TMI Blog2017 (11) TMI 1523X X X X Extracts X X X X X X X X Extracts X X X X ..... (Arising Out of Slp (C) No. 33514/2016) - - - Dated:- 27-11-2017 - R.K. Agrawal And Abhay Manohar Sapre JJ. JUDGMENT Abhay Manohar Sapre, J. 1. Leave granted. 2. This appeal is directed against the final judgment and order dated 11.05.2016 passed by the High Court of Delhi at New Delhi in LPA No.699 of 2015 whereby the Division Bench of the High Court dismissed the appeal filed by the appellant herein for quashing the order dated 01.09.2015 passed by the Single Judge, which dismissed the appellant s W.P.(c) No.8314 of 2015. 3. The controversy involved in the appeal centers around the short facts and is essentially a legal one. However, few relevant facts need mention, in brief, to appreciate the controversy. 4. Respondents-Punjab National Bank(hereinafter referred to as PNB ) is a Nationalised Bank. The PNB had given loan facility to a Company called M/s India Iron Steel Corporation Limited (in short, Borrower ) for their business, which they were carrying at a place called Noorpur Khirki, Village Farid Nagar, Tehsil Dhampur, District Bijnor (U.P.). 5. To secure the loan amount, the Borrower had secured their assets, which consisted of the land, fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 and nor can the appellant be permitted to remove the scrap material lying in the factory premises. 9. This led the PNB to forfeit the appellant's deposit by their letter dated 26.06.2015 (Annexure-P25). The appellant objected to the action of PNB by letters and then filed the writ petition in the High Court of Delhi challenging therein the action of PNB in forfeiting the appellant's deposit of money. 10. The Single Judge of the High Court, by order dated 01.09.2015, dismissed the appellant's writ petition on the ground of availability of alternative statutory remedy to the appellant of filing the application under Section 17 of the SARFAESI Act before the DRT to challenge the action of PNB in forfeiting the deposit money of the appellant. The Single Judge, therefore, declined to go into the merits of the case. 11. The appellant, felt aggrieved of the order of the Single Judge, filed intra Court appeal (LPA 699 of 2015) before the Division Bench. By impugned judgment, the Division Bench dismissed the appeal and confirmed the order of the Single Judge. The Division Bench was also of the view that the writ petition filed by the appellant was rightly not entertai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any of the measures referred to in Section 13(4) once taken by the secured creditor. However, since forfeiture of the amount made by the secured creditor against the auction purchaser is not one of the measures under Section 13(4) and hence, the action of forfeiture made by the secured creditor cannot be challenged by the auction purchaser under Section 17 of the SARFAESI Act by filing an application. It was urged that under these circumstances the appellant had rightly filed the writ petition under Article 226/227 of the Constitution to challenge the action of forfeiture of deposit money in the High Court, that being the only remedy available to them and, therefore, the writ petition should have been entertained for its hearing on merits by the writ court. It is these submissions, which were elaborated by the learned counsel for the appellant by pointing out relevant provisions of the SARFAESI Act. 16. In reply, learned counsel for the respondents (PNB) supported the impugned judgment and contended that the action impugned in the writ petition does attract Section 13(4) read with the Rules framed thereunder and hence the remedy of the appellant lies in approaching DRT by filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d) require at any time by notice in writing, any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt. Section 17 17. Application against measures to recover secured debts-(1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorized officer under this Chapter, may make an application along with such fee, as may be prescribed to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken: ( 2) The Debts Recovery Tribunal shall consider whether any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor for enforcement of security are in accordance with the provisions of this Act and the rules made thereunder. ( 3) If, the Debts Recovery Tribunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that any of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a). 21. The secured creditor under clause (b) can also take over the management of the business of the borrower or transfer by way of lease, assignment or sale. However such power can be invoked only when the creditor holds substantial part of the borrower s business as security and further it satisfies the condition set out in second proviso. 22. The secured creditor under clause (c) can also appoint any manager to manage the borrower s business and lastly under clause (d), the secured creditor can ask any person to whom the money is due or become due to pay to the secured creditor instead of paying to borrower which is sufficient to satisfy the debt. 23. So far as Section 17 is concerned, it provides a remedy to a person who is aggrieved by the measures taken by the secured creditor or his authorized officer under Section 13(4) in relation to secured assets of the borrower. It says that any person (including borrower) may make an application to the DRT within 45 days from the date of measures taken under Section 13(4). Sub-section (2) of Section 17 was added by way of amendment w.e.f. 11.11.2004. It provides that the Tribunal, on such application being made under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4) would not be completed unless the entire procedure laid down in Rules 8 and 9 for sale of secured assets is fully complied with by the secured creditor. It is for this reason, the Tribunal has been empowered by Section 17(2),(3) and (4) to examine all the steps taken by the secured creditor with a view to find out as to whether the sale of secured assets was made in conformity with the requirements contained in Section 13(4) read with the Rules or not? 29. We also notice that Rule 9(5) confers express power on the secured creditor to forfeit the deposit made by the auction purchaser in case the auction purchaser commits any default in paying installment of sale money to the secured creditor. Such action taken by the secured creditor is, in our opinion, a part of the measures specified in Section 13(4) and, therefore, it is regarded as a measure taken under Section 13(4) read with Rule 9(5). In our view, the measures taken under Section 13(4) commence with any of the action taken in clauses (a) to (d) and end with measures specified in Rule 9. 30. In our view, therefore, the expression any of the measures referred to in Section 13(4) taken by secured creditor or his author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective. 43. 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 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. Therefore, in all such cases, the High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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