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.