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TMI Blog2016 (4) TMI 964X X X X Extracts X X X X X X X X Extracts X X X X ..... h the provisions of the enactment in question or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of principles of natural justice, or when the vires of the statute is under challenge. Unless the Court is convinced that the case falls under the exceptional categories, the writ petition filed against the order of the Tribunal, passed in exercise of the jurisdiction under S.17 of the SARFAESI Act, on account of the legislative intent behind the enactment of the SARFAESI Act and RDDB Act and the ratio of law laid down by the Apex Court in the cases of (1) Kanaiyalal Lalchand Sachdev [2011 (2) TMI 1277 - SUPREME COURT OF INDIA ] (2) Satyawati Tondon [2010 (7) TMI 829 - SUPREME COURT ] and (3) Sri Siddeshwara Co.Op. Bank Ltd. [ 2013 (9) TMI 216 - SUPREME COURT ], cannot be entertained, as the approach of the High Court should be consistent with the provisions of the statutes and also the law laid down by the Apex Court, mandated by Article 141 of the Constitution. In view of the aforesaid discussion, we are of the opinion that Hotel Vandana Palace case [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set mentioned in the petition, on the premise that the same is arbitrary and illegal. On 14.06.2013, the said appeal having been dismissed, this writ petition was filed to quash the aforesaid order and for issue of a writ of mandamus directing the respondent - Bank, to consider 'One Time Settlement' proposal of the petitioners, and for grant of the consequential reliefs. 4. As this Bench is only required to answer the aforesaid question and lay down the principle of law, it is unnecessary to state the facts of the case in detail. 5. The petitioners borrowed loan from the respondent No.1 (for short 'the Bank') and their account was treated on 30.09.2010, as Non-performing Asset. A demand notice dated 22.12.2010, under S.13(2) of the Act, was issued by the Bank. S.A.No.399/2011 filed on 19.08.2011 by the petitioners was allowed on 22.08.2012 by the Tribunal, on the ground that there is violation of sub-rule(4) of Rule 9 of the Security Interest (Enforcement) Rules, 2002. A fresh auction notice having been issued and proceeding initiated in pursuance of the liberty granted in S.A.No.399/2011 and an auction notice dated 25.09.2012 having been published, S.A.No.688 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of the work to the learned Judges. He submitted that the powers of the Chief Justice to constitute Benches and allocate the work to the learned Judges is traceable under Articles 225 and 226 of the Constitution and, therefore, any provision in any statute concerning the High Court administration must yield to the powers of the Hon'ble Chief Justice, which flows from Constitution itself and, therefore, S.9(xii)(a) of the KHC Act, 1961 should yield to the prerogative of the Chief Justice. 9. In view of the rival contentions and there being no dispute that the reference to this Bench is not by the learned Single Judge and that the Special Bench was constituted by the Hon'ble Chief Justice, we would address the preliminary objection raised with regard to the maintainability of the reference made by the Hon'ble Chief Justice. 10. What a learned Single Judge should do, if he feels that the decision of the Division Bench is required to be reconsidered was the subject matter of consideration by the Apex Court, in LALA SHRI BHAGAWAN AND ANOTHER Vs. RAM CHAND AND ANOTHER, AIR 1965 SC 1767.. Therein, it has been held as follows: It is hardly necessary to emphasise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscretion of the Chief Justice in whom vests the power of framing the roster and who can direct any particular matter to be placed for hearing before any particular Bench of any strength. (emphasis supplied) 13. In Narasimha Setty v. Padma Setty ILR 1998 Karn. 3230, with regard to the competency of a Single Judge to refer a case to a Full Bench is concerned, after having noticed the provisions contained in the Karnataka High Court Act, 1961 and the scope and ambit of the powers of the Chief Justice with regard to the posting of the cases before different Benches of the High Court and the decision of Apex Court, rendered in the case of Lala Shri Bhagwan (supra), it has been held as follows: 17. Therefore, if a learned Single Judge of a High Court hearing a matter feels that the earlier judgment of a Division Bench of the Court requires reconsideration, then in absence of any statutory provision empowering him to refer the same to a larger bench, he can place the relevant papers before the Chief Justice to enable him to constitute a larger bench to examine the question. (emphasis supplied) 14. In State of Karnataka v. Sri. B. Krishna Bhat, 2001 (2) KLJ 1 (FB), a Fiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rinciples of law laid down by the Apex Court and the Full Benches of this Court. Hence, the preliminary objection raised by Sri. R.L. Patil, being devoid of merit, we hold that the reference made is competent and constitution of the Special Bench on account of the facts and circumstances stated in para 2 supra, is justified. 