Raveendran K.R. v. The Authorized Officer, Ponnani Co-operative Urban Bank Ltd.

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR** **&** **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **MONDAY, THE 16TH DAY OF MARCH 2020 / 26TH PHALGUNA, 1941** **WA.No.557 OF 2020** **AGAINST JUDGMENT 11/02/2020 IN WP(C) no.3508/2020(K) OF HIGH COURT OF KERALA** ## **APPELLANT/PETITIONER:** **RAVEENDRAN K.R, AGED 53 YEARS, S/O.RAGHAVAN, RESIDING AT KANHIYOOR HOUSE, MOOKKUTHALA P.O., MALAPPURAM DISTRICT, PIN - 679 574.** **BY ADVS. SRI.ARUN SAMUEL SMT.DEEPA K.RADHAKRISHNAN** ## **RESPONDENT/RESPONDENT:** **THE AUTHORISED OFFICER, THE PONNANI COPERATIVE URBAN BANK LTD., K.K.JUNCTION, PONNANI, MALAPPURAM DISTRICT, PIN - 679 577.** **BY ADV. SRI.D.SOMASUNDARAN** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 16.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **W.A.557 of 2020** ## **-:2:-** ## **JUDGMENT** ## **Dated this the 16[th] day of March, 2020** ## S. Manikumar, CJ Instant writ appeal is filed against judgment dated 11.02.2020 in W.P. (C) No.3508 of 2020, by which, writ court dismissed the writ petition by observing thus: “The petitioner has challenged the SARFAESI proceedings for which an alternate remedy is available. The learned counsel for the petitioner says that his client is ready to pay the balance amount in installments. The petitioner is at liberty to approach the Bank for such relief as this Court cannot be a party to the terms and conditions of the mortgage and the other contract of law which are sacrosanct between the parties. 2. Short facts leading to the appeal are that the appellant/writ petitioner availed a loan of Rs.3,40,000/- from the Ponnani Co-operative Urban Bank Ltd., for constructing a residential house. He committed default and hence, the respondent bank initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002. The learned Chief Judicial Magistrate, Manjeri appointed an Advocate Commissioner to inspect the property of the appellant and to take its possession. The Commissioner, accordingly, issued notice dated 25.01.2020 (Exhibit-P2) to the appellant proposing to do the afore act, prompting him to challenge the same before the writ court. **W.A.557 of 2020** **-:3:-** Being aggrieved, W.P.(C) No.3508 of 2020 has been filed seeking for the following reliefs: - i. To issue a writ of mandamus or any other appropriate writ, order or direction against the respondent commanding him to grant installment facility to the petitioner for discharging the liability arising out of Exhibit-P1 loan. - ii. To issue an appropriate writ, order or directing, quashing Exhibit-P2 notice dated 25.01.2020 issued by the respondent Bank to the petitioner as unjust, illegal and unsustainable. 3. Adverting to the pleadings and submissions, writ court by the impugned judgment, as extracted above, dismissed the writ petition. Being aggrieved, instant appeal is filed on the following grounds: - A) Writ court dismissed the writ petition on the ground that appellant has an alternate remedy for the grievance projected. To substantiate the same, appellant has relied on the decision of the Hon'ble Apex Court in Maharstra Chess Association v. Union of India and Others, wherein it was held as under: - “18. This argument of the second Respondent is misconceived. The existence of an alternate remedy, whether adequate or not, does not alter the fundamentally discretionary nature of the High Court's writ jurisdiction and therefore does not create an absolute legal bar on the exercise of the writ jurisdiction by a High Court. The decision whether or not to entertain an action under its writ jurisdiction remains a decision to be taken by the High **W.A.557 of 2020** **-:4:-** Court on an examination of the facts and circumstances of a particular case. 19. This understanding has been laid down in several decisions of this Court. In _Uttar Pradesh State Spinning Co Limited v. R S Pandey_ [(2005) 8 SCC 264) this Court held: "11. Except for a period when Art.226 was amended by the Constitution (Forty - Second Amendment) Act, 1976, the power relating to alternative remedy has been considered to be a rule of self imposed limitation. It is essentially a rule of policy, convenience and discretion and never a rule of law. Despite the existence of an alternative remedy it is within the jurisdiction or discretion of the High Court to grant relief under Art.226 of the Constitution. At the same time, it cannot be lost sight of that though the matter relating to an alternative remedy has nothing to do with the jurisdiction of the case, normally the High Court should not interfere if there is an adequate efficacious alternative remedy." 