High Court of KeralaSingle JudgeDismissed
PDMC Industries v. South Indian Bank Ltd. and Reserve Bank of India (W.P.(C) No.29909/2023 & connected cases)
Case / Petition Number:W.P.(C) No.29909/2023
Case Details & Bench
- Court
- High Court of Kerala
- Hon'ble Judges
- N. Nagareesh
- Judgment Date
- 2024-05-21
- Court Decision / Holding
- W.P.(C) Nos. 29909/2023 & connected cases dismissed. The Kerala High Court held that in light of settled law, including Supreme Court precedents and its own decisions, writ petitions challenging SARFAESI proceedings against a private bank are not maintainable; the petitioners were afforded an efficacious statutory remedy under SARFAESI, and therefore the petitions were dismissed.
- Final Disposition
- Dismissed
Parties to the Case
Appellants / Petitioners
- PDMC Industries
- M/S PDMC CO RUBBER
- Bobby Isaac Mathew (Managing Partner)
Respondents
- South Indian Bank Ltd.
- Reserve Bank of India
Legal Representation & Advocates
Counsels for Petitioners
- • Meena A.
- • Vinod Ravindranath
- • K.C. Kiran
- • M.R. Mini
- • M. Devesh
- • Anish Antony
- • Anathazhath Thareeq
- • Anver
- • K. Nivedhitha
- • Prem.V
Counsels for Respondents
- • Mohan Jacob
- • George P.V. Parvathy
- • Reena Thomas
- • Nigi George
- • Ananthu V.
- • Lal
Case Synopsis & Summary
PDMC Industries, a partnership firm operating a crusher unit, challenged SARFAESI proceedings initiated by South Indian Bank after its loan accounts were classified as NPAs. The firm had availed a cash credit overdraft of ₹2 crore and an ECLGS facility of ₹49 lakh. Operations were temporarily suspended due to non-renewal of a mining licence, but the unit later resumed activity and the petitioner claimed the defaulted instalments could be paid if given time. The petitions—W.P.(C) Nos. 29909/2023, 32498/2023, and 32643/2023—sought to quash notices under SARFAESI and to restrain the bank from proceeding with enforcement actions, including reviving and revoking KCC facilities. The respondents argued that the Bank is a private entity not amenable to Article 226 jurisdiction, that classification as NPA was proper due to lack of activity, and that SARFAESI provides an efficacious remedy. They relied on established precedents that writ petitions are not maintainable against SARFAESI actions by financial institutions. After hearing the parties, the Kerala High Court, citing Supreme Court and High Court authorities, held that writ petitions are not maintainable and dismissed the petitions in light of the statutory remedy under SARFAESI. The matter underscores the primacy of statutory remedies over writ jurisdiction in SARFAESI matters.
Provisions of Law Cited
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act)Section 13 of SARFAESI ActSection 13(2) of SARFAESI ActArticle 226 of the Constitution of India
Legal Doctrines & Maxims
- No writ would lie against SARFAESI proceedings under the Act
- Writs under Article 226 should be exercised only in extraordinary circumstances where there is no efficacious alternative remedy
- There is an efficacious statutory remedy under the SARFAESI Act; writ petitions are not maintainable against SARFAESI proceedings against a private bank
- Writ petitions challenging SARFAESI proceedings must be directed to the Tribunal under the SARFAESI Act for adjudication.
Submissions & Arguments
Contentions of Appellants / Petitioners
The petitioners contended that the temporary suspension of operations was due to unavoidable circumstances, with the unit subsequently resuming activity. They asserted that the bank’s classification of the loan as NPA was improper and asked for time to pay defaulted instalments, consideration of representations, and revival of KCC facilities. They argued that the notices under SARFAESI were issued without due process and that the bank should be required to assess the representations before taking further steps under SARFAESI. They also sought relief from enforcing coercive actions and a revival of operations given that the original causes of suspension had been resolved or mitigated.
Contentions of Respondents
The respondents submitted that the petitioners are challenging proceedings initiated under SARFAESI against a private bank, which is not amenable to judicial review under Article 226. They argued that the loan accounts were correctly classified as NPAs for want of business activity, that stock statements were not submitted, and that SARFAESI provides an alternate remedy through the statutory framework. They relied on established jurisprudence that writ petitions are not maintainable against SARFAESI actions and emphasized that the petitioners had effective remedies within the Act’s mechanism.
