2016 (2) TMI 756 - HC - Indian Laws

Writ jurisdiction to entertain the present petition - proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Held that - There is a clinching reason for not entertaining the petition and relegating the petitioner before the Debts Recovery Tribunal. It is an admitted position that principal borrower has already approached the Debts Recovery Tribunal by filing the aforesaid S.A. No.122 of 2015 under Section 17 of the Act. The same is pending and the Tribunal is seized with the said proceedings. Interim directions have been operating in that matter. It relates to the controversy and the subject matter. It would be entirely appropriate that the petitioner approaches the Tribunal to agitate his rights by filing appropriate application in the said proceedings. In any view, therefore, the petitioner has to get his rights agitated by approaching the Tribunal which is a statutory remedy available. In the aforesaid view, present petition is not entertained and dismissed, leaving the petitioner at liberty to approach the Debts Recovery Tribunal. It goes without saying that this Court has not gone into the merits of the case of the petitioner.

Summary

Issues:
Challenge to order under Section 14 of the SERFAESI Act and notice dated 26th May, 2014.

Analysis:
The petitioner challenged orders passed by the District Magistrate and Executive Magistrate under Section 14 of the SERFAESI Act, along with a notice dated 26th May, 2014. The petitioner claimed to have purchased a property in good faith, unaware of any encumbrances, only to later discover it was under proceedings by a bank. The petitioner argued that no security interest was created by the previous owner, rendering the SERFAESI Act inapplicable. Additionally, the petitioner contended that the orders were passed without providing an opportunity to be heard. The petitioner's case was based on the premise of bona fide purchase and lack of legal authority in the actions taken against them.

The court declined to entertain the petition, citing Section 17 of the SERFAESI Act which allows aggrieved parties to appeal measures taken by secured creditors. The court referred to previous judgments emphasizing the availability of remedies under Section 17, even for actions post-Section 13(4) stage. The court highlighted that the petitioner, as an aggrieved person, could appeal to the Debts Recovery Tribunal, as established by legal precedents. The court noted that the petitioner's situation fell under a stage where the right to appeal under Section 17 was applicable.

Furthermore, the court emphasized the importance of exhausting statutory remedies before approaching the High Court under Article 226. Quoting previous rulings, the court stressed the need to respect the comprehensive procedures for recovery of dues established by relevant statutes. The court cautioned against High Courts interfering in matters involving recovery of public dues, urging adherence to statutory remedies available under the law. Ultimately, the court dismissed the petition, directing the petitioner to seek recourse before the Debts Recovery Tribunal, without delving into the merits of the case.

In conclusion, the judgment highlighted the statutory right of appeal under Section 17 of the SERFAESI Act for aggrieved parties, emphasizing the need to exhaust statutory remedies before seeking relief through writ jurisdiction. The court's decision underscored the importance of respecting established legal procedures for recovery of dues and directed the petitioner to pursue their rights through the appropriate statutory channels.