High Court of KeralaSingle JudgeWrit petition dismissed.

AL Noor Hospitals Private Limited v Union of India and Others

Case / Petition Number:WP(C) No.39876/2023

Case Details & Bench

Court
High Court of Kerala
Hon'ble Judges
  • N. Nagareesh
Judgment Date
2024-02-29
Court Decision / Holding
The writ petition is not maintainable; it is dismissed. The aggrieved party has an effective and efficacious remedy before the Tribunal constituted under the SARFAESI Act.
Final Disposition
Writ petition dismissed.

Parties to the Case

Appellants / Petitioners

  • AL Noor Hospitals Private Limited
  • Thaithottathil Abdul Salam

Respondents

  • Union of India, Ministry of Finance Department of Financial Services
  • Reserve Bank of India
  • Perinthalmanna Urban Co-Operative Bank Limited
  • Authorized Officer, Perinthalmanna Urban Co-Operative Bank Limited

Legal Representation & Advocates

Counsels for Petitioners

  • • Shaji Chirayath
  • • Jiji M. Varkey
  • • M.K. Safeela Beevi
  • • Savitha Ganapathiyatan
  • • M. Shajahan

Counsels for Respondents

  • • Chandini G. Nair
  • • Jayasree K.P.
  • • John Joseph

Case Synopsis & Summary

AL Noor Hospitals Private Limited challenged Ext.P3 notice issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), seeking to stall the proceedings that aim to take over and sell the secured asset. The petitioners contend Ext.P3 is hit by Section 26D and barred by limitation under Section 36 of the SARFAESI Act, and pray for certiorari to quash Ext.P8, the CJM Manjeri order in Criminal Miscellaneous Petition No.3335 of 2022. The relief sought includes declarations that Ext.P3 is invalid and that the order Ext.P8 should be set aside, with a broader plea for any other appropriate relief. The petition relies on the principle that writs should not ordinarily lie against SARFAESI actions, emphasizing statutory remedies and the availability of efficacious redressal under the Act. The respondents and their counsel resist, arguing that Article 226 writ petitions are not maintainable against SARFAESI proceedings because the statute provides a specific, effective remedy before the Tribunal established under SARFAESI, a position reinforced by established Supreme Court and High Court decisions. The court reflects on post-2010 jurisprudence, including Satyawati Tondon and subsequent Kerala decisions, and ultimately dismisses the petition as not maintainable, reaffirming that the aggrieved party should pursue the statutory remedy rather than a writ petition.

Provisions of Law Cited

Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002Section 26D of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002Section 36 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002

Legal Doctrines & Maxims

  • No writ would lie against SARFAESI proceedings
  • Efficacious alternate remedy doctrine

Submissions & Arguments

Contentions of Appellants / Petitioners

The petition contends Ext.P3 under Section 13(2) is invalid as it contravenes Sections 26D and 36 of the SARFAESI Act and that Ext.P3 is barred by limitation; Ext.P8 (CJM order) is sought to be quashed. The petition urges the court to intervene on grounds of procedural impropriety in the securitisation process and on the premise that the Act contemplates an efficacious remedy before the Tribunal rather than a writ petition; it further relies on the general principle that writs should not normally lie against SARFAESI actions.

Contentions of Respondents

The respondents submit that writ petitions under SARFAESI are not maintainable, as the Act provides a statutory, efficacious remedy before the Tribunal; Article 226 jurisdiction should be exercised only in extraordinary circumstances; they rely on established judgments including United Bank of India v. Satyawati Tondon and others, Mathew K.C., Anilkumar v. SBI, South Indian Bank v. Naveen Mathew Philip, and Jayakrishnan A. v. Union Bank of India to support non-maintainability of the writ and the primacy of the Tribunal mechanism.

Cited Precedents (5)