20. The principle that the writ jurisdiction of a High Court can be exercised where no adequate alternative remedies exist can be traced even further back to the decision of the Constitution Bench of this Court in _State of Uttar Pradesh v. Mohammad Nooh_ (1958 SCR 595), where Justice Vivian Bose observed: "10. In the next place it must be borne in mind that there is no rule, with regard to certiorari as there is with mandamus, that it will lie only where there is no other equally effective remedy. It is well established that, provided the requisite grounds exist, certiorari will lie although a right of appeal has been conferred by statute. **W.A.557 of 2020** **-:5:-** (Halsbury's Laws of England, 3[rd] Ed., Vol. 11, p. 130 and the cases cited there). The fact that the aggrieved party has another and adequate remedy may be taken into consideration by the superior court in arriving at a conclusion as to whether it should, in exercise of its discretion, issue a writ of certiorari to quash the proceedings and decisions of inferior courts subordinate to it and ordinarily the superior court will decline to interfere until the aggrieved party has exhausted his other statutory remedies, if any. But, this rule requiring the exhaustion of statutory remedies before the writ will be granted is a rule of policy, convenience and discretion rather than a rule of law and instances are numerous where a writ of certiorari has been issued in spite of the fact that the aggrieved party had other adequate legal remedies." 21. The mere existence of alternate forums where the aggrieved party may secure relief does not create a legal bar on a High Court to exercise its writ jurisdiction. It is a factor to be taken into consideration by the High Court amongst several factors. Thus, the mere fact that the High Court at Madras is capable of granting adequate relief to the Appellant does not create a legal bar on the Bombay High Court exercising its writ jurisdiction in the present matter.” Therefore, the presumption laid by the writ court that there is an alternate remedy does not hold water and hence, the instant writ petition ought not to have dismissed on that score and the impugned judgment, therefore, necessarily requires to be set aside by this Court. **W.A.557 of 2020** **-:6:-** B) Another ground based on which the writ petition was dismissed is that the appellant is at liberty to approach the respondent bank for such relief since the writ court cannot be a party to the terms and conditions of mortgage between the parties. Annexure-A1 representation is submitted before the respondent bank, consequent to the impugned judgment and hence, the respondent is liable to act upon the same. The interference of this Court in that regard is imminently warranted in the facts and circumstances of this case. C) The defaults in repayment of the loan availed by the appellant from the respondent does not owe to his deliberate act, but rather due to his pitiable financial condition and the difficulty caused by issuance of Exhibit-P2 which ought to have been obviated by the writ court. He contended that he is an daily wage electrician and is mostly jobless. Therefore, this situation ought to have been taken note of by the writ court and it is imperative that the writ court takes cognizance of the same and have en effective intervention in the matter and thereby remediating the distress caused to him on account of the judgment impugned. 4. Heard learned counsel for the parties and perused the material available on record. 5. Material on record discloses that instant writ petition has been filed by the appellant seeking installment facility, to discharge the liability arising out of Exhibit-P1 loan passbook, and to quash Exhibit-P2. Exhibit-P2 is the notice dated 25.01.2020 issued to the appellant by learned Advocate **W.A.557 of 2020** **-:7:-** Commissioner appointed by the learned Chief Judicial Magistrate, Manjeri in Crl.M.P. No.1908 of 2018 and the same is extracted hereunder: “BEFORE THE HONOURABLE CHIEF JUDICIAL MAGISTRATE COURT, MANJERI ## Crl.M.P. - 1901/2018 The Ponnani Urban Co-op. Bank. - Petitioner Raveendran - Respondent Notice of inspection issued by Advocate Commissioner, PRAJOSH P.T. In the above matter. Please take notice that I will be inspecting the petition schedule property on 28.01.2020 at 2 p.m. with aid of Village Officer, Nannamukku. Please take necessary arrangements. Dated this the 25[th] day of January, 2020 Sd/- PRAJOSH P.T. ADVOCATE COMMISSIONER” 6. Material on record further discloses that consequent to the passing of the impugned judgment, appellant has approached the respondent bank and submitted a representation dated 11.02.2020 (Annexure-A1) for granting installment facility. Said representation is reproduced. “Sir, I am Raveendran, aged 53, S/o. Raghavan, Kanhiyoor