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2007 DIGILAW 403 (UTT)

JAGDISH CHANDRA JOSHI v. STATE BANK OF PATIALA

2007-07-30

J.C.S.RAWAT, RAJEEV GUPTA

body2007
RAJEEV GUPTA, C. J. ( 1 ) MR. Arvind Vashishth, Advocate for the petitioner. Mr. S. K. Jain, Advocate for Respondent No. 1. Mr. Subhash Upadhyaya, Brief Holder for respondent No. 2. They are heard on admission. ( 2 ) PETITIONER Jagdish Chandra Joshi has filed this writ petition for the following reliefs : " (i) issue a writ, order or direction in the nature of certiorari quashing the impugned auction notice published by respondent No. 1 in News Paper "amar Ujala" in its issue dated 24-5-2007 and further proceedings of auction in pursuance thereof. (ii) a writ, order or direction in the nature of Mandamus directing the respondents not to put petitioner's property (Plot No. 301 kusum Khera Haldwani measuring 4200 sq. Ft.) to auction and this Hon'ble High court may further be pleased to pass such further and other orders and other suitable writs, order or direction which this Hon'ble court may deem fit and proper in the circumstances of the case. (iii) award the cost of petition to the Petitioner. " ( 3 ) THE petitioner, in substance, is seeking quashing of the auction proceedings of the petitioner's land, which is said to have been mortgaged with first respondent Bank. ( 4 ) FIRST Respondent State Bank of patiala, Branch Haldwani sanctioned a C. C. Limit of Rs. 4,00,000/- (Rupees Four Lakhs only) to M/s. Green Land Garments Sale through its proprietor respondent No. 3 meghshyam Rawat sometime in the year 2004. Petitioner Jagdish Chandra Joshi, according to the Bank, stood as guarantor to the said loan and mortgaged his land measuring 4200 Sq. Ft. (Plot No. 301 Kusum kheda, Haldwani ). As respondent No. 3 meghshyam Rawat committed default in repayment of the loan, the Bank took steps under Section 13 of the Securitisation and reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as '2002 Act') against the principal borrower respondent No. 3 meghshyam Rawat and the guarantor petitioner Jagdish Chandra Joshi, which led to the publication of the auction notice of the petitioner's above land in the Daily Edition of Amar Ujala dated 24-5-2007, quashing whereof is sought in the writ petition. ( 5 ) MR, S, K. Jain, the learned counsel for respondent No, 1 Bank has' raised a preliminary objection about the maintainability of the writ petition, in view of the dictum of the Apex Court in the case of Mardia chemicals Ltd. and others v. Union of India and others reported in (2004) 4 SCC 311 ; AIR 2004 SC 2371, on the ground that the petitioner has an alternative efficacious remedy of Invoking the Jurisdiction of the Debts Recovery Tribunal under Section 17 of the 2002 Act. ( 6 ) MR. Arvlnd Vashlshth, the learned counsel for the petitioner, on the other hand, tried to Justify the filing of the writ petition on the grounds that: I. Petitioner Jagdish Chandra Joshi never stood as guarantor In the loan transaction granted by the Bank In favour of respondent No. 3 Meghshyam Rawat; II. The provisions of the Securitisation and Reconstruction of Financial Assets and enforcement of Security Interest Act, 2002 have no application to the matter, as the land, which is said to have been mortgaged by the petitioner as guarantor, is an agricultural land; ill. As the Securitisation and Reconstruction of Financial Assets and Enforcement of security Interest Act, 2002 has no application to the present case, the petitioner cannot Invoke the Jurisdiction of the Debts Recovery Tribunal under Section 17 of the 2002 Act; iv. As the amount due against the principal borrower and the guarantor, at the time of the notice under Section 13 (4) of the 2002 act, was only Rs. 5,15,345,50/-, which is less than Rs, 10. 00,ooo/-, the Debts Reeev= ify Tribunal has ne juridieun le enter= lain the matter In view f yb^ggti9fl (4) ef section 1 of the Recovery of Debts Due to banks and Financial Institutions Act, 1993 (hereinafter referred to as '1993 Act'); and v. Section 35 of the 2002 Act cannot widen the jurisdiction of the Debts Recovery Tribunal constituted under 1993 Act. ( 7 ) THE petitioner's first submission that the petitioner never stood guarantor in the loan transaction between respondent No. 1 state Bank of Patiala and respondent No. 3 meghshyam Rawat apparently involves disputed questions of fact, which cannot be decided in the proceedings under Article 226/227 of the Constitution of India. ( 7 ) THE petitioner's first submission that the petitioner never stood guarantor in the loan transaction between respondent No. 1 state Bank of Patiala and respondent No. 3 meghshyam Rawat apparently involves disputed questions of fact, which cannot be decided in the proceedings under Article 