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TMI Blog2017 (9) TMI 2035X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the SERFAESI Act to recover the debt. The merits in law in Bank's action cannot be equated with absence or otherwise of the jurisdiction to take such action. Merely because certain grounds are raised to challenge notices under Section 13(2) of the SERFAESI Act, it is not possible to conclude that the action was without jurisdiction. The remedy of Appeal is proper, efficacious and appropriate remedy, required to be resorted to by the petitioners. Though the prayers are couched in different language, they all are centripetal in nature to the validity of notices under Section 13(2) of the SERFAESI Act, for which there is a specific statutory alternative efficacious remedy with the petitioner under Section 17 of the SERFAESI Act. It is a cardinal principle that the High Court would be loath to exercise discretion in favour of entertaining a writ petition where the Legislature has provided alternative statutory remedy. In the present case, a special forum is available in form of Debts Recovery Tribunal where appeal would lie. In the matters involving commercial disputes, it is trite that rule of availing alternative remedy should be adhered to steadfast. The principle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decree dated 30th June, 2003 in the Lavad Suit on the basis of which recovery proceedings under the SERFAESI Act were initiated was unenforceable; (iv) it was prayed that since Official Liquidator was not joined as party in the proceedings at the time of winding-up order dated 15th January, 2013 was passed, decree obtained in absence of Official Liquidator was illegal and not enforceable. 2.1 In other words, the petitioners are aggrieved by the action on part of the respondent No.2 Bank which proceeded against the petitioners for recovery of the amount as per the decree passed in the Lavad Suit. The main relief asked for is for setting aside notices issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SERFAESI). In the other attendant prayers, petitioners have questioned the legality and enforceability of the said decree by raising various contentions in the petition on that score. 3. The relevant facts may be stated in a nutshell. One Minal Oil Agro Industries Limited, a private limited company had taken financial assistance for running its business from respondent No.2 Kalupur Commercial Co-operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances of the case, against the liability of Rs. 250 lakhs, machineries and Salt Purification Plant of the value of Rs. 286 lakhs was given in pledge but respondent No.2 Bank did not take any steps because of which the said property was lost for want of carte and precaution by the Bank and that since the Bank remained negligent, the petitioners who are the guarantors, stood discharged from their obligation by virtue of operation of Section 139 and Section 142 of the Contract Act. It was also submitted that notice under Section 13(2) was once already issued in the year 2012, therefore, such notice was not competent for the second time. 4.1 By pressing into service certain decisions including in Ratansingh v. Vijaysingh [AIR 2001 SC 279] it was submitted that in the present case also, the decree was rendered unenforceable in view of passage of time and that the limitation provided under Article 136 of the Schedule to the Limitation Act, 1963 had expired. 4.2 The respondent filed their affidavit-in reply and contested the petition by raising preliminary objection. Learned advocate Mr. Nandish Chudgar for the respondents submitted that the petitioners have remedy under Section 17 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernative remedy could not be entertained. In order to support the contention that where the goods lost due to Bank's negligency, surety would be discharged to the extent of the security lost, decision in State Bank of Saurashtra v. Chitranjan Rangnath Raja [AIR 1980 SC 1528] as well as decision in State of M. P. v. Kaluram [AIR 1967 SC 1105] , and still another decision in Amrit Lal Goverdhan Lalan (dead) by his legal representative v. State Bank of Travancore [AIR 1968 SC 1432] were relied on, on the aspect of guarantors' rights and liabilities, decision in Industrial Investment Bank of India v. Biswanath Jhunjhunwala [(2009) 9 SC 478] was relied on. Also relied on decision in Mardia Chemicals Limited v. Union of India [AIR 2004 SC 2371] for what was laid down in paragraphs 59, 60 and 64 of the judgment. 5. Now, Section 17 of the Act which is an alternative remedy of appeal, reads as under. 17. Application against measures to recover secured debts.- (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 su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... secured debt. (4A) Where - (i) any person, in any application under subsection 91), claims any tenancy or leasehold rights upon the secured asset, the Debt Recovery Tribunal, after examining the facts of the case and evidence produced by the parties in relation to such claims shall, for the purposes of enforcement of security interest, have the jurisdiction to examine whether lease or tenancy, - (a) has expired or stood determined; or (b) is contrary to section 65A of the Transfer of Property Act, 1882 (4 of 1882); or (c) is contrary to terms or mortgage; or (d) is created after the issuance of notice of default and demand by the Bank under sub-section (2) of section 13 of the Act; and (ii) the Debt Recovery Tribunal is satisfied that tenancy right or leasehold rights claimed in secured asset falls under the sub-clause (a) or sub-clause (b) or sub-clause (c) or subclause (d) of clause (i), then notwithstanding anything to the contrary contained in any other law for the time being in force, the Debt Recovery Tribunal may pass such order as it deems fit in accordance with the provisions of the Act. (5) Any application made under sub-section (1) shall be dealt with by the Debts Recove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not be countenanced that on the ground of Bank's action being without jurisdiction, the writ petition was required to be entertained directly even though the petitioner has a remedy as stated above under Section 17 of the SERFAESI Act. 5.3 Various contentions raised on behalf of the petitioners about the legality of the notices, about the Bank's conduct or about the discharge of the petitioners guarantors or sureties are the questions which could be agitated before the Debts Recovery Tribunal in the alternative remedy of Appeal before it. These are the questions which require factual inquiry and leading of evidence which could be better done in the appeal proceedings before the Tribunal. In that view also, the remedy of Appeal is proper, efficacious and appropriate remedy, required to be resorted to by the petitioners. Though the prayers are couched in different language, they all are centripetal in nature to the validity of notices under Section 13(2) of the SERFAESI Act, for which there is a specific statutory alternative efficacious remedy with the petitioner under Section 17 of the SERFAESI Act. 5.4 It is a cardinal principle that the High Court would be loath to exer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court, the High Courts continue to ignore the availability of statutory remedies under the DRT DRT Act and SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues. It is hoped and trusted that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection. 6.3 Lastly coming to the submission that once the petition is admitted, it cannot be dismissed on the ground of availability of alternative remedy, such proposition has not been accepted by the Apex Court. In State of Uttar Pradesh v. Uttar Pradesh Rajya Khanij Vikas Nigam Sangharsh Samiti [(2008) 12 SCC 675] it was ruled by the Court with respect to the aspect of maintainability of the petition under Article 226 that its dismissal after admission is not barred on the ground of existence of alternative remedy. Dealing with the case under the U.P. Industrial Disputes Act, 1947, the Supreme Court ruled that where no retrenchment as proposed had been taken place, the writ petition ought not to have been entertained by the High Court. Reasoning al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the petitioner. (Para 38) 6.5 The above dictum of law by the Apex Court completely takes care of and answers the submission on behalf of the petitioners that as rule is issued in the petitions, alternative remedy aspect was not permissible to be urged. Looking to the settled proposition of law on this count as emanating from aforementioned decisions, kind of contentions and the nature of of dispute, appeal under Section 17 of the Act is proper remedy. 7. For the foregoing reasons and discussion, only on the ground that the petitioners have got alternative statutory remedy as above, these petitions, without entering into any other aspects of merits of either side, are not entertained. The petitioners are relegated to approach Debts Recovery Tribunal by preferring an Appeal under Section 17 of the SERFAESI Act. 8. The petitioners as well as respondents, are at liberty to raise all their contentions in the appeal proceedings as may be available in law. 9. The impugned notice issued on 16th November, 2015 and the petitions were filed on 23rd December, 2015 and this Court granted interim order directing that there shall be no further steps pursuant to the impugned notice, which relie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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