House, Mookkuthala P.O., Malappuram District. I availed a loan of Rs.3,40,000/- from Ponnani Co-operative Urban Bank Ltd., in the year 2015 (Loan No.ML-1852). However, I could defaulted the payment of the afore loan owing to many financial difficulties and **W.A.557 of 2020** **-:8:-** hence, the Bank has initiated legal steps against me. I am a daily waged electrician and my wife is jobless. My 2 children are students. I have been facing employment issues, owing to the financial slowdown, for the past 2-3 years. I don't have regular work. I have made and it still making all efforts to sell my property to discharge my afore liability, but the same is not materializing due to the current financial slowdown. I am liable to discharge my afore liability. If I am granted 1 year time, I shall pay off the same in monthly installments. Hence, I request you to do the needful. Yours respectfully, Ponnani Sd/11/02/2020 Raveendran 7. Learned counsel for the respondent bank contended that order of the learned Magistrate can be challenged before the Debt Recovery Tribunal under Section 17 of the SARFAESI Act, 2002 and that writ petition is not maintainable. Section 17 of the SARFAESI Act, being relevant, is reproduced: “ **17. Application against measures to recover secured debts** -(1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, may make an application along with such fee, as may be prescribed to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measure had been taken: PROVIDED that different fees may be prescribed for making the application by the borrower and the person other than the borrower. [ _Explanation_ .—For the removal of doubts, it is hereby declared that the communication of the reasons to the borrower by the secured **W.A.557 of 2020** **-:9:-** creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under sub-section (1) of section 17.] (1A) An application under sub-section (1) shall be filed before the Debts Recovery Tribunal within the local limits of whose jurisdiction- - (a) the cause of action, wholly or in part, arises; - (b) where the secured asset is located; or - (c) the branch or any other office of a bank or financial institution is maintaining an account in which debt claimed is outstanding for the time being. (2) The Debts Recovery Tribunal shall consider whether any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor for enforcement of security are in accordance with the provisions of this Act and the rules made thereunder. (3) If, the Debts Recovery Tribunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that any of the measures referred to in subsection (4) of section 13, taken by the secured creditor are not in accordance with the provisions of this Act and the rules made thereunder, and require restoration of the management or restoration of possession, of the secured assets to the borrower or other aggrieved person, it may, by order,- - (a) declare the recourse to any one or more measures referred to in-sub-section (4) of section 13 taken by the secured creditor as invalid; and - (b) restore the possession of secured assets or management of secured assets to the borrower or such other aggrieved person, who has made an application under sub-section (1), as the case may be; and **W.A.557 of 2020** **-:10:-** - (c) pass such other direction as it may consider appropriate and necessary in relation to any of the recourse taken by the secured creditor under sub-section (4) of section 13. (4) If, the Debts Recovery Tribunal declares the recourse taken by a secured creditor under sub-section (4) of section 13, is in accordance with the provisions of this Act and the rules made thereunder, then, notwithstanding anything contained in any other law for the time being in force, the secured creditor shall be entitled to take recourse to one or more of the measures specified under subsection (4) of section 13 to recover his secured debt. (4A) Where - (i) any person, in an application under sub-section (1), claims any tenancy or leasehold rights upon the secured asset, the Debt Recovery Tribunal, after examining the facts of the case and evidence produced by the parties in relation to such claims shall, for the purposes of enforcement of security interest, have the jurisdiction to examine whether lease or tenancy,- - (a) has expired or stood determined; or - (b) is contrary to section 65A of the Transfer of Property Act, 1882 (4 of 1882); or (c) is contrary to terms of mortgage; or - (d) is created after the issuance of notice of default and demand by the Bank under sub-section (2) of section 13 of the Act; and (ii) the Debt Recovery Tribunal is satisfied that tenancy right or leasehold rights claimed in secured asset falls under the sub-clause (a) or