226/227 of the Constitution of India. That apart, the petitioner has already approached the Civil Court for seeking a permanent injunction restraining the Bank from recovering the loan amount from the petitioner on the ground that he never stood guarantor in the said loan transaction. The petitioner has also filed a criminal complaint against respondents Nos. 3 and 4 Meghshyam Rawat and C. S. Pant alleging therein that the petitioner never stood guarantor in the said loan transaction. ( 8 ) THE petitioner claims that the land, which is said to have been mortgaged with the Bank in the said loan transaction, is an agricultural land. The petitioner's pleading, in that behalf, is to be found in Para 17 of the writ petition, which reads as follows : "17. That the land in dispute is an agricultural land and the provisions of the Act no. 54 of 2002 shall not apply to the agriculture land. It is also pertinent to mention here that the agriculture land cannot be equitably mortgaged. A true copy of the sale deed is annexed herewith and marked as annexure No. 11 to this writ petition. " ( 9 ) RESPONDENT No. 1 State Bank of Patiala seriously disputed the above factual aspect of the matter in Para 23 of its counter affidavit, which reads as follows : "23. That in fact the said land is lying on the spot as plot situated in Abadi there are several plots and houses surrounding the said plots and the deponent has come to know from the respondent No. 3 that the said land is not the part of the agriculture land and declared as abadi land u/s. 143 of U. P. Z. A. and L. R. Act before mortgaged. The said fact also clear from the documents filed by the petitioner and also clear from the perusal of averments made in the suit proceeding at different stages. " ( 10 ) IN Paras 3 and 4 of the writ petition, the petitioner has pleaded that the petitioner has submitted a map for proposed construction of house on the said land. " ( 10 ) IN Paras 3 and 4 of the writ petition, the petitioner has pleaded that the petitioner has submitted a map for proposed construction of house on the said land. Paras 3 and 4 of the writ petition read as follows : "3. That the petitioner is working out of the State of Uttarakhand and therefore Sri chandra Shekhar Pant who is the close relative of the petitioner has assured him to got a map of the proposed house over sanctioned, on the said land, from the office of building operation authorities at Haldwani. Believing on the assurance the petitioner handed over his registered sale deed of aforementioned land to Mr. Chandra Shekhar pant, 4. That petitioner was very much interested to construct his own house on his own land and he enquired details of stage of sanctioning of map time to time but Mr. Chandra shekhar Pant did not give any proper reply. After a period of four years when the petitioner joined Mandi Parishad Moradabad in u. P. as a Junior Engineer, he again contacted and enquired about the Map and original sale deed which was handed over to Sri Pant for getting map sanctioned, then mr. Chandra Shekhar Pant started avoiding the petitioner and making lame excuses that the registered sale deed was lying with the authorities for sanctioning of map. " ( 11 ) A bare look at the contents of the sale deed (Annexure No. 11) also gives an indication that the land in question was meant for residential purposes, which is evident from the following sentence on the first page of the sale deed, which reads as follows : (Vernacular matter omitted. . . . . . . . . Ed.) ( 12 ) SIMILAR is the averment on the second page of the sale deed, which reads as follows : (Vernacular matter omitted. . . . . . . . . Ed.) ( 13 ) FROM the above-quoted pleadings of the parties and the averments about the nature of the land in the sale deed, itself, it becomes apparent that the fact, that the land in question is an agricultural land, is not admitted by the Bank. . . . . . . . . Ed.) ( 13 ) FROM the above-quoted pleadings of the parties and the averments about the nature of the land in the sale deed, itself, it becomes apparent that the fact, that the land in question is an agricultural land, is not admitted by the Bank. Rather, it is a seriously disputed question of fact, which will require leading of evidence by the parties in support of their respective claim which course is not permissible in the writ proceedings under Article 226 of the Constitution of India. ( 14 ) THE Apex Court, in the case of P. R. Murlidharan v. Swami Dharmananda theertha Padar reported in 2006 (4) SCC 501, while considering the permissibility of resolving disputed questions of fact in writ proceedings, observed in Paras 12 and 17 : "12. It is one thing to say that in a given case a person may be held to be entitled to police protection, having regard to the threat