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2014 DIGILAW 815 (CAL)

Jawahar Singh v. United Bank of India

2014-08-25

INDRAJIT CHATTERJEE

body2014
JUDGMENT : Indrajit Chatterjee, J. A common order is being passed in respect of both the writ applications as noted in the previous order dated 21st August, 2014 in W.P. No. 788 of 2013. The present petitioner who is the defaulting borrower has prayed for writ of mandamus to cancel the demand notices, possession notices and also to rescind the proposed e-auction sale notice as appeared in the newspapers. The subject-matter of writ petition No. 787 of 2014 is the ground floor alongwith the car parking space of a multi-storied building and in W.P. No. 788 of 2014 it is the first floor of the said multi-storied building. It has been duly described in the e-auction notice issued by the bank. There is no dispute regarding the description of the property. 2. In both the writ applications the taking of loan is admitted. There is also no dispute regarding the calculation of interest etc. It has been claimed by the bank that the assets have been declared as non-performing assets long ago. But there is dispute as raised by the present writ petitioner in view of the internal circulation of the Reserve Bank of India given to the banks. 3. It was argued on behalf of the writ petitioner in both the cases that no notice was served on the writ petitioner under Rule 8, sub-rule (6) of the Security Interest (Enforcement) Rules, 2002 (hereinafter called as the said Rules), that the proposals for settlement is pending with the bank and that the Writ Court had every jurisdiction to cancel the notices of the e-auction sale. 4. On the point of pendency of the settlement proposal, the learned Counsel cited the following decisions : (i) M/s. Shivam Traders and others v. Bank of Baroda and others, AIR 2007 Pat 237 a Single Bench decision; and (ii) Kumar Hotels and Restaurant v. Indian Overseas Bank and others, 2013(1) DRTC 259 (P&H), a Division Bench decision; 5. On the point of notice under Rule 8(6) of the said Rule of 2002, the learned Counsel cited the following decisions : (i) K.R.S. Latex (India) Pal. Ltd. v. Federal Bank Ltd., 2011(1) DRTC 528 (Ker), and (ii) Kanha International through Proprietor and others v. Union of India and others, 2011 (2) DRTC 825 (Guj) : 2011(105) AIC 8 (Guj.) (Sum); 6. Ltd. v. Federal Bank Ltd., 2011(1) DRTC 528 (Ker), and (ii) Kanha International through Proprietor and others v. Union of India and others, 2011 (2) DRTC 825 (Guj) : 2011(105) AIC 8 (Guj.) (Sum); 6. It may be mentioned that in the decision of Kerala High Court the decision of Division Bench of Bombay High Court as in Manoj D. Kapasi v. Union of India, (2005)125 Comp. Cas. 676, was referred to. 7. Regarding fixation of valuation of reserved price the learned Counsel cited the decision of the Division Bench of the Orissa High Court as in Swastik Agency and others v. State Bank of India, Bhubaneswar and others, AIR 2009 Orissa 147. 8. The learned Counsel appearing for the respondents submitted that the matter be disposed of on the documents available before this Court considering the fact that the auction sale is fixed on 25.8.2014. His main argument was that the High Court in its power under Article 226 of the Constitution of India cannot stall a proceeding under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter call as the said Act). He cited the decision of the Hon'ble Apex Court as passed in Civil Appellate Jurisdiction which was delivered by the Hon'ble Apex Court on 26th July, 2010 in Union Bank of India v. Satyawati Tondon and others, wherein the Apex Court in paragraph 27 held as follows : "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 D.R.T. Act and S.A.R.F.A.E.S.I. Act and exercised 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". 9. Regarding the point of notice the learned advocate appearing on behalf of the respondent submitted that if the documents as filed by the writ petitioner are perused only one irresistible conclusion will follow that the petitioner was well aware regarding his liability. 9. Regarding the point of notice the learned advocate appearing on behalf of the respondent submitted that if the documents as filed by the writ petitioner are perused only one irresistible conclusion will follow that the petitioner was well aware regarding his liability. He submitted that huge amount of cash credit is also pending against the petitioner and the petitioner has already approached the Debt Recovery Tribunal-II being S.A. No. 113 of 2013, but for these two house building loans the petitioner has approached this Court in two separate writ applications just to stall the e-auction fixed on August 28, 2014 by filing the writ petitions only on August 20, 2014 and the gap is just two working days i.e., August 21, 2014 and August 22, 2014, the other dates being holidays. 10. As regards the non-disposal of settlement prayer the learned Counsel submitted by taking me to page No. 44 (Annexure-8 of the W.P. No. 787 of 2014) that the bank requested the writ petitioners to come up with one enrich offer and to make arrangement to submit a reasonable proposal within seven days of the writing of the letter which is dated August 24, 2012 failing which the bank will initiate necessary measures. 