sub-clause (b) or sub-clause (c) or sub-clause (d) of clause (i), then notwithstanding anything to the contrary contained in any other law for the time being in force, the Debt Recovery Tribunal may pass such order as it deems fit in accordance with the provisions of this Act. **W.A.557 of 2020** **-:11:-** (5) Any application made under sub-section (1) shall be dealt with by the Debts Recovery Tribunal as expeditiously as possible and disposed of within sixty days from the date of such application: PROVIDED that the Debts Recovery Tribunal may, from time to time, extend the said period for reasons to be recorded in writing, so, however, that the total period of pendency of the application with the Debts Recovery Tribunal, shall not exceed four months from the date of making of such application made under sub-section (1). (6) If the application is not disposed of by the Debts Recovery Tribunal within the period of four months as specified in sub-section (5), any party to the application may make an application, in such form as may be prescribed, to the Appellate Tribunal for directing the Debts Recovery Tribunal for expeditious disposal of the application pending before the Debts Recovery Tribunal and the Appellate Tribunal may, on such application, make an order for expeditious disposal of the pending application by the Debts Recovery Tribunal. (7) Save as otherwise provided in this Act, the Debts Recovery Tribunal shall, as far as may be, dispose of application in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and the rules made thereunder.” 8. As rightly contended by the respondent bank, any measures taken by the secured creditor or its authorised officer, can be challenged under Section 17 of the SARFAESI Act, 2002. That apart, in _**United Bank of India v. Satyawati Tondon and Others**_ [(2010) 8 SCC 110], the Hon'ble Supreme Court held as under: “24. Sub-section (5) of Section 17 prescribes the timelimit of sixty days within which an application made under **W.A.557 of 2020** **-:12:-** Section 17 is required to be disposed of. The proviso to this sub-section envisages extension of time, but the outer limit for adjudication of an application is four months. If the Tribunal fails to decide the application within a maximum period of four months, then either party can move the Appellate Tribunal for issue of a direction to the Tribunal to dispose of the application expeditiously.” ## 9. Further in _**Authorised Officer, State Bank of Travancore and Another v. K.C. Mathew**_ reported in (2018) 3 SCC 85, the Hon'ble Apex Court held as under: “17. We cannot help but disapprove the approach of the High Court for reasons already noticed in **Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engineering Works (P) Ltd. and Another** , (1997) 6 SCC 450, observing :- “32. When a position, in law, is well settled as a result of judicial pronouncement of this Court, it would amount to judicial impropriety to say the least, for the subordinate courts including the High Courts to ignore the settled decisions and then to pass a judicial order which is clearly contrary to the settled legal position. Such judicial adventurism cannot be permitted and we strongly deprecate the tendency of the subordinate courts in not applying the settled principles and in passing whimsical orders which necessarily has the effect of granting wrongful and unwarranted relief to one of the parties. It is time that this tendency stops.” ## 10. In _**ICICI Bank Ltd. v. Umakanta Mohapatra and Others**_ reported in 2018 (13) SCALE 724, the Hon'ble Apex Court has reaffirmed the legal **W.A.557 of 2020** **-:13:-** position that High Court has no jurisdiction 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 application under Section 17 of the said Act. 11. A notice issued by the learned Advocate Commissioner, cannot be challenged in a proceeding under Article 226 of the Constitution of India. Granting loan to a person is based on offer and acceptance, purely contractual. Mandamus cannot be issued to the bank to enter into a contract, and consequently to grant installment facility for discharging the liability arising out of Exhibit-P1 loan passbook. Such a prayer is wholly misconceived. In the light of the statutory provision and decisions extracted above, we are not inclined to interfere with the impugned judgment. Writ appeal is dismissed. No costs. **SD/-** **S.MANIKUMAR CHIEF JUSTICE** **SD/SHAJI P.CHALY JUDGE** Krj.17/3 **W.A.557 of 2020** ## **-:14:-** ## **APPENDIX** **PETITIONER'S/S EXHIBITS:** **ANNEXURE A1** **A TRUE COPY OF THE REPRESENTATION DATED 11/02/2020 SUBMITTED BY THE APPELLANT BEFORE THE RESPONDENT BANK AND ENGLISH TRANSLATION.** ## **RESPONDENT'S EXHIBITS:-NIL** //TRUE COPY// P.A. TO JUDGE