perception, but it is another thing to say that he is entitled thereto for holding an office and discharging certain functions when his right to do so is open to question. A person could not approach the High Court for the purpose of determining such disputed questions of fact which were beyond the scope and purport of the jurisdiction of the High court while exercising writ jurisdiction as it also involved determination of disputed questions of fact. Respondent 1 who sought to claim a status was required to establish the same in a Court of law in an appropriate proceeding. He for one reason or the other, failed to do so. The provisions of Order 9 Rule 9 of the Code of Civil Procedure stare on his face. He, therefore, could not have filed a writ petition for getting the selfsame issues determined in his favour which he could not do even by filing a suit. Indeed the jurisdiction of the writ Court is wide while granting relief to a citizen of India so as to protect his life and liberty as adumbrated under Article 21 of the Constitution, but while doing so it could not collaterally go into that question, determination whereof would undoubtedly be beyond its domain. Indeed the jurisdiction of the writ Court is wide while granting relief to a citizen of India so as to protect his life and liberty as adumbrated under Article 21 of the Constitution, but while doing so it could not collaterally go into that question, determination whereof would undoubtedly be beyond its domain. What was necessary for determination of the question arising in the writ petition was not the interpretation of the documents alone, but it required adduction of oral evidence as well. Such evidence was necessary for the purpose of explaining the true nature of the deed of trust, as also the practice followed by this trust. In any event, the impleading applicant herein, as noticed hereinbefore, has raised a contention that he alone was ordained to hold the said office as per the bye-laws of the trust. The qualification of the first respondent to hold the office was also in question. In this view of the matter, we are of the opinion that such disputed questions could not have been gone into by the High Court in a writ proceeding. 17. A writ petition under the guise of seeking a writ of mandamus directing the police authorities to give protection to a writ petitioner cannot be made a forum for adjudicating on civil rights. It is one thing to approach the High Court, for issuance of such a writ on a plea that a particular party has not obeyed a decree or an order of injunction passed in favour of the writ petitioner, was deliberately flouting that decree or order and in spite of the petitioner applying for it, or that the police authorities are not giving him the needed protection in terms of the decree or order passed by a court with jurisdiction. But, it is quite another thing to seek a writ of mandamus directing protection in respect of property, status or right which remains to be adjudicated upon and when such an adjudication can only be got done in a properly instituted civil suit. It would be an abuse of process for a writ petitioner to approach the High court under Article 226 of the Constitution seeking a writ of mandamus directing the police authorities to protect his claimed possession of a property without first establishing his possession in an appropriate civil court. It would be an abuse of process for a writ petitioner to approach the High court under Article 226 of the Constitution seeking a writ of mandamus directing the police authorities to protect his claimed possession of a property without first establishing his possession in an appropriate civil court. The temptation to grant relief in cases of this nature should be resisted by the High court. The wide jurisdiction under Article 226 of the Constitution would remain effective and meaningful only when it is exercised prudently and in appropriate situations. " ( 15 ) THE Apex Court in the case of State of President, Poornathrayisha Seva sangham, Thripunithura v. K. Thilakan kavenal and others reported in 2005 (2) SCC 639 : AIR 2005 SC 2918, reiterating the same view, observed in Para 9 : "9. Above being the position, we feel that nothing further remains to be done in this appeal except noticing that certain observations made, as regards the functioning of the appellant Society and its credibility were unnecessary. For the purpose of adjudication of the dispute before the High Court which only related to the permission granted to use the Oottupura, other observations and views expressed by the Division Bench are, therefore, treated as inoperative. Since disputed facts were involved, the High Court should not have gone into them even in respect of the primary grievances of the