M/s Hotel Nature Valley v. The Jammu and Kashmir Bank Ltd & Ors.

Discharged and disposed of. CWP No. 8675 of 2025 In the present Writ petition, challenge is to the order dated 25.02.2025 (Annexure P-33) passed by the respondent- Bank and the resultant communication dated 08.05.2023 (Annexure P-34), wherein, the petitioner was put to notice that physical possession of secured asset as such would be taken over on 21.05.2025. 1 Whether reporters of Local Papers may be allowed to see the judgment? 2 2) Perusal of the paper book would go on to show that notice dated 06.06.2023 under section 13(2) of the Secrutisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “SARFAESI Act”) (Annexure P-12) was issued, wherein, the Bank as such put the petitioner on notice that there was outstanding sum of Rs.12,24,35,281.92 as on 01.06.2023, against the credit facilities availed in seven accounts and had been classified by the Bank as Non-Performing Asset on 31.12.2023, as per the guidelines of the Reserve Bank of India. 3) The 1st reply to the same was sent on 17.02.2024 (Annexure P-13) by the petitioner. The Bank also replied to the same on 09.08.2023 (Annexure P-15), whereby an opportunity was given to the petitioner to come up with some resolution plans before the bank. 4) The 2nd detailed reply of over 47 paragraphs was sent by the petitioner on 04.09.2024 (Annexure P-17), but with no proposal how to pay back the amount or regularize the account. 5) Apparently, notice was issued on 12.09.2023 (Annexure P-20), under Section 13(4) of the Act, whereby the symbolic possession as such of the mortgaged property was to be taken. The Bank thereafter approached the District Magistrate, Chamba under Section 14 for giving effect to the order and on 29.01.2024 (P-24) the 3 Sub-Divisional Magistrate, Dalhousie was authorized to assist the Bank in taking possession of the assets, subject to the provisions of Section 31 of SARFAESI Act, 2002. 6) The petitioner thereafter approached the Tribunal by filing S.A/83/2024, in which a settlement had been arrived at and a deposit of two crores was to be made, firstly by 30th June, 2024 and thereafter the applicant would make the payment as per the terms and conditions of the original sanctions dated 28.02.2018 and 11.09.2019. The order dated 15.03.2024 passed by the Debts Recovery Tribunal-I, Chandigarh (DRT) (Annexure P-27)), reads as under:- “The possession of the secured asset i.e. Hotel Nature Valley was fixed up for today. However, the parties have settled their dispute. As per settlement applicant would deposit Rs.25 lacs on or before

31.03.2024 and further payment of Rs.1.75 crores every quarter from 30.06.2024. The first installment would be paid on or before 30.06.2024, till the overdue sum is paid to the bank. Thereafter, applicant would make the payment as per the terms and conditions of the original sanction dated 28.02.2018 and 11.09.2019, in all the loan accounts. In case there is any default in payment as agreed to by the parties, the bank would be free to proceed against the borrowers and guarantors, as per law. In view of the above mentioned terms, the SA stands disposed of. File be consigned to record room after 4 due compliance.” 7) Apparently, the petitioner had filed an application (MA/70/2024) in SA/83/2024 for extension of time and on

04.07.2024, the DRT gave the following concession: “Registrar has put up this matter before me. As per the order dated 15.03.2024, passed in SA No.83/2024 applicant had to deposit Rs.2.00 Crore by

30.06.2024. So far, he has deposited Rs.75.00 Lacs and Rs.1.25 Crore has not been paid as undertaken by him. Counsel for the applicant states that Sh. Ajay Khanka, has met with an accident and has fractured his spine. On account of this the could not make the repayment. Mr. Gupta, states that applicant would pay Rs.50.00 Lacs within 2 weeks from today i.e. on or before 18.07.2024; another Sum of Rs.50.00 Lacs by