11. The learned Counsel further submitted that after 37 days of the issuance of that letter the petitioner only enhanced the offer to Rs. 132 lac from Rs. 130 lac and thereafter the bank issued notice under section 13(2) read with section 13(13) of the said Act of 2002. It was duly received and answered. 12. The learned Counsel of the respondent further took me to page No. 55 (Annexure-P-12, Paragraph-IV) to show that the second proposal dated October 1, 2012 for one time settlement was not accepted by the bank and that was duly communicated to the writ petitioners through his learned advocate on November 30, 2012. Thus, he submitted that the decision of the Hon'ble Punjab and Haryana High Court and that of the Hon'ble Patna High Court will not be applicable in the present case. 13. The learned Counsel also referred to page Nos. Thus, he submitted that the decision of the Hon'ble Punjab and Haryana High Court and that of the Hon'ble Patna High Court will not be applicable in the present case. 13. The learned Counsel also referred to page Nos. 57, 60-61 and 62-63 of the present writ petition No. 787 of 2014 to convince this Court for possession notice and notice of intended sale were duly communicated vide letter dated June 4, 2013 and June 19, 2014 respectively and as such e-auction sale notice was duly published which is legal and valid. Thus, he submitted that e-auction notice for auction sale of the premises in question as referred to in column 3 and 4 of the said notice cannot be cancelled. He ended his argument by saying that the decision cited by the writ petitioner of the Hon'ble Gujarat High Court, Kerala High Court and Bombay High Court and that of Hon'ble Orissa High Court will not apply on the facts and circumstances of this case. 14. In reply to all these the learned advocate appearing on behalf of the petitioner cited a Division Bench decision of our Hon'ble Court as in Debasree Das v. State of West Bengal and others, 2011 (104) AIC 949 (Cal), to substantiate his claim in W.P. No. 288 of 2014 that there was no equitable mortgage and as such the said Act of 2002 cannot apply in the present case and as such this Court has jurisdiction under Article 226 of the Constitution of India. 15. To counter the decision of the Apex Court which is commonly known as Satyawati Tandon s case as disposed of by the Apex Court on 26th July, 2010 the learned Counsel cited the decision of the Apex Court as in (1) Standard Chartered Bank v. Noble Kumar and others, 2013 (130) AIC 76 (SC) : 2013 (100) ALR 683 (SC), and (ii) Senior Manager, State Bank of India and another v. R. Shiva Subramniyan and another. 16. Unfortunately in this decision, the decision of the Apex Court i.e.. United Bank of India v. Satyawati Tandon and others, which is one earlier decision and the point of jurisdiction was not considered. In this decision it was also not considered whether in exercising jurisdiction under Article 226 of the Constitution of India the High Court can nullify one e-auction which is otherwise ready. 17. United Bank of India v. Satyawati Tandon and others, which is one earlier decision and the point of jurisdiction was not considered. In this decision it was also not considered whether in exercising jurisdiction under Article 226 of the Constitution of India the High Court can nullify one e-auction which is otherwise ready. 17. I have considered the facts and circumstances of both the writ petitions. The series of documents go to show that the writ petitioner was fully aware regarding the debts and liabilities. Notices under section 13(2) of the said Act of 2002 were duly served in both the writ petitions. 18. The present writ petitioner preferred not to reply the notice under section 13(2) which was issued in respect of the house building loan pertaining to W.P. No. 788 of 2014. This attitude of the petitioner may also be noted. The one time settlement proposal was duly disposed of about which I have noted earlier while noting the argument of the learned advocate appearing on behalf of the respondents. The advertisement of e-auction sale shows that the notices under section 8(6) of the said Rule of 2002 were duly issued. It is difficult to say that a public sector bank will not observe this formality keeping in view of the legal position that such notice is a must. This Court can refer here the provisions of section 114(g) of the Evidence Act to say that the official's acts are duly performed. The argument in WP No. 788 of 2014 that no equitable mortgage was created in respect of the property in question is also not convincing to me. Had the contention been correct then the writ petition must have taken that plea in any earlier document either filed in W.P. No. 787 or 788 of 2014 and the writ petitioner should not raise this point only at the stage of filing of the writ petition just to match the case with the decision of our Hon'ble Court as reported in 2011 (1) CHN Calcutta page-10 (supra). This Court is of the considered view that the Division Bench of our Hon'ble Court just referred to above cannot have any application in this W.P. No. 788 of 2014 where taking of loan was in dispute but here taking of loan is admitted. This Court is of the considered view that the Division Bench of our Hon'ble Court just