Case NameCitationTreatmentExplanation
United Bank of India v. Satyawati Tondon and others(2010) 8 SCC 110PositiveThe Apex Court held that no writ petition shall be entertained against SARFAESI proceedings due to the existence of an efficacious alternate remedy.
Authorized Officer, State Bank of Travancore v. Mathew K.C.2018 (1) KLT 784PositiveApex Court reiterated that no writ petition would lie against SARFAESI proceedings in view of the statutory remedy.
Anilkumar v. State Bank of India2020 (2) KLT 756PositiveDivision Bench declined Article 226 challenge against SARFAESI proceedings, aligning with the Satyawati Tondon doctrine.
South Indian Bank Limited v. Naveen Mathew Philip2023 (4) KLT 29PositiveApex Court held Article 226 should be exercised only in extraordinary circumstances where redressal is not available under statute.
Jayakrishnan A. v. Union Bank of India and othersW.P.(C) No.30803/2023PositiveCourt held writs against SARFAESI proceedings not maintainable given effective Tribunal remedy.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE N.NAGARESH** **THURSDAY, THE 29[TH] DAY OF FEBRUARY 2024/10TH PHALGUNA, 1945** **WP(C) NO. 39876 OF 2023** **AGAINST THE ORDER DATED 11.11.2022 IN CRMP NO.3335 OF 2022 OF CHIEF JUDICIAL MAGISTRATE ,MANJERI PETITIONERS:** **1 AL NOOR HOSPITALS PRIVATE LIMITED, AGED 47 YEARS, REGISTERED OFFICE, 2/15, 3RD FLOOR, WEST PATEL NAGAR, WEST DELHI (PO), NEW DELHI PIN-110 008 REPRESENTED ITS MANAGING DIRECTOR MR. THAITHOTTATHIL ABDUL SALAM, PIN - 110008 2 THAITHOTTATHIL ABDUL SALAM, AGED 58 YEARS, SON OF MR. ABDUL RAHIMAN, MANGING DIRECTOR, AL NOOR HOSPITAL PRIVATE LIMITED, THAITHOTTATHIL HOUSE, MAMPAD (PO) MALAPURAM DISTRICT, PIN – 676542 BY ADVS. SHAJI CHIRAYATH JIJI M. VARKEY M.K.SAFEELA BEEVI SAVITHA GANAPATHIYATAN M.M.SHAJAHAN** ## **RESPONDENTS:** **1 UNION OF INDIA, MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES, 3RD FLOOR, JEEVAN DEEP BUILDING, SANSAD MARG, NEW DELHI, REPRESENTED BY ITS FINANCE SECRETARY, PIN - 110001** W.P.(C) No.39876/2023 : 2 : - **2 RESERVE BANK OF INDIA, REPRESENTED BY ITS EXECUTIVE DIRECTOR & CHIEF VIGILANCE OFFICER, CENTRAL OFFICE BUILDING, SHAHID BHAGAT SINGH MARG MUMBAI - 400 001.** - **3 PERINTHALMANNNA URBAN CO-OPERATIVE BANK LIMITED NO. 1758, PERINTHALMANNNA (PO), URBAN BANK BUILDING, PATTAMBI ROAD, MALAPPURAM DISTRICT, PIN- 679 322, REPRESENTED BY ITS CHAIRMAN MR. C. DIVAKARAN, PIN - 679322** - **4 AUTHORISED OFFICER, PERINTHALMANNNA URBAN CO-OPERATIVE BANK LIMITED, PERINTHALMANNNA (PO), MALAPURAM DISTRICT, REPRESENTED BY ITS MR. SR RAVISANKAR, PIN – 679322** **BY ADVS. CHANDINI G.NAIR, CGC JAYASREE K.P. JOHN JOSEPH(K/000875/2019)** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C) No.39876/2023 : 3 : ## **JUDGMENT** Dated this the 29[th] day of February, 2024 ## The petitioners have approached this Court ## seeking the following reliefs: “i) Declare that proceedings pursuant to Ext.P3 notice is hit by section 26D of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act. ii) Declare that proceedings pursuant to Ext.P3 are barred by limitation under Section 36 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act. iii) Issue writ of certiorari quashing Ext.P8 order in Criminal Miscellaneous Petition No.3335 of 2022 order of the Chief Judicial Magistrate's Court, Manjeri. iv) Issue such other order or direction as this Hon'ble Court may deem just and necessary in the fact and circumstances of the case.” 2. In this writ petition, the petitioners challenged Ext.P3 notice issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The declaration W.P.(C) No.39876/2023 : 4 : sought for by the petitioners also relates to the provisions of the securitisation Act, 2002. 3. I have heard the learned counsel for the petitioners, the learned Standing Counsel representing the respondents and the learned Central Government Counsel. 4. The grievance of the petitioners is relating to the proceedings initiated by the respondents under Sections 13 of the Securitisation Act and the attempt of the respondents to take over and sell the secured asset provided by the petitioners. 