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TMI Blog2017 (2) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... are initiated before the Debts Recovery Tribunal, the Tribunal shall examine the same in accordance with law and on merits. - LETTERS PATENT APPEAL NO. 277 of 2017 In SPECIAL CIVIL APPLICATION NO. 2337 of 2017 - - - Dated:- 16-2-2017 - MR. R.SUBHASH REDDY AND MR. VIPUL M. PANCHOLI, JJ. FOR THE APPELLANT : ARJUN R SHETH, ADVOCATE ORAL ORDER (PER :HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI) 1. This appeal is filed under Clause 15 of the Letters Patent by the appellants original petitioners (hereinafter referred to as the petitioners) against the order dated 13.02.2017 passed by the learned Single Judge in Special Civil Application No.2337 of 2017, by which the learned Single Judge has dismissed the petition on the ground that the petitioners are having alternative efficacious remedy to approach Debts Recovery Tribunal. 2. It is the case of the petitioners that petitioner No.1 had taken cash credit facility on 08.05.2015 to the tune of ₹ 1.5 crores and inland/import letter of credit cum BCR encashment facility of ₹ 3.5 crores from respondent herein original respondent (hereinafter referred to as respondent). Against the said facility the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icularly set out in the notice dated 14 October 2016 issued by the Respondent (Annexure C) as non-performing asset on 14 September 2016 is illegal and null and void; b. This Hon'ble court be pleased to declare that the notice dated 14 October 2016 (Annexure C) issued by the Respondent is illegal and null and void; c. This Hon'ble Court be pleased to set aside and quash the notice dated 14 October 2016 (Annexure G); d. This Hon'ble court be pleased to declare that the possession notices dated 5 January 2017 (Annexure G) and the possession notices published in the newspapers on 8 January 2017 (Anneuxre H) are illegal and null and void; e. This Hon'ble court be pleased to declare that the E auction sal notices issued in the newspaper on 11 January 2017 (Anneuxre I) are illegal and null and void; f. This Hon'ble Court be pleased to set aside and quash the possession notices dated 5 January 2017 (Annexure G) the possession notices published in the newspapers on 8 January 2017 (Annexure H); g. This Hon'ble court be pleased to set aside and quash the E auction sale notices issued in the newspapers on 11 January 2017 (Annexure I) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ects can be examined by the Tribunal. He, therefore, requested that this appeal be dismissed. 11. We have considered the rival submissions canvassed on behalf of learned advocates appearing for the parties. We have gone through the material produced on record. 12. Section 17 of the Act provides as under: 17. Right to appeal (1)Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, may make an application alongwith such fee, as may be prescribed to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measure had been taken: PROVIDED that different fees may be prescribed for making the application by the borrower and the person other than the borrower. Explanation : For the removal of doubts, it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Recovery Tribunal within the period of four months as specified in subsection (5), any part to the application may make an application, in such form as may be prescribed, to the Appellate Tribunal for directing the Debts Recovery Tribunal for expeditious disposal of the application pending before the Debts Recovery Tribunal and the Appellate Tribunal may, on such application, make an order for expeditious disposal of the pending application by the Debts Recovery Tribunal. (7) Save as otherwise provided in this Act, the Debts Recovery Tribunal shall, as far as may be, dispose of the application in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the rules made thereunder. 13. From the aforesaid provisions of the Act, it can be said that the remedy provided under the Act is an efficacious remedy. The petitioners can lead evidence before the Tribunal to establish his case and the contentions. Even the Tribunal has power to restore back the possession if the aggrieved person succeeds before the Tribunal. The powers of the Tribunal are wider and the Tribunal can undertake the examination of various issues by virtu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the application expeditiously. Section 18 provides for an appeal to the Appellate Tribunal. 5. Section 3 4 lays down that no Civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which a Tribunal or Appellate Tribunal is empowered to determine. It further lays down that no injunction shall be granted by any Court or other authority in respect of any action taken or to be taken under the SARFAESI Act or the DRT Act. Section 35 of the SARFAESI Act is substantially similar to Section 34(1) of the DRT Act. It declares that the provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. 6. However, effective implementation of the SARFAESI Act was delayed by more than two years because several writ petitions were filed in the High Courts and this Court questioning its vires. The matter was finally decided by this Court in Mardia Chemicals v. Union of India (2004) 4 SCC 311 and the validity of the SARFAESI Act was upheld except the condition of deposit of 75% amount enshrined in Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasonably fair deal and opportunity to get the matter adjudicated upon before the Debts 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 the economy of the country and welfare of the people in general which would subserve the public interest. (emphasis supplied) xxx xxx xxx 12. The Division Bench of the High Court did not even advert to the appellant's plea that the writ petition should not be entertained because an effective alternative remedy was available to the writ petitioner under Section 17 of the SARFAESI Act and passed the impugned order restraining the appellant from taking action in furtherance of notice issued under Section 13(4) of the SARFAESI Act. The reason which prompted the High Court to pass the impugned interim order and operative portion thereof are extracted below: Learned counsel for the petitioner has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute. 14. Thus, keeping in mind the aforesaid decision rendered by the Hon'ble Supreme Court, we are of the view that learned Single Judge has not committed any error while relegating the petitioners to an alternative efficacious remedy i.e. appeal under Section 17 of the Act before the Debts Recovery Tribunal. At this stage, it is also relevant to note that the learned Single Judge has specifically observed that he has not gone into the merits of the case of the petitioners and therefore any observations made in the said order does not m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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