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2025 DIGILAW 544 (AP)

Snap Gym 24/7 LL v. Union Of India

2025-03-28

DHIRAJ SINGH THAKUR, RAVI CHEEMALAPATI

body2025
ORDER : Ravi Cheemalapati, J. Challenge laid in this writ petition is to the action of respondent no.2-State Bank of India, in trying to take possession of the movable assets (gym equipment) in the premises situated at The SNAP GYM 24/7 LLP, being illegal, arbitrary and in violation of Articles 14, 19, 21, 300-A of the Constitution, besides being violative of Reserve Bank Circulars and Banking Regulation Act, 1949. 2. The facts, in brief, are that the petitioner is a partnership firm commenced on 01.03.2018 initially under the name and style THE SNAP GYM 24/7 and the same was registered in the Labour Department and obtained Form-C valid upto 31.03.2021. The said Form-C was renewed and new Form- C was taken on 01.04.2021, which is valid upto 31.03.2027 and the firm name was changed to THE SNAP GYM 24/7 LLP. On 03.07.2024, agents of respondent Bank entered into the gym premises and intimated the receptionist that loan taken by the firm from the Bank fell overdue and unless the overdue is cleared, the gym will be seized. In the notice affixed on 02.07.2024, it was mentioned that Fitness equipment, interiors and all other chargeable assets in the premises are hypothecated to the respondent bank. The petitioner firm never obtained loan and there was no occasion for them to hypothecate the equipment as mentioned in the said notice. The bank had never issued any notice at any point of time. It is the further case of the petitioner that there is another gym in the same premises separated by a common partition wall under the name and style NEW THE SNAP GYM 24/7, which was under renovation and non-operational. Apprehending that the bank may take coercive steps under the guise of the notice, the petitioner filed a suit in O.S.No.156 of 2024 for permanent injunction along with an application vide I.A.No.933 of 2024 for grant of temporary injunction. The learned Principal Junior Civil Judge, Vijayawada, though was pleased to grant ad interim injunction, after hearing the parties, dismissed the petition in I.A.No.933 of 2024. Aggrieved thereby, the petitioner filed Civil Miscellaneous Appeal (For short, ‘CMA’) on the file of the Court of the learned V Additional District Judge’s Court, Vijayawada and as caveat petition is pending, notice was ordered to respondent bank and on the request made by counsel for respondent, the matter stood posted to 25.2.2025 for filing counter. Aggrieved thereby, the petitioner filed Civil Miscellaneous Appeal (For short, ‘CMA’) on the file of the Court of the learned V Additional District Judge’s Court, Vijayawada and as caveat petition is pending, notice was ordered to respondent bank and on the request made by counsel for respondent, the matter stood posted to 25.2.2025 for filing counter. It is the further case of the petitioner that after getting time for filing counter, the bank authorities had affixed possession notice stating that symbolic possession of the gym equipment was taken under Section 13(4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, ‘the SARFAESI Act’) on 19.02.2025 and filed a petition before the Chief Metropolitan Magistrate on 20.02.2025 for taking physical possession through the Advocate Commissioner to seize the articles lying in the premises of The Snap Gym 24/7 LLP. In fact, the bank had sanctioned loan to the NEW SNAP GYM 24/7 lying adjacent to the petitioner firm , but not to the petitioner. Therefore, the action of the bank authorities in initiating SARFAESI proceedings against the petitioner for the loan advanced by them to some other firm is unreasonable and illegal and therefore, the bank authorities be restrained from taking physical possession of the articles lying in the premises of the petitioner. 3. The respondent bank filed counter affidavit denying the material averments of the writ affidavit and further contending that one Jenny Abhilashitha Patnaik approached the bank and obtained loan of Rs.6 crores to start business under the name and style ‘New Snap gym 24/7-VIJ’ by executing mortgage deed in respect of immovable property besides hypothecating the gym equipment towards security and as there was default in payment of EMIs, the bank issued demand notice. Pursuantly, the petitioner claiming to be a separate entity as if running Gym with a slight change in the name in the same premises that too with the same entrance, however said to be separated by a partition wall, filed suit vide O.S.No.156 of 2024 for permanent injunction restraining the bank from interfering with the petitioner’s peaceful possession and enjoyment of the plaint schedule property and also filed I.A.No.933 of 2024 for grant of temporary injunction. Though the learned Principal Junior Civil Judge (for short, ‘PJCJ’), Vijayawada granted ad interim injunction, subsequently the petition filed for temporary injunction was dismissed by the learned PJCJ, Vijayawada. Though the learned Principal Junior Civil Judge (for short, ‘PJCJ’), Vijayawada granted ad interim injunction, subsequently the petition filed for temporary injunction was dismissed by the learned PJCJ, Vijayawada. Aggrieved thereby, the petitioner filed CMA and owing to caveat, notice was ordered to the respondent. Thereafter, the bank issued notice under Section 13(2) of the SARFAESI Act and had taken symbolic possession of the hypothecated gym articles as per Section 13(4) of the Act and thereafter, the petitioner filed this writ petition. The writ petition being meritless is liable to be dismissed. 