Shaji KuriaKose v. Authorized Officer, Syndicate Bank

**WA.No.958 OF 2020** **1** **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR** **&** **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **TUESDAY, THE 28TH DAY OF JULY 2020 / 6TH SRAVANA, 1942** ## **WA.No.958 OF 2020** **AGAINST THE ORDER/JUDGMENT IN WP(C) 10511/2020(L) OF HIGH COURT OF KERALA** ## **APPELLANT/S:** **SHAJI KURIAKOSE AGED 49 YEARS SON OF SHRI. KURIