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2016 (4) TMI 1251 - HC - Indian LawsCommercial disputes - eligibility to order under Section 14 of SERFAESI ACT whereby the respondent-Bank was given the police assistance for the purpose of taking possession of the mortgaged property came to be passed by the District Magistrate at the instance of Bank by by-passing his rights and without affording him the necessary opportunity - Held that - In relation to commercial disputes and matters the remedy before the alternative forum specially created under the special statute has to be necessarily resorted to before a party can be permitted to invoke the extra-ordinary jurisdiction and writ powers of this Court under Article 226 of the Constitution. In such matters the normal rule of relegating the party to the alternative remedy and not allowing the approaching to the High Court straightway would require a steadfast adherence. As a result this petition is not entertained and dismissed relegating the petitioner to the remedy of Appeal before the Debts Recovery Tribunal which may be resorted to by the petitioner if advised.
Issues Involved:
1. Legality of the District Magistrate's order under Section 14 of the SERFAESI Act. 2. Petitioner's contention regarding the lack of opportunity to be heard. 3. Compliance with procedural requirements by the Bank. 4. Availability of alternative remedy under Section 17 of the SERFAESI Act. Issue-wise Detailed Analysis: 1. Legality of the District Magistrate's order under Section 14 of the SERFAESI Act: The main Special Civil Application challenged the order dated 17th September, 2015/17th October, 2015 passed by the District Magistrate, Ahmedabad under Section 14 of the SERFAESI Act. This order provided police assistance to the respondent-Bank for taking possession of the mortgaged property. The petitioner questioned the legality of the order, arguing that the District Magistrate bypassed the petitioner's rights and did not afford the necessary opportunity to be heard. 2. Petitioner's contention regarding the lack of opportunity to be heard: The petitioner argued that the procedure for taking possession was not followed, and that the Magistrate should have provided an opportunity to be heard. The petitioner relied on various judicial decisions to support the contention that the conditions precedent for the exercise of powers and the required modalities were not observed. However, the Court did not delve into these submissions, leaving it open for the petitioner to raise these contentions before an alternative forum if opted. 3. Compliance with procedural requirements by the Bank: The petitioner contended that the Bank did not comply with the requirement of making certain factual averments in its application under Section 14 of the Act. The petitioner also claimed that the notice of the proceedings was not properly served. However, the Court noted that the notice was affixed on the property, and since the petitioner was in possession, it was presumed that the petitioner had knowledge of the proceedings. The Court further observed that the petitioner had instituted a suit for specific performance and obtained an injunction to maintain the status quo, which was not disclosed initially. 4. Availability of alternative remedy under Section 17 of the SERFAESI Act: The Court emphasized that the petitioner had an alternative statutory remedy of filing an appeal under Section 17 of the SERFAESI Act before the Debts Recovery Tribunal. The Court cited precedents to highlight that the remedy under Section 17 is available not only up to the stage referable to Section 13(4) but also for measures taken post-Section 13(4). The Court clarified that the language of Section 17 is wide enough to include any aggrieved person, not just the borrower. The Court reiterated the principle that the High Court should not entertain a writ petition if an effective alternative remedy is available, especially in matters involving recovery of dues by banks and financial institutions. Conclusion: The petition was dismissed, and the petitioner was relegated to the remedy of appeal before the Debts Recovery Tribunal. The Court clarified that its order would not influence the Tribunal, which should consider the appeal on its own merits. The request for a stay of the order was also rejected.
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