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TMI Blog2015 (12) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent-bank to give a valid discharge of the liability over the scheduled property; and to deliver the documents/execute a sale deed in favour of the petitioners. In its order, in S.A. No.97 of 2009 dated 20.09.2013, the Debts Recovery Tribunal observed that the petitioners had challenged the action of the 2nd respondent-bank in invoking the jurisdiction of the SARFAESI Act, and in taking measures under Section 13(4) thereof, against the scheduled property solely on the ground of exclusive ownership of the said property by virtue of an agreement of sale dated 31.12.2007; the petitioners had not pointed out any irregularity committed by the 2nd respondent- bank, while initiating proceedings for taking measures under Section 13(4) of the SARFAESI Act and the Rules made thereunder; the petitioners had no right over the scheduled property as ownership was not conveyed in their favour; they had no absolute right over the property by virtue of the agreement of sale dated 31.12.2007; and they were not entitled to challenge the proceedings of the 2nd respondent-bank, when proceeding against the scheduled property by invoking the provisions under the SARFAESI Act, because of the defau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich has the normal feature of finality. (Sow Chandra Kante v. Sk. Habib (1975) 1 SCC 674 ; Kamlesh Verma v. Mayawati (2013) 8 SCC 320 ). The earlier order cannot be reviewed unless the court is satisfied that material error, manifest on the face of the order, undermines its soundness or results in miscarriage of justice. (Kamlesh Verma4; Col. Avtar Singh Sekhon v. Union of India (1980) Supp SCC 562 ). Error apparent on the face of the proceedings is an error which is based on clear ignorance or disregard of the provisions of law. Such error is an error which is a patent error and not a mere wrong decision. (T.C. Basappa v. T. Nagappa AIR 1954 SC 440 ; Kamlesh Verma4). It is essential that it should be something more than a mere error; it must be one which must be manifest on the face of the record. (Hari Vishnu Kamath v. Ahmad Ishaque AIR 1955 SC 233 ; Kamlesh Verma4). Bearing these aspects in mind, let us now examine the order of the Division bench on each of the three points, the contentions of the Learned Counsel on either side for and against its being reviewed, and whether or not each of the points, decided by the earlier Division bench, necessitates review. On Point No.1 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct makes no distinction between a public sector bank and a private sector bank in the case of a non-performing asset; even otherwise, the order under challenge was the order passed by the Debts Recovery Tribunal in S.A.No.97 of 2009 dated 20.09.2013; the order passed by the Debts Recovery Tribunal (which was under challenge in the Writ Petition), was in exercise of the powers conferred on it under Section 17 of the SARFAESI Act; the Debts Recovery Tribunal is a statutory Tribunal against whose order a Writ Petition, under Article 226 of the Constitution of India, would lie; and the Division Bench had erred in holding that the Writ Petition was not maintainable against the 2nd respondent-bank. Learned Counsel would rely on Mardia Chemicals Ltd v. Union of India AIR 2004 SC 2371 = (2004) 4 SCC 311 ; Edara Haribabu v. District Collector-cum-Presiding Officer2015(1) ALD 595 ; Bhopal Sugar Industries Ltd. v. Income Tax Officer, Bhopal AIR 1961 SC 182 ; and M/s. East India Commercial Co. Ltd v. Collector of Customs, Calcutta AIR 1962 SC 1893. On the other hand Sri K.V. Subramanya Narusu, Learned Counsel for the 2nd respondent bank, would submit that the 2nd respondent bank is a private b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lic as a whole or, in the case of local government, the public in the locality who are the beneficiaries of what is protected by public law and it is the individuals or bodies entitled to the rights who are the beneficiaries of the protection provided by private law. ("Public Law Private Law : Why the Divide? A personal View (published in "Public Law" Summer : (1986)" : Sir Harry Woolf; Sri Konaseema Co-operative Central Bank Ltd.14). While public law deals only with public bodies, this does not mean that the activities of public bodies are never governed by private law. Like public figures, at least in theory, public bodies are entitled to have a private life. The servant employed by a public body ordinarily has the same private rights as any other servant. The position may, however, be different if such relationship is circumscribed by a statutory provision. ("Public Law Private Law: Why the Divide? A personal View (published in "Public Law" Summer : (1986)" : Sir Harry Woolf; Sri Konaseema Co-operative Central Bank Ltd.14). The bodies to which the remedies of these prerogative writs have been applied have all been statutory bodies on whom Parliament has conferred statutory powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord or other persons or bodies exercising judicial or quasi-judicial functions. A certiorari lies only in respect of a judicial or quasi-judicial act as distinguished from an administrative act. (Udit Narain Singh Malpaharia v. Additional Member Board of Revenue, Bihar AIR 1963 SC 786 ). Wherever anybody of persons having legal authority to determine