TMI Blog2019 (4) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... JAY KUMAR MITTAL AND MRS MANJARI NEHRU KAUL, JJ. For The Petitioners : Mr. Saurabh Goel, Advocate For The Respondent : Mr. Anupm Gupta, Sr. Advocate with Mr. Gaurav Goel And Mr. Ashwani Chopra, Sr. Advocate with Mr. Ashutosh Jerath, Advocate ORDER Ajay Kumar Mittal, J . 1. The petitioners through the instant writ petition pray for a writ in the nature of certiorari for quashing the impugned sale notice dated 06.03.2018, Annexure P.1 and all proceedings and actions taken by respondent No.1-State Bank of India consequent and pursuant thereto, including auction proceedings dated 20.04.2018, Annexure P.2, sale confirmation letter dated 23.04.2018, Annexure P.3, qua house No.315, Sector-9, Panchkula being wholly, arbitrary, illegal, unfair and unjust, thereby causing undue loss to them. Direction has also been sought to respondent No.1-Bank to consider the offer of a much higher price of ₹ 2.05 crore than the auction price of ₹ 1,81,50,000/- for the house in question. 2. A few facts relevant for the decision of the controversy involved as narrated in the petition may be noticed. Petitioners No.1 and 2 were owners of residential hous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dential house and had no other place to go, respondent No.1-bank had filed CWP No. 16811 of 2018 in this Court seeking directions to the Tehsildar, Panchkula to help in getting possession of the said house. Upon notice, petitioners No. 1 and 2 appeared. The petitioners offered to pay a sum of ₹ 2 crore as against the offer of ₹ 1,81,50,000/- made by respondent No.2-auction purchaser. The petitioners had arranged the draft for a sum of ₹ 2 crore and the said amount was paid to the bank in Court. CWP No. 16811 of 2018 filed by bank came up for hearing on 06.09.2018 alongwith CWP No. 7559 of 2018 filed by M/s Swami Automobiles Private Limited against the cancellation of one time settlement. CWP No. 7559 of 2018 was withdrawn by M/s Swami Automobile Private Limited with liberty to avail remedy in accordance with law. Since CWP No. 16811 of 2018 was filed by the bank for possession of the secured asset and petitioners No. 1 2 were respondents in the said writ petition, they could not have questioned the validity of the auction proceedings. As the auction proceedings had taken place during the pendency of CWP No. 7559 of 2018 filed by M/s Swami Automobiles Private Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to bring any buyer paying more than the highest bid received by the Bank. The borrower did not bring any buyer. The proposals given by the borrower were rejected by the Bank. Thereafter, respondent Nos. 2 and 3 deposited the balance payment and the bank issued sale certificate to them. On these premises, prayer for dismissal of the petition has been made. 4. In the written statement filed on behalf of respondent Nos. 2 and 3, it has been inter alia stated that the petitioners have filed the present writ petition at the behest of Shri Pardeep Mittal, Director of M/s Swami Automobiles Private Limited, Chandigarh who after having failed to get any relied in CWP No.7559 of 2018 propped up the present petitioners to assail sale notice dated 6.3.2018 and all consequent proceedings thereto with the sole objective of negating the outcome of auction conducted by respondent No.1. It has been further stated that respondent No.1 has already issued sale certificate after having received the entire payment of sale price from respondent Nos. 2 and 3. A replication to the written statement on behalf of respondents No.2 and 3 has been filed by the petitioners inter alia controverting the averm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r limit for adjudication of an application is four months. If the Tribunal fails to decide the application within a maximum period of four months, then either party can move the Appellate Tribunal for issue of a direction to the Tribunal to dispose of the application expeditiously. Sub section (7) makes the provisions of the 1993 Act applicable to the DRT while dealing with an application under Section 17 of the SARFAESI Act. 6. Admittedly, in the present case, the petitioners were owners of the residential house in question i.e. H.No.315, Sector 9, Panchkula. The said house was mortgaged as collateral security for availing loan from respondent No.1 Bank. The loan was availed by M/s Swami Automobiles Private Limited in which son of petitioner No.2 and brother of petitioner No.1 was one of the Director. M/s Swami Automobiles Private Limited defaulted in repayment of the loan. Respondent No.1 in exercise of the powers under the provisions of the SARFAESI Act issued notice under Section 13(2) and 13(4) of the said Act and took symbolic possession. Thereafter, part physical possession of the house was also taken by the Bank. Since M/s Automobiles Private Limited who entered into one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal or the remedy of the auction purchaser is in filing writ petition under Articles 226/227 of the Constitution of India to examine the legality of such action? After considering the relevant statutory provisions of the SARFAESI Act and the case law on the point, it was held that the writ court was justified in dismissing the writ petition on the ground of availability of alternative statutory remedy of filing an application under Section 17(1) of the SARFAESI Act before the Tribunal concerned to challenge the action of the secured creditor in forfeiting the auction purchaser s deposit under Rule 9(5) of the Security Interest (Enforcement) Rules, 2002. The relevant paras of the judgment read thus: 17. The short question that