17. Undisputedly, the respondent No.1-Bank advanced loan to the petitioners and the loan was secured by way of equitable mortgage executed in respect of the property bearing No.256, III Main, Banashankari III Stage, II Phase, VI Block, Bangalore-85. Original title deeds of the property was deposited with the Bank i.e., at the time of availing the loan. Since the petitioners committed default in repaying the loan, the Bank issued notice under S.13(2) of the Act and took steps under S.13(4) in respect of the said property. Auction notice was published and bid of respondent Nos.2 and 3 was accepted. Feeling aggrieved, the petitioners filed S.A.No.688/2012 before the Tribunal, to set aside the sale notice dated 25.09.2012 and the consequential action. The same having been dismissed, this writ petition was filed, though the statutory remedy of appeal, under S.18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Bank agreed for settlement but the respondent failed to abide by the conditions of the settlement. Consequently, Bank issued notice for possession of the secured assets which was challenged by filing another writ petition, which was disposed of directing the loanee to pay the amount in instalments for liquidating the dues of the Bank. The Bank having assailed the said order, the Apex Court while allowing the appeal and setting aside the impugned order, has held as follows: 7. . there was no justification for the High Court to entertain the writ petition and that too by ignoring the fact that a statutory alternative remedy was available to the respondent under Section 17 of the Act. 21. The object of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short, 'the RDDB Act'), is to provide for the establishment of Tribunal for expeditious adjudication and recovery of debts due to Banks and financial institutions and for matters connected therewith or incidental thereto. The RDDB Act creates a special machinery for speedy recovery of dues of the Banks and financial institutions. S.17 of the RDDB Act deals with jurisdiction, powers and auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2004) 4 SCC 31, wherein, the vires of the Act was examined and upheld. After referring to the statement of objects and reasons and while upholding the constitutional validity, it has been held as follows: 81. In view of the discussion held in the judgment and the findings and directions contained in the preceding paragraphs, we hold that the borrowers would get a reasonably fair deal and opportunity to get the matter adjudicated upon before the Debt Recovery Tribunal. The effect of some of the provisions may be a bit harsh for some of the borrowers but on that ground the impugned provisions of the Act cannot be said to be unconstitutional in view of the fact that the object of the Act is to achieve speedier recovery of the dues declared as NPAs and better availability of capital liquidity and resources to help in growth of economy of the country and welfare of the people in general which would subserve the public interest. (emphasis supplied) 24. In AUTHORISED OFFICER, INDIAN OVERSEAS BANK Vs. M/S. ASHOK SAW MILL, (2009) 8 SCC 366, with regard to the SARFAESI Act and the jurisdiction of Tribunal, under S.17, Apex Court has held as follows: 33. It is clear that whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal finds that the recourse taken by the secured creditor under sub-section (4) of Section 13 is in accordance with the provisions of the Act and the Rules made thereunder, then, notwithstanding anything contained in any other law for the time being in force, the secured creditor can take recourse to one or more of the measures specified in Section 13(4) for recovery of its secured debt. 24. Sub-section (5) of Section 17 prescribes the time-limit of sixty days within which an application made under Section 17 is required to be disposed of. The proviso to this sub-section envisages extension of time, but the outer limit for adjudication of an application is four months. If the Tribunal fails to decide the application within a maximum period of four months, then either party can move the Appellate Tribunal for issue of a direction to the Tribunal to dispose of the application expeditiously. (emphasis supplied) 26. Sri R.L. Patil, contended that the power of judicial review under Articles 226 and 227 of the Constitution is an inviolable part of the basic structure of the Constitution and the same cannot be denied much less ousted by the statutes made by the Parliament ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not subject to any exceptions, then it would be futile to contend that a citizen cannot move the High Courts or this Court to invoke their jurisdiction even in cases where his fundamental rights have been violated. The existence of judicial power in that behalf must necessarily and inevitably postulate the existence of a right in the citizen to move the Court in that behalf; otherwise the power conferred on the High Courts and this Court would be rendered virtually meaningless. Let it not be forgotten that the judicial power conferred on the High Courts and this Court is meant for the protection of the citizens' fundamental rights, and so, in the existence of the said judicial power itself is necessarily involved the right of the citizen to appeal to the said power in a proper case. (emphasis supplied in original) 30. Basic principle for exercising the power under Article 227 was considered by the Apex Court, in Babubhai Muljibhai Patel v. Nandlal Khodidas Barot, [1974] 2 SCC 706 and it has been held as follows: 10. Exercise of the jurisdiction is no doubt discretionary, but the discretion must be exercised on sound judicial principles. When the petition raises comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h v. National Insurance Co. Ltd., Surya Dev Rai v. Ram Chander Rai and SBI v. Allied Chemical Laboratories.) 