TMI Blog2015 (12) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... discipline, do not confer any such status upon the company nor put any such obligation upon it which may be enforced through issue of a writ under Article 226 of the Constitution. Present is a case of disciplinary action being taken against its employee by the appellant Bank. The respondents service with the Bank stands terminated. The action of the Bank was challenged by the respondent by filing a writ petition under Article 226 of the Constitution of India. The respondent is not trying to enforce any statutory duty on the part of the Bank. That being the position, the appeal deserves to be allowed Division bench held that an agreement of sale was not prohibited by Section 13(13) of the SARFAESI Act; if at all entered into, that would be subject to the mortgage already created by the borrower in favour of the bank; and it could not, therefore, curtail the rights of the banks in any manner whatsoever. As this finding is binding inter-parties, this question could not have been re-agitated before the Division bench and the Division Bench ought not to have re-examined this question to hold that the sale in favour of the petitioners was void ab initio in view of the interdict cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of an agreement of sale dated 31.12.2007; the petitioners had not pointed out any irregularity committed by the 2nd respondent- bank, while initiating proceedings for taking measures under Section 13(4) of the SARFAESI Act and the Rules made thereunder; the petitioners had no right over the scheduled property as ownership was not conveyed in their favour; they had no absolute right over the property by virtue of the agreement of sale dated 31.12.2007; and they were not entitled to challenge the proceedings of the 2nd respondent-bank, when proceeding against the scheduled property by invoking the provisions under the SARFAESI Act, because of the default committed by the borrowers in servicing their loan account as they were due a large sum of money to the 2nd respondent-bank. While dismissing S.A. No.97 of 2009, the Division bench directed the 2nd respondent-bank to return ₹ 10.00 Lakhs deposited by the petitioners pursuant to the interim order dated 19.03.2009. Aggrieved thereby, the petitioners invoked the jurisdiction of this Court by way of W.P. No.35413 of 2013. The Division Bench, in its order in W.P. No.35413 of 2013, framed three points for consideration. Firstly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law. Such error is an error which is a patent error and not a mere wrong decision. (T.C. Basappa v. T. Nagappa AIR 1954 SC 440 ; Kamlesh Verma4). It is essential that it should be something more than a mere error; it must be one which must be manifest on the face of the record. (Hari Vishnu Kamath v. Ahmad Ishaque AIR 1955 SC 233 ; Kamlesh Verma4). Bearing these aspects in mind, let us now examine the order of the Division bench on each of the three points, the contentions of the Learned Counsel on either side for and against its being reviewed, and whether or not each of the points, decided by the earlier Division bench, necessitates review. On Point No.1 the Division Bench, following the judgment in B.S.K. Madhavi v. Kotak Mahindra Bank Ltd, Vijayawada 2012 (5) ALD 537 (DB) which in turn followed the judgment of the Supreme Court in Federal Bank Limited v. Sagar Thomas AIR 2003 SC 4325 , held that the 2nd respondent (ING Vysya Bank Limited) was a private bank, and a bank within the meaning of Section 2[c] read with Section 6 of the SARFAESI Act; a private bank does not perform public functions merely by providing banking services; the 2nd respondent-bank was not a State wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Article 226 of the Constitution of India, would lie; and the Division Bench had erred in holding that the Writ Petition was not maintainable against the 2nd respondent-bank. Learned Counsel would rely on Mardia Chemicals Ltd v. Union of India AIR 2004 SC 2371 = (2004) 4 SCC 311 ; Edara Haribabu v. District Collector-cum-Presiding Officer2015(1) ALD 595 ; Bhopal Sugar Industries Ltd. v. Income Tax Officer, Bhopal AIR 1961 SC 182 ; and M/s. East India Commercial Co. Ltd v. Collector of Customs, Calcutta AIR 1962 SC 1893. On the other hand Sri K.V. Subramanya Narusu, Learned Counsel for the 2nd respondent bank, would submit that the 2nd respondent bank is a private bank and is not an instrumentality of the State under Article 12 of the Constitution of India; and as has been rightly held by the Division bench, in the order under review, a Writ Petition would not lie against the 2nd respondent bank. Mandamus and certiorari are public law remedies. They are not available to enforce private law rights. Every act of a company/society, which may be a 'State' within the meaning of Article 12 of the Constitution, does not necessarily belong to the public law field. A company/soc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vities of public bodies are never governed by private law. Like public figures, at least in theory, public bodies are entitled to have a private life. The servant employed by a public body ordinarily has the same private rights as any other servant. The position may, however, be different if such relationship is circumscribed by a statutory provision. ( Public Law Private Law: Why the Divide? A personal View (published in Public Law Summer : (1986) : Sir Harry Woolf; Sri Konaseema Co-operative Central Bank Ltd.14). The bodies to which the remedies of these prerogative writs have been applied have all been statutory bodies on whom Parliament has conferred statutory powers and duties which, when