is clear and admits of no ambiguity. 8. It is well-settled that when a Statute confers a right of appeal, while granting the right, the Legislature can impose conditions for the exercise of such right, so long as the conditions are not so onerous as to amount to unreasonable restrictions, rendering the right almost illusory. Bearing in mind the object of the Act, the conditions hedged in the said proviso cannot be said to be onerous. Thus, we hold that the 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 t....
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....han twenty-five per cent of the debt referred to in the second proviso. 18. While such is the legal mandate, in the impugned order, the first respondent Appellate Tribunal has granted complete waiver of the deposit amount to the appellants/guarantors, which has not been contemplated under law. In the interpretation of statutes, the courts always presume that the legislature inserted every part thereof for a purpose and the legislative intention is that every part of the statute 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 ....
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....ns to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection." (emphasis supplied) 51. Article 141 of the Constitution of India reads as follows: "141. Law declared by Supreme Court to be binding on all courts.- The law declared by Supreme Court shall be binding on all courts within the territory of India." Article 141 of the Constitution provides that the law declared by the Apex Court shall be binding 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 LAL....
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....ved the mandatory provisions of Rules 8 and 9 of the Rules. Hence, it cannot be said that the remaining part of the decision in the case of Hotel Vandana Palace (supra) as having merged in the order passed by the Apex Court in the case of Vasu P. Shetty case (supra). Thus, the view expressed by the Division Bench of this Court in Hotel Vandana Palace (supra), on point No.(ii), is open to reconsideration by a coram of more than two Judges. 53. When extraordinary writ remedy is invoked, despite the availability of an alternative remedy, the Court 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 rem....