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2014 DIGILAW 742 (AP)

Kothapeta Yada Goud v. State Bank of India

2014-06-17

ASHUTOSH MOHUNTA, M.SATYANARAYANA MURTHY

body2014
Judgment M. Satyanarayana Murthy, J. 1. This writ petition, under Article226 of the Constitution of India, is filed by the petitioner to issue a writ order or direction, more particularly, one in the nature of writ of mandamus, declaring the action of the respondents-Bank, to take possession of the application schedule property pursuant to the impugned proceedings issued by the District Collector, Medak at Sangareddy vide proceedings in Lr.No.C3/3565/2013, dated 19.10.2013, and consequential notice issued by the Tahsildar, Shivampet Mandal, Medak District vide proceedings in Lr.No.B/1803/2013, dated 5.11.2013, proposing to take over possession of the application schedule land on 22.11.2012, as illegal arbitrary and against the principles of natural justice on the ground that the schedule property is an agricultural land exempted under Section 31(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (For short, 'the SARFAESI Act') and consequently set-aside the impugned proceedings. It is contended that on receipt of notice dated 15.4.2013, under Section 13(2) of the SARFAESI Act, a representation was made by the petitioner but, the same was not considered and disposed of by the respondents-Bank, in compliance of Section 13(3-A) of the SARFAESI Act. Further, it is contended that after issuance of notice, the petitioner paid substantial amount of Rs. 4,50,000/- and thereafter the debt due is only a meagre amount and prayed to set-aside the impugned proceedings. 2. Respondents 1 and 2 filed counter denying material allegations of the petition while admitting issuance of proceedings under Section 13(2) and 13(4) of SARFAESI Act, as the petitioner is a defaulter in discharge of the debt due to the Bank, and that the schedule property is converted into Non-Agricultural Land, thereby the exemption contained under Section 31(1) has no application to the facts and circumstances of the case. It is further contended that the petitioner has to approach the Debts Recovery Tribunal under Section 17 of the SARFAESI Act and as such not entitled to invoke the jurisdiction of this Court straightaway, under Article 226 of the Constitution of India, and prayed to dismiss the petition. 3. During course of argument, learned Counsel for both the parties reiterated the grounds urged in their respective pleadings. 4. 3. During course of argument, learned Counsel for both the parties reiterated the grounds urged in their respective pleadings. 4. Admittedly, proceeding were initiated under the SARFAESI Act, declaring the loan account of the petitioner as N.P.A. and issued notice under Section 13(2) of the SARFAESI Act, which was not challenged in the present writ petition. However, the petitioner only challenged the proceedings dated 19.10.2013, issued by the District Collector, Medak at Sangareddy, in authorizing the Tahsildar to take possession of the secured assets and in turn the proceedings dated 22.11.2013, issued by the Tahsildar, Shivampet Mandal, for taking possession of the schedule property on 22.11.2012. Though a specific ground is urged for non-compliance of Section 13(3-A) of the SARFAESI Act, since the proceedings issued under Section 13(2) were not challenged, it is not necessary to decide the validity of proceedings issued under Section 13(2) or 13(4) of the SARFAESI Act. Even otherwise, the challenge in the present writ petition is only with regard to the proceedings referred supra and, admittedly, the petitioner has got a remedy to file an appeal before the Debts Recovery Tribunal, under Section 17(1), since any order passed under Section 13 or Section 14 of the SARFAESI Act is appealable. 5. Admittedly, as mentioned in Para 14 of the affidavit filed along with the petition, the petitioners filed SA No. 701 of 2013 along with IA No. 3902 of 2013 before the Debts Recovery Tribunal, Hyderabad, on 14.11.2013, which was posted for hearing on 19.11.2013, but the same was not taken up on that day as neat copy of the petition was not filed; thereafter, moved the application with an out of order to take up the matter but the officer did not take up the matter on 20.11.2013, as he went on leave for 3 days from 20.11.2013 to 22.11.2013. Therefore, taking advantage of non-passing of any order due to availment of leave by the Presiding Officer of Debts Recovery Tribunal, against the impugned proceedings to take possession of the property on 22.11.2013, the petitioner approached this Court. 6. In view of the specific allegations made in Para 14 of the affidavit filed along with the petition, the petitioners approached the Debts Recovery Tribunal by availing the remedy available under Section 17(1) of the SARFAESI Act and the same is pending before the Debts Recovery Tribunal. 6. In view of the specific allegations made in Para 14 of the affidavit filed along with the petition, the petitioners approached the Debts Recovery Tribunal by availing the remedy available under Section 17(1) of the SARFAESI Act and the same is pending before the Debts Recovery Tribunal. Merely, because the Presiding Officer availed leave for 3 days, the petitioner is not supposed to approach this Court to exercise the extraordinary power of judicial review, that too when the appeal filed under Section 17(1) of the SARFAESI Act is pending before the Debts Recovery Tribunal. 