questions affecting the rights of subjects, and having the duty to act judicially, act in excess of their legal authority they are subject to the controlling jurisdiction of the Court exercised in a writ of Certiorari. (The King v. The Electricity Commissioner ; Udit Narain Singh Malpaharia19). In order to establish that certiorari will issue, it is enough to show that the body in question was obliged to act in a judicial manner, in the sense that it was under an express duty to adopt a procedure analogous to a judicial procedure, or that it was required to determine questions of law and fact or otherwise to exercise a limited yet judicial discretion, or that it was under an implied duty to act judicially in accordance with natural justice, or even under a more loosely formulated duty to act fairly. A duty to act judicially may be inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on must, therefore, be made between a duty and a mere power. Mandamus is not limited to judicial acts. It will issue at the instance of a person whose legal right is involved and a corresponding statutory obligation is also involved. There must be a legal right existing in the petitioner and a corresponding legal duty upon the authority in order to issue a mandamus. (Harijander Singh21). A writ can issue against a public body or authority or bodies created under statute apart from the State. Violation of any statutory provision or rule can be a ground for the issue of such a writ. (Harijander Singh21). Where the authority has failed to carry out a legal duty imposed on him, and such failure is destructive of a basic principle of justice, a writ of mandamus should issue ex debito justitiae to compel him to carry out the duty. (Bhopal Sugar Industries Ltd12). A writ of mandamus can also be issued for statutory violation by a private body, including private banks such as the second respondent-bank. In Federal Bank Ltd.9, the 1st respondent, who was working as the branch manager of Federal Bank, was placed under suspension, and disciplinary action was initiated against him. On his bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y not be amenable to the writ jurisdiction under Article 226 of the Constitution. But in certain circumstances a writ may issue to such private bodies or persons as there may be statutes which need to be complied with by all concerned including the private companies. For example, there are certain legislations like the Industrial Disputes Act, the Minimum Wages Act, the Factories Act or for maintaining proper environment, say the Air (Prevention and Control of Pollution) Act, 1981 or the Water (Prevention and Control of Pollution) Act, 1974 etc. or statutes of the like nature which fasten certain duties and responsibilities statutorily upon such private bodies which they are bound to comply with. If they violate such a statutory provision a writ would certainly be issued for compliance with those provisions. For instance, if a private employer dispenses with the service of its employee in violation of the provisions contained under the Industrial Disputes Act, in innumerable cases the High Court interfered and has issued the writ to the private bodies and the companies in that regard. But the difficulty in issuing a writ may arise where there may not be any non-compliance with or v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tutes which need to be complied with by all concerned including private companies; in cases where there is no violation of any statutory provision by a private body, a writ may not be issued, and other remedies may have to be resorted to; and a private body would be amenable to the writ jurisdiction only where it becomes necessary to compel such body to enforce any statutory obligation and its obligations of a public nature. In Sri Konaseema Co-operative Central Bank Ltd.14 a Full Bench of this Court held that the bye-laws of a co-operative society, registered under the A. P. Co-operative Societies Act, did not have the force of law; they were in the nature of a contract; and, where a Society could not be characterised as a 'State', the service conditions of its employees, governed by bye-laws, could not be enforced through a writ petition. It is evident, therefore, that service conditions of employees of companies/societies, which are either governed by bye laws or by provisions which do not have the force of law, are in the nature of a contract; and in cases where a company or a society cannot be characterised as a State, the service conditions of its employees cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the SARFAESI Act before the Debts Recovery Tribunal, the petitioners could not defeat the claim of the secured creditor i.e. the 2nd respondent-bank; time and again, the Supreme Court had held that sale of property, in contravention of Section 13(13) of the SARFAESI Act, was invalid; the sale in favour of the petitioners, by respondents 4 to 7, was invalid and hit by Section 13(13) of the SARFAESI Act; and, on the basis of a void agreement, the petitioners were not entitled to claim any preferential right over the claim of the 2nd respondent-bank. Point No.2 was also held in favour of the 2nd respondent-bank, and against the petitioners. Sri Krishna Murthy, Learned Counsel appearing for the petitioners, would submit that, in W.P. No.27307 of 2011 filed by the 2nd respondent-bank against the petitioners herein, the Division