writ petitioner. " ( 16 ) IN view of the above quoted dicta of the Apex Court in the cases of P. R. Murlidharan v. Swami Dharmananda theertha Padar and President, Poornathrayisha Seva Sangham, Thripunithura v. K. Thilakan Kavenal and others, AIR 2005 SC 2918, the present writ petition is liable to be dismissed on this short ground alone that the writ petition involves serious disputed questions of fact, which cannot be resolved in writ proceedings. ( 17 ) IN view of our above conclusion, the petitioner's next submission that the petitioner cannot invoke the jurisdiction of the debts Recovery Tribunal in view of Section 31 of the 2002 Act deserves an outright rejection. ( 18 ) THE petitioner's submission that the debts Recovery Tribunal has no jurisdiction to entertain the matter, as the amount due towards the principal borrower and the guarantor is only Rs. 5,15,345. 50/-, which is less than Rs. ( 18 ) THE petitioner's submission that the debts Recovery Tribunal has no jurisdiction to entertain the matter, as the amount due towards the principal borrower and the guarantor is only Rs. 5,15,345. 50/-, which is less than Rs. 10,00,000/-, deserves an outright rejection, as the petitioner is to invoke the jurisdiction of the Debts Recovery tribunal under Section 17 of the 2002 Act and not under the provisions of 1993 Act and, as such, the restriction contained in sub-section (4) of Section 1 of the 1993 Act will not come in the way of the petitioner in invoking the jurisdiction of the Debts Recovery Tribunal under Section 17 of the 2002 Act. Admittedly, the 2002 Act does not contain any provision similar to sub-section (4) of Section 1 of the 1993 Act. It may also be mentioned that under the provisions of the 1993 Act, the Jurisdiction of the Debts recovery Tribunal is to be invoked by the bank and the financial institutions whereas under Section 17 of the 2002 Act, the jurisdiction of the Debts Recovery Tribunal is to be invoked by any person (including borrower) aggrieved by any of the measures taken by the secured creditor or his authorised officer under Section 13 (4) of the Act. ( 19 ) THE last submission of the learned counsel for the petitioner does not advance the petitioner's case any further in view of the specific provision contained in Section 35 of the 2002 Act, which reads as follows : "35. The provisions of this Act to override other laws. The provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. " ( 20 ) THE Apex Court, while considering the remedies available to a person/defaulter against whom the Bank has proceeded under Section 13 (4) of 2002 Act, in the case of mardia Chemicals Ltd. and others v. Union of india and others reported in (2004) 4 SCC 311 : air 2004 SC 2371, observed in Paras 80 to 83 : "80. Under the Act in consideration, we find that before taking action a notice of 60 days is required to be given and after the measures under Section 13 (4) of the Act have been taken, a mechanism has been provided under Section 17 of the Act to approach the Debts Recovery Tribunal. The abovenoted provisions are for the purpose of giving some reasonable protection to the borrower. Viewing the matter in the above perspective, we find what emerges from different provisions of the Act, is as follows : 1. Under sub-section (2) of Section 13 it is incumbent upon the secured creditor to serve 60 days' notice before proceeding to take any of the measures as provided under sub-section (4) of Section 3 of the Act. After service of notice, if the borrower raises any objection or places facts for consideration of the secured creditor, such reply to the notice must be considered with due application of mind and the reasons for not accepting the objections, howsoever brief they may be, must be communicated to the borrower. In connection with this conclusion we have already held a discussion in the earlier part of the judgment. The reasons so communicated shall only be for the purposes of the information/knowledge of the borrower without giving rise to any right to approach the Debts Recovery Tribunal under section 17 of the Act, at that stage. 2. As already discussed earlier, on measures having been taken under sub-section (4) of Section 1 before the date of sale/auction of the property it would be open for the borrower to file an appeal (petition) under section 17 of the Act before the Debts Recovery Tribunal. 3. That the Tribunal in exercise of its ancillary powers shall have jurisdiction to pass any stay/interim order subject to the condition as it may deem fit and proper to impose. 