7. In Narayan Chandra Ghosh v. UCO Bank and others, (2011) 4 SCC 548 , the apex Court in Para 8 held as follows : "It is well-settled that when a statute confers a right of appeal, while granting the right, the Legislature can impose conditions for the exercise of such right, so long as the conditions are not so onerous as to amount to unreasonable restrictions, rendering the right almost illusory. Bearing in mind the object of the Act, the conditions hedged in the said proviso cannot be said to be onerous. Thus, we hold that the requirement of pre-deposit under sub-section (1) of Section 18 of the Act is mandatory and there is no reason whatsoever for not giving full effect to the provisions contained in Section 18 of the Act. In that view of the matter, no Court, much less the Appellate Tribunal, a creature of the Act itself, can refuse to give full effect to the provisions of the statute. We have no hesitation in holding that deposit under the second proviso to Section 18(1) of the Act being a condition precedent for preferring an appeal under the said section, the Appellate Tribunal had erred in law in entertaining the appeal without directing the appellant to comply with the said mandatory requirement." 8. In Kanaiyalal Lalchand Sachdev and others v. State of Maharashtra and others, (2011) 2 SCC 782 , the apex Court in Para 23 held as follows : "In our opinion therefore, the High Court rightly dismissed the petition on the ground that an efficacious remedy was available to the appellants under Section 17 of the Act. It is well settled that ordinarily relief under Articles 226/227 of the Constitution of India is not available if an efficacious alternative remedy is available to any aggrieved person." 9. It is well settled that ordinarily relief under Articles 226/227 of the Constitution of India is not available if an efficacious alternative remedy is available to any aggrieved person." 9. In another decision reported in United Bank of India v. Satyawati Tandon and others, (2010) 8 SCC 110 , the apex Court in Para Nos. 42 to 45 held as follows : "There is another reason why the impugned order should be set-aside. If respondent 1 had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14, then she could have availed remedy by filing an application under Section 17(1). The expression "any person" used in Section 17(1) is of wide import. It takes within its fold, not only the borrower but also the guarantor or any other person who may be affected by the action taken under Section 13(4) or Section 14. Both the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution of India, 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 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. 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. 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 HI 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. 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." 10. In a recent decision of the apex Court reported in Commissioner of Income Tax and others v. Chhabil Dass Agarwal, was held as follows: "Non-entertainment of petitions under writ jurisdiction by the High Court when an efficacious alternative remedy is available is a rule of self-imposed limitation. It is essentially a rule of policy, convenience and discretion rather than a rule of law. It is within the discretion of the High Court to grant relief under Article 226 despite the existence of an alternative remedy, however, the High Court must not interfere if there is an adequate efficacious alternative remedy available to the petitioner and he has approached the High Court without availing the same unless he has made out an exceptional case warranting such interference or there exist sufficient grounds to invoke the extraordinary jurisdiction under Article 226. However, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation. However, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation. In the instant case, the Act provides complete machinery for the assessment/re-assessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by the Revenue Authorities, and the assessee could not be permitted to invoke the writ jurisdiction when he had adequate remedy open to him by an appeal to the Commissioner of Income Tax (Appeals). Assessee in the instance case neither described the available alternative remedy under the Act as ineffectual and non-efficacious nor has the High Court ascribed cogent and satisfactory reasons to have exercised its jurisdiction in the facts of instant case. Writ Court accordingly, as held, should not have entertained the writ petition." 11. In view of the principles laid down by the apex Court in the decisions cited supra, this Court cannot pass any order, exercising the extraordinary power available under Article 226 of the Constitution of India, since the petitioner already filed SA No. 701 of 2013 along with IA No. 3902 of 2013 before the Debts Recovery Tribunal, praying to grant similar reliefs. Therefore, on account of pendency of the appeal before the Debts Recovery Tribunal, filed under Section 17(1) of the SARFAESI Act, challenging the proceedings issued by the respondents-Bank, this Court need not exercise the extraordinary power available under Article 226 of the Constitution of India. Hence, we find no ground to grant any relief in this petition, and the petitioner is permitted to prosecute the proceedings before the Debts Recovery Tribunal, for appropriate relief. 12. Accordingly, with the above observation, the writ petition is dismissed. In consequence, miscellaneous petitions, if any, pending in this writ petition, shall stand dismissed. No order as to costs.