TaxTMI 
TaxTMI 
2019 (4) TMI 884
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....00/- for the house in question. 2. A few facts relevant for the decision of the controversy involved as narrated in the petition may be noticed. Petitioners No.1 and 2 were owners of residential house No. 315, Sector-9, Panchkula which was mortgaged as collateral security for availing loan from respondent No1- bank. The loan was availed by M/s Swami Automobiles Private Limited in which son of the petitioner No.2 and brother of petitioner No.1 is one of the Directors. M/s Swami Automobiles Private Limited defaulted in re-payment of the loan. Respondent No.1-bank in exercise of powers under the provisions of Securitization and Reconstruction of Financial Assets Enforcement of Securities Interest Act, 2002 ("SARFAESI Act") issued the notice under Section 13(2) and Section 13(4) of the said Act and also took symbolic possession. Thereafter, part physical possession of the house in question was also taken by respondent No.1-bank. Since, the borrower-M/s Swami Automobiles Private Limited who had entered into one time settlement with respondent No.1-bank and had failed to honour the terms thereto, the bank had put the properties to sale, including the only residential house i.e. House No....
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....ioned the validity of the auction proceedings. As the auction proceedings had taken place during the pendency of CWP No. 7559 of 2018 filed by M/s Swami Automobiles Private Limited, it was considered appropriate by petitioners No. 1 and 2 to seek refund of Rs. 2 crores and to hand over keys of the house in question in CWP No. 16811 of 2018 filed by the bank as no relief could have been sought by them in the said proceedings. According to petitioners, the action of respondent No.1-bank in accepting the solitary bid of Rs. 1,81,50,000/- as against reserve price of Rs. 1,81,00,000/- for the property capable of fetching much higher price is arbitrary and unfair. The petitioners assert that they have a buyer ready to put the secured asset for a sum of Rs. 2,05,00,000/- and the entire payment could be made as and when directed by this Court. Hence the instant writ petition by the petitioners. 3. A written statement has been filed on behalf of respondent No.1 - State Bank of India wherein it has been inter alia stated that one M/s Swami Automobiles Private Limited through its directors namely Sh.Pradeep Mittal and Smt.Monika Mittal had availed the loan facility from the respondent Bank t....
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....2 and 3. A replication to the written statement on behalf of respondents No.2 and 3 has been filed by the petitioners inter alia controverting the averments made in the written statement and reiterating the contents of the writ petition. 5. The SARFAESI Act was enacted to regulate securitization and reconstruction of financial assets and enforcement of security interest and to provide for a central database of security interests created on property rights and for matters connected therewith or incidental thereto. Section 17 of the SARFAESI Act has been amended w.e.f 1.9.2016, whereby the words "Application against measures to recover secured debts" are substituted in place of "Right to appeal". Sub-section (1) of Section 17 of the SARFAESI Act entitles a person to file an application within 45 days to the Tribunal against any of the measures referred to in Section 13(4) thereof. By the use of the expression "aggrieved by any of the measures", Section 17(1) makes it clear that the measures contemplated under Section 13(4) provide continuity to the cause of action. An Explanation has been added to Section 17(1) clarifying that the communication of reasons to the borrower in terms of....
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....ssession. Thereafter, part physical possession of the house was also taken by the Bank. Since M/s Automobiles Private Limited who entered into one time settlement with the Bank, failed to honour the terms thereof, the Bank put the properties to sale including the residential house in question in which the petitioners were residing. Thereafter, M/s Automobiles Pvt. Limited filed CWP No.7559 of 2018. During the pendency of the said writ petition, auction proceedings took place in which respondent Nos. 2 and 3 were the only bidder. Against the reserve price of Rs. 1,81,00,000/-, a bid of Rs. 1,81,50,000/- was received. Despite having only one bid, the respondent Bank confirmed the sale. The market value of the house in question was much higher than the reserve price. Respondent Nos. 2 and 3 paid only 50% of the said amount. Since the petitioners were residing in the said house and had no other place, respondent bank filed CWP No.16811 of 2018 before this court seeking directions to the Tehsildar, Panchkula to help respondent No.1 in getting possession of house. Upon notice, the petitioners appeared and offered to pay a sum of Rs. 2 crores which was paid in court. When CWP No.16811 of ....
