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M/s. Mercury Exporters and Manufacturing Pvt. Ltd. & Another v/s Punjab National Bank & Another


Company & Directors' Information:- MERCURY MANUFACTURING COMPANY LIMITED [Amalgamated] CIN = U28112TN1992PLC023798

Company & Directors' Information:- R K MANUFACTURING CO LTD [Active] CIN = L27209WB1984PLC037758

Company & Directors' Information:- R K MANUFACTURING CO LTD [Active] CIN = L27209GJ1984PLC098951

Company & Directors' Information:- J J EXPORTERS LTD [Active] CIN = L17112WB1972PLC028631

Company & Directors' Information:- K S V EXPORTERS PVT LTD [Active] CIN = U52201KL1991PTC006093

Company & Directors' Information:- C K EXPORTERS PRIVATE LIMITED [Converted to LLP] CIN = U74899DL1983PTC015092

Company & Directors' Information:- INDIA MANUFACTURING CORPORATION PRIVATE LIMITED [Active] CIN = U24100DL2010PTC198947

Company & Directors' Information:- S I A MANUFACTURING PRIVATE LIMITED [Active] CIN = U74120UP2013PTC057004

Company & Directors' Information:- S K M MANUFACTURING PRIVATE LIMITED [Active] CIN = U17200DL2011PTC223768

Company & Directors' Information:- S T S MANUFACTURING PRIVATE LIMITED [Active] CIN = U28112TZ2006PTC012940

Company & Directors' Information:- A S P MANUFACTURING COMPANY PVT LTD [Active] CIN = U27109WB1991PTC051461

Company & Directors' Information:- A K MANUFACTURING PVT LTD [Active] CIN = U51909MN1988PTC003110

Company & Directors' Information:- I T A C (INDIA) MANUFACTURING CO LTD [Dissolved] CIN = L51109WB1982PLC034689

Company & Directors' Information:- J D MANUFACTURING CO PVT LTD [Active] CIN = U51909WB1996PTC079825

Company & Directors' Information:- A S P MANUFACTURING COMPANY PVT LTD [Not available for efiling] CIN = U36900WB1991PTC005146

Company & Directors' Information:- B R D MANUFACTURING PRIVATE LIMITED [Active] CIN = U51109WB1997PTC085188

Company & Directors' Information:- R J S MANUFACTURING PRIVATE LIMITED [Active] CIN = U27104DL1997PTC090521

Company & Directors' Information:- B U MANUFACTURING PVT LTD [Active] CIN = U51109WB1982PTC035271

Company & Directors' Information:- M M MANUFACTURING PVT LTD [Active] CIN = U26922WB1993PTC059837

Company & Directors' Information:- J. C. MANUFACTURING INDIA PRIVATE LIMITED [Active] CIN = U21099WB2020PTC236821

Company & Directors' Information:- S B MANUFACTURING PRIVATE LIMITED [Strike Off] CIN = U31506WB1999PTC088567

Company & Directors' Information:- K. V. J. MANUFACTURING INDIA PRIVATE LIMITED [Active] CIN = U29308DL2017PTC320213

Company & Directors' Information:- A T E MANUFACTURING CO PRIVATE LIMITED [Amalgamated] CIN = U28999GJ1973PTC002296

Company & Directors' Information:- J P MANUFACTURING AND CO PVT LTD [Strike Off] CIN = U51226WB1982PTC034927

Company & Directors' Information:- D. K. MANUFACTURING (INDIA) LIMITED [Strike Off] CIN = U37200WB2011PLC170403

Company & Directors' Information:- K C D EXPORTERS PRIVATE LIMITED [Strike Off] CIN = U52599TN1996PTC035117

Company & Directors' Information:- S M MANUFACTURING COMPANY PRIVATE LIMITED [Active] CIN = U34300HR1997PTC057824

Company & Directors' Information:- G K MANUFACTURING PRIVATE LIMITED [Strike Off] CIN = U34300PB2012PTC036073

Company & Directors' Information:- P & B MANUFACTURING PRIVATE LIMITED [Active] CIN = U29254TN2010PTC076696

Company & Directors' Information:- B. V. H. MANUFACTURING INDIA PRIVATE LIMITED [Active] CIN = U74999GJ2018FTC100633

Company & Directors' Information:- MERCURY INDIA LIMITED [Active] CIN = U74999MH1992PLC068693

Company & Directors' Information:- R A MANUFACTURING COMPANY PRIVATE LIMITED [Strike Off] CIN = U36900HR2012PTC047669

Company & Directors' Information:- EXPORTERS (INDIA) LIMITED [Active] CIN = U51109MH1949PLC007061

Company & Directors' Information:- R K D EXPORTERS PRIVATE LIMITED [Strike Off] CIN = U51909PB1995PTC017237

