High Court of Orissa
Case Details
HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.2355 of 2016 Sk. Samsuddin …. Petitioner Mr. S. Sourav, Advocate -versus- Allahabad Bank, Head Office, Kolkata and Others …. Opp. Parties Mr. Anindya Kumar Mishra, (Advocate for Opp. Party Nos.1&2-Bank) Mr. Anshuram Mishra, Advocate for Opp. Party No.3 CORAM: JUSTICE JASWANT SINGH JUSTICE M.S. SAHOO ORDER (Oral) 03.02.2023 Order No. (Hybrid Mode) 07. 1. Petitioner had stood as a guarantor by mortgaging his immovable property for a loan of Rs.7 Lakhs availed by M/s. Ajmeri Traders, a proprietorship
Legal Reasoning
our writ jurisdiction. It is well settled by the Hon’ble Supreme Court in United Bank of India Vs. Satyawati Tondon (2010) 8 SCC 110 wherein the following was held:- 226 of a petition under Article “43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain 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 Page 4 of 7 // 5 // enacted by Parliament and State Legislatures for recovery of such dues are 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, 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. 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 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 by the them State and/or importance and disables 46. It must be remembered that stay of an action its initiated agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, prove which detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved Chandra Maheshwari v. Antarim Zila Parishad AIR 1969 SC 556, Whirlpool Corporation v. Registrar of Trade Marks, Mumbai (1998) 8 SCC 1 and Harbanslal Sahnia and another v. Indian Oil Corporation Ltd. and others (2003) 2 SCC 107 and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass appropriate interim order.” in Baburam ultimately Prakash out Page 5 of 7 // 6 // The above views were recently reiterated in Phoenix Arc Private Limited Vs. Vishwa Bharatai Vidya Mandir and Others (2022) 5 SCC 345, whereby the following was held: “21.Applying the law laid down by this Court in the case of Mathew K.C. (supra) to the facts on hand, we are of the opinion that filing of the writ petitions by the borrowers before the High Court under Article 226 of the Constitution of India is an abuse of process of the Court. The writ petitions have been filed against the proposed action to be taken under Section 13(4). As observed hereinabove, even assuming that the communication dated 13.08.2015 was a notice under Section 13(4), in that case also, in view of the statutory, efficacious remedy available by way of appeal under Section 17 of the SARFAESI Act, the High Court ought not to have entertained the writ petitions. Xxx.. Filing of the writ petition by the borrowers before the High Court is nothing but an abuse of process of Court. It appears that the High Court has initially granted an ex-parte ad-interim order mechanically and without assigning any reasons. The High Court ought to have appreciated that by passing such an interim order, the rights of the secured creditor to recover the amount due and payable have been seriously prejudiced. The secured creditor and/or its assignor have a right to recover the amount due and payable to it from the borrowers. The stay granted by the High Court would have serious adverse impact on the financial health of the secured creditor/assignor. Therefore, the High Court should have been extremely careful and circumspect in exercising its discretion while granting stay in such matters. In these circumstances, the proceedings before the High Court deserve to be dismissed.” 6. In view of the above, the present Writ Petition stands dismissed. However, the petitioner is relegated Page 6 of 7 // 7 // to seek his alternative remedy before the DRT in accordance with law. (Jaswant Singh) Judge (M.S. Sahoo) Judge Sipun 3rd February, 2023 Cuttack Page 7 of 7
Arguments
concern of Sri S. K. Barkatullah from Allahabad Bank, Ashok Nagar Branch, Bhubaneswar in the year 2004. Due to non-servicing of the account, it was classified as NPA and a Demand Notice dated 2nd February, 2012 was issued under Section 13(2) of the SARFAESI Act, 2002 (for short, “the Act, 2002”) recalling the outstanding liability of Rs.7,41,322/- due as on that date together with further interest, // 2 // expenses etc. No reply was filed by the principal loanee or the petitioner-guarantor. The symbolic possession of the mortgaged property was assumed on 20th June, 2012 by issuance of a notice under Section 13(4) of the Act, 2002. Subsequently, a Sale Notice was issued on 20th October, 2012 fixing the auction sale of the mortgaged property for 23rd November, 2012. In the auction conducted on the fixed date, Sri Bibhu Ranjan Parida/Opposite Party No.3 (for short, O.P.3) was the successful bidder and upon deposit of the entire sale price of Rs.7 Lakhs, a Sale Certificate in favour of the O.P.3 was issued on 30th January, 2013. Thereafter, the deed of conveyance was registered on 27th September, 2014 along with actual physical possession of the auctioned immovable property. 2. The petitioner has filed the Writ Petition challenging the aforesaid registered deed of conveyance dated 27th September, 2014 in favour of O.P.3 on the ground that no opportunity of redemption was provided to the petitioner. The property has been sold for a meager amount of Rs.7 Lakhs although the benchmark valuation of the property is shown to be Rs.14.96 Lakhs. It is claimed that the petitioner had not received any notice prior Page 2 of 7 // 3 // to the sale as envisaged under Section 13(8) of the Act, 2002. 3. This Court while issuing notice vide order dated 22nd February, 2016, passed an interim direction restraining the auction purchaser/O.P.3 for changing the nature and character of the land in question. 4. The Bank/Opposite Party Nos.1 & 2 have filed their reply wherein it is asserted that due procedure and process of law has been followed as per the provisions of the Act, 2002 in recovering the outstanding dues. It is claimed that the petitioner had earlier filed W.P.(C) No.24115 of 2012 challenging the highest bid offered by the auction purchaser by impleading him as O.P.3, and prayed for setting aside the auction proceedings held on 23rd November, 2012. 4.1 This Hon’ble Court vide interim order dated 15th January, 2013 in the said petition had directed the petitioner to deposit a sum of Rs.5 Lakhs with the Registrar Judicial of this Court within one month, while directing the maintenance of status quo. 4.2 Concededly, the petitioner failed to deposit the stipulated amount leading to the withdrawal of the Writ Petition on 18th June, 2014. It is claimed that the opposite parties had illegally proceeded to issue Page 3 of 7 // 4 // the Sale Certificate on 30th January, 2013 before the time period of one month of deposit of Rs.5 Lakhs had lapsed thereby violated the status quo order. However, in view of the event of failure of deposit, we are not persuaded to accept that the issuance of Sale Certificate or the execution of the conveyance deed would be illegal and therefore liable to be set aside. 5. After hearing learned counsel for both the parties, we are of the considered view that the grounds raised for laying challenge to the conveyance deed requires leading of cogent evidence for which the proper remedy for the petitioner would have been to file an application under Section 17 of the Act, 2002 before the DRT, Cuttack, being the efficacious and alternative remedy. The disputed question of facts being raised, cannot not be adjudicated by us in