24. In City and Industrial Development Corpn. v. Dosu Aardeshir Bhiwandiwala this Court had observed that: 30. The Court while exercising its jurisdiction under Article 226 is duty- bound to consider whether: (a) adjudication of the writ petition involves any complex and disputed questions of facts and whether they can be satisfactorily resolved; (b) the petition reveals all material facts; (c) the petitioner has any alternative or effective remedy for the resolution of the dispute; (d) the person invoking the jurisdiction is guilty of unexplained delay and laches; (e) ex facie barred by any laws of limitation; (f) grant of relief is against public policy or barred by any valid law; and host of other factors. (emphasis supplied) 33. In NIVEDITA SHARMA Vs. CELLULAR OPERATORS ASSN. OF INDIA, (2011) 14 SCC 337, Apex Court has held, that when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained, ignoring the statutory dispensation. 34. In SOUTHERN ELECTRICITY SUPPLY CO. OF ORISSA LTD. VS. SR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction and where the authorities have acted beyond the provisions of the Act. However, it should only be for the specialised tribunal or the appellate authorities to examine the merits of assessment or even the factual matrix of the case. (emphasis supplied) 35. In Cicily Kallarackal Vs. Vehicle Factory, (2012) 8 SCC 524, Apex Court has issued a direction of caution, that it will not be a proper exercise of the jurisdiction by the High Court to entertain a writ petition against such orders against which statutory appeal lies. The relevant portion of the Judgment reads as follows: 4. Despite this, we cannot help but state in absolute terms that it is not appropriate for the High Courts to entertain writ petitions under Article 226 of the Constitution of India against the orders passed by the Commission, as a statutory appeal is provided and lies to this Court under the provisions of the Consumer Protection Act, 1986. Once the legislature has provided for a statutory appeal to a higher court, it cannot be proper exercise of jurisdiction to permit the parties to bypass the statutory appeal to such higher court and entertain petitions in exercise of its powers under Art ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gle Judge, in our opinion, ought not to have been interfered with by the Division Bench of the High Court in the appeal filed by the respondent assessee. (emphasis supplied) 38. Sri R.L.Patil, contended that the view expressed in Hotel Vandana Palace case (supra) with regard to the maintainability of writ petition i.e., without filing the appeal before the DRAT, under S.18 of the Act being the correct position of law, the decision in the case of Smt.Lily Joseph (supra), expressing a contrary view is unsound and is liable to be declared as per incuriam. 39. Sri R. Ashok Kumar, on the other hand supported the conclusion arrived at in Smt.Lily Joseph case and contended that the finding recorded on point (ii), in the case of Hotel Vandana Place case, being in ignorance of well settled principles of law and also the binding decision in the case of Satyawati Tondon, is liable to be declared as per incuriam. Learned advocate submitted that the Hotel Vandana Palace case having been decided in the peculiar facts, which can be seen from the opening sentence of para 23, does not constitute a binding precedent especially on account of not noticing and following the decision of the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the peculiar facts and circumstances of the case, with the aforesaid reasoning, the writ petition was held as maintainable. 42. In Smt. Lily Joseph case (supra), the challenge in the writ petition was to an order passed by the Tribunal under S.17 of the SARFAESI Act. The writ petition was dismissed by the learned Single Judge on the ground of availability of alternative remedy of appeal to the DRAT. By referring to the decision of the Apex Court in Kanaiyalal Lalchand Sachdev (supra), the Division Bench has dismissed the writ appeal, by stating that the law is well settled on the issue. It is to be pointed out that without raising a point for consideration and assigning reasons, the conclusion has been arrived at. There is no express declaration of law or authority of a general nature, to reckon the decision as binding, as is contemplated by Article 141 of the Constitution. 43. Presently, we shall deal with the concept of per incuriam. 44. A decision rendered in ignorance of a binding precedent and/or in ignorance of the statutory provision, would be held to have been rendered per incuriam (See para 98 of the decision in Subhash Chandra v. Delhi subordinate services sele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er did not avail of that remedy and further remedies from that order and instead directly approached the High Court in extraordinary jurisdiction under Article 226 of the Constitution of India. *** *** *** 27. No doubt an alternative remedy is not an absolute bar to the exercise of extraordinary jurisdiction under Article 226 but by now it is well settled that where a statute provides efficacious and adequate remedy, the High Court will do well in not entertaining a petition under Article 226. On misplaced considerations, statutory procedures cannot be allowed to be circumvented. (emphasis