9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (5) TMI 798 - SC - Indian LawsSeeking enforcement of a unilateral offer concerning private financial transactions - recovery of dues on the failure to comply with the one-time settlements, extraordinary jurisdiction of the High Court - HELD THAT - A writ of certiorari is to be issued over a decision when the Court finds that the process does not conform to the law or statute. In other words, courts are not expected to substitute themselves with the decision-making authority while finding fault with the process along with the reasons assigned. Such a writ is not expected to be issued to remedy all violations. When a Tribunal is constituted, it is expected to go into the issues of fact and law, including a statutory violation. A question as to whether such a violation would be over a mandatory prescription as against a discretionary one is primarily within the domain of the Tribunal. The object and reasons behind the Act 54 of 2002 are very clear as observed by this Court in MARDIA CHEMICALS LTD. VERSUS UNION OF INDIA 2004 (4) TMI 294 - SUPREME COURT . While it facilitates a faster and smoother mode of recovery sans any interference from the Court, it does provide a fair mechanism in the form of the Tribunal being manned by a legally trained mind. The Tribunal is clothed with a wide range of powers to set aside an illegal order, and thereafter, grant consequential reliefs, including re-possession and payment of compensation and costs. Section 17(1) of the SARFAESI Act gives an expansive meaning to the expression any person , who could approach the Tribunal. Approaching the High Court for the consideration of an offer by the borrower is also frowned upon by this Court. A writ of mandamus is a prerogative writ. In the absence of any legal right, the Court cannot exercise the said power. More circumspection is required in a financial transaction, particularly when one of the parties would not come within the purview of Article 12 of the Constitution of India. When a statute prescribes a particular mode, an attempt to circumvent shall not be encouraged by a writ court. A litigant cannot avoid the noncompliance of approaching the Tribunal which requires the prescription of fees and use the constitutional remedy as an alternative - the powers conferred under Article 226 of the Constitution of India are rather wide but are required to be exercised only in extraordinary circumstances in matters pertaining to proceedings and adjudicatory scheme qua a statute, more so in commercial matters involving a lender and a borrower, when the legislature has provided for a specific mechanism for appropriate redressal. The present appeals are disposed of.
Issues Involved:
1. Enforcement of a unilateral offer concerning private financial transactions. 2. Steps taken to recover dues on the failure to comply with one-time settlements. 3. Invocation of the extraordinary jurisdiction of the High Court under Article 226 of the Constitution of India. 4. Maintainability of writ petitions involving private individuals over financial transactions. 5. Effectiveness and jurisdiction of the Debt Recovery Tribunal (DRT) and Debt Recovery Appellate Tribunal (DRAT). Summary of Judgment: Issue 1: Enforcement of a Unilateral Offer Concerning Private Financial Transactions The Respondents obtained two loans, which were declared as non-performing assets (NPA) on 27.05.2021. Notices under Section 13(2) of the SARFAESI Act were issued, and the Respondents sought twelve months to repay the loan. Despite this, they filed a writ petition challenging the demand notice, leading to a High Court direction to consider their proposal. The Respondents were allowed to remit dues in five installments but failed to utilize this benefit, resulting in further notices under Section 13(4) of the SARFAESI Act. Issue 2: Steps Taken to Recover Dues on the Failure to Comply with One-Time Settlements After the Respondents failed to comply with the settlement terms, two writ petitions were filed challenging the notices under Section 13(4) of the SARFAESI Act. The High Court allowed the Respondents to make deferred payments in 20 installments, later modified to 12 months by the Division Bench, which led to the lender bank filing the present appeals. Issue 3: Invocation of the Extraordinary Jurisdiction of the High Court Under Article 226 of the Constitution of India The High Court invoked its extraordinary jurisdiction under Article 226 of the Constitution, even after the Debt Recovery Tribunal became functional. The Supreme Court reiterated that a writ petition involving private financial transactions is not maintainable and that the High Court should not entertain such writ petitions when an effective and efficacious alternative forum is available. Issue 4: Maintainability of Writ Petitions Involving Private Individuals Over Financial Transactions The Supreme Court emphasized that writ petitions against private financial institutions under Article 226 of the Constitution of India are not maintainable. The Court reiterated the settled position of law that the High Court should not interfere in commercial matters where an effective and efficacious alternative forum exists. Issue 5: Effectiveness and Jurisdiction of the Debt Recovery Tribunal (DRT) and Debt Recovery Appellate Tribunal (DRAT) The Supreme Court highlighted that the SARFAESI Act provides a fair mechanism through the Tribunal for resolving disputes. The Tribunal has the power to set aside illegal orders and grant consequential reliefs. The Court stressed that approaching the High Court for consideration of an offer by the borrower is discouraged and that the High Court should insist on exhausting alternative statutory remedies before invoking its jurisdiction under Article 226. Conclusion: The Supreme Court, while disposing of the appeals, reiterated the settled position of law regarding the interference of High Courts in matters pertaining to the SARFAESI Act. The Court directed the Registry to mark a copy of the order to the High Court of Kerala and the High Court of Punjab & Haryana, emphasizing the need for High Courts to exercise their discretion with greater caution, care, and circumspection in such matters.
|
