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TMI Blog2024 (4) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... in comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. It has been held that, though the powers of the High Court under Article 226 of the Constitution are of widest amplitude, still the Courts cannot be oblivious of the rules of self-imposed restraint evolved by this Court. In the present case, it can clearly be seen that though it was specifically contended on behalf of the appellant herein that the writ petition was not maintainable on account of availability of alternative remedy, the High Court has interfered with the writ petition only on the ground that the matter was pending for sometime before it and if the petition was not entertained, the Borrower would be left remediless - the High Court has failed to take into consideration the conduct of the Borrower. It is further to be noted that, though the High Court had been specifically informed that, on account of subsequent developments, that is confirmation of sale and registration thereof, the position had reached an irreversible stage, the High Court has failed to take into consideration those aspects of the matter. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ismissed as withdrawn vide DRT vide order dated 21st September 2020. The Division Bench of the High Court, in the impugned order, while setting aside the order of DRT dated 2nd February 2021, further directed DRT to proceed with S.A. No. 1476 of 2017 in accordance with law. 3. The facts, in brief, giving rise to the present appeal are as under: 3.1 The Borrower had availed a loan from the Respondent- Bank and in order to secure the said loan, the Borrower had mortgaged four properties (hereinafter referred to as scheduled properties ) situated at Vijayawada, Andhra Pradesh as collateral security. However, the Borrower defaulted in the repayment of the loan amount, which led the Respondent-Bank to initiate proceedings against the borrower under the SARFAESI Act. 3.2 Thereafter, the Respondent-Bank issued an Auction Sale Notice on 2nd September 2017 for auctioning off the scheduled properties and published information about the same in the Times of India and one other vernacular newspaper. According to the said Auction Sale Notice, the auction was to be conducted on 14th December 2017. 3.3 Aggrieved by the Auction Sale Notice, the Borrower preferred a securitization application being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est of the Borrower who submitted that the matter had been settled out of court. On the other hand, the Respondent-Bank filed a Memo of Non- Settlement before DRT thereby informing that no such out-ofcourt settlement had been reached. 3.9 Upon S.A. No. 1476 of 2017 being dismissed as withdrawn, the Respondent-Bank confirmed the sale of the scheduled properties in favor of the appellant herein. A Sale Certificate was issued by the Respondent-Bank on 2nd November 2020 and the possession of the scheduled properties was accordingly delivered to the appellant. Subsequently, on 11th November 2020, the Sale Certificate came to be registered in favor of the appellant herein. 3.10 In the meantime, the Borrower preferred M.A. No. 97 of 2020 in S.A. No. 1476 of 2017 before DRT, praying for the restoration of S.A. No. 1476 of 2017 to the file and setting aside the aforesaid order of DRT dated 21st September 2020. However, on 2nd February 2021, DRT passed an order thereby dismissing the said M.A. filed by the Borrower. 3.11 Aggrieved thereby, the Borrower filed writ petition before the High Court. The High Court, by the impugned order, disposed of the said writ petition, thereby setting aside t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of U.P. v. Mohammad Nooh AIR 1958 SC 86 : 1957 INSC 81 . 10. The facts in the present case are not disputed. It is not in dispute that in the auction held on 14th December 2017, the appellant-auction purchaser was the highest bidder having offered a bid for an amount of Rs.5,72,22,200/- and that the appellant-auction purchaser deposited 25% of the bid amount i.e. Rs.1,38,05,550/- immediately. It is also not in dispute that on 14th December 2017, the learned DRT, though refused to interfere with the sale but directed the Respondent-Bank not to confirm the sale of the scheduled properties subject to the Borrower depositing 30% of the outstanding dues in two equal installments within one week and two weeks thereafter respectively. The learned DRT had also directed that, in case of failure of compliance, the interim stay would stand automatically vacated and the Respondent-Bank would be entitled to confirm the sale. It is also not in dispute that the Borrower did not comply with the said order of the learned DRT. It is thus clear that, on non-deposit of the amount as directed by the learned DRT vide order dated 14th December 2017, the interim direction passed on the said date stood au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity of alternative remedy is well settled. In the case of Satyawati Tondon (supra), this Court observed thus: 43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, 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 a 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, the 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. 44. While express ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, still it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution. 16. The view taken by this Court has been followed in the case of Agarwal Tracom Private Limited v. Punjab National Bank and Others (2018) 1 SCC 626 : 2017 INSC 1146 . 17. In the case of Authorized Officer, State Bank of Travancore and Another v. Mathew K. C. (2018) 3 SCC 85 : 2018 INSC 71 , this Court was considering an appeal against an interim order passed by the High Court in a writ petition under Article 226 of the Constitution staying further proceedings at the stage of Section 13(4) of the SARFAESI Act. After considering various judgments rendered by this Court, the Court observed thus: 16. The writ petition ought not to have been entertained and the interim order granted for the mere asking without assigning special reasons, and that too without even granting opportunity to the appellant to contest the maintainability of the writ petition and failure to notice the subsequent developments in the interregnum. The opinion of the Division Bench that the counter-affidavit having subsequently been filed, stay/modification could be sought of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 18 of the SARFAESI Act, petitioner has the alternative remedy against the impugned order by filing appeal before the appellate Tribunal. However, having regard to the fact that the writ petition is pending before this Court for quite some time and also considering the fact that if the impugned order is allowed to stand, petitioner would be left without a remedy to ventilate his grievance, we deem it fit and proper not to non-suit the petitioner on the ground of not availing the alternative remedy. 12. Section 17 of the SARFAESI Act provides that any person including a borrower who is aggrieved by the action of secured creditor under Section 13 (4) of the SARFAESI Act may file an application thereunder. Supreme Court has held time and again that the Tribunal exercises wide jurisdiction under Section 17 of the SARFAESI Act, even to the extent of setting aside an auction sale. In the instant case, we are consciously not referring to the merit of the case. All that we are concerned is whether for whatever reason a person who is aggrieved in law should be left remediless. In the instant case, petitioner had invoked his remedy by filing securitization application under sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion) the auction is not complete and no rights accrue until the sale is confirmed by the said authority. Once, however, the sale is confirmed by that authority, certain rights accrue in favour of the auction - purchaser, and these rights cannot be extinguished except in exceptional cases such as fraud. 31. In the present case, the auction having been confirmed on 30-7-2003 by the Court it cannot be set aside unless some fraud or collusion has been proved. We are satisfied that no fraud or collusion has been established by anyone in this case. 26. In our view, the High Court ought to have taken into consideration that the confirmed auction sale could have been interfered with only when there was a fraud or collusion. The present case was not a case of fraud or collusion. The effect of the order of the High Court would be again reopening the issues which have achieved finality. 27. It is further to be noted that this Court, in the case of Dwarika Prasad v. State of Uttar Pradesh and Others ( 2018 ) 5 SCC 491 : 2018 INSC 210 , has clearly held that the right of redemption stands extinguished on the execution of the registered sale deed. In the present case, the sale was confirmed on 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance. 31. Undisputedly, the present case would not come under any of the exceptions as carved out by this Court in the case of Chhabil Dass Agarwal (supra). 32. We are therefore of the considered view that the High Court has grossly erred in entertaining and allowing the petition under Article 226 of the Constitution. 33. While dismissing the writ petition, we will have to remind the High Courts of the following words of this Court in the case of Satyawati Tondon (supra) since we have come across various matters wherein the High Courts have been entertaining petitions arising out of the DRT Act and the SARFAESI Act in spite of availability of an effective alternative remedy: 55. It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adver ..... 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