TMI Blog2019 (2) TMI 1997X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 17 of the SARFAESI Act, if the petitioner had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14, then he could have availed the 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 the guarantor or any other person, who may be affected by the action taken under Section 13(4) or Section 14. Both, the Debts Recovery Tribunal and the Debts Recovery Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within the fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective. In the case on hand, the petitioner has not approached the Debts Recovery Tribunal, instead, he has directly filed the above Writ Petition challenging the action taken under Section 14 of the Act - In the instant case, since the petitioner is the borrower, they have got remedy by way of an appeal under Section 17 of the SARFAESI Act as against the order passed by the Chief Metrop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... came to know that the 1st respondent took physical possession of the Hospital premises pursuant to an order dated 12.07.2018 passed by the Chief Metropolitan Magistrate under Section 14 of the SARFAESI Act in Crl.M.P.No.3133 of 2018. Challenging the order passed by the Chief Metropolitan Magistrate dated 12.07.2018, the petitioner has filed the Writ Petition. 3. The 1st respondent filed a counter denying the averments stated in the affidavit filed in support of the petition. Further, the 1st respondent contended that the Writ Petition challenging the Section 14 order is not maintainable and the parties will have to avail the alternate remedy of approaching the Debts Recovery Tribunal under Section 17 of the SARFAESI Act. Further, the 1st respondent has stated that the present Writ Petition seeking to regain possession of the secured asset, the possession of which has been taken over by the respondent in accordance with law pursuant to the order passed by the Chief Metropolitan Magistrate under Section 14 of the SARFAESI Act in Crl.M.P.No.3133 of 2018, is nothing but a delaying tactics adopted by the petitioner. 3.1. That apart, the respondent has also stated that the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SARFAESI, the entire proceedings are liable to be set aside. 6. With regard to the contention raised by Mr.AR.L.Sundaresan, learned senior counsel for the 1st respondent as to the maintainability of the Writ Petition, the learned senior counsel appearing for the petitioner submitted that the remedy available to the petitioner borrower as against the order passed under Section 14 of the SARFAESI Act by the Chief Metropolitan Magistrate is only by way of a Writ Petition and not by way of an appeal under Section 17 of the SARFAESI Act before the Debts Recovery Tribunal. 6.1. In support of his contentions, the learned senior counsel relied on the following judgments: (i)(2014) 6 SCC 1 [Harshad Govardhan Sondagar Vs. International Assets Reconstruction Company Limited and others] wherein the Hon'ble Supreme Court held as follows: ... 29.Sub-section (3) of Section 14 of the SARFAESI Act provides that no act of the Chief Metropolitan Magistrate or the District Magistrate or any officer authorised by the Chief Metropolitan Magistrate or the District Magistrate done in pursuance of Section 14 shall be called in question in any Court or before any authority. The SARFAESI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 002, that in the event that a borrower makes a representation under Section 13(3-A) of the Act, the Secured Creditor, must communicate reasons for accepting or rejecting the representation of the borrower, within 15 days from the receipt of the representation, failing which, the notice under Section 13(2) would be rendered invalid. The Secured Creditor, would therefore have to issue a fresh Notice under Section 13(2), and start the process again. 7. Countering the submissions made by the learned senior counsel appearing for the petitioner, Mr.AR.L.Sundaresan, learned senior counsel appearing for the 1st respondent submitted that the petitioner admitted the liability and only sought three months time in their reply dated 03.10.2017 and when no dispute has been raised by the petitioner, the provisions of Section 13(3-A) shall have no application. Further, the learned senior counsel submitted that the present Writ Petition is not maintainable for the reason that the petitioner has got alternate remedy by way of an appeal under Section 17 of the SARFAESI Act. 7.1.In support of his contentions, the learned senior counsel relied upon the following judgments: (i)2018 (2) CTC 569 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be seen that though the reply was addressed to Shri W.F.Moses, the Authorized Officer of the 1st respondent, it was sent to one N.S.Bose on 03.10.2017. The learned senior counsel appearing for the 1st respondent submitted that had the petitioner sent the reply dated 03.10.2017 directly to the Authorized Officer, he would have seen the reply on the very same day, but for the reasons best known to the petitioner, they sent the reply not to the Authorized Officer, but to one N.S.Bose. The learned senior counsel for the 1st respondent further submitted that the said N.S.Bose had forwarded the e-mail to the Authorized Officer only on 12.10.2017. 