Research › Search › Judgment

Punjab High Court · body

2023 DIGILAW 2923 (PNJ)

Sudha Bansal v. Union Bank of India

2023-10-03

LISA GILL, RITU TAGORE

body2023
JUDGMENT Lisa Gill, J. (Oral) Prayer in this writ petition is for setting aside order dated 11.01.2023, Annexure P-11, passed by the District Magistrate, Sirsa, under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'SARFAESI Act') and notice dated 11.05.2023, Annexure P-15, issued pursuant thereto by respondent no.4. It is further prayed that respondents be directed to grant some time to the petitioner to arrange the amount due for settlement of loan accounts and to consider applications, Annexure P-12 and P-16, submitted by the petitioner and take a final decision thereon 2. Learned counsel for the petitioner submits that loan facility was availed of by the petitioner and her husband in June 2017. Term loan to the tune of Rs. 15,00,000/- besides a house loan for a sum of Rs. 10,00,000/- was availed of by them. A third loan facility was also availed of by them. Residential house in the name of the petitioner and shop owned by her husband were mortgaged with the respondent-Bank. Unfortunately, petitioner's husband is stated to have suffered a Paralysis attack in the year 2020 and he ultimately passed away on 15.12.2022. It is submitted that two complaints under Section 138 of the Negotiable Instruments Act (for short NI Act) in respect to security cheques for a sum of Rs. 9,63,000/- and Rs. 14,00,000/-, both dated 02.12.2019, were filed by the respondent-Bank. Suit for recovery for a sum of Rs. 9,88,338/- along with requisite interest filed by the respondent-Bank was decreed on 15.09.2022. Two other civil suits for recovery were also filed by the respondent-Bank. Petitioner was proceeded ex parte in the said proceedings. It is submitted that respondent-Bank in an absolute illegal manner also initiated proceedings under the SARFAESI Act. It is mentioned in the application under Section 14 of SARFAESI Act that accounts of the petitioner and her husband were declared Non Performing Asset (NPA) on 02.04.2022. Notice under Section 13(2) of the SARFAESI Act was issued on 07.09.2022. Claim of Rs. 23,52,122/- was raised. The District Magistrate, Sirsa, passed order dated 11.01.2023, Annexure P-23, under Section 14 of the SARFAESI Act. 3. It is contended that on coming to know of the said proceedings, petitioner represented before the Chief Manager, Union Bank of India on 28.05.2023, stating that she wished to close her loan account. Reminders were also sent by her. 23,52,122/- was raised. The District Magistrate, Sirsa, passed order dated 11.01.2023, Annexure P-23, under Section 14 of the SARFAESI Act. 3. It is contended that on coming to know of the said proceedings, petitioner represented before the Chief Manager, Union Bank of India on 28.05.2023, stating that she wished to close her loan account. Reminders were also sent by her. Meanwhile, notice dated 11.05.2023, was issued by the Tehsildar, Sirsa. The petitioner, yet again submitted representation dated 11.07.2023, Annexure P-16, seeking settlement of all her three loan accounts expressing her intention to deposit a sum of Rs. 35,00,000/- as One Time Settlement (OTS) for all the three loan accounts. Mortgaged property, it is submitted is the sole residential house of the petitioner, who is a widow and in case, her residential house is taken away, she would be rendered destitute as her son is also not looking after her and has in-fact abandoned her. Actual market price of the residential house of the petitioner is stated to be much more than the outstanding amount and that there is no justification for selling the same. Learned counsel for the petitioner submits that keeping in view the facts and circumstances of the case this writ petition should be allowed. 4. Learned counsel for the respondent-Bank on advance notice submits that this writ petition is not entertainable as the petitioner has an efficacious remedy for redressal of her grievance. Furthermore, total outstanding qua all the three loan accounts is approximately Rs. 48,50,000/-. Factum of filing of civil suits or complaint under Section 138 of the NI Act is not a bar for initiation of proceedings under the SARFAESI Act. Thus, this writ petition, it is prayed should be dismissed. 5. We have heard learned counsel for the parties and have gone through the file with their able assistance. 6. Availing of loan facility(ies) (3) by the petitioner and her husband from respondent-Bank is a matter of record. Liability of the petitioner has not been denied. Furthermore, learned counsel for the petitioner is unable to deny that petitioner has an efficacious statutory remedy for redressal of the grievance(s) as raised by her. No such exceptional or extraordinary circumstance has been pointed out by learned counsel for the petitioner, which calls for interference in exercise of jurisdiction under Article 226 of the Constitution of India. Furthermore, learned counsel for the petitioner is unable to deny that petitioner has an efficacious statutory remedy for redressal of the grievance(s) as raised by her. No such exceptional or extraordinary circumstance has been pointed out by learned counsel for the petitioner, which calls for interference in exercise of jurisdiction under Article 226 of the Constitution of India. Factum of suit for recovery being filed and one of them being decreed in favour of the respondent-Bank, filing of criminal complaints and then resort to proceedings under the SARFAESI Act do not carve out any exceptional circumstance, which call for interference. It has been held by Hon'ble the Supreme Court in a catena of cases that in such circumstances, petitioner should be relegated to their remedy under the statute in such like situations. 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. 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. 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. " 7. 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. 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. 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." 8. Keeping in view the facts and circumstances as above, we do not find any ground to interfere in this writ petition. 9. Accordingly, this writ petition is dismissed with liberty to the petitioner to avail the remedy/remedies as available to her in accordance with law. There is no expression of opinion on the merits of the matter.