Cited Precedents (6)
| Case Name | Citation | Treatment | Explanation |
|---|---|---|---|
| Federal Bank Limited v. Sagar Thomas | (2003) 10 SCC 733 | Positive | Cited to support the proposition that a writ petition is not maintainable against a private company in the SARFAESI context. |
| United Bank of India v. Satyawati Tondon and others | (2010) 8 SCC 110 | Positive | Cited for the principle that no writ shall be entertained against proceedings under the SARFAESI Act due to an efficacious statutory remedy. |
| Authorised Officer, State Bank of Travancore v. Mathew K.C. | (2018) (1) KLT 784 | Positive | Reiterates that no writ petition lies against SARFAESI proceedings given statutory remedy. |
| Anilkumar v. State Bank of India | (2020) (2) KLT 756 | Positive | Division Bench refused to exercise jurisdiction under Article 226 against SARFAESI proceedings. |
| South Indian Bank Limited v. Naveen Mathew Philip | (2023) (4) KLT 29 | Positive | Apex Court held writs should be used only in extraordinary circumstances where a remedy is provided by statute. |
| Jayakrishnan A. v. Union Bank of India and others | W.P.(C) No.30803/2023 | Positive | Writ challenge to SARFAESI not maintainable where an efficacious remedy before the Tribunal exists. |
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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**
**TUESDAY, THE 21[ST] DAY OF MAY 2024 / 31ST VAISAKHA, 1946**
**WP(C) NO. 29909 OF 2023**
## **PETITIONER:**
**PDMC INDUSTRIES, THROUGH ITS MANAGING PARTNER BOBBY ISAAC MATHEW, AGED 52 YEARS S/O P.D. MATHEW, TTCMPS BUILDING, MUTTOM, THODUPUZHA, IDUKKI, PIN - 685567, RESIDING AT THAZHATHU PULINGAPPALLIL, ATHIRAMPUZHA ROAD, ETTUMANOOR PO, KOTTAYAM, PIN – 686631.**
**BY ADVS. MEENA.A. VINOD RAVINDRANATH K.C.KIRAN M.R.MINI M.DEVESH ANISH ANTONY ANATHAZHATH THAREEQ ANVER K. NIVEDHITHA PREM.V**
## **RESPONDENTS:**
- **1 SOUTH INDIAN BANK LTD., REGIONAL OFFICE, KOTTAYAM, 1ST FLOOR, REGENCY SQUARE, K.K. ROAD, COLLECTRATE PO, KOTTAYAM, PIN - 686002**
**REPRESENTED BY ITS DEPUTY GENERAL MANAGER.**
**2 RESERVE BANK OF INDIA, BRANCH OFFICE, P.B. NO.6507, NANDAVANAM, PALAYAM, THIRUVANANTHAPURAM, KERALA, PIN - 695033 REPERSENTED BY GENERAL MANAGER.**
## W.P.(C) No.29909/2023 & connected cases : 2 :
**BY ADVS. MOHAN JACOB GEORGE P.V.PARVATHY (P-41) REENA THOMAS NIGI GEORGE ANANTHU V.LAL**
**THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21.05.2024, ALONG WITH WP(C).32498/2023, 32643/2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:**
W.P.(C) No.29909/2023 & connected cases : 3 :
# **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE N.NAGARESH**
**TUESDAY, THE 21[ST] DAY OF MAY 2024 / 31ST VAISAKHA, 1946 WP(C) NO. 32498 OF 2023**
## **PETITIONER:**
**BOBBY ISAAC MATHEW, AGED 52 YEARS, S/O P.D. MATHEW, TTCMPS BUILDING, MUTTOM, THODUPUZHA, IDUKKI, PIN - 685567, RESIDING AT THAZHATHU PULINGAPPALLIL, ATHIRAMPUZHA ROAD, ETTUMANOOR PO, KOTTAYAM., PIN – 686631.**
**BY ADV M.R.MINI**
## **RESPONDENTS:**
**1 SOUTH INDIAN BANK LTD., REGIONAL OFFICE, KOTTAYAM, 1ST FLOOR, REGENCY SQUARE, K.K. ROAD, COLLECTRATE PO, KOTTAYAM, PIN - 686002 REPRESENTED BY ITS DEPUTY GENERAL MANAGER.**
**2 RESERVE BANK OF INDIA, BRANCH OFFICE, P.B NO 6507, NANDAVANAM, PALAYAM, THIRUVANANTHAPURAM, KERALA PIN - 695033 REPRESENTED BY GENERAL MANAGER.**
**BY ADVS. MOHAN JACOB GEORGE P.V.PARVATHY (P-41) REENA THOMAS NIGI GEORGE ANANTHU V.LAL**
**THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21.05.2024, ALONG WITH WP(C).29909/2023 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:**
W.P.(C) No.29909/2023 & connected cases : 4 :
# **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE N.NAGARESH**
**TUESDAY, THE 21[ST] DAY OF MAY 2024 / 31ST VAISAKHA, 1946 WP(C) NO. 32643 OF 2023**
## **PETITIONER:**
**M/S. PDMC CO RUBBER**
**THROUGH ITS PROPRIETOR BOBBY ISAAC MATHEW, AGED 52 YEARS, S/O P.D. MATHEW, TTCMPS BUILDING, MUTTOM, THODUPUZHA, IDUKKI, PIN - 685567, RESIDING AT THAZHATHUPULINGAPPALLIL, ATHIRAMPUZHA ROAD, ETTUMANOOR PO, KOTTAYAM, PIN – 686631.**
**BY ADVS. M.R.MINI VINOD RAVINDRANATH MEENA.A. K.C.KIRAN M.DEVESH ANISH ANTONY ANATHAZHATH THAREEQ ANVER K. NIVEDHITHA PREM.V**
## **RESPONDENTS:**
- **1 SOUTH INDIAN BANK LTD REGIONAL OFFICE, KOTTAYAM, 1ST FLOOR, REGENCY SQUARE, K.K. ROAD, COLLECTRATE PO, KOTTAYAM, PIN - 686002 REPRESENTED BY ITS DEPUTY GENERAL MANAGER.**
