2016 (7) TMI 1522 - HC - Indian Laws

Alternative efficacious remedy of appeal - application for possession of the property filed by the respondent Bank - SARFAESI Act - HELD THAT - The petitioners have an alternative efficacious remedy of appeal against the impugned order. Moreover, the disputed questions of fact have been sought to be raised in the writ petition. The Apex Court in Commissioner of Income Tax and others vs. Chhabil Dass Agarwal, 2013 (8) TMI 458 - SUPREME COURT , elaborately considered the question of entertaining writ petition where alternative statutory remedy was available. Appeal dismissed.

Summary

Issues Involved:
1. Quashing of the impugned order by the Debt Recovery Tribunal (DRT).
2. Quashing of notices issued by the Bank under section 13(2) of the SARFAESI Act.
3. Application for possession of the property filed by the respondent Bank.
4. Direction to the respondents not to initiate coercive methods under the SARFAESI Act.
5. Availability of an alternative efficacious remedy of appeal.

Issue-wise Detailed Analysis:

1. Quashing of the Impugned Order by the Debt Recovery Tribunal (DRT):
The petitioners sought to quash the impugned order dated 7.6.2016, passed by DRT-I, Chandigarh, which dismissed their appeal under section 17 of the SARFAESI Act. The petitioners contended that the proceedings post the declaration of the Non-Performing Asset (NPA) were not in consonance with the provisions of the SARFAESI Act and the rules. They argued that the Bank did not follow the mandatory technicalities before initiating the sale of the property. However, the court noted that the DRT upheld the proceedings as compliant with the SARFAESI Act.

2. Quashing of Notices Issued by the Bank under Section 13(2) of the SARFAESI Act:
The petitioners also sought to quash the notices issued by the Bank under section 13(2) of the SARFAESI Act. The Bank had issued a legal notice dated 26.8.2015, stating that the petitioners had borrowed a housing loan and failed to meet their obligations, leading to the potential declaration of their assets as NPA. The court observed that the petitioners had an alternative remedy available and did not find sufficient grounds to interfere with the notices through writ jurisdiction.

3. Application for Possession of the Property Filed by the Respondent Bank:
The petitioners challenged the Bank's application for possession of the property under section 13(4) of the SARFAESI Act. They argued that the Bank had not disbursed the full loan amount for construction purposes, leading to irregular payments. Despite this, the Bank initiated possession proceedings and took symbolic possession, which was intimated through a notice dated 18.3.2016. The court dismissed the petitioners' challenge, citing the availability of an alternative remedy.

4. Direction to the Respondents Not to Initiate Coercive Methods under the SARFAESI Act:
The petitioners sought a direction to the respondents not to initiate coercive methods against them under the SARFAESI Act. They contended that the Bank's actions, including filing a complaint under section 138 of the Negotiable Instruments Act for dishonouring a cheque, were coercive. The court reiterated the principle that when an alternative statutory remedy is available, the High Court should not interfere through writ jurisdiction unless exceptional circumstances exist.

5. Availability of an Alternative Efficacious Remedy of Appeal:
The court emphasized that the petitioners had an alternative efficacious remedy of appeal against the impugned order. Citing the Supreme Court's decision in Commissioner of Income Tax vs. Chhabil Dass Agarwal, the court noted that non-entertainment of writ petitions when an efficacious alternative remedy is available is a rule of self-imposed limitation. The court held that the petitioners should exhaust the statutory remedy of appeal before resorting to writ jurisdiction.

Conclusion:
The court concluded that the petitioners had an alternative remedy of appeal and that the disputed questions of fact should be addressed through the statutory mechanism provided under the SARFAESI Act. Consequently, the writ petition was dismissed.