Anil Kumar S and Sheeja S.S v Axis Bank Ltd (W.A. No. 1971/2022)

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** # **THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR** **&** **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY THURSDAY, THE 22[ND] DAY OF DECEMBER 2022 / 1ST POUSHA, 1944 WA NO. 1971 OF 2022** **AGAINST JUDGMENT DATED 17.11.2022 IN WP(C) No. 34770/2022** **OF HIGH COURT OF KERALA** ## **PETITIONERS/PETITIONERS IN W.P.(C.) NO. 34770/2022:** **1 ANIL KUMAR S AGED 49 YEARS S/O. SASEENDRAN T.C. TC 58/2021, GEETHU BHAVAN, KOLIYOOR, VENGANOOR, EDAKKODE, THIRUVANANTHAPURAM, PIN – 695 523 2 SHEEJA. S.S AGED 43 YEARS W/O. ANILKUMAR S T.C 4/384, RADHA KRISHNA BHAVAN, PANAGODE, VENGANOOR P.O, THIRUVANANTHAPURAM, PIN – 695 523** **BY ADV. M.R.SARIN** ## **RESPONDENT/RESPONDENT IN W.P.(C.) NO. 34770/2022:** **AUTHORISED OFFICER THE AXIS BANK. LTD, NIHAL COMPLEX, 2ND FLOOR, KARAMANA P.O, THIRUVANANTHAPURAM, PIN – 695002** **BY ADV. MADHU RADHAKRISHNAN** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON** **22.12.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.A. No. 1971/2022 2 ## JUDGMENT ## S. Manikumar, C.J. Before the writ court, in W.P.(C) No.34770/2022, petitioners/appellants have sought for a writ of mandamus or any other appropriate writ, order or direction, directing the respondent Bank to grant 50 equal monthly instalments for repayment of entire defaulted arrears due to them from the petitioners. 2. Short facts leading to the filing of the writ petition are as under:- 2.1 The petitioners have availed a loan for Rs.1,37,00,000/- and also Rs.24,99,999/-, as credit facilities, from the respondent - Axis Bank Ltd., Thiruvananthapuram, in the year 2019. The petitioners had mortgaged their properties comprising of 20 cents, with a building, situated in Kanjiramkulam Village, Trivandrum District, which belonged to the petitioners, to the respondent, as security, for the above loan transactions. 2.2 As per the loan transactions, the petitioners have to pay monthly instalments. They had paid the instalments regularly, but due to the financial crisis, the petitioners could not able to pay the balance instalment regularly. W.A. No. 1971/2022 3 2.3 It is submitted that the respondent had issued demand notices under Section 13[2] of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 directing the petitioners to pay an amount of Rs. 1,56,473,45.00, otherwise, the properties belonging to petitioners will be taken possession by the respondent. 2.4 It is further submitted that though the petitioners approached respondent to grant time to settle the entire defaulted arrears amount in 50 instalments, all fell on deaf ears. Hence, the writ petition is filed. 3. Having regard to the submission of the learned counsel for the petitioners, that an opportunity for repaying the overdue amount in instalments be given for regularisation of the loan account, and taking note of the default in payment of overdue amount of Rs. 10,25,754/-, writ court, vide judgment dated 17.11.2022 in W.P.(C.) No. 34770 of 2022 ordered thus:- “6. Accordingly, there will be a direction to the respondent bank to accept repayment of the entire overdue amount of Rs.10,25,754/- (Rupees Ten lakhs twenty five thousand seven hundred fifty four only) along with bank charges from the petitioners and regularise the loan account of the petitioners on the following conditions: W.A. No. 1971/2022 4 - (i) The overdue amount of Rs.10,25,754/- (Rupees Ten lakh twenty five thousand seven hundred fifty four only) shall be repaid in ten (10) equated monthly installments; - (ii) The first installment shall be paid on or before 12.12.2022 and the subsequent installments shall be paid on or before the 12[th] day of each succeeding month; - (iii) The petitioners shall continue to pay the regular EMIs along with the installments directed above; - (iv) In the event of default of any one installment, the respondent bank shall be entitled to proceed in accordance with law; - (v) In order to enable the petitioners to repay the entire amounts, all coercive proceedings shall be kept in abeyance. The writ petition is disposed of as above. 4. Being aggrieved, instant writ appeal is filed. 5. Though Mr. M.R. Sarin, learned counsel for the appellants, assailed the correctness of the judgment on various grounds, we are not inclined to interfere with the same, as the Hon'ble Supreme Court, on more than one occasion, held that writ against the recovery proceedings initiated by the banks, is not maintainable. 