supplied) 47. In NARAYAN CHANDRA GHOSH VS. UCO BANK AND OTHERS, (2011) 4 SCC 548, the material facts were, that the appellant/borrower, filed an appeal before the DRAT and in that appeal, an application was filed under S.18(1) of the SARFAESI Act. The DRAT exempted the appellant from making any deposit in terms of the second proviso to S.18 of the Act, before entertaining the appeal against the order passed by the DRT. The said order, when questioned by the Bank having been set aside by the High Court and the borrower having approached the Apex Court, the question raised for consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 18(1) of the Act being a condition precedent for preferring an appeal under the said section, the Appellate Tribunal had erred in law in entertaining the appeal without directing the appellant to comply with the said mandatory requirement. (emphasis supplied) 48. In the case of Parsn Medicinal Plants Private Limited And Another Vs. Indian Bank And Others, (2011) 15 SCC 253, the material facts were, the finding of the Debts Recovery Appellate Tribunal that the appellants / guarantors need not make any deposit to maintain the appeal was assailed by the Bank and also by the auction-purchaser by filing writ petitions and by contending that the amount paid / deposited by the auction-purchaser cannot be adjusted towards the deposit to be made by the borrowers / guarantors, while preferring appeal under S.18 of the SARFAESI Act and also that there cannot be complete waiver of the deposit, as was prayed on the part of the guarantors, before the Appellate Tribunal and was accepted by the Appellate Tribunal. Repelling the contention urged on behalf of the guarantors that the issue of waiver is a matter completely between the appellant / guarantors and the Appellate Tribunal and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the avowed statutory purpose. Hence, impugned order passed by the first respondent Appellate Tribunal is absolutely bereft of any power granted to it and therefore, the same needs to be set aside. (emphasis supplied) 49. In T.P.VISHNU KUMAR Vs. CANARA BANK, P.N. ROAD, TIRUPPUR AND OTHERS, (2013) 10 SCC 652, the material facts were that the Bank filed O.A. before the DRT to pass a decree directing the defendants, to pay the quantified sum along with interest. I.As. were filed to produce the extract of the accounts and the documents relating to the loan transactions. The applications having been contested were rejected by the Tribunal, against which, the writ petitions were filed and the same was opposed on the ground of availability of alternative remedy under the Act. Writ petitions having been allowed, the Bank took up the matter in appeal and the Division Bench having allowed the writ appeals by holding that the borrower had not availed the alternative remedy available under S.20 of the RDDB Act, Apex Court was approached for relief. Considering the purpose for which the Tribunal has been established and the Act providing for a mechanism by way of appeal as per S.20 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing precedent. In the case of Smt.Lily Joseph (supra),, the Division Bench has not assigned reasons, while holding the writ petition as not maintainable, except making reference to the decision in the case of KANAIYALAL LALCHAND SACHDEV,. 52.1. Sri R.L. Patil, submitted that the Judgment rendered in Hotel Vandana Palace case (supra) was questioned before the Apex Court and the appeal was dismissed, in the case of VASU P. SHETTY Vs. HOTEL VANDANA PALACE, (2014) 5 SCC 660 and hence the doctrine of merger applies. He further submitted that the decision in Hotel Vandana Palace case (supra), thus, having attained finality is a binding precedent. 52.2. Sri R. Ashok Kumar, on the other hand, submitted that, the mere fact that appeal preferred against the decision in VASU P. Shetty case was dismissed by the Apex Court does not mean that the issue under consideration viz., point No.(ii) raised in Hotel Vandana Palace case as having been determined by the Apex Court. He submitted that the Division Bench while deciding Hotel Vandana Palace case, having overlooked the decision in SATYAWATI TONDON'S case and also misinterpreted the ratio of law laid down in Kanaiyalal Lalchand Sachdev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances are made out. The writ remedy cannot be permitted to be availed as a routine / matter of course, but only in exceptional circumstances. The Apex Court has recognized some exceptions to the rule of alternative remedy i.e., where the statutory body has not acted in accordance with the provisions of the enactment in question or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of principles of natural justice, or when the vires of the statute is under challenge. 54. Unless the Court is convinced that the case falls under the exceptional categories, the writ petition filed against the order of the Tribunal, passed in exercise of the jurisdiction under S.17 of the SARFAESI Act, on account of the legislative intent behind the enactment of the SARFAESI Act and RDDB Act and the ratio of law laid down by the Apex Court in the cases of (1) Kanaiyalal Lalchand Sachdev (2) Satyawati Tondon and (3) Sri Siddeshwara Co.Op. Bank Ltd., cannot be entertained, as the approach of the High Court should be consistent with the provisions of the statutes and also th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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