2020 (12) TMI 362

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....petitioner at sufficient length of time. She argued that the 1 st respondent-secured creditor has filed a Corporate Insolvency Resolution proceedings before the National Company Law Tribunal (NCLT), Mumbai. In that matter, on 27.03.2019, the learned NCLT has passed an order of moratorium (Ext.P1) against properties of corporate debtor and that order is in operation till conclusion of the Corporate Insolvency Resolution process or till approval of the resolution plan or till liquidation of the corporate debtor. Learned counsel for the petitioner also urged that when proceedings are pending before the NCLT, the 1 st respondent was not justified in initiating parallel proceedings under the SARFAESI Act against the Managing Director of the corporate debtor in respect of properties which are covered in the insolvency proceedings. Learned counsel for the petitioner further urged that Section 60 of the Insolvency and Bankruptcy Code , 2016 bars entertainment of parallel insolvency proceedings in respect of same assets during pendency of proceedings before the NCLT. 3. As against this, learned counsel for the 1 st respondent, by relying on the judgment of the Hon'ble Apex Court in t....

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.... a bankruptcy proceeding of a personal guarantor of the corporate debtor pending in any Court or Tribunal, which shall stand transferred to the Adjudicating Authority dealing with the insolvency resolution process or liquidation proceedings of such corporate debtor. An "Adjudicating Authority", defined under Section 5(1) of the Code, means the National Company Law Tribunal constituted under the Companies Act, 2013". 6. It is thus clear that the argument advanced by the learned counsel for the petitioner that because of pendency of proceedings before the NCLT, parallel proceedings under the SARFAESI Act are not maintainable, needs to be rejected. Even otherwise Section 7 of the Insolvency and Bankruptcy Code has application against the corporate debtor. It cannot be said that there is bar for proceedings against the guarantor under the SARFAESI Act because of pendency of corporate insolvency resolution process against the corporate debtor. 7. The counter affidavit filed by the 1 st respondent shows that subject properties were leased out by the petitioner in favour of M/s.Hotel Mythri and as against sale notices, the said Hotel Mythri had already approached the Debts Recovery ....

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....e is a hierarchy of appeal provided in the Act, namely, filing of an appeal under Section 20 and this fast-track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision under an Act cannot expressly oust the jurisdiction of the court under Articles 226 and 227 of the Constitution, nevertheless, when there is an alternative remedy available, judicial prudence demands that the Court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have directed the respondent to take recourse to the appeal mechanism provided by the Act." 10. In Satyawati Tandon (supra), the High Court had restrained further proceedings under Section 13(4) of the Act. Upon a detailed consideration of the statutory scheme under the SARFAESI Act, the availability of remedy to the aggrieved under Section 17 before the Tribunal and the appellate remedy under Section 18 before the Appellate Tribunal, the object....

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.... 12. The same view was reiterated in Kanaiyalal Lalchand Sachdev and others vs. State of Maharashtra and others, 2011 (2) SCC 782 observing: "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.)" 13. In Ikbal (supra), it was observed that the action of the Bank under Section 13(4) of the 'SARFAESI Act' available to challenge by the aggrieved under Section 17 was an efficacious remedy and the institution directly under Article 226 was not sustainable, relying upon Satyawati Tandon (Supra), observing : "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 C....