4. In view of the discussion already held in this behalf, we find that the requirement of deposit of 75% of the amount claimed before entertaining an appeal (petition) under Section 17 of the Act is an oppressive, onerous and arbitrary condition against all the canons of reasonableness. Such a condition is invalid and it is liable to be struck down. 5. Such a condition is invalid and it is liable to be struck down. 5. As discussed earlier in this judgment, we find that it will be open to maintain a civil suit in civil Court, within the narrow scope and on the limited grounds on which they are permissible, in the matters relating to an English mortgage enforceable without intervention of the Court. 81. In view of the discussion held in the judgment and the findings and directions contained in the preceding paragraphs, we hold that the borrowers would get a reasonably fair deal and opportunity to get the matter adjudicated upon before the Debts recovery Tribunal. The effect of some of the provisions may be a bit harsh for some of the borrowers but on that ground the impugned provisions of the Act cannot be said to be unconstitutional in view of the fact that the object of the Act is to achieve speedier recovery of the dues declared as NPAs and better availability of capital liquidity and resources to help in growth of the economy of the country and welfare of the people in general which would subserve the public Interest. 82. We, therefore, subject to what is provided in Para 80 above, uphold the validity of the Act and its provisions except that of sub-section (2) of Section 17 of the Act, which is declared ultra vires Article 14 of the Constitution of India. 83. Before we part with the case, we would like to observe that where a secured creditor has taken action under Section 13 (4) of the Act, in such cases it would be open to borrowers to file appeals under Section 17 of the Act within the limitation as prescribed therefor, to be counted with effect from today. " ( 21 ) IT is, thus, clear that a person, against whom the bank has taken steps under Section 13 (4) of the 2002 Act. can approach the Debts Recovery Tribunal under Section 17 of the Act against those proceedings. ( 22 ) THE Apex Court, in the case of Punjab national Bank v. O. C. Krishnan and others reported in (2001) 6 SCC 569 : AIR 2001 SC 3208, while deprecating the entertainment of writ petition in the matters arising of the proceedings pending before Debts Recovery tribunal under 1993 Act, observed in Para 6 : "6. ( 22 ) THE Apex Court, in the case of Punjab national Bank v. O. C. Krishnan and others reported in (2001) 6 SCC 569 : AIR 2001 SC 3208, while deprecating the entertainment of writ petition in the matters arising of the proceedings pending before Debts Recovery tribunal under 1993 Act, observed in Para 6 : "6. The Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial institutions. There is a hierarchy of appeal provided in the Act, namely, filing of an appeal under Section 20 and this fast-track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision under an act cannot expressly oust the Jurisdiction of the Court under Articles 226 and 227 of the Constitution, nevertheless, when there is an alternative remedy available, judicial prudence demands that the Court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have directed the respondent to take recourse to the appeal mechanism provided by the Act. " ( 23 ) THE observations made by the Apex court in the above quoted dictum about the recovery of Debts Due to Banks and Financial institutions Act, 1993 equally holds good for the Securttisation and Reconstruction of financial Assets and Enforcement of Security Interest Act, 2002, as both the Acts were enacted to provide a special procedure for speedier recovery of debts due to the banks and financial institutions. As hierarchy of appeal is provided in both the Acts of 1993 and 2002, the fast track procedure, provided under these Acts are speedier recovery of the debts, cannot be allowed to be derailed at the behest of the defaulters by taking recourse to the proceedings under Articles 226 and 227 of the Constitution of India. ( 24 ) TO sum up, the writ petition involves several disputed questions of fact. The parties would be required to lead evidence in support of their respective claims. In our opinion, it would be appropriate for the petitioner to invoke the jurisdiction of the debts Recovery Tribunal under Section 17 of 2002 Act. ( 24 ) TO sum up, the writ petition involves several disputed questions of fact. The parties would be required to lead evidence in support of their respective claims. In our opinion, it would be appropriate for the petitioner to invoke the jurisdiction of the debts Recovery Tribunal under Section 17 of 2002 Act. ( 25 ) FOR the foregoing reasons, the writ petition is liable to be dismissed and is hereby dismissed summarily. With the above order, CLMA No. 2017 of 2007 and I. A. No. 1210 of 2007 also stand disposed of. --- *** --- .