**2 RESERVE BANK OF INDIA BRANCH OFFICE, P.B NO 6507, NANDAVANAM, PALAYAM, THIRUVANANTHAPURAM, KERALA PIN - 695033 REPRESENTED BY GENERAL MANAGER.**
## W.P.(C) No.29909/2023 & connected cases : 5 :
**BY ADVS. MOHAN JACOB GEORGE P.V.PARVATHY (P-41) REENA THOMAS NIGI GEORGE ANANTHU V.LAL**
**THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21.05.2024, ALONG WITH WP(C).29909/2023 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:**
W.P.(C) No.29909/2023 & connected cases : 6 :
## **N. NAGARESH, J.**
`````````````````````````````````````````````````````````````
W.P.(C) Nos.29909, 32498 and 32643 of 2023
`````````````````````````````````````````````````````````````
_Dated this the 21[st] day of May, 2024_
## **J U D G M E N T**
~ ~ ~ ~ ~ ~ ~ ~ ~
W.P.(C) No.29909/2023 is filed by a Partnership Firm which is operating a crusher unit. The Firm availed a Cash Credit Overdraft Loan from the South Indian Bank to the tune of ₹2 Crores. A further financial assistance under ECLGS was granted to the Firm of an amount of ₹49 lakhs. The Mining and Geology Department did not renew their licence which resulted in suspension of operations of the industry. The loan account was declared as NPA. The Bank recalled the loans and initiated proceedings under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
## W.P.(C) No.29909/2023 & connected cases : 7 :
2. The petitioner would contend that the unit was stopped temporarily due to unavoidable circumstances. The functioning of the unit has resumed. The petitioner will be able to pay defaulted instalments and interest if a short time is given. Categorising the petitioner's loan account as NPA is improper and illegal. The petitioner challenges Ext.P6 notice issued under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
3. The Bank issued yet another notice dated 31.07.2023. The petitioner therefore filed W.P.(C) No.32643/2023 challenging Ext.P3 notice dated 31.07.2023 issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The Bank has demanded ₹5,01,41,063.82. The petitioner would urge that the petitioner is ready to pay the defaulted instalments and interest and representation submitted by the petitioner is liable to be considered by the Bank.
## W.P.(C) No.29909/2023 & connected cases : 8 :
4. W.P.(C) No.32498/2023 has been filed by the Managing Partner of the Firm seeking to direct the Bank not to proceed with the steps under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 already initiated against the petitioner and to grant an opportunity to the petitioner for paying the defaulted instalments and interest and to revive the KCC account. The loan availed by the petitioner in this writ petition is to the tune of ₹2.75 Crores. The loan was availed for cultivating cardamom. The temporary suspension of operations was as a result of the non-renewal of the licence by the Mining and Geology Department. According to the petitioner, categorising the loan account as NPA and blocking KCC operating accounts are illegal and unjustifiable. The petitioner seeks to direct the 1[st] respondent-Bank not to proceed with the steps under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
## W.P.(C) No.29909/2023 & connected cases : 9 :
5. The respondents resisted the writ petition filing counter affidavit. The respondents pointed out that the Bank is a private company and is not amenable to the writ jurisdiction under Article 226 of the Constitution of India. The accounts of the petitioners were classified as NPA as there was no business activity. The borrower did not submit the stock statement and consequently, the loan accounts were classified as NPA. The respondents are proceeding strictly in accordance with the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The writ petitions are therefore liable to be dismissed.