4. Heard Sri Arjampudi Rama Koteswara Rao, learned counsel for the petitioner, Sri Dhara Satyanarayana, learned standing counsel for State Bank of India and the learned Government Pleader for Home. 5. Sri Arjampudi Rama Koteswara Rao, learned counsel, while reiterating the contents of the writ affidavit, would further contend that the bank affixed possession notice taking symbolic possession of the gym articles lying in the petitioner gym premises for the loan said to have been availed by another gym lying adjacent in the same premises, without there being any relationship of creditor and debtor and thus initiation of SARFAESI proceedings against the petitioner is untenable. The learned counsel would further contend that the petitioner had never availed any loan facility from the respondent bank and the principal borrower who said to have availed loan facility of the respondent bank was never related to the petitioner and he was never the partner of the petitioner partnership firm, except similarity in the name and location in the same premises. In fact, the bank in the counter filed in the suit categorically admitted that there is no relation or money transactions between the petitioner and the bank and therefore, initiation of proceedings under SARFAESI Act against the petitioner, who had neither borrowed nor stood as guarantor for any loan, is nothing but violation of fundamental rights guaranteed under the Constitution. Accordingly, prayed to allow the writ petition. 6. Sri Dhara Satyanarayana, learned standing counsel, while reiterating the contents of the counter affidavit would contend that the petitioner having failed in its attempts to get interim orders of injunction, has filed this writ petition though the CMA filed by it in relation to the same subject property is pending on the file of the learned V Additional District Court, Vijayawada. The writ petition is misconceived, devoid of merits and not maintainable and the same deserves dismissal. Accordingly, prayed to dismiss the writ petition. 7. Perused the material available on record and considered the submissions made by learned counsel for the parties. 8. The petitioner claims that even according to the bank one Abhishita Patnaik, who runs gym in the name New Snap gym 24/7 located next to the gym of the petitioner, who had nothing to do with the petitioner, had availed loan from the bank and as security hypothecated gym equipment. Therefore, the bank, if at all the said Abhishita Patnaik committed any default in payment of the loan availed, has to realize the amount due by initiating steps under SARFAESI Act against the gym equipment hypothecated to the bank by the said Abhishita Patnaik. Instead, the Bank issued notice under Section 13(2) of the SARFAESI Act as if symbolic possession was taken of the articles situated in the petitioner gym, which is located in the same premises. 9. This Court appointed court Commissioners to visit and submit a report with regard to location of the two premises, their entrances and also their view as to whether the two enterprises are different or being run buy one and the same person. Pursuantly, the commissioners executed the commission warrant and filed their report, as per which the two Gyms have their individual entries but separated by a glass partition. 10. It is evident that when the bank affixed notice on 02.07.2024 mentioning that gym equipment, interiors and all other chargeable assets in the premises are hypothecated to the bank, the petitioner filed suit for permanent injunction, got ad interim injunction, which was later vacated and interim injunction application was dismissed. Aggrieved thereby, the petitioner filed Civil Miscellaneous Appeal and at the request made by learned counsel for the respondent bank for filing counter, the same was adjourned. 11. The issue involves disputed questions of fact, determination whereof requires both oral and documentary evidence.nThis Court while exercising jurisdiction under Article 226 of the Constitution cannot take up such a task. 12. Further, in response to the notice dated 02.07.2024, the petitioner, as mentioned supra, had already filed a suit and as of now the CMA filed by the petitioner assailing the orders passed in dismissing the interim injunction application is pending. 12. Further, in response to the notice dated 02.07.2024, the petitioner, as mentioned supra, had already filed a suit and as of now the CMA filed by the petitioner assailing the orders passed in dismissing the interim injunction application is pending. The subject matter of this writ petition and the CMA pending before the Civil Court is the same, but for the fact that this writ petition is filed questioning the action of the bank authorities in trying to take physical possession pursuant to the notice issued under Section 13(2) of the SARFAESI Act. Therefore, since the petitioners had already invoked jurisdiction of the civil Court and the proceedings are pending therein, filing this writ petition almost for the similar purpose and in respect of the same subject matter is not permissible, in view of the settled principle of law that a party cannot be permitted to pursue two parallel remedies simultaneously in respect of the same subject-matter. 13. Further, in Union Bank of India v. Satyawati Tondon, (2010) 8 SCC 110 , the Hon’ble Supreme Court has deplored action of High Courts in exercising writ jurisdiction ignoring availability of statutory remedies under the DRT Act and SARFAESI Act. They are extracted hereunder: “55. It is a matter of serious concern that despite repeated pronouncements of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the SARFAESI Act and exercise 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.” 14. Of late, this Court, vide orders dated 11.07.2024, passed in Writ Petition No.14411 of 2024, held that in the absence of exceptions enumerated in the decision of the Hon’ble Supreme Court in PHR Invent Educational Society v. UCO Bank, (2024) 6 SCC 579 , the petitioners should avail the alternate remedy in terms of SARFAESI Act and further taking note of the observations referred to supra in para-55 in Satyawati Tondon (supra 1), finding no merit in the writ petition granted liberty to the petitioners to avail an appropriate remedy. 15. 15. Therefore, availability of alternative efficacious statutory remedy provided under SARFAESI Act to question the proceedings initiated by respondent bank under Section 17 of the Act, debars the petitioner from invoking writ jurisdiction. 16. In view of the above, as there are disputed questions of fact, further as the petitioner had already invoked the jurisdiction of civil Court in relation to the same subject property and since there is an alternative efficacious statutory remedy provided under Section 17 of the SARFAESI Act, this writ petition deserves dismissal. 17. Accordingly, the writ petition is dismissed. There shall be no order as to costs. Pending miscellaneous petitions, if any, shall stand closed.