Vineet Kothari, J.
1. This Letters Patent Appeal is directed against the order dated 5.12.2016, by which the learned Single Judge dismissed Special Civil Application No.20209 of 2016 filed by the Petitioners M/s.Harikrishna Engineering Works and others.
2. The learned Single Judge dismissed the said writ petition filed by the Petitioners only on the ground of availability of alternative remedy to the Petitioners, the borrowers of the certain loans from the Respondent Syndicate Bank, under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('SARFAESI Act' for short) relying upon several decisions of the Hon'ble Supreme Court in this regard.
3. Mr. B.M. Mangukiya, learned counsel for the Appellants urged before us that the main crux of the matter, which does not permit the Appellants to avail such alternative remedy as directed by the learned Single Judge, is that the Respondent Syndicate Bank failed to disburse the working capital loan sanctioned in favour of one of the Appellants M/s.Nilkanth Enterprise, which is a sister concern of M/s.Harikrishna Engineering Works, despite the fact that the said Appellant M/s. Nilkanth Enterprise had made a substantial investment in the said industrial unit on the faith of the promise of the disbursement of such sanctioned loan in favour of the said Appellant M/s. Nilkanth Enterprise to the extent of Rs.14 crore and though the Appellants had invested more than Rs.20 crore, in absence of the timely and punctual disbursement of the said sanctioned working capital loan by the Respondent Syndicate Bank, the entire project came to a standstill and therefore, invoking the principles of promissory estoppel, the writ petition filed by the Appellants seeking disbursement of the said loan in favour of M/s. Nilkanth Enterprise deserved to be allowed. He further submitted that this relief cannot be granted by the Debts Recovery Tribunal under provisions of Section 17 of the SARFAESI Act and consequently, the learned Single Judge has erred in relegating the Appellants to avail such alternative remedy.
4. He further submitted that in absence of such fulfillment of promise on the part of the Respondent Syndicate Bank to disburse full amount of sanctioned working capital loan, the Respondent Syndicate Bank is not entitled to invoke the recovery measures under Section 13 of the SARFAESI Act against the present Appellants declaring the Loan Accounts as Non Performing Account and consequently, the entire action on the part of the Respondent Syndicate Bank initiated by issuance of Notice dated 12.8.2016 under Section 13(2) of the SARFAESI Act against these two sister concerns and its partners deserves to be quashed by this Court.
5. He further submitted that while other loans in favour of M/s.Harikrishna Engineering Works and Term Loan by way of Housing Loan in favour of Mr. Nitin Mehta, Mrs. Jyotsna Mehta and Mr. Savan Mehta were duly disbursed by the Respondent Syndicate Bank and even the Term Loan in favour of M/s. Nilkanth Enterprise was disbursed, but the working capital loan was not disbursed and that derailed the entire project of development of industrial unit and consequently, the Respondent Syndicate Bank was bound by the principles of promissory estoppel to disburse the same.
6. He relied upon the decision in the case of Lotus Hotel Pvt. Ltd. vs. Gujarat State Financial Corporation, reported in AIR 1983 SC 848 : 1983 (2) GLR 1352, which arose from the judgment of the Division Bench of this Court in the case of Gujarat State Financial Corporation vs. Lotus Hotels Pvt. Ltd., reported in 1981 (229) GLR 982 : AIR 1981 Guj 212.
7. Per contra, Mr. Uday R. Bhatt, learned counsel for the Respondent Syndicate Bank urged relying upon detailed Affidavit dated 23.1.2017 filed by the Respondent Syndicate Bank before the learned Single Judge that since the said Borrower was not conducting well its loan account and adequate security by way of stocks was not available and even the cases of over billing for the purchase of the plant and machinery was found out by the Respondent Syndicate Bank and there was a non-deposit of margin money, therefore, for all these reasons, the Respondent Syndicate Bank advisably felt that the disbursement of further loan to the said Appellant would be not in the best interest of the Bank, lest the accounts turned Non Performing Accounts. Therefore, the Appellants are not entitled to invoke the extraordinary writ jurisdiction of this Court under Article 226 of the Constitution of India and seek a mandamus from this Court to disburse the said sanctioned amount of working capital loan. He submitted that the principles of promissory estoppel are not applicable as the disbursement of sanctioned amount of loan also depends upon a detailed analysis of the matrix of facts which is a business and economic decision on the part of the Respondent Syndicate Bank. He further submitted that the judgment relied upon by the learned counsel for the Appellants in the case of Lotus Hotel Pvt. Ltd. (supra) is not applicable here in the present case, as the disbursement of the sanctioned Term Loan which depends upon pre-scrutiny of relevant material, is different from the disbursement of the working capital loan which depends upon the subsequent developments after the sanction of working capital loan viz. good conduct of business, availability of stocks for hypothecation, etc. and therefore, the petition filed by the Appellants has no merit.