arises for consideration in this appeal is whether the High Court was justified in holding that the remedy of the appellant (auction purchaser) lies in challenging the action of the secured creditor (PNB) in forfeiting the deposit by filing an application under Section 17 of the SARFEASI Act before the DRT or the remedy of auction purchaser is in filing the writ petition under Articles 226/227 of the Constitution of India to examine the legality of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 13(2) of the Act was given to him by the bank. The borrower did not avail of that remedy and further remedies from that order and instead directly approached the High Court. It was held by the Apex Court that where an effective remedy was available to the aggrieved person, the High Court must insist that before availing the remedy under Article 226, the alternative remedies available to him under the relevant statute are exhausted. 11. In Union Bank of India vs. Satyawati Tondon, 2010(8) SCC 110, the Court was concerned with an argument of alternative remedy provided under Section 17 of SARFAESI Act. Dealing with this argument, the Court had observed that where an effective remedy was available to the aggrieved person, the High Court must insist that before availing the remedy under Article 226 the alternative remedies available to him under the relevant statute are exhausted. In paragraphs 43, 44 and 45, the Court stated as follows: 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration and decision is whether the High Court was justified in interfering with the order passed by the assessing authority under Section 148 of the Act in exercise of its jurisdiction under Article 226 when an equally efficacious alternate remedy was available to the assessee under the Act. 15. Before discussing the fact proposition, we would notice the principle of law as laid down by this Court. It is settled law that non-entertainment of petitions under writ jurisdiction by the High Court when an efficacious alternative remedy is available is a rule of self-imposed limitation. It is essentially a rule of policy, convenience and discretion rather than a rule of law. Undoubtedly, it is within the discretion of the High Court to grant relief under Article 226 despite the existence of an alternative remedy. However, the High Court must not interfere if there is an adequate efficacious alternative remedy available to the petitioner and he has approached the High Court without availing the same unless he has made out an exceptional case warranting such interference or there exist sufficient grounds to invoke the extraordinary jurisdiction under Article 226. (See: State of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd observed: (AIR p. 1423, para 7). 7. The High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon an alternative remedy provided by statute for obtaining relief. Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under Article 226 of the Constitution the machinery created under the statute to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up. 13. In Titaghur Paper Mills Co. Ltd. v. State of Orissa , (1983) 2 SCC 433 this Court observed: (SCC pp. 440-41, para 11) 11. It is now well recognized that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of. This rule was stated with great clarity by Willes, J. in Wolverhampton New Waterworks Co. v. Hawkesford, 141 ER 486 in the following passa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18. In Union of India vs. Guwahati Carbon Ltd ., (2012) 11 SCC 651, this Court has reiterated the aforesaid principle and observed: 8. Before we discuss the correctness of the impugned order, we intend to remind ourselves the observations made by this Court in Munshi Ram v. Municipal Committee, Chheharta , (1979) 3 SCC 83. In the said decision, this Court was pleased to observe that: (SCC p. 88, para 23). 23. when a revenue statute provides for a person aggrieved by an assessment thereunder, a particular remedy to be sought in a particular forum, in a particular way, it must be sought in that forum and in that manner, and all the other forums and modes of seeking [remedy] are excluded. 19. Thus, while it can be said that this Court has recognized some exceptions to the rule of alternative remedy, i.e., where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, the proposition laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on against the assessment order as it does not fulfill any of the broad outlines noticed herein above..... . 14. Adverting to the judgments relied upon by the learned counsel for the petitioners, it may be noticed that in Valji Khimji and Company vs. Official Liquidator of Hindustan Nitro Product (Gujarat) Limited and others , (2008) 9 SCC 299, it was held by the Apex court that the auction is not complete and no rights accrue until the sale is confirmed by the competent authority. Once the sale is confirmed by the said authority, certain rights accrue in favour of the auction purchaser and these rights cannot be extinguished except in exceptional cases such as fraud or collusion. In Mathew Varghese vs. M.Amritha Kumar and others, (2014) SCC 610, the Supreme Court was considering strict compliance with the prescribed procedure and requirements under the provisions of the SARFAESI Act. Any violation of the mandatory requirements was held to be invalid. In Vasu P.Shetty vs. Hotel Vandana Palance and others , (2014) 5 SCC 660, it was recorded by the Apex Court that borrower s efforts to thwart the sale of the secured property cannot be taken as waiver of mandatory r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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