6. I have heard the learned counsel for the petitioners and the learned Standing Counsel representing the Bank.
7. The 1[st] respondent in all these writ petitions is a private Bank. The Hon’ble Apex Court has held in the judgment in _**Federal Bank Limited v. Sagar Thomas** [(2003) 10 SCC 733]_ that a writ petition is not maintainable
## W.P.(C) No.29909/2023 & connected cases : 10 :
against a private company. Furthermore, the petitioners are challenging proceedings initiated by the 1[st] respondent-Bank invoking the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
8. 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.
9. 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.
## W.P.(C) No.29909/2023 & connected cases : 11 :
10. 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.
11. 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.
12. In Jayakrishnan A. v. Union Bank of India and others (W.P.(C) No.30803/2023), this Court held that writ 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.
W.P.(C) No.29909/2023 & connected cases : 12 :
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**
aks/13.05.2024
## W.P.(C) No.29909/2023 & connected cases : 13 :
## **APPENDIX OF WP(C) 29909/2023**
## **PETITIONER'S EXHIBITS**
**Exhibit P1 TRUE COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT ON 12.04.2023 Exhibit P2 TRUE COPY OF THE NOTICE DATED 19.04.2023 ISSUED BY THE 1ST RESPONDENT BANK TO THE PETITIONER Exhibit P3 TRUE COPY OF THE REPRESENTATION DATED 08.05.2023 BEFORE THE 1ST RESPONDENT Exhibit P4 TRUE COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT DAETD 02.06.2023 Exhibit P5 TRUE COPY OF THE REPRESENTATION BEFORE THE 1ST RESPONDENT DATED NIL Exhibit P6 TRUE COPY OF THE REPLY FROM THE 1ST RESPONDENT BANK DATED 07.07.2023 Exhibit P7 TRUE COPY OF THE MINING LICENSE ISSUED ON 06.07.2023 TO THE PETITIONER Exhibit P8 TRUE COPY OF THE ORDER DATED 01.08.2023 IN W.P. (C) NO.24761/2023 Exhibit P9 TRUE COPY OF THE REGISTRATION CERTIFICATE DATED 27.11.2020 ISSUED BY THE GOVERNMENT OF INDIA Exhibit P10 TRUE COPY OF THE REPRESENTATION DATED 02.09.2023**
## W.P.(C) No.29909/2023 & connected cases : 14 :
## **APPENDIX OF WP(C) 32498/2023**
## **PETITIONER'S EXHIBITS**
|**Exhibit P1**|**TRUE COPY OF NOTICE DATED 02.05.2023**|
|---|---|
|**Exhibit P2**|**TRUE COPY OF THE REPRESENTATION DATED**|
||**10.05.2023 FILED BY THE PETTIOER**|
||**BEFORE THE 1ST RESPODENT**|
|**Exhibit P3**|**TRUE COPY OF THE REPRESENTATION DATED**|
||**31.07.2023 FILED BY THE PETITIONER**|
||**BEFORE THE 1ST RESPONDENT**|
|**Exhibit P4**|**TRUE COPY OF THE REPRESENTATION DATED**|
||**12.09.2023 FILED BY THE PETITIONER**|
||**BEFORE THE 1ST RESPODENT**|
## W.P.(C) No.29909/2023 & connected cases : 15 :
## **APPENDIX OF WP(C) 32643/2023**
## **PETITIONER'S EXHIBITS**
|**Exhibit P1**|**TRUE COPY OF THE NOTICE DATED**|
|---|---|
||**02.05.2023 SENT BY THE 1ST RESPONDENT**|
||**BANK TO THE PETITIONER**|
|**Exhibit P2**|**TRUE COPY OF THE REPRESENTATION FILED**|
||**BY THE PETITIONER DATED 10.05.2023**|
||**BEFORE THE 1ST RESPONDENT**|
|**Exhibit P3**|**TRUE COPY OF THE NOTICE DATED**|
||**31.07.2023 ISSUED BY THE 1ST**|
||**RESPONDENT**|
|**Exhibit P4**|**TRUE COPY OF THE REPRESENTATION DATED**|
||**12.09.2023 BEFORE THE 1ST RESPONDENT**|