exercised, may lead to the detriment of the subjects who may have to submit to their jurisdiction. (R. v. National Joint Council for Dental Technicians, ex parte Neate ; Sri Konaseema Co- operative Central Bank Ltd.14). Every body which is created by a statute, and whose powers and duties are defined by a statute, is a 'public authority'. Government departments, local authorities, police authorities, and statutory undertakings and corporations, are all 'public authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction of the Court exercised in a writ of Certiorari. (The King v. The Electricity Commissioner ; Udit Narain Singh Malpaharia 19 ). In order to establish that certiorari will issue, it is enough to show that the body in question was obliged to act in a judicial manner, in the sense that it was under an express duty to adopt a procedure analogous to a judicial procedure, or that it was required to determine questions of law and fact or otherwise to exercise a limited yet judicial discretion, or that it was under an implied duty to act judicially in accordance with natural justice, or even under a more loosely formulated duty to act fairly. A duty to act judicially may be inferred from the severity of the impact made by the exercise of a power or duty on individual interests. (Halsbury's Laws of England. 4th Edition at page 104; Harijander Singh v. Selection Committee, Kakatiya Medical College, Warangal ). The ambit of certiorari can be said to cover every case in which a body of persons, of a public as opposed to a purely private or domestic character, has to determine matters affecting subjects, provided always that it has a duty to act judicially. If tribunals ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Violation of any statutory provision or rule can be a ground for the issue of such a writ. (Harijander Singh 21 ). Where the authority has failed to carry out a legal duty imposed on him, and such failure is destructive of a basic principle of justice, a writ of mandamus should issue ex debito justitiae to compel him to carry out the duty. (Bhopal Sugar Industries Ltd 12 ). A writ of mandamus can also be issued for statutory violation by a private body, including private banks such as the second respondent-bank. In Federal Bank Ltd.9, the 1st respondent, who was working as the branch manager of Federal Bank, was placed under suspension, and disciplinary action was initiated against him. On his being found guilty of the charge, he was imposed the punishment of dismissal from service. The 1st respondent challenged the order of dismissal by way of a Writ Petition before the High Court. The objection taken by the appellant bank, to the maintainability of the Writ Petition, was negatived by the Learned Single judge holding that Federal Bank performed a public duty. The appeal preferred thereagainst was dismissed by a Division bench of the High Court. On Federal bank questioning the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 81 or the Water (Prevention and Control of Pollution) Act, 1974 etc. or statutes of the like nature which fasten certain duties and responsibilities statutorily upon such private bodies which they are bound to comply with. If they violate such a statutory provision a writ would certainly be issued for compliance with those provisions. For instance, if a private employer dispenses with the service of its employee in violation of the provisions contained under the Industrial Disputes Act, in innumerable cases the High Court interfered and has issued the writ to the private bodies and the companies in that regard. But the difficulty in issuing a writ may arise where there may not be any non-compliance with or violation of any statutory provision by the private body. In that event a writ may not be issued at all. Other remedies, as may be available, may have to be resorted to For the discussion held above, in our view, a private company carrying on banking business as a scheduled bank, cannot be termed as an institution or a company carrying on any statutory or public duty. A private body or a person may be amenable to writ jurisdiction only where it may become necessary to compel s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 a Full Bench of this Court held that the bye-laws of a co-operative society, registered under the A. P. Co-operative Societies Act, did not have the force of law; they were in the nature of a contract; and, where a Society could not be characterised as a 'State', the service conditions of its employees, governed by bye-laws, could not be enforced through a writ petition. It is evident, therefore, that service conditions of employees of companies/societies, which are either governed by bye laws or by provisions which do not have the force of law, are in the nature of a contract; and in cases where a company or a society cannot be characterised as a State, the service conditions of its employees cannot be enforced in writ proceedings. In B.S.K. Madhavi8, the Writ Petitions were filed against ICICI Bank Limited, Asset Reconstruction Management Services, which was a division of Asset Reconstruction Company (India) Limited, Dhana Lakshmi Bank Limited, Axis Bank Limited, Citi Bank, Federal Bank, Karur Vysya Bank, ICICI Home Finance and Sundaram Finance. In all the Writ Petitions, the grievance of the petitioners was regarding the improper initiation of recovery under the SA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not entitled to claim any preferential right over the claim of the 2nd respondent-bank. Point No.2 was also held in favour of the 2nd respondent-bank, and against the petitioners. Sri Krishna Murthy, Learned Counsel appearing for the