6. On the said aspect, reference can be made to a few decisions: (i) In **United Bank of India v. Satyawati Tondon and Others [(2010) 8 SCC 110]** , the High Court restrained W.A. No. 1971/2022 5 further proceedings under Section 13(4) of the Act. Upon a detailed consideration of the statutory scheme under the SARFAESI Act, 2002, availability of remedy to the aggrieved under Section 17 before the Tribunal and the appellate remedy under Section 18 before the Appellate Tribunal, object and purpose of the legislation, Hon'ble Apex Court observed that a writ petition ought not to be entertained in view of the alternate statutory remedy available. Relevant portion reads as under: _“43. 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 a 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, the 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._ _. . . . . . . . . . . . . . . . . . . ……………………. . . . . . . . . . . . . . . ._ _. . . . . . ….............................................._ _55. 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 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.”_ ## _(_ ii) In **ICICI Bank Ltd. v. Umakanta Mohapatra and** **Others [2018 (13) SCALE 724]** , the Hon'ble Supreme Court reaffirmed the legal position that High Court has no jurisdiction W.A. No. 1971/2022 6 to entertain writ petitions under Article 226 of the Constitution of India, relating to matters coming under the purview of SARFAESI Act, 2002, where a statutory remedy is available by filing an application under Section 17 of the said Act." 7. Reiterating the settled position of law, recently, Hon’ble Supreme Court in **Phoenix ARC Private Limited v. Vishwa Bharati Vidya Mandir & Ors.** reported in **[(2022) 5 SCC 345]** held that writ against recovery proceedings, initiated under the SARFAESI Act, 2002 is not maintainable. 8. In a recent decision in **Varimadugu Obi Reddy v. B. Sreenivasulu and Others** reported in MANU/SC/1495/2022 (Civil Appeal No.8470 of 2022 dated 16.11.2022), the Hon’ble Supreme Court has deprecated the practice of entertaining the writ petition against the SARFAESI proceedings, without exhausting the alternative statutory remedy available under the law. Paragraph Nos.32, 33 and 34 of the said judgment are extracted hereunder: “32. The order of the Tribunal dated 1[st] August, 2019 was an appealable order under Section 18 of the SARFAESI Act, 2002 and in the ordinary course of business, the borrowers/person aggrieved was supposed to avail the statutory remedy of appeal which the law provides under Section 18 of the SARFAESI Act, 2002 in the absence of efficacious alternative remedy being availed, there was no reasonable justification tendered by the respondent borrowers in approaching the High Court and filing writ application assailing order of the Tribunal dated 1[st] August, 2019 under its jurisdiction under Article 226 of the Constitution without exhausting the statutory right of appeal available at its command. W.A. No. 1971/2022 7 33. This Court in the judgment in _United Bank of India vs. Satyawati Tondon & Others_ , was concerned with the argument of alternative remedy provided under the SARFAESI Act, 2002 and dealing with the argument of alternative remedy, this Court had observed that where an effective remedy is available to an aggrieved person, the High Court ordinarily must insist that before availing the remedy under Article 226 of the Constitution, the alternative remedy available under the relevant statute must be exhausted. Paras 43, 44 and 45 of the said judgment are relevant for the purpose and are extracted below: “43. 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 a 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, the 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. 44. 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. 45. 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, W.A. No. 1971/2022 8 appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance.” 34. In the instant case, although the respondent borrowers initially approached the Debts Recovery Tribunal by filing an application under Section 17 of the SARFAESI Act, 2002, but the order of the Tribunal indeed was appealable under Section 18 of the Act subject to the compliance of condition of pre-deposit and without exhausting the statutory remedy of appeal, the respondent borrowers approached the High Court by filing the writ application under Article 226 of the Constitution. We deprecate such practice of entertaining the writ application by the High Court in exercise of jurisdiction under Article 226 of the Constitution without exhausting the alternative statutory remedy available under the law. This circuitous route appears to have been adopted to avoid the condition of predeposit contemplated under 2nd proviso to Section 18 of the Act 2002.” ## 9. However, indulgence has been granted to the appellants. In the light of the above discussion, and the decisions referred to above, appellants have not made out a case for interference. Accordingly, the writ appeal is dismissed. Sd/- **S. MANIKUMAR CHIEF JUSTICE** **Sd/-** **SHAJI P. CHALY JUDGE** DCS/23.12.2022