Writ Petition No. 26716 of 2023 · The High Court
Case Details
- 1 - NC: 2025:KHC:22493 WP No. 26716 of 2023 HC-KAR IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26TH DAY OF JUNE, 2025 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 26716 OF 2023 (GM-DRT) BETWEEN: 1. M/S SBM CENTRICAST PRIVATE LIMITED INCORPORATED UNDER THE COMPANIES ACT, 1956 AND THE COMPANY PVT. LTD., NO.109, BYRAVESHWARA INDUSTRIAL ESTATE, ANDRAHALLI MAIN ROAD, NEAR PEENYA II STAGE, BENGALURU-560 091. …PETITIONERS Digitally signed by VIDYA G R Location: HIGH COURT OF KARNATAKA
Legal Reasoning
2. SRI M. BHASKAR, AGED ABOUT 62 YEARS, R/AT NO.52/53, 9TH MAIN, 3RD CROSS, VIDYMANYA NAGAR, ANDHRAHALLI, BENGALURU-560 091. (BY SRI RAJENDRA M.A., ADVOCATE) AND: THE AUTHORISED OFFICER, UNION BANK OF INDIA, (ERSTWHILE CORPORATION BANK), A BODY CORPORATE CONSTITUTED UNDER THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT, 1979, HAVING ITS HEAD OFFICE AT NO.239, VIDHANA BHAVAN MARG, NARIMAN POINT, MUMBAI-400 021 AND BRANCHES ALL OVER INDIA, INTER-ALIA ASSET RECOVERY BRANCH, NO.1/1, GROUND FLOOR, JEEVAN SAMPIGE, - 2 - NC: 2025:KHC:22493 WP No. 26716 of 2023 HC-KAR II MAIN ROAD, MALLESHWARAM, BENGALURU-560003. REP BY ITS CHIEF MANAGER, SRI KHAMITHKAR SAMBA RAO, (BY SMT. DIVYA PURANDAR, ADVOCATE) …RESPONDENT THIS WP IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH / SET ASIDE THE IMPUGNED ORDERS DATED 3RD OCTOBER, 2023 IN S.A. NO. 346/2021, BENGALURU (ANNEXURE-A). THIS PETITION IS COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S SUNIL DUTT YADAV ORAL ORDER The petitioner has called in question the validity of the order passed in S.A.No.346/2021. Various contentions have been raised regarding the validity of the impugned order. It is
Decision
further submitted that during the pendency of the writ petition, pursuant to the conditional interim order passed on 12.12.2023, the petitioner has paid Rs.30 Lakhs and accordingly, it is submitted that the contention of the learned counsel for the respondent that the petitioner be relegated to avail of the substantive remedy under Section 18 of the SARFAESI Act may be rejected and the Court may continue to hear the writ petition. - 3 - NC: 2025:KHC:22493 WP No. 26716 of 2023 HC-KAR 2. Learned counsel for the respondent relied on the order of the Hon'ble Supreme Court in the case of Varimadugu Obireddy v. B.Sreenivasulu and Others - (2023) 2 SCC 168 and submits that the petitioner is required to avail of the substantive remedy under Section 18 of the SARFAESI Act. 3. Observations of the Apex Court in the case of Varimadugu Obireddy's case (supra) reads as follows: "34. The order of the Tribunal dated 1-8-2019 was an appealable order under Section 18 of the SARFAESI Act, 2002 and in the ordinary course of business, the borrowers/person aggrieved was supposed to avail the statutory remedy of appeal which the law provides under Section 18 of the SARFAESI Act, 2002. In the absence of efficacious alternative remedy being availed, there was no reasonable justification tendered by the respondent borrowers in approaching the High Court and filing writ application assailing order of the Tribunal dated 1-8- 2019 under its jurisdiction under Article 226 of the Constitution without exhausting the statutory right of appeal available at its command. 35. This Court in the judgment in United Bank of India v. Satyawati Tondon, was concerned with the argument of alternative remedy provided under the SARFAESI Act, 2002 and dealing with the argument of - 4 - NC: 2025:KHC:22493 WP No. 26716 of 2023 HC-KAR alternative remedy, this Court had observed that where an effective remedy is available to an aggrieved person, the High Court ordinarily must insist that before availing the remedy under Article 226 of the Constitution, the alternative remedy available under the relevant statute must be exhausted. Paras 43, 44 and 45 of the said judgment are relevant for the purpose and are extracted below: (SCC p. 123) "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 mo 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 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 - 5 - NC: 2025:KHC:22493 WP No. 26716 of 2023 HC-KAR 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 g any reason why the High Court should entertain a 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." 36. In the instant case, although the respondent borrowers initially approached the Debts Recovery Tribunal by filing an application under Section 17 of the SARFAESI Act, 2002, but the order of the Tribunal indeed was appealable under Section 18 of the Act subject to the compliance of condition of pre-deposit and without exhausting the statutory remedy of appeal, the respondent borrowers approached the High Court by filing the writ application under Article 226 of the Constitution. We deprecate such practice of entertaining the writ application by the High Court in exercise of jurisdiction under Article 226 of the Constitution without exhausting the alternative statutory remedy available under the law. This circuitous route appears to have been adopted to avoid the condition of pre-deposit contemplated under 2nd proviso to Section 18 of the 2002 Act." - 6 - NC: 2025:KHC:22493 WP No. 26716 of 2023 HC-KAR 5. In light of the observations made by the Apex Court, it can be noticed that several factual contention raised by the petitioner are the matters that cannot be adjudicated in the present proceedings. 6. Accordingly, the petition is disposed off relegating the petitioners to avail of the substantive remedy as regards the impugned proceedings. All contentions of both the sides are kept open. 7. 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 eight weeks from today. 8. The interim protection granted under this order is only to enable the petitioner to avail of his 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 petitioner may approach are to look at the matter afresh uninfluenced by the observations made herein. - 7 - NC: 2025:KHC:22493 WP No. 26716 of 2023 HC-KAR 9. Needless to state that while considering the aspect of limitation, in the event the proceedings are instituted before the DRAT, time spent before this Court may be raised, which may taken note of appropriately. Sd/- (S SUNIL DUTT YADAV) JUDGE AV List No.: 1 Sl No.: 40