8. He further submitted that since the measures under Section 13 of the SARFAESI Act have been initiated against the Appellants in 2016 and for last 4 years, no effective further measures could be taken in view of the pendency of this litigation and the Appellants are deliberately trying to delay the same further and not allowing the Respondent Syndicate Bank to realise its dues from the sale of the assets mortgaged with them under provisions of the SARFAESI Act. He further submitted that the SARFAESI Act provides for effective alternative remedy under Section 17 of the SARFAESI Act to any person who wants to raise any objection against the measures taken under Section 13 of the SARFAESI Act, who can file an Application under Section 17 of the SARFAESI Act and therefore, the learned Single Judge was right in dismissing the writ petition.
9. We have heard learned counsel for both sides and given our earnest consideration to the rival submissions and the judgments cited at bar.
10. We are of the considered opinion that the Appellants- borrowers are seeking to put cart before the horse and are raising bogey of promissory estoppel against the Respondent Syndicate Bank at the stage when the accounts have already turned Non Performing Accounts and the Bank has initiated recovery measures under Section 13 of the SARFAESI Act, which is a Special Law enacted by the Parliament with its overriding effect and non-obstante provisions to provide independent power to the Banks and Financial Institutions to undertake recovery by coercive measures by the sale of assets of the borrower for realisation of the dues, which is public money.
11. When the recovery measures have been initiated, instead of availing the remedy available to the borrower for raising objection against such recovery measures under Section 17 of the SARFAESI Act before the Debts Recovery Tribunal, the Borrowers have invoked the extraordinary jurisdiction of this Court straightaway under Article 226 of the Constitution of India, as if to put the blame of the accounts turning Non Performing Accounts on the Bank itself. The loans in question in favour of the three borrowers, two firms viz. M/s.Harikrishna Engineering Works and M/s.Nilkanth Enterprise were sanctioned in the middle of the year 2015 and after about one year only, it appears that the accounts turned Non Performing Accounts and the Bank had to initiate measures for recovery under the aforesaid Special Law viz. SARFAESI Act. While monitoring these loan accounts, if the Bank finds that the borrower is not conducting the business in appropriate manner and not properly utilising the money advanced to them under the Loan Accounts in an appropriate manner or no adequate security available in the form of stocks or margin money, the Court cannot compel the Respondent Syndicate Bank to first advance more money to the Borrowers and then seek recovery of more of such outstanding amount under SARFAESI law. It will be like adding fuel to the fire.
12. The judgments relied upon by learned counsel for the Appellants Mr. B.M. Mangukiya in the case of Gujarat State Financial Corporation vs. Lotus Hotels Pvt. Ltd. (supra) is not applicable to the case in hand at all. In that case, the Term Loan was sanctioned by the Gujarat State Financial Corporation and on the basis of faith and promise of funds to be made available by such sanctioned loan, the entrepreneur made investments and the Gujarat State Financial Corporation, without any cogent reasons, refused to disburse the said sanctioned amount of Term Loan and in these circumstances, the Division Bench of this Court and the Hon'ble Supreme Court, in an appeal filed by Gujarat State Financial Corporation, held, on facts, that Gujarat State Financial Corporation was bound by the principles of promissory estoppel and could not refuse the disbursement of the sanctioned loan to the Petitioner M/s. Lotus Hotels Pvt. Ltd.