Bench, by its order dated 27.08.2012, had specifically rejected the contention, urged on behalf of the 2nd respondent- bank, that the agreement of sale was null and void under Section 13(13) of the SARFAESI Act; and as the order passed by the Division Bench in W.P. No.27307 of 2011 dated 27.08.2012 is a judgment inter-parties, it is not open to the subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a matter in issue is a composite decision; the decision of law cannot be dissociated from the decision on facts on which the right is founded. A decision on an issue of law will be res judicata in a subsequent proceeding if it be the same as in the previous proceeding. (Sushil Kumar Mehta v. Gobind Ram Bohra (1990) 1 SCC 193 ; Mathura Prasad Sarjoo Jaiswal v. Dossibai N. B. Jeejeebhoy AIR 1971 SC 2355. The earlier Judgment, on the points decided on fact or of law or of fact and law, is conclusive in every subsequent proceeding between the same parties. (Swamy Atmananda v. Swami Bodhananda AIR 2005 SC 2227; Ishwar Dutt v. Land Acquisition Collector (2005) 7 SCC 190). An order of a Court/Tribunal of competent jurisdiction directly upon a point creates a bar, as regards a plea, between the same parties in some other matter in another Court/Tribunal, where the said plea seeks to raise afresh the very point that was determined in the earlier order. An order passed by a Court/Tribunal having jurisdiction over the subject matter, and over the parties, cannot be ignored as a nullity unless such erroneous orders are corrected in accordance with law. Such orders bind the parties in a subsequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , would submit that existence of an alternative remedy is not a bar for invoking the jurisdiction of the High Court under Article 226 of the Constitution of India; the remedy of an appeal is neither effective nor efficacious; when the Debts Recovery Tribunal had specifically recorded findings contrary to its earlier order, and the order of this Court, the petitioners cannot be relegated to the alternative remedy of an appeal all over again; the conditions imposed under the second proviso to Section 18, regarding pre-deposit, renders the remedy of an appeal ineffective; and the order of the Division Bench necessitates review on this ground also. On the other hand, Sri K.V. Subrahmanya Narusu, Learned Counsel for the 2nd respondent - bank, would submit that the statutory remedy of appeal, under Section 18 of the SARFAESI Act, is effective and efficacious; and the petitioners cannot, without exhausting the alternative remedy, straightaway invoke the extra- ordinary jurisdiction of this Court under Article 226 of the Constitution of India. It is not in dispute that, against the order passed by the Debt Recovery Tribunal, in S.A. No.97 of 2009 dated 20.09.2013, the petitioners herein h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Industries Ltd. v. Union of India (1997) 5 SCC 536 ; Chhabil Dass Agarwal35; G. Veerappa Pillai v. Raman & Raman Ltd. AIR 1952 SC 192; CCE v. Dunlop India Ltd. (1985) 1 SCC 260 ; Ramendra Kishore Biswas v. State of Tripura (1999) 1 SCC 472 ; Shivgonda Anna Patil v. State of Maharashtra (1999) 3 SCC 5 ; C.A. Abraham v. ITO AIR 1961 SC 609 ; Titaghur Paper Mills Co. Ltd.39; Excise and Taxation Officer-cum-Assessing Authority v. Gopi Nath and Sons (1999) Supp (2) SCC 312 ; Whirlpool Corpn. v. Registrar of Trade Marks (1998) 8 SCC 1 ; Tin Plate Co. of India Ltd. v. State of Bihar (1998) 8 SCC 272 ; Sheela Devi v. Jaspal Singh (1999) 1 SCC 209 and Punjab National Bank v. O.C. Krishnan ((2001) 6 SCC 569 ). Writ jurisdiction cannot normally be invoked if a statutory remedy of appeal is provided under the Act. If a statutory appeal lies, then, ordinarily, the aggrieved party has to challenge the order in an appeal and not by filing a writ petition. (Civily Kallarackal v. Vehicle Factory (2012) 8 SCC 524 ; Whirlpool Corporation47; Paschim Gujarat Vij Co. Ltd. v. Devabhai Memabhai Myatra AIR 2014 Gujarat 26 ). The Rule that the High Court will, ordinarily, not entertain a petition under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and there is no difficulty in the enforcement of the order appealed against in case the appeal is ultimately dismissed. It is open to the Legislature to impose an accompanying liability upon a party upon whom a legal right is conferred or to prescribe conditions for the exercise of the right. Any requirement for the discharge of that liability or the fulfilment of that condition, in case the party concerned seeks to avail of the said right, is a valid piece of legislation. (Anant Mills Co. Ltd.56). The requirement of pre-deposit under sub-section (1) of Section 18 of the SARFAESI Act is mandatory and there is no reason whatsoever for not giving full effect to the provisions contained in Section 18 of the Act. Deposit, under the second proviso to Section 18(1) of the Act, is a condition precedent for preferring an appeal under the said section. (Narayan Chandra Ghosh32). As the conditions of pre-deposit, under Section 18(1) of the SARFAESI Act, have been upheld by the Supreme Court in Narayana Chandra Ghosh32, it cannot be said that imposition of such a condition would render the remedy of an appeal ineffective. It is only where there can reasonably be no two opinions entertained ..... X X X X Extracts X X X X X X X X Extracts X X X X
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