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2023 DIGILAW 2628 (PNJ)

Harbhajan Singh v. State Bank of India

2023-08-31

LISA GILL, RITU TAGORE

body2023
JUDGMENT Mrs. Lisa Gill, J. (Oral) Prayer in this writ petition is for directing respondents no.1 and 2 to refrain from taking over possession of the house as described in the writ petition under the proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'SARFAESI Act') on the premise that petitioner no.1 is neither the borrower or guarantor of the loan account and that the outstanding amount should be recovered from respondents no.3 to 5, who have sufficient properties to satisfy the outstanding loan amount. There is a further prayer for directing the respondent-Bank to decide representation dated 10.01.2023, submitted by the petitioner. 2. Learned counsel for the petitioners submits that the house in question belonged to petitioner no.1, who is a retired person. Petitioners no.2 and 3 are his wife and daughter respectively, respondents no.3 and 4 are his son and daughter-in-law, respectively. It is submitted that on assurance given by respondents no. 3 and 4 that they would look after the petitioners for rest of their lives and would take care of all their needs, petitioner no.1 transferred ownership of the house in question in favour of respondent no.4 (his daughter-in-law), vide registered deed no. 2331 dated 03.10.2016. Copy thereof is not available on record. 3. The said respondents, it is submitted thereafter availed a loan of Rs. 14,00,000/- from respondent no.1 with respondent no.5 as guarantor thereof. Respondents no. 3 and 4 did not repay the loan amount pursuant to a well planned conspiracy to ensure sale of the house in question. Due to financial indiscipline on the part of respondents no. 3 and 4, respondent no.1 initiated proceedings under the SARFAESI Act. Notice under Section 13(2) of the SARFAESI Act was issued besides notice under Section 13(4) of the SARFAESI Act being issued on 23.09.2019. Application dated 28.09.2020 was filed by the respondent-Bank under Section 14 of the SARFAESI Act. It is contended that respondent-Bank is taking steps to dispossess the petitioners from their sole residential house. It is contended that the said respondents have committed fraud and are guilty of breach of trust of petitioner no. 1 as they seek to evict the petitioners from their sole residential house in this illegal manner. 4. It is contended that respondent-Bank is taking steps to dispossess the petitioners from their sole residential house. It is contended that the said respondents have committed fraud and are guilty of breach of trust of petitioner no. 1 as they seek to evict the petitioners from their sole residential house in this illegal manner. 4. It is submitted that petitioner no.1 has initiated proceedings for cancellation of transfer deed dated 03.10.2016 under the Maintenance and Welfare of Parents and Senior Citizens Act, 2007 (for short 'Senior Citizens Act'), though the said details are not forthcoming in the writ petition or even during the course of arguments. Complaint for taking action against the respondents, it is contended was filed by petitioner no.1 on 09.06.2020 before the Superintendent of Police, Faridkot, but no action thereon was taken. Representation dated 10.01.2023, in this respect is stated to have been submitted before the respondent-Bank, as well. 5. Heard learned counsel for the petitioners at length. 6. It is not denied that petitioner no.1 transferred the property in question (i.e., the secured asset) in favour of respondent no.4 vide registered transfer deed dated 03.10.2016. Petitioners are stated to be residing in the residential house. Copy of transfer deed dated 03.10.2016 and details of proceedings initiated under the Senior Citizens Act are not available on record. 7. Be that as it may, keeping in view the facts and circumstances as above, we do not find any ground to entertain this writ petition. Insofar as proceedings under the SARFAESI Act are concerned, petitioners admittedly have an efficacious remedy for redressal of their grievance/s under the SARFAESI Act. Hon'ble the Supreme Court in a catena of judgments has held that the High Court should desist from interference in such matters under the SARFAESI Act in exercise of jurisdiction under Article 226 of the Constitution of India except in exceptional and extraordinary circumstances. Gainful reference can be made to the judgment of Hon'ble Supreme Court in Union Bank of India v. Satyawati Tandon and others, 2010(8) SCC 110 , Varimadugu Obi Reddy v. B. Sreenivasulu and others, 2023(1) RCR (Civil) 34, M/s South Indian Bank Limited and others v. Naveen Mathew Philip and another, 2023(1) RCR (Civil) 771 and Division Bench judgment of this High Court in CWP No. 10738 of 2022, titled M/s Harinder Fabrics v. Shriram City Union Finance Limited, decided on 04.05.2023. Hon'ble the Supreme Court in Satyawati Tandon's case (supra) has held as under:- "17 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 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 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. 18. 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 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. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them 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, which ultimately prove 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 out in Baburam Prakash 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. " 8. Hon'ble the Supreme Court in M/s South Indian Bank (supra) while reiterating its earlier decisions held as under: - "13 We may, however, reiterate the settled position of law on the interference of the High Court invoking Article 226 of the Constitution of India in commercial matters, where an effective and efficacious alternative forum has been constituted through a statute. XX XX XX XX 14. A writ of certiorari is to be issued over a decision when the Court finds that the process does not conform to the law or statute. In other words, courts are not expected to substitute themselves with the decision-making authority while finding fault with the process along with the reasons assigned. Such a writ is not expected to be issued to remedy all violations. In other words, courts are not expected to substitute themselves with the decision-making authority while finding fault with the process along with the reasons assigned. Such a writ is not expected to be issued to remedy all violations. When a Tribunal is constituted, it is expected to go into the issues of fact and law, including a statutory violation. XX XX XX XX 15. The object and reasons behind the Act 54 of 2002 are very clear as observed by this Court in Mardia Chemicals Ltd. v. Union of India, (2004) 4 SCC 311 . While it facilitates a faster and smoother mode of recovery sans any interference from the Court, it does provide a fair mechanism in the form of the Tribunal being manned by a legally trained mind. The Tribunal is clothed with a wide range of powers to set aside an illegal order, and thereafter, grant consequential reliefs, including repossession and payment of compensation and costs. Section 17(1) of the SARFAESI Act gives an expansive meaning to the expression "any person", who could approach the Tribunal. xx xx xx xx 18. While doing so, we are conscious of the fact that the powers conferred under Article 226 of the Constitution of India are rather wide but are required to be exercised only in extraordinary circumstances in matters pertaining to proceedings and adjudicatory scheme qua a statute, more so in commercial matters involving a lender and a borrower, when the legislature has provided for a specific mechanism for appropriate redressal." 9. Therefore, interference by this Court, at this stage, in exercise of jurisdiction under Article 226 of the Constitution of India, is not justified in view of the efficacious statutory remedy available to the petitioners. 10. Accordingly, this writ petition is dismissed with liberty to the petitioner to avail the remedy/remedies as available to them in accordance with law. There is no expression of opinion on the merits of the matter. Pending application/s, if any, stand/s disposed of accordingly.