2018 (12) TMI 26 - HC - Indian Laws

Maintainability of petition - alternative remedy of appeal under Section 18 of the SARFAESI Act - respondent had directed the petitioner to hand over the possession of the secured assets on account of failure to discharge full amount of loan - Held that - Admittedly, the petitioner has not challenged the order dated 20.9.2018 (Annexure P-8) passed by the Tribunal. The petitioner cannot challenge the impugned notice dated 15.10.2018 (Annexure P-10) without challenging the order, Annexure P-8. It was under such circumstances that no order favourable to the petitioner can be passed. Further, against the order of the Tribunal there is a remedy of appeal under Section 18 of the SARFAESI Act. The Apex Court in Commissioner of Income Tax and others vs. Chhabil Dass Agarwal, 2013 (8) TMI 458 - SUPREME COURT , considered the question of entertaining writ petition where alternative statutory remedy was available, where it was held that Writ Court ought not to have entertained the Writ Petition filed by the assessee, wherein he has only questioned the correctness or otherwise of the notices issued under Section 148 of the Act, the re-assessment orders passed and the consequential demand notices issued thereon. The writ petition is dismissed being not maintainable.

Summary

Issues:
1. Challenge to notices issued by the respondent under the SARFAESI Act.
2. Alternative remedy available to the petitioner.
3. Applicability of writ jurisdiction in light of alternative statutory remedy.

Issue 1: The petitioner sought to challenge the notices dated 15.10.2018, 9.4.2018, and 12.6.2018 issued by the respondent under the SARFAESI Act. The petitioner had availed a term loan and repaid a substantial amount, but the respondent claimed outstanding dues. The petitioner approached the Tribunal, which directed submission of a proposal. The petitioner's subsequent proposals were rejected, leading to the issuance of possession notices for the mortgaged property. The petitioner filed a writ petition under Articles 226/227 of the Constitution of India seeking to quash the notices.

Issue 2: The High Court noted that the petitioner had an alternative remedy against the impugned notice dated 15.10.2018. The Court emphasized that the first appellate authority would be the proper forum to establish the required factual matrix, rather than invoking writ jurisdiction under Article 226 of the Constitution of India at the first instance. The petitioner had not challenged the Tribunal's order dated 20.9.2018, which dismissed the SA. The Court highlighted that the petitioner could not challenge the impugned notice without challenging the Tribunal's order, and there was a statutory remedy of appeal available under Section 18 of the SARFAESI Act.

Issue 3: The Court cited legal precedents emphasizing the principle that the High Court should not entertain writ petitions when an efficacious alternative remedy is available to the petitioner. Referring to various cases, the Court reiterated that the existence of an alternative remedy is a rule of self-imposed limitation, and the High Court should refrain from interference unless exceptional circumstances warrant it. The Court dismissed the writ petition as not maintainable, clarifying that the dismissal was without prejudice to the petitioner's liberty to pursue appropriate steps under the SARFAESI Act. The judgment highlighted the importance of exhausting statutory remedies before resorting to writ jurisdiction for relief, especially in cases where an alternate statutory remedy is available.