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2022 (5) TMI 1079 - HC - Indian LawsMaintainability of writ petition - availability of alternative remedy of appeal - Grant of benefit of Moratorium - Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - HELD THAT - In case of M/s Balaji Enterprises and other connected matters 2022 (2) TMI 1235 - RAJASTHAN HIGH COURT involving identical controversy, a co-ordinate Bench of this Court has dismissed the writ petitions on account of availability of remedy to the petitioners under the SARFAESI Act - the issue of availability of an alternative statutory remedy is no more res integra and stands decided against the petitioner. In the backdrop of judgments of the Hon ble Apex Court of India in the cases of M.D. Frozen Foods Exports Pvt. Ltd. 2017 (9) TMI 1266 - SUPREME COURT and Indiabulls Housing Finance Limited 2018 (3) TMI 118 - SUPREME COURT , the contention of learned counsel for the petitioners that in view of availability of arbitration clause and invocation of Section 9 of the Act of 1996, the proceedings under the SARFAESI Act could not have been resorted to, does not merit acceptance. The writ petition is dismissed in view of availability of alternative remedy to the petitioners under the provisions of the SARFAESI Act.
Issues:
1. Maintainability of the writ petition despite the availability of an alternative remedy under the SARFAESI Act. 2. Invocation of SARFAESI Act despite the existence of an arbitration clause in the loan agreement. 3. Interpretation of judgments related to the interplay between arbitration proceedings and SARFAESI Act. Issue 1: Maintainability of the writ petition under SARFAESI Act: The writ petition was filed by borrowers seeking to quash an order under Section 14 of the SARFAESI Act and to obtain the benefit of a moratorium. The petitioner argued that the appeal remedy was not available against the Section 14 order, citing a Supreme Court judgment. However, the respondent contended that the writ petition was not maintainable due to the availability of an alternative remedy under Section 17 of the SARFAESI Act. The respondent referred to previous court decisions upholding the availability of statutory remedies under the SARFAESI Act, leading to the dismissal of similar writ petitions. The court noted that the issue of alternative statutory remedy had been previously decided against the petitioner, and thus dismissed the writ petition. Issue 2: Invocation of SARFAESI Act and arbitration clause: The petitioner argued that the respondent should not have resorted to the SARFAESI Act due to the existence of an arbitration clause in the loan agreement. The petitioner relied on judgments of the Supreme Court regarding the interplay between arbitration proceedings and the SARFAESI Act. However, the respondent contended that objections to SARFAESI Act proceedings based on arbitration clauses were not sustainable, citing relevant Supreme Court judgments. The court, considering the cited judgments, concluded that the petitioner's argument regarding the inapplicability of SARFAESI Act proceedings in the presence of arbitration clauses was not valid. Therefore, the court dismissed the writ petition. Issue 3: Interpretation of judgments on arbitration and SARFAESI Act: The court analyzed various Supreme Court judgments on the relationship between arbitration proceedings and the SARFAESI Act. The court highlighted that the SARFAESI Act provides an additional remedy to secured creditors for expeditious enforcement of security interests, distinct from arbitration proceedings. The court emphasized that arbitration and SARFAESI Act proceedings can be pursued simultaneously, as held in previous judgments. The court distinguished cases dealing with the remedy before a civil court from those involving arbitration clauses and the SARFAESI Act. Ultimately, the court dismissed the writ petition, emphasizing the availability of alternative remedies under the SARFAESI Act based on the interpretations of relevant judgments. In conclusion, the court dismissed the writ petition due to the availability of alternative statutory remedies under the SARFAESI Act, despite arguments regarding the invocation of the Act in the presence of an arbitration clause. The court's decision was based on the interpretation of relevant judgments emphasizing the distinct nature of SARFAESI Act proceedings and the validity of pursuing arbitration and SARFAESI Act proceedings simultaneously.
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