referred to above cannot have any application in this W.P. No. 788 of 2014 where taking of loan was in dispute but here taking of loan is admitted. The conduct of the writ petitioner should not go unnoticed regarding the unpaid cash credit which is more than a crore. He duly approached the Debt Recovery Tribunal-II, Kolkata as against the realisation of the loan but kept himself waiting till August 20, 2014 particularly when the auction sale is fixed on August 25, 2014 from 1-30 p.m. to 2-30 p.m. giving the Court and the respondents a breathing time of just two working days. 19. Thus, the intention is clear that by hook or by crook the petitioner wants to stall the e-auction. I like to say that after issuance of notice under section 13(2) of the S.A.R.F.A.E.S.I. Act, the bank which is the secured creditor may take recourse to different clauses of 13(4) of the said Act. The Apex Court in the judgment of Satyawati Tandon and ors., categorically held that the only remedy available to the parties that is the secured creditor and borrower is under section 17 of the said Act and the aggrieved person may make an application to the Tribunal that is the Debt Recovery Tribunal having jurisdiction within 45 days from the date on which action is taken under that sub-section. The Apex Court further held that the borrower can challenge the action taken under section 13(4) by filing an application under section 17 of the said Act to get the matter adjudicated by the Debt Recovery Tribunal and it is the only remedy. 20. The Apex Court expressed it's anguish that case that the Division Bench of the High Court did not even advert to the appellant's plea that the writ petition should not be entertained because an effective alternative remedy was available to the writ petitioner under section 17 of the said Act. The Apex Court was pleased to set aside the order of the Hon'ble Court. I like to reiterate that in the present case the petitioner could have availed effective alternative remedy by filing an application or appeal under the said Act but he preferred to file this writ application just to stall the proceeding and that too at the fag end. 21. I like to reiterate that in the present case the petitioner could have availed effective alternative remedy by filing an application or appeal under the said Act but he preferred to file this writ application just to stall the proceeding and that too at the fag end. 21. I like to quote here from the judgment of the Apex Court as passed in Thansingh Nathmal v. Superintendent of Taxes, (1964) 6 SCR 654 , a Constitution Bench decision : "........The jurisdiction of the High Court under Article 226 of the Constitution is couched in wide terms and the exercise thereof is not subject to any restrictions except the territorial restrictions which are expressly provided in the Articles. But the exercise of the jurisdiction is discretionary: it is not exercised merely because it is lawful to do so. The very amplitude of the jurisdiction demands that it will ordinarily be exercised subject to certain self-imposed limitations. Resort that jurisdiction is not intended as an alternative remedy for relief which may be obtained in a suit or other mode prescribed by statute. Ordinarily the Court will not entertain a petition for a writ under Article 226, where the petitioner has an alternative remedy, which without being unduly onerous, provides an equally efficacious remedy. Again the High Court does not generally enter upon a determination of questions which demand an elaborate examination of evidence to establish the right to enforce which the writ is claimed. The High Court does not therefore act as a Court of appeal against the decision of a Court or Tribunal, to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon an alternative remedy provided by statute for obtaining relief. Where it is open to the aggrieved petitioner to move another Tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under Article 226 of the Constitution the machinery created under the statute to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up." 22. In another decision as in Titagarh Paper Mills Co. In another decision as in Titagarh Paper Mills Co. Ltd. v. State of Orissa, (1983)2 SCC 433 a three Judge Bench of the Hon'ble Apex Court observed that it is now well recognised that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of. 23. I may also refer here paragraph-27 of the judgment as passed by the Apex Court in Satyawati Tondon's case which has been quoted earlier while noting the argument of the learned advocate of the respondents. 24. Before I end, I must say that whether one asset is Non Performing Asset or not is to be determined by the bank the defaulting borrower cannot challenge it in a writ application particularly when that matter was not taken up with the bank by claiming the negative. 25. Thus, considering the every aspect this Court is of the opinion that this Writ Court has no jurisdiction to entertain such writ petitions and as such both the writ petitions stand dismissed in view of the observations so long made on contest but without any cost. Urgent certified photocopies of this judgment, if applied for, be supplied to the parties, upon compliance with all requisite formalities. Petitions Dismissed.