10. Further, on a perusal of the reply dated 03.10.2017, it is clear that the petitioner had admitted their liability and only sought for three months time to settle the outstanding dues. It is relevant to extract the reply dated 03.10.2017, which reads as follows: Zimbra cmd@santosh.ac.in Santosh Hospitals Pvt., Ltd.,'s Reply to Notice u/s 13(2) of SARFAESI Act 2002 From :cmd@santosh.ac.in Tue,Oct 03,2017 10:17 AM Subject :Santsoh Hospitals Pvt., Ltd.,'s Reply to Notice u/s 13(2) of SARFAESI Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime and this Court also showed indulgence to the petitioner by order dated 05.12.2018 extending the time for compliance till 10.01.2019. Even then, without complying with the undertaking given before this Court, the petitioner again sought for extension of time. However, this Court declined to accept the request of the petitioner and posted the Writ Petition on 28.01.2019 for hearing on merits. Therefore, the conduct of the petitioner has been to merely seek time and not repay the loan as promised by them. Inspite of filing of an affidavit of undertaking before this Court, so far the petitioner has not honoured their commitment. Therefore, just for the sake of prolonging the matter, they have filed an affidavit of undertaking dated 17.10.2018 before this Court stating that they would settle the entire dues within a period of 45 days. 13. In these circumstances, the ratio laid down by the Apex Court in the judgment reported in 2018 (2) CTC 569 [ITC Limited Vs. Blue Coast Hotels Ltd., others] squarely applies to the facts and circumstances of the present case. Following the ratio laid down by the Apex Court, we are of the considered view that non-compliance of sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 under the relevant statute. * * * 55. It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... misplaced considerations, statutory procedures cannot be allowed to be circumvented. 28. ... In our view, there was no justification whatsoever for the learned Single Judge to allow the borrower to bypass the efficacious remedy provided to him under Section 17 and invoke the extraordinary jurisdiction in his favour when he had disentitled himself for such relief by his conduct. The Single Judge was clearly in error in invoking his extraordinary jurisdiction under Article 226 in light of the peculiar facts indicated above. The Division Bench also erred in affirming the erroneous order of the Single Judge. 14.A similar view was taken in Punjab National Bank vs. Imperial Gift House, (2013) 14 SCC 622, observing:- 3. Upon receipt of notice, the respondents filed representation under Section 13(3-A) of the Act, which was rejected. Thereafter, before any further action could be taken under Section 13(4) of the Act by the Bank, the writ petition was filed before the High Court. 4. In our view, the High Court was not justified in entertaining the writ petition against the notice issued under Section 13(2) of the Act and quashing the proceedings initiated by the Bank. 15. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder. 16.2.In the judgment reported in (2018) 1 Supreme Court Cases 626 [Agarwal Tracom Private Limited Vs. Punjab National Bank and others], the Apex Court held as follows: ... 27.The reason is that Section 17(2) empowers the Tribunal to examine all the issues arising out of the measures taken under Section 13(4) including the measures taken by the secured creditor under Rules 8 and 9 for disposal of the secured assets of the borrower. The expression provisions of this Act and the Rules made thereunder occurring in subsections (2), (3), (4) and (7) of Section 17 clearly suggests that it includes the action taken under Section 13(4) as also includes therein the action taken under Rules 8 and 9 which deal with the completion of sale of the secured assets. In other words, the measures taken under Section 13 (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled 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 under the relevant statute. 44. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany incorporated under the Companies Act, 1956, having its Registered Office at Secunderabad 500 003, Andhra Pradesh Vs. Canara Bank, represented by its Authorized Officer, Prime Corporate Branch, TSR Complex, S.P.Road, Secunderabad 500 003] held as follows: ... 13.Section 13(4) stipulates taking over symbolic possession of the secured assets. Section 14 contemplates taking physical possession of the secured assets with the assistance of the order of the CMM or District Magistrate, as the case may be. Both actions come within the definition of measure/action under sub-section (4) of Section 13, and as such, the appeal under Section 17 SARFAESI Act against the order passed under Section 14 of the SARFAESI Act is maintainable. The handing over of possession of the borrower or taking over possession of the secured asset by the secured creditor pursuant to the order passed under Section 14 is not mandatory or pre-condition for the purpose of preferring an appeal under Section 17 of the SARFAESI Act. 19.The ratio laid down in the judgment reported in (2014) 5 MLJ 613 (SC) : (2014) 6 Supreme Court Cases 1 [Harshad Govardhan Sondagar Vs. International Assets Reconstruction C ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