petitioners, would submit that, in W.P. No.27307 of 2011 filed by the 2nd respondent-bank against the petitioners herein, the Division Bench, by its order dated 27.08.2012, had specifically rejected the contention, urged on behalf of the 2nd respondent- bank, that the agreement of sale was null and void under Section 13(13) of the SARFAESI Act; and as the order passed by the Division Bench in W.P. No.27307 of 2011 dated 27.08.2012 is a judgment inter-parties, it is not open to the subsequent Division Bench to take a view contrary thereto. On the other hand Sri K.V. Subramanya Narusu, Learned Counsel for the 2nd respondent bank, would submit that no error of law has been committed by the Division Bench in holding that sale of property, in contravention of Section 13(13) of the SARFAESI Act, is not valid. The petitioners herein were the respondents, and the 2nd respondent herein was the petitioner, in W.P. No.27307 of 2011 which was filed to quas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of law or of fact and law, is conclusive in every subsequent proceeding between the same parties. (Swamy Atmananda v. Swami Bodhananda AIR 2005 SC 2227; Ishwar Dutt v. Land Acquisition Collector (2005) 7 SCC 190). An order of a Court/Tribunal of competent jurisdiction directly upon a point creates a bar, as regards a plea, between the same parties in some other matter in another Court/Tribunal, where the said plea seeks to raise afresh the very point that was determined in the earlier order. An order passed by a Court/Tribunal having jurisdiction over the subject matter, and over the parties, cannot be ignored as a nullity unless such erroneous orders are corrected in accordance with law. Such orders bind the parties in a subsequent litigation. (Barkat Ali Vs. Badrinarain AIR 2001 Rajasthan 51 ). Issues which have been concluded inter-parties cannot be raised again in proceedings inter-parties. (State of Haryana v. State of Punjab 2004(12) SCC 673). In its order in W.P. No.27307 of 2011 dated 28.08.2012, the Division bench held that an agreement of sale was not prohibited by Section 13(13) of the SARFAESI Act; if at all entered into, that would be subject to the mortgage already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions imposed under the second proviso to Section 18, regarding pre-deposit, renders the remedy of an appeal ineffective; and the order of the Division Bench necessitates review on this ground also. On the other hand, Sri K.V. Subrahmanya Narusu, Learned Counsel for the 2nd respondent - bank, would submit that the statutory remedy of appeal, under Section 18 of the SARFAESI Act, is effective and efficacious; and the petitioners cannot, without exhausting the alternative remedy, straightaway invoke the extra- ordinary jurisdiction of this Court under Article 226 of the Constitution of India. It is not in dispute that, against the order passed by the Debt Recovery Tribunal, in S.A. No.97 of 2009 dated 20.09.2013, the petitioners herein have the remedy of a statutory appeal under Section 18 of the SARFAESI Act. It is no doubt true that existence of an alternative statutory remedy of an appeal would not bar exercise of jurisdiction under Article 226 of the Constitution of India. The power of the High Court, under Article 226 or 227 of the Constitution, has not been taken away because of the alternative efficacious remedy provided under the statute. The power of judicial review and/or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Sons (1999) Supp (2) SCC 312 ; Whirlpool Corpn. v. Registrar of Trade Marks (1998) 8 SCC 1 ; Tin Plate Co. of India Ltd. v. State of Bihar (1998) 8 SCC 272 ; Sheela Devi v. Jaspal Singh (1999) 1 SCC 209 and Punjab National Bank v. O.C. Krishnan ((2001) 6 SCC 569 ). Writ jurisdiction cannot normally be invoked if a statutory remedy of appeal is provided under the Act. If a statutory appeal lies, then, ordinarily, the aggrieved party has to challenge the order in an appeal and not by filing a writ petition. (Civily Kallarackal v. Vehicle Factory (2012) 8 SCC 524 ; Whirlpool Corporation 47 ; Paschim Gujarat Vij Co. Ltd. v. Devabhai Memabhai Myatra AIR 2014 Gujarat 26 ). The Rule 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, 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. While dealing with such petitions, 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 un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said right, is a valid piece of legislation. (Anant Mills Co. Ltd. 56 ). The requirement of pre-deposit under sub-section (1) of Section 18 of the SARFAESI Act is mandatory and there is no reason whatsoever for not giving full effect to the provisions contained in Section 18 of the Act. Deposit, under the second proviso to Section 18(1) of the Act, is a condition precedent for preferring an appeal under the said section. (Narayan Chandra Ghosh 32 ). As the conditions of pre-deposit, under Section 18(1) of the SARFAESI Act, have been upheld by the Supreme Court in Narayana Chandra Ghosh32, it cannot be said that imposition of such a condition would render the remedy of an appeal ineffective. It is only where there can reasonably be no two opinions entertained about it, is a clear case of an error apparent on the face of the record made out. (M/s. Thungabhadra Industries Ltd v. Govt. of A.P AIR 1964 SC 1372 ; Surendra Mohnot 2 ). If the view adopted by the Court in the original judgment is a possible view it is difficult to hold that there is an error apparent. ( n Caterers (India) Ltd. v. Ltd. Governor of Delhi (1980) 2 SCC 167 ). The possibility of two views on the subject is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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