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2024 (4) TMI 466
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....t aside the order dated 2nd February 2021, passed by the Debts Recovery Tribunal-II at Hyderabad (hereinafter referred to as 'DRT') and allowed Miscellaneous Application (M.A.) No. 97 of 2020 in Securitization Application (S.A.) No. 1476 of 2017 filed by the Borrower for the restoration of the said S.A. No. 1476 of 2017 filed by him under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('SARFAESI Act' for short). The Borrower had filed S.A. No. 1476 of 2017 against the Notice dated 2nd September 2017 issued by the UCO Bank (hereinafter referred to as the 'Respondent-Bank') for the sale of his mortgaged properties which was to be conducted by the Authorized Officer (Respondent No.2) of the Respondent-Bank in light of the default in repayment of loan by the Borrower. The DRT, in its aforementioned order dated 2nd February 2021, had dismissed the M.A. No. 97 of 2020 for the restoration of S.A. No. 1476 of 2017, which had been previously dismissed as withdrawn vide DRT vide order dated 21st September 2020. The Division Bench of the High Court, in the impugned order, while setting aside the order of DRT dated 2nd Feb....
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....and the second installment of 15% amount was to be deposited within two weeks thereafter. The DRT further directed that, in the event that the Borrower failed to make the aforesaid deposits, the interim stay would stand vacated and the Respondent-Bank would be at liberty to confirm the sale in favor of the highest bidder, although the sale itself was made subject to the final outcome in S.A. No. 1476 of 2017. 3.6 Subsequently, the appellant deposited Rs.4,29,16,650/- towards the payment of the balance auction price on 28th December 2017. 3.7 In the meanwhile, the Borrower proposed One Time Settlement ('OTS' for short) for all the outstanding loan accounts. However, the Respondent-Bank refused to accept the same and requested the Borrower to settle all the outstanding loan accounts with interest payable at the contractual rate, as applicable thereon vide letter dated 12th May 2020. 3.8 Following which, DRT passed an order dated 21st September 2020, whereby S.A. No. 1476 of 2017 was dismissed as withdrawn at the behest of the Borrower who submitted that the matter had been settled out of court. On the other hand, the Respondent-Bank filed a Memo of Non- Settlement before DRT there....
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....e Borrower had filed the writ petition after the entire payment was made by the appellant-auction purchaser and a Sale Certificate was also issued in its favour. The learned Senior Counsel therefore submitted that the writ petition filed by the Borrower deserves to be dismissed and the present appeal deserves to be allowed. 8. Shri Partha Sil, learned counsel appearing on behalf of the UCO Bank, also advanced similar arguments and prayed for dismissal of the writ petition filed by the Borrower. 9. Shri Bhushan, learned Senior Counsel, appearing on behalf of the Borrower, on the contrary, submitted that nonexercising of the jurisdiction under Article 226/227 of the Constitution of India on the ground of availability of an alternative remedy is a rule of self-restraint. It is submitted that, in deserving cases, the High Court is not precluded from entertaining a petition under Article 226 of the Constitution in order to do justice to the parties. The learned Senior Counsel relies on the judgment of this Court in the case of State of U.P. v. Mohammad Nooh AIR 1958 SC 86 : 1957 INSC 81. 10. The facts in the present case are not disputed. It is not in dispute that in the auction held....
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....ondent-Bank confirmed the sale in favour of the appellant-auction purchaser on 2nd November 2020. Thereafter, on 4th November 2020, the Borrower filed a miscellaneous application being M.A. No. 97 of 2010 for restoration of the said S.A. No. 1476 of 2017 on the ground that the said S.A. No. 1476 of 2017 had been withdrawn because the Chief Manager and AGM of the Respondent-Bank had orally told the Borrower that unless the S.A. No. 1476 of 2017 was withdrawn, they could not process the OTS proposal. It is further relevant to note that on 11th November 2020, the Sale Certificate was registered. Vide order dated 2nd February 2021, DRT dismissed the said M.A. No. 97 of 2010. Thereafter, the writ petition being No. 5275 of 2021 came to be filed by the Borrower on 25th February 2021 before the High Court. Vide the impugned order, the High Court set aside the order passed by DRT and directed it to proceed with S.A. No. 1476 of 2017. 14. The law with regard to entertaining a petition under Article 226 of the Constitution in case of availability of alternative remedy is well settled. In the case of Satyawati Tondon (supra), this Court observed thus: "43. Unfortunately, the High Court ove....
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....o the aggrieved person. It has been held 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. The Court clearly observed that, 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. It has been held that, though the powers of the High Court under Article 226 of the Constitution are of widest amplitude, still the Courts cannot be oblivious of the rules of self-imposed restraint evolved by this Court. The Court further held that though the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, still it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution. ....
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....s judgments of this Court, the Court observed thus: "101. More than a decade back, this Court had expressed serious concern despite its repeated pronouncements in regard to the High Courts ignoring the availability of statutory remedies under the RDBFI Act and the SARFAESI Act and exercise of jurisdiction under Article 226 of the Constitution. Even after, the decision of this Court in Satyawati Tondon [United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110 : (2010) 3 SCC (Civ) 260] , it appears that the High Courts have continued to exercise its writ jurisdiction under Article 226 ignoring the statutory remedies under the RDBFI Act and the SARFAESI Act." 22. It can thus be seen that it is more than a settled legal position of law that in such matters, the High Court should not entertain a petition under Article 226 of the Constitution particularly when an alternative statutory remedy is available. 23. The only reasoning that could be seen from the impugned order given by the learned Division Bench of the High Court is as under: "11. It is true that under Section 18 of the SARFAESI Act, petitioner has the alternative remedy against the impugned order by filing appeal befo....
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....nly on the ground that the matter was pending for sometime before it and if the petition was not entertained, the Borrower would be left remediless. We however find that the High Court has failed to take into consideration the conduct of the Borrower. It is further to be noted that, though the High Court had been specifically informed that, on account of subsequent developments, that is confirmation of sale and registration thereof, the position had reached an irreversible stage, the High Court has failed to take into consideration those aspects of the matter. 25. This Court, in the case of Valji Khimji and Company v. Official Liquidator of Hindustan Nitro Product (Gujarat) Limited and Others (2008) 9 SCC 299 : 2008 INSC 925, has observed thus: "30. In the first case mentioned above i.e. where the auction is not subject to confirmation by any authority, the auction is complete on the fall of the hammer, and certain rights accrue in favour of the auction-purchaser. However, where the auction is subject to subsequent confirmation by some authority (under a statute or terms of the auction) the auction is not complete and no rights accrue until the sale is confirmed by the said auth....
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....ot 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." 29. It could thus clearly be seen that the Court has carved out certain exceptions when a petition under Article 226 of the Constitution could be entertained in spite of availability of an alternative remedy. Some of them are thus: (i) where the statutory authority has not acted in accordance with the provisions of the enactment in question; (ii) it has acted in defiance of the fundamental principles of judicial procedure; (iii) it has resorted to invoke the provisions which are repealed; and (iv) when an order has been passed in total violation of the principles of natural justice. 30. It has however been clarified that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is....