TaxTMI 
TaxTMI 
2020 (7) TMI 741
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....uction of Financial Assets and Enforcement of Security Interest Act, 2002 (the SARFAESI Act). Eventually, he came to know about the proceedings under the SARFAESI Act only upon receipt of communication dated 12.12.2010 from the 4th Respondent Bank stating that the property had been sold to the 5th Respondent herein by taking action under Section 13(4) of the SARFAESI Act. The said sale was challenged by filing SA.SR.No.558 of 2010 before the Debts Recovery Tribunal, Madurai (the DRT Madurai), which was dismissed for default. Subsequently, a restoration petition in I.A. Nos.1209 to 1212 of 2015 were filed, which were dismissed for non prosecution on 05.05.2015. 2. Meanwhile, proceedings had been initiated by the Indian Bank under Section 14 of the SARFAESI Act to obtain vacant possession of the property from the Petitioner and orders were passed in the said Section 14 proceeding by the District Magistrate and District Collector, Namakkal, on 27.04.2011. The said order dated 27.04.2011 was challenged by filing W.P. No.25758 of 2012, which was disposed of by order dated 03.04.2018 by a Division Bench of this Court granting liberty to the Petitioner herein to challenge the order dat....
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.... from the date of receipt of the order to make the pre-deposit of Rs. 1.51 lakhs. After making the pre-deposit, the present writ petition challenging the constitutional validity of the Section 18(1) of the SARFAESI Act and the second proviso thereto has been filed in these facts and circumstances. 4. We heard Mr.N.Subramaniyan, the learned counsel for the Petitioner. Mr.Subramaniyan contended that the Petitioner is only a guarantor and not a borrower. He further contended that the Petitioner did not receive the notice under Section 13(2) of the SARFAESI Act and that, therefore, the measures taken under Section 13(4) thereof are illegal. In particular, the resort to Section 14 of the SARFAESI Act in order to obtain physical possession of the property from the Petitioner is invalid. SA.SR.No.8187 of 2018 was filed in order to challenge the order dated 27.04.2011 of the District Magistrate and District Collector, Namakkal. The said SA.SR.No.8187 of 2018 was filed pursuant to the liberty granted by this Court under order dated 03.04.2018 in W.P. No.25758 of 2012. However, the Petitioner had exceeded the limitation period of 45 days and therefore was constrained to file I.A. No.2712 ....
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....to make the pre-deposit. The present writ petition is filed in these facts and circumstances. On each of the two previous occasions, the fact situation was that the Petitioner had been directed to make the pre-deposit as a condition precedent to maintain the appeal. The fact situation prevailing, at this juncture, remains unchanged except to the limited extent that the Petitioner has remitted the pre-deposit. Thus, in the two earlier writ petitions, the Petitioner could have challenged the constitutional validity of Section 18(1) of the SARFAESI Act and the second proviso thereto but chose not to do so. In sum, the Petitioner is contending for the third time that the DRAT order is an order in a Section 5 application and not in an application under Section 17 of the SARFAESI Act. The only difference in the present case is that the Petitioner also challenges the constitutional validity of Section 18(1) of the SARFAESI Act and the second proviso thereto albeit on grounds raised on two earlier occasions. 6. In K.K.MODI Vs. K.N.MODI AND OTHERS (1998) 3 SCC 573, the Hon'ble Supreme Court dealt with re-litigation as an example of abuse of process and held as under: "44. On....
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.... (a) full disclosure of facts is made in the affidavit and the relevant documents are enclosed; and (b) a constitutional challenge is mounted in the third round. 9. We, therefore, proceed to deal with the constitutional challenge. In this case, the challenge is to the imposition of a pre-deposit in appellate proceedings before the DRAT. The provision under challenge, namely, Section 18(1) of the SARFAESI Act reads as under: "18.Appeal to Appellate Tribunal: (1) Any person aggrieved, by any order made by the Debts Recovery Tribunal under section 17, may prefer an appeal along with such fee, as may be prescribed to the Appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery Tribunal: Provided that different fees may be prescribed for filing an appeal by the borrower or by the person other than the borrower: Provided further that no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal fifty per cent of the amount of debt due from him, as claimed by the secured creditors or determined by the Debts Recovery Tribunal, whichever is less: Provided also that th....
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....d person who intends to challenge measures taken under Section 13(4) of the SARFAESI Act. In that context, the Hon'ble Supreme Court concluded that the imposition of the pre-deposit requirement of 75% of the debt was onerous and liable to be interfered with. Given the fact that the pre-deposit requirement, which is challenged herein, is contained in Section 18, which deals with the filing of an appeal, we find that it is distinguishable from Mardia Chemicals which dealt with pre-deposit before a court of first instance. This is evident from paragraphs 59 and 64 of Mardia Chemicals. The said paragraphs are as under: "59. We may like to observe that proceedings under Section 17 of the Act, in fact, are not appellate proceedings. It seems to be a misnomer. In fact it is the initial action which is brought before a forum as prescribed under the Act, raising grievance against the action or measures taken by one of the parties to the contract. It is the stage of initial proceeding like filing a suit in civil court. As a matter of fact proceedings under Section 17 of the Act are in lieu of a civil suit which remedy is ordinarily available but for the bar under Section 34 of t....