Writ Petition No. 5889 of 2022 · The High Court
Case Details
- 1 - NC: 2025:KHC:24559 WP No. 5889 of 2022 HC-KAR IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 5889 OF 2022 (GM-RES) BETWEEN: 1. M/S SIMIN TRADING COMPANY REP BY MOHAMMED SHAMMER AGED ABOUT 50 YEARS S/O U YAKOOB, R/AT NO 13-98 NEAR MADANI, JUNIOR COLLEGE ALEKAL, ULLAL MANGALORE 560091. (BY SRI. KAVITHA D., ADVOCATE) AND: …PETITIONER 1. M/S UNION BANK OF INDIA
Legal Reasoning
BALMATTA MANGALORE BRANCH SARSWATHI COMMERCIAL COMPLEX UPPER BENDOOR MANGALORE 575002 THE AUTHORIZED OFFICER MR. NITIN MAROTHRAO MAHESHKAR. (BY SRI. VIJAYA KUMAR P L., ADVOCATE) Digitally signed by PRAKASH N Location: HIGH COURT OF KARNATAKA …RESPONDENT THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER IN SECTION 14 ORDER IN MAG (2) CR723/2018/54742/C4 ON 12.10.2018 PASSED BY THE LEARNED DISTRICT MAGISTRATE VIDE ANNX-B ISSUED UNDER THE PROVISIONS OF THE SARFAESI ACT, 2002 OBTAINED BY THE RESPONDENT BANK AND DECLARE THAT THE ENTIRE RECOVERY PROCEEDINGS INITIATED BY THE RESPONDENT BANK AND ITS RULES AGAINST THE SCHEDULE - 2 - NC: 2025:KHC:24559 WP No. 5889 of 2022 HC-KAR PROPERTY ARE LEGALLY INVALID AND IN VIOLATION OF SARFAESI ACT, 2002. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV ORAL ORDER Petitioner has called in question the correctness of the order passed under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 by the District Magistrate. 2. It is to be noticed that several contentions have been raised regarding the irregularity in the procedure to be followed. 3. Learned counsel for respondent - Bank submits that the substantive remedy is before the Debts Recovery Tribunal. 4. It is noticed that the conditions imposed while granting interim order, in its entirety has not been - 3 - NC: 2025:KHC:24559 WP No. 5889 of 2022 HC-KAR complied with. The matter relates to the year 2022 while the order of the District Magistrate is dated 12.10.2018. 5. It is relevant to take note of the observations of the Apex Court in the case of Union Bank of India v. Satyawati Tondon and Others - (2010) 8 SCC 110 that the appropriate remedy would be to relegate the petitioner to seek for substantive remedy before the Debt Recovery Tribunal. The relevant observations of the Apex Court are as follows: "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 - 4 - NC: 2025:KHC:24559 WP No. 5889 of 2022 HC-KAR 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 expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self-imposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution. 45. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a - 5 - NC: 2025:KHC:24559 WP No. 5889 of 2022 HC-KAR petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance. 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 adverse impact on the right of banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection." 6. In light of the observations made by the Apex Court, it can be noticed that several factual contentions raised by the petitioner are the matters that cannot be adjudicated in the present proceedings. 7. Accordingly, the petition is disposed off relegating the petitioner to avail of the substantive remedy - 6 - NC: 2025:KHC:24559 WP No. 5889 of 2022 HC-KAR as regards the impugned proceedings. All contentions of both the sides are kept open. 8. In light of disposal of writ petition, it would meet the ends of justice by directing the respondent - Bank not to take any precipitative steps for a period of two weeks from today. 9. The interim protection granted under this order is only to enable the petitioners to avail of the substantive remedy and must not be considered to be an order passed on the basis of adjudication on merits. Upon the lapse of the time stipulated, the protection granted would cease to operate and the authorities before whom petitioners may approach are to look at the matter afresh uninfluenced by the observations made herein. 10. It is clarified that in the event the petitioner were to approach the Debts Recovery Tribunal, it is only the time that spent before this Court may be excluded - 7 - NC: 2025:KHC:24559 WP No. 5889 of 2022 HC-KAR while the time between 12.10.2018 and the date of filing of writ petition is a matter to be explained.
Decision
11. Accordingly, petition is disposed off. Sd/- (S SUNIL DUTT YADAV) JUDGE VP