2019 (2) TMI 1997 - HC - Indian Laws

Maintainability of petition - alternate remedy by way of an appeal under Section 17 of the SARFAESI Act - HELD THAT - The petitioner has not disputed the claim made by the 1st respondent. Infact they specifically admitted the claim and only sought three months time to settle the outstanding. But inspite of seeking for three months time to settle the outstanding dues as early as on 03.10.2017 it is pertinent to note that even till date the petitioner has not settled the loan account with the 1st respondent. By their rejoinder dated 19.10.2017 the 1st respondent informed the petitioner that no further time would be granted and that they have taken symbolic possession of the secured asset under the provisions of Section 13(4) of the SARFAESI Act on 11.10.2017. With regard to the maintainability of the Writ Petition is concerned it is pertinent to note that under Section 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 Metropolitan Magistrate under Section 14 of the SARFAESI Act. In these circumstances the present Writ Petition cannot be entertained. Petition dismissed.

Summary

Issues Involved:

1. Maintainability of the Writ Petition.
2. Non-consideration of the reply under Section 13(3-A) of the SARFAESI Act.
3. Petitioner's admission of liability and request for time.
4. Availability of alternative remedy under Section 17 of the SARFAESI Act.

Issue-wise Detailed Analysis:

1. Maintainability of the Writ Petition:

The respondent contended that the Writ Petition challenging the Section 14 order is not maintainable, and the petitioner must approach the Debts Recovery Tribunal (DRT) under Section 17 of the SARFAESI Act. The court referenced judgments, including the Supreme Court's decision in *Authorized Officer, State Bank of Travancore v. Mathew K.C.*, emphasizing that the High Court should not entertain a writ petition if an effective remedy is available under the statute. The court concluded that the petitioner should have approached the DRT, making the Writ Petition not maintainable.

2. Non-consideration of the Reply under Section 13(3-A) of the SARFAESI Act:

The petitioner argued that their reply dated 03.10.2017 to the Section 13(2) notice was not considered, violating Section 13(3-A) of the SARFAESI Act. The respondent countered that the reply was received beyond the sixty-day period specified in the Section 13(2) notice. The court noted that the reply was sent to an incorrect recipient and forwarded to the Authorized Officer only on 12.10.2017. Additionally, the reply admitted the liability and sought time to settle the dues, which the court found insufficient to invalidate the proceedings.

3. Petitioner's Admission of Liability and Request for Time:

The court examined the petitioner's reply, which admitted the demand and requested three months to settle the dues. Despite this admission, the petitioner failed to settle the loan even after multiple extensions and an affidavit of undertaking filed in court. The court emphasized that the petitioner's conduct was merely to seek time without repaying the loan, aligning with the Supreme Court's judgment in *ITC Limited v. Blue Coast Hotels Ltd.*, which held that non-compliance with Section 13(3-A) cannot benefit a debtor who repeatedly seeks time without repayment.

4. Availability of Alternative Remedy under Section 17 of the SARFAESI Act:

The court reiterated that under Section 17 of the SARFAESI Act, an aggrieved person, including the borrower, can challenge actions taken under Sections 13(4) and 14 before the DRT. The court cited multiple judgments, including *Kanaiyalal Lalchand Sachdev v. State of Maharashtra*, affirming that the DRT provides an expeditious and effective remedy. The court concluded that the petitioner should have utilized this statutory remedy instead of filing a Writ Petition.

Conclusion:

The court dismissed the Writ Petition, emphasizing the availability of an alternative remedy under Section 17 of the SARFAESI Act and the petitioner's failure to honor their commitment to repay the loan. The court found no merit in the petitioner's arguments regarding the non-consideration of their reply and upheld the respondent's actions under the SARFAESI Act. Consequently, the connected miscellaneous petitions were also closed.