Company & Directors' Information:- B AND L EXPORTERS PVT LTD [Strike Off] CIN = U51909KL1994PTC007825

Company & Directors' Information:- C S A EXPORTERS PVT LTD [Strike Off] CIN = U51909CH1983PTC005685

Company & Directors' Information:- J S S EXPORTERS PRIVATE LIMITED [Strike Off] CIN = U51909TZ2005PTC011860

Company & Directors' Information:- A K R MANUFACTURING PRIVATE LIMITED [Active] CIN = U19200RJ2012PTC041177

Company & Directors' Information:- C N C MANUFACTURING PRIVATE LIMITED [Strike Off] CIN = U64204DL2015PTC281449

Company & Directors' Information:- B R EXPORTERS PRIVATE LIMITED [Strike Off] CIN = U99999MH1973PTC016377

Company & Directors' Information:- MERCURY EXPORTERS PRIVATE LIMITED [Strike Off] CIN = U51900MH1975PTC018593

Company & Directors' Information:- EXPORTERS (INDIA) LIMITED [Dissolved] CIN = U99999MH1941PTC003430

    WP No. 353 of 2014

    Decided On, 06 May 2014

    At, High Court of Judicature at Calcutta

    By, THE HONOURABLE MR. JUSTICE DIPANKAR DATTA

    For the Petitioners: Samit Talukdar, Sr. Advocate, Sakya Sen, Chanchal Kumar Dutt, Provat Sil, Advocates. For the Respondents: Joy Saha, Victor Dutta, Advocates.



Judgment Text

The challenge in this writ petition is to a notice dated 22nd February, 2010 issued by Punjab National Bank. Although the said notice was issued in purported exercise of power conferred by Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereafter 'the Act'), the bank did not take possession of the secured asset; instead, by the said notice it conveyed its decision of taking possession of the secured asset if the petitioners failed to deliver possession before 12th March, 2010.

It is not in dispute that challenging the aforesaid notice, an application under Section 17 of the Act was filed by the petitioners before the Debts Recovery Tribunal having jurisdiction and the petitioners also obtained an interim order of injunction which remained operative for nearly four years. Only recently, the application under Section 17 of the Act has been rejected by the Tribunal on the ground that the same is premature.

It is further not in dispute that challenging the order of dismissal of the application under Section 17 of the Act, the petitioners filed a recalling application and this writ petition has been presented at a point of time when the recalling application was pending before the Tribunal. That the recalling application has since been dismissed by the Tribunal yesterday, is also not in dispute.

Mr. Saha, learned advocate for the bank takes a preliminary objection to the maintainability of the writ petition. According to him, the petitioners by presenting this writ petition have been pursuing parallel remedy which is not permissible in law.

Mr. Sen, learned advocate for the petitioners led by Mr. Talukdar, learned senior advocate submits that the very invocation of the SARFAESI Act by the bank is illegal and, therefore, notwithstanding the forum that may be available under Section 17 of the Act, as and when possession of the secured asset is taken, the writ court ought to entertain this writ petition and decide once and for all as to whether the bank is justified in issuing the demand notice under Section 13(2) of the Act.

The decision of the Supreme Court in United Bank of India vs. Satyawati Tandon, reported in AIR 2010 SC 3413, is relevant for a decision on the point of entertainability of this writ petition. The relevant passages are reproduced below:-

"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 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 : (AIR 1999 SC 22 : 1998 AIR SCW 3345) and Harbanslal Sahnia and another v. Indian Oil Corporation Ltd. and others (2003) 2 SCC 107 : (AIR 2003 SC 2120 : 2003 AIR SCW 126) and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass appropriate interim order."

It is not in dispute that the bank has taken symbolic possession of the secured asset and despite rejection of the application under Section 17 of the Act, it is yet to take physical possession of the secured asset. In view of the decision of the Supreme Court in Standard Chartered Bank vs. V. Noble Kumar, reported in (2013) 9 SCC 620, approach under Section 17(1) of the Act can be made only after possession of the secured asset is lost.

Section 17(3) of the Act empowers the Tribunal to direct restoration of possession of the secured asset in favour of the borrower if the secured creditor is found to have violated the provisions of the Act.

The Act no doubt provides on efficacious remedy to the

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petitioners, which they can pursue at the right time. The petitioners would, therefore, be free to approach the Tribunal under Section 17 of the Act once physical possession of the secured asset is taken. At this stage, no right of the petitioners is affected by the action taken in terms of the Act so as to call for interference by the writ court. The writ petition stands dismissed, without any order as to costs. This order shall not preclude the petitioners approach the Tribunal at the appropriate stage and to raise all points before it in respect of their claim that the bank was not justified in invoking the provisions of the Act and if such application is made, it shall be the duty of the Tribunal to examine such claim of the petitioners and pass necessary order in accordance with law.
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