2015 (1) TMI 1484 - HC - Indian Laws

Cancellation of certain proceedings initiated for sale of the property in question through a private treaty entered into under Rule 8 of Security Interest (Enforcement) Rules, 2002 - whether the petitioner should be relegated to take recourse of the remedy available under under Section 17 and 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002? HELD THAT - Even though Shri Shekhar Sharma, learned counsel for the petitioner has tried to emphasize that the remedy available under section 17 and 18 of the Act of 2002 is not a efficacious remedy, but we are of the considered view that as the action taken in the matter is nothing but one under Section 13 read with section 14 of the Act of 2002. There is a statutory remedy of appeal avalable under section 17 before the Debt Recovery Tribunal and thereafter further appeal to the Appellate Tribunal under section 18 , all the disputes between the parties arising out of these proceedings have to be agitated and resolved in these statutory proceedings and it is not appropriate for this court to exercise its extraordinary jurisdiction in these proceedings under Article 226 of the Constitution of India to interfere when a statutory Tribunal has jurisdiction to deal with the matter. Finding existence of statutory remedy of appeal, this petition stands dismissed.

Summary

Issues involved:
Challenge to the cancellation of proceedings for sale of property through a private treaty under Rule 8 of Security Interest (Enforcement) Rules, 2002.
Determination of whether the petitioner should resort to the remedy under Section 17 and 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
Refund of amount paid to the Commercial Tax Department by the petitioner.

Analysis:

The judgment pertains to a petition challenging the cancellation of proceedings for the sale of a property through a private treaty under Rule 8 of Security Interest (Enforcement) Rules, 2002. The petitioner entered into a memorandum of understanding with the bank due to a dispute arising from non-payment of a loan obtained by M/s Bhopal Transmission Control (Pvt.) Ltd. The bank cancelled the memorandum of understanding under Rule 8 of the Rules 2002 following a dispute over tax payment by the petitioner. The primary issue was whether the petitioner should resort to the remedy under Section 17 and 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

The court emphasized that the action taken falls under Section 13 read with Section 14 of the Act of 2002, providing a statutory remedy of appeal under Section 17 before the Debt Recovery Tribunal and further appeal to the Appellate Tribunal under Section 18. The court held that all disputes between the parties arising from these proceedings must be resolved through these statutory avenues. The court rejected the argument that the remedy under Section 17 and 18 was ineffective, stating that it is inappropriate for the court to interfere when statutory tribunals have jurisdiction over the matter.

Additionally, the judgment kept open the issue of the refund of the amount paid by the petitioner to the Commercial Tax Department for future adjudication before the appropriate forum. Ultimately, the court dismissed the petition, citing the existence of a statutory remedy of appeal under Sections 17 and 18, directing the parties to resolve their disputes through the prescribed statutory proceedings rather than seeking intervention through Article 226 of the Constitution of India.

In conclusion, the judgment underscores the importance of abiding by statutory remedies available under the law and the jurisdiction of specialized tribunals to adjudicate disputes related to financial assets and security interests, emphasizing the need for parties to pursue legal recourse through the designated statutory channels.