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V. ANNAMALAI V/S AUTHORISED OFFICER, CITY UNION BANK LTD, THANJAVUR & OTHERS, decided on Tuesday, September 19, 2017.
[ In the High Court of Madras, Writ Petition No. 13297 of 2017. ] 19/09/2017
Judge(s) : S. MANIKUMAR & V. BHAVANI SUBBAROYAN
Advocate(s) : Alex Raj, R. Gururaj. R1, No appearance, R2, G. Senthil Kumar, R3, A. Muthukumar, ,R4, Tapal returned left.
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    (Prayer: Writ Petition filed under Article 226 of the Constitution of India praying for issuance of a Writ of certiorari to call for the records and quash the sale certificate dated 19/1/2017 in favour of third respondent in respect of the property measuring 1553 sq.ft in T.S.No.458 in Gayathri Amman Koil Street Chidambaram Town Chidambaram Taluk Cuddalore District.)S. Manikumar J.1. Claiming himself to be an agreement holder in respect of property measuring 1553 sq.ft in T.S.No.458 in Gayathri Amman Koil Street Chidambaram Town Chidambaram Taluk Cuddalore District with respondent No.4 and the said property mortgaged with the City Union Bank Limited and further contending inter alia that the petitioner is a person interested in respect of the above said property  for which a sale certificate dated 20/12/2016 has been issued to K.Rajeswari third respondent auction purchaser instant writ petition has been filed seeking for a writ of certiorari to quash the sale certificate dated 20/12/2016.2. Union Bank of India has filed counter affidavit disputing the averments made in the supporting affidavit of the writ petition.3. Mr.A.Muthukumar learned counsel for the third respondent auction purchaser submitted that a writ petition against a sale certificate is not maintainable.4. Heard the learned counsel for the parties and perused the materials available on record.5. Repeatedly the Hon'ble Supreme Court has held that when there is an efficacious and alternate remedy under the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act or Securitisation And Reconstructions of Financial Assets Act 2002 as the case may be writ petition is not maintainable. We deem it fit to consider the following decisions.(i) In Precision Fastenings v. State Bank of Mysore reported in 2010(2) LW 86 this Court held as follows:This Court has repeatedly held in a number of decisions right from the decision in Division Electronics Ltd. v. Indian Bank (DB) Markandey Katju C.J. (2005 (3) C.T.C. 513) that the remedy of the aggrieved party as against the notice issued under Section 13(4) of SARFAESI Act is to approach the appropriate Tribunal and the writ petition is not maintainable. The same position has been succinctly stated by the Hon'ble the Supreme Court in Transcore v. Union Of India (2006 (5) C.T.C. 753) in paragraph No. 26 wherein the Supreme Court has held as under:—“The Tribunal under the DRT Act is also the Tribunal under the NPA Act. Under Section 19 of the DRT Act read with Rule 7 of the Debts Recovery Tribunal (Procedure) Rules 1993 (1993 Rules) the applicant bank or FI has to pay fees for filing such application to DRT under the DRT Act and similarly a borrower aggrieved by an action under Section 13(4) of NPA Act was entitled to prefer an Application to the DRT under Section 17 of NPA.” (Emphasis added) (ii) In Union Bank of India v. Satyawati Tondon reported in 2010 (5) LW 193 (SC) the Hon'ble Apex Court has held as follows:16. The facts of the present case show that even after receipt of notices under Section 13(2) and (4) and order passed under Section 14 of the SARFAESI Act respondent Nos. 1 and 2 did not bother to pay the outstanding dues. Only a paltry amount of Rs. 50 000/- was paid by respondent No. 1 on 29.10.2007. She did give an undertaking to pay the balance amount in installments but did not honour her commitment. Therefore the action taken by the appellant for recovery of its dues by issuing notices under Section 13(2) and 13(4) and by filing an application under Section 14 cannot be faulted on any legally permissible ground and in our view the Division Bench of the High Court committed serious error by entertaining the writ petition of respondent No. 1.17. There is another reason why the impugned order should be set aside. If respondent No. 1 had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14 then she could have availed remedy by filing an application under Section 17(1). The expression   ‘any person’ used in Section 17(1) is of wide import. It takes within its fold not only the borrower but also guarantor or any other person who may be affected by the action taken under Section 13(4) or Section 14. Both the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective. Unfortunately the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the 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 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 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.18. 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 five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but at the same time we cannot be oblivious of the rules of self-imposed restraint evolved by this Court which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application appeal revision etc. and the particular legislation contains a detailed mechanism for re-dressal of his  grievance. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes cess fees etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks financial institutions and secured creditors stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions which ultimately prove detrimental to the economy of the nation. Therefore the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course if the petitioner is able to show that its case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad AIR 1969 SC 556 Whirlpool Corporation v. Registrar of Trade Marks Mumbai (1998) 8 SCC 1=1999-2-L.W. 200 and Harbanslal Sahnia and another v. Indian Oil Corporation Ltd. and others (2003) 2 SCC 107 and some other judgments then the High Court may after considering all the relevant parameters and public interest pass appropriate interim order.27. It is a matter of serious concern that  despite repeated pronouncement of this Court the High Courts continue to ignore the availability of statutory remedies under the DRT Act and SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions 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.28. Insofar as this case is concerned we are convinced that the High Court was not at all justified in injuncting the appellant from taking action in furtherance of notice issued under Section 13(4) of the Act.29. In the result the appeal is allowed and the impugned order is set aside. Since the respondent has not appeared to contest the appeal the costs are made easy.(iii) In Saraspathy Sundararaj v. Authorised Officer and Assistant General Manager State Bank of India reported in (2010) 5 LW 560 the Court held as follows:The petitioner has filed this writ petition praying for a Writ of Certiorarified Mandamus calling for the records relating to the possession notice dated 16.09.2004 issued by the respondent under the SARFAESI Act and consequently direct the respondent to effect the settlement in accordance with the SBI OTS-SME 2010 Scheme as contained in its letter dated 18.03.2010 and unconditionally restore physical possession of the six rooms taken physical possession by it at No. 29 Sarojini Street T. Nagar Chennai - 17 with such damages.... When a specific forum has been created which enables the borrower to challenge the action of the financial institution by filing necessary petition under Section 17 the petitioner is not entitled to invoke the writ jurisdiction of this Court. What could not be achieved by the petitioner by filing a petition before the appropriate Forum which is at present barred by period of limitation could not be permitted to be achieved by extending the jurisdiction conferred to this Court under Article 226 of The Constitution of India. Above all since the petitioner has violated the terms and conditions of the loan by transferring the property in favour of her son this Court is not inclined to entertain the petition.7. In this connection we are fortified by the decision of the Honourable Supreme Court reported in (United Bank of India v. Satyawati Tondon and others) III (2010) BC 495 (SC) = 2010-5-L.W. 193 wherein in para Nos. 17 and 18 it was held thus:—“17. …Both the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective. Unfortunately the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the 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 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 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.18. 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 five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but at the same time we cannot be oblivious of the rules of self-imposed restraint evolved by this Court which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective  alternative remedy by filing application appeal revision etc. and the particular legislation contains a detailed mechanism for redressal of his grievance. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes cess fees etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks financial institutions and secured creditors stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions which ultimately prove detrimental to the economy of the nation. Therefore the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course if the petitioner is able to show that its case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad AIR 1969 SC 556 Whirlpool Corporation v. Registrar of Trade Marks Mumbai (1998) 8 SCC 1 and Harbanslal Sahnia and another v. Indian Oil Corporation Ltd. and others (2003) 2 SCC 107 and some other judgments then the High Court may after considering all the relevant parameters and public interest pass appropriate interim order  (underlining added).9. In the light of the above decision of the Honourable Supreme Court the writ petition filed by the petitioner seeking to set aside the possession notice issued to her long back is legally not sustainable. We are of the considered view that this petition has been filed only to drag on the proceedings and to evade repayment of the loan. That be so the petitioner has no legal right to compel the bank to accept the one time settlement offer made by her.13. The present case is identical in nature and it is covered by the judgment of the Supreme Court mentioned supra. In this case the petitioner has violated the condition of mortgage by transferring the secured asset in favour of her son and therefore as per clause 1.7 of the OTS Scheme offered by the bank the petitioner has to be excluded from extending the benefits of the scheme which was rightly done by the bank. In any event without exhausting the alternative remedy the relief sought for by the petitioner by invoking the discretionary remedy under Article 226 of The Constitution of India cannot be granted.iv) In Simon's Foot Wear Pvt. Ltd. v. Indian Bank reported in (2015) 2 MLJ 166 a Hon'ble Division Bench of this court held as follows:“9. As against the confirmation of sale and issuance of the sale certificate the writ petitioners did have their remedy of filing an appeal under Section 18 of the SARFAESI Act before the Debts Recovery Appellate Tribunal. The appeal remedy is an effective and efficacious remedy. When such an effective and efficacious remedy is available this court will decline exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India. ....10. So far as the challenge made to the order dated 24.06.2013 is concerned since an appeal remedy is available the writ petitioners ought to have exhausted the appeal remedy before approaching this Court with this writ petition. .......”6. In the light of the above decisions writ petition is dismissed. No costs. Consequently the connected Miscellaneous Petitions are closed.