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....rchaser is in filing the writ petition under Articles 226/227 of the Constitution of India to examine the legality of such action? Xxxxxxxxxxxxxxxxxxxxxx 33. In the light of foregoing discussion, we are of the considered opinion that the Writ Court as also the Appellate Court were justified in dismissing the appellant's writ petition on the ground of availability of alternative statutory remedy of filing an application under Section 17(1) of SARFAESI Act before the Tribunal concerned to challenge the action of the PNB in forfeiting the appellant's deposit under Rule 9(5). We find no ground to interfere with the impugned judgment of the High Court." 8. In K. Chidambara Manickam vs. Shakeena and others, AIR 2008 Madras 108, it was held by the Madras High Court that on the date of filing of the writ petitions, the entire proceedings under Section 13(4) of the Act had come to an end and become final by issuance of sale certificate under sub rule (7) of Rule 9 of the Security Interest (Enforcement) Rules, 2002 on 6.1.2006. The writ petitions had been prepared and signed by the parties only on 19.1.2006. In such circumstances, it was held that the proper course for the bo....
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....e Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc. the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, the High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute. 44. While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the f....
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....xtraordinary jurisdiction under Article 226. (See: State of U.P. vs. Mohammad Nooh, AIR 1958 SC 86; Titaghur Paper Mills Co. Ltd. vs. State of Orissa, (1983) 2 SCC 433; Harbanslal Sahnia vs. Indian Oil Corpn. Ltd., (2003) 2 SCC 107; State of H.P. vs. Gujarat Ambuja Cement Ltd., (2005) 6 SCC 499). 16. The Constitution Benches of this Court in K.S. Rashid and Sons vs. Income Tax Investigation Commission, AIR 1954 SC 207; Sangram Singh vs. Election Tribunal, Kotah, AIR 1955 SC 425; Union of India vs. T.R. Varma, AIR 1957 SC 882; State of U.P. vs. Mohd. Nooh, AIR 1958 SC 86 and K.S. Venkataraman and Co. (P) Ltd. vs. State of Madras, AIR 1966 SC 1089 have held that though Article 226 confers a very wide powers in the matter of issuing writs on the High Court, the remedy of writ absolutely discretionary in character. If the High Court is satisfied that the aggrieved party can have an adequate or suitable relief elsewhere, it can refuse to exercise its jurisdiction. The Court, in extraordinary circumstances, may exercise the power if it comes to the conclusion that there has been a breach of principles of natural justice or procedure required for decision has not been adopted. (See:....
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.... 495) '... There are three classes of cases in which a liability may be established founded upon a statute. ... But there is a third class viz. where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it. ... The remedy provided by the statute must be followed, and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to.' The rule laid down in this passage was approved by the House of Lords in Neville v. London Express Newspapers Ltd., 1919 AC 368 and has been reaffirmed by the Privy Council in Attorney General of Trinidad and Tobago v. Gordon Grant and Co. Ltd., 1935 AC 532 (PC) and Secy. of State v. Mask and Co., AIR 1940 PC 105 It has also been held to be equally applicable to enforcement of rights, and has been followed by this Court throughout. The High Court was therefore justified in dismissing the writ petitions in limine." 14. In Mafatlal Industries Ltd. v. Union of India, (1997) 5 SCC 536 B.P. Jeevan Reddy, J. (speaking for the majority of the larger Bench) observed: (SCC p. 607, para ....
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....and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation. 20. In the instant case, the Act provides complete machinery for the assessment/re-assessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by the Revenue Authorities, and the assessee could not be permitted to abandon that machinery and to invoke the jurisdiction of the High Court under Article 226 of the Constitution when he had adequate remedy open to him by an appeal to the Commissioner of Income Tax (Appeals). The remedy under the statute, however, must be effective and not a mere formality with no substantial relief. In Ram and Shyam Co. vs. State of Haryana, (1985) 3 SCC 267 this Court has noticed that if an appeal is from "Caesar to Caesa....
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....osition in J.Rajiv Subramaniyan and another vs. Pandiyas and others, (2014(5) SCC 651.In State of Punjab and others vs. Shreyans Industries Limited and others, (2016) 4 SCC 769, the issue before the Apex Court was with regard to extension of the period of limitation under Section 11(10) of the Punjab General Sales Tax Act, 1948 for the purposes of assessment of returns filed within the prescribed period. It was held that power to extend time is to be exercised before the normal period of assessment expires. It cannot be exercised after prescribed period has expired. In Rakesh Birani (dead) through legal representatives vs. Prem Narain Sehgal and another, (2018) 5 SCC 543, the issue was with regard to requirement specified under Rule 9(4) of the Security Interest (Enforcement) Rules, 2002 to deposit balance 75% purchase price within 15 days of confirmation. It was held that the day of confirmation is not the same as day of auction. The said period of 15 days would start from the day of confirmation of sale by secured creditor. In New India Assurance Company Limited vs. Hilli Multipurpose Cold Storage Private Limited, (2015) 16 SCC 20, it was held that District Forum can grant maximu....