13. In the facts before us, the Respondent Syndicate Bank has not only sanctioned the Term Loans which stood disbursed in accordance with the sanction by the Respondent Syndicate Bank but also sanctioned a working capital loan, which was bound to be disbursed in a phased manner only upon the compliance of various conditions including that of maintaining adequate stocks for hypothecation, payment of margin money, etc. If the Respondent Syndicate Bank had found that the Borrowers have not utilised the earlier disbursement of loan amounts in appropriate manner and they took a considered decision not to disburse any further loan amount in the form of working capital loan, the Court cannot obviously direct the Respondent Syndicate Bank to do so.
14. We are quite surprised at the stage, at which this prayer for mandamus to disburse loan is made after initiation of recovery measures under Section 13 of the SARFAESI Act and which reveals the real hidden intuition of petitioners behind the apparently innocuous prayer. Though such recovery action appears to have been initiated only after a period of one year of the sanction of the loan, but we cannot hold that per se such action for recovery under the SARFAESI Act would be illegal. The case set up by the Appellants on the anvil of promissory estoppel for disbursement of loan, cannot be allowed to stop the recovery process under the SARFAESI law.
15. We are also aware of the fact that one M/s.Harikrishna Engineering Works is a proprietary concern of Mr. Nitin Mehta, while the other firm - M/s.Nilkanth Enterprise is a partnership firm, in which also said Mr. Nitin Mehta appears to be a partner along with other family members. Therefore, all the borrowers who are before us as Appellants, are members of the same family and the loan accounts in favour of three are, therefore, integrally connected and the Respondent Syndicate Bank after satisfying them with the credit worthiness of the said persons only could have sanctioned these loans in the year 2015. However, later on, if the Bank finds that the loan amounts are being misused and loan accounts are not being conducted or operated properly and the Bank refuses to disburse any further loan amount, the Borrowers cannot raise the plea of promissory estoppel and first seek the disbursement of entire loan amount, despite the Bank finding it to be inexpedient and not in the best interest of the Respondent Syndicate Bank. Such economic and financial decisions of experts and financial institutions or banks cannot be subjected to judicial scrutiny in these type of cases in the writ jurisdiction, which is dependent only on Affidavits, without the evidence or facts being proved fully and properly as done in civil trials, as per the Evidence Act.
16. Therefore, we are of the considered opinion that the writ petition has been rightly dismissed by the learned Single Judge.
17. As far as the question of alternative remedy under Section 17 of the SARFAESI Act is concerned after its amendment by the Act No.44 of 2016 with effect from 1.9.2016, the scope of locus of persons as well as scope of nature of objections, has been widened in the said law and as against the right of Appeal provided earlier only to the Borrowers under the said provisions of Section 17 of the SARFAESI Act, now the substituted words permit 'Application' by any person (including borrower) to be filed, who is aggrieved by any of the measures referred to in sub- section (4) of Section 13 of the SARFAESI Act, which may be taken by Secured Creditor viz. Banks, etc. and the Debts Recovery Tribunal having jurisdiction in the matter is bound to decide such application in accordance with law. Thus, even the plea of promissory estoppel and desired disbursement of the wo
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rking capital loan by the Appellant borrowers could have been raised in the form of objection against the measures taken under Section 13(4) of the SARFAESI Act before the Debts Recovery Tribunal. 18. The contention raised by the learned counsel for the Appellants Mr. B.M. Mangukiya that the issue raised before this Court in the present writ petition could not have been raised before the Debts Recovery Tribunal, is, therefore, misconceived and is liable to be rejected. The same is accordingly rejected. 19. For the same reasons, the cognate contention raised by the learned counsel for the Appellants on the basis of the judgments of the Hon'ble Supreme Court in the case of Standard Chartered Bank vs. Dharmendra Bhoi, reported in (2013) 15 SCC 341 and in the case of Transcore vs. Union of India, reported in (2008) 1 SCC 125, that the Special Tribunal like Debts Recovery Tribunal does not have any inherent power like the constitutional Court and therefore cannot deal with the issue raised by him before this Court, also cannot be accepted. 20. For the aforesaid reasons, we do not find any merit in the present appeal filed by the Appellants and the same is liable to be dismissed. The appeal is accordingly dismissed. We make it clear that if the Appellants avail such alternative remedy before the Debts Recovery Tribunal, then the Debts Recovery Tribunal may decide such objections on their own merits in accordance with law. No order as to costs.