5. It is settled law that no writ would lie against the proceedings initiated by a financial institution under the provisions of the SARFAESI Act. In _**United Bank of India v. Satyawati Tondon and others** [(2010) 8 SCC 110]_ , the Hon’ble Apex Court declared that no writ petition shall be entertained against the proceedings initiated under the SARFAESI Act at the instance of a defaulter since the statute provides for an efficacious alternate remedy. W.P.(C) No.39876/2023 : 5 : 6. In the judgment in _**Authorised Officer, State Bank of Travancore v. Mathew K.C.** [2018 (1) KLT 784],_ the Hon’ble Apex Court reiterated that no writ petition would lie against the proceedings under the SARFAESI Act in view of the statutory remedy available under the said Act. 7. Following the judgment in _**Satyawati Tondon**_ (supra), a Division Bench of this Court in the judgment in _**Anilkumar v. State Bank of India** [2020 (2) KLT 756]_ declined to exercise jurisdiction under Article 226 of the Constitution of India against the proceedings initiated under the Securitisation Act. 8. In _**South Indian Bank Limited v. Naveen Mathew Philip** [2023 (4) KLT 29]_ , the Apex Court held that when the legislature has provided a specific mechanism for appropriate redressal, the powers conferred under Article 226 of the Constitution of India shall be exercised only in extraordinary circumstances. 9. In Jayakrishnan A. v. Union Bank of India and others (W.P.(C) No.30803/2023), this Court held that writ W.P.(C) No.39876/2023 : 6 : petition challenging any proceedings under the Securitisation Act is not maintainable since the aggrieved person has an effective and efficacious remedy before the Tribunal constituted under the Act which is competent to adjudicate the issues of fact and law, including statutory violations. In the light of the categorical pronouncements of law made by the Apex Court and by this Court, the above writ petition is not maintainable and it is dismissed. Sd/- **N. NAGARESH JUDGE** SR W.P.(C) No.39876/2023 : 7 : ## **APPENDIX OF WP(C) 39876/2023** ## **PETITIONERS' EXHIBITS:** - **Exhibit P1 COPY OF CRIMINAL MISCELLANEOUS PETITION NO. 3335 OF 2022 DATED 04TH NOVEMBER 2022 ON THE CHIEF JUDICIAL MAGISTRATE, MANJERI** - **Exhibit P2 COPY OF THE AFFIDAVIT IN CRIMINAL MISCELLANEOUS PETITION NO. 3335 OF 2022 DATED 04TH NOVEMBER 2022 ON THE CHIEF JUDICIAL MAGISTRATE, MANJERI** - **Exhibit P3 COPY OF THE DEMAND NOTICE DATED 31ST DECEMBER 2021 ISSUED TO 01ST PETITIONER COMPANY** - **Exhibit P4 COPY OF THE SEARCH REPORT BASED ON SECURITY INTEREST ID BASED SEARCH REPORT DATED 04TH NOVEMBER 2022 ISSUED BY THE REGISTRAR OF CENTRAL REGISTRY OF SECURITIZATION OF ASSETS RECONSTRUCTION OF SECURITY INTEREST OF INDIA** **Exhibit P5 COPY OF THE DEMAND PROMISSORY NOTE DATED 18TH DECEMBER 2019 Exhibit P6 COPY OF THE HYPOTHECATION AGREEMENT DATED 18TH DECEMBER 2019 Exhibit P7 COPY OF THE GUARANTEE FORM DATED 18TH DECEMBER 2019 Exhibit P8 COPY OF THE ORDER DATED 11TH NOVEMBER 2022 IN CRIMINAL MISCELLANEOUS PETITION NO. 3335 OF 2022 ON THE FILES OF THE CHIEF JUDICIAL MAGISTRATE, MANJERI** **RESPONDENTS' EXHIBITS: Exhibit R3(a)** **A true copy of the Securitisation Application No 278/2022 (without annexures) dated 22.04.2022 filed by the Mumtaz Abdul Salam, one of the Directors of 1st appellant herein against the 3rd respondent Bank before the Debt Recovery Tribunal, Ernakulam** W.P.(C) No.39876/2023 : 8 : **Exhibit R3(b)** **Exhibit R3(c)** **Exhibit R3(d)** **Exhibit R3(e)** **Exhibit R3(f)** **Exhibit R3(g)** **A true copy of the IA No 1583 of 2023 dated 28.04.2023 filed by the applicant in SA No.278/2022 along with the typed copy of the page10 [ Running page 26 shown as A3(4) ] and True English Translation of the Schedule given in Page Nos 12 and 13 [Running page 28]** **A true copy of the IA No 1584/2023 dated 28.04.2023 filed by the applicant in the above SA seeking a stay of recovery proceedings initiated by the 3rd respondent Bank under the SARFAESI Act** **A true copy of the order dated 20.09.2023 passed by the Honourable Debt Recovery Tribunal-I, Ernakulam dismissing IA No 1584/2023 in SA No 278 of 2022** **A true copy of the judgment dated 03.10.2023 passed by this Honourable Court in OP(DRT)No 361 of 2023** **A TRUE COPY OF THE JUDGMENT DATED 14.02.2023 PASSED BY THIS HONOURABLE COURT IN WPC NO.1703 OF 2023** **TRUE COPY OF THE JUDGMENT IN WA NO.2202 OF 2023 DATED:11/01/2024 OF THIS HON"BLE COURT .**