07.08.2024 and remaining Rs.25.00 Lacs by 14.08.2024. Subject to honoring the commitment, bank would not take the possession. However, in case applicant commits any default in making the repayment on due date, he would surrender the possession. Applicant would also file undertaking within a week from today. Accordingly, the MA stands disposed of. File be consigned to record room after due compliance.” 8) It is pertinent to mention that the said order has now been produced by the Bank and the petitioner chose not to append the 5 same, though he had filed the said application, which would be clear from the presence as such of the counsel for the applicant. Apparently, there seems to have no commitment to the said undertaking. 9) From perusal of paper book, it seems that in the intervening period, the petitioner filed CWP No.759 of 2025 before the learned Single Judge, wherein an impression as such was given that his representation had not been decided without bringing on record the order dated 04.07.2024 and the fact that it had defaulted. Resultantly, the learned Single Judge passed an order that the same be done by passing a speaking order, which is now under challenge dated

25.02.2025 (Annexure P-33). 10) From perusal of notice dated 08.05.2025 (Annexure P- 34), it would be clear that the Bank again started proceedings to take physical possession, since it secured an order under Section 14 of SARFAESI Act from District Magistrate, Chamba. 11) Even from the order now under challenge dated

25.02.2025 (Annexure P-33) it would go on to show that as per order dated 04.07.2024, the commitment had not been made by the petitioner and he only deposited 50 lakhs on 20.07.2024.The relevant portion whereof reads as under: 6 “ ix) While the applicant failed to honor commitment of depositing the agreed amount within stipulated timeline, an application was moved by her before DRT stating that her husband Mr. Ajay Khanka met with an accident and fractured his spine which was the reason of her not depositing the amount on due date. Out of the total amount of Rs2.00 Crores due by 30-06- 2024, the applicant deposited only Rs75.00 lacs. The DRT accepting the plea of the borrower ordered that the applicant would pay Rs50.00 Lacs within 02 weeks i.e on or before 18-07-2024, another sum of Rs50.00 lacs by 07-08-2024 and remaining Rs25.00 lacs by 14-08-

2024.11 was further ordered by the DRT that subject to honoring the commitment, bank would not take the possession. However, in case applicant commits any default in making repayment on due date, he would surrender the possession. However, the borrower failed again and deposited only Rs50.00 lacs on 20-07-2024.” The factual aspect is that as informed by the Bank that on 21.05.2025, the Bank had gone to take physical possession and again an undertaking dated 21.05.2025 was given that a sum of Rupees five crores will be paid on 23.05.2025, otherwise possession will be handed over. It was also mentioned therein that the petitioner would not make any fresh booking of the Hotel rooms and the guests already staying in the Hotel shall be accommodated at some other Hotel, which request apparently the bank had accepted. 7 12) In such circumstances, we are of the considered opinion that the petitioner having opted for the remedy before the DRT and the proceedings under Section 13(4) of the Act have already been challanged, it is not open for this Court to start parallel proceedings and it is for the petitioner to revive his Securitization Application (S.A) before the DRT. 13) The Apex Court in South Indian Bank Ltd. and others vs. Naveen Mathew Philip and another, reported in 2023 SCC Online SC 435, has also held that the extra ordinary writ jurisdiction is not to be exercised at the mere asking, especially once there is alternative remedy as such. Relevant paragraph of the said judgment reads as under: “18. While doing so, we are conscious of the fact that the powers conferred under Article 226 of Constitution of India are rather wide but are required to be exercised only in extraordinary circumstances in matters pertaining to proceedings and adjudicatory scheme qua a statute, more so in commercial matters involving a lender and a borrower, when legislature has provided for a specific mechanism for appropriate redressal.” 14) In such circumstances, keeping in view, the above we are of the considered opinion that this is not a fit case as such to exercise 8 extra ordinary writ jurisdiction. Accordingly, the writ petition stands disposed of with liberty to the petitioner to revive his alternate remedy as per law. Pending applications, if any, also stand disposed of. ( G.S. Sandhawalia ) Chief Justice 26th May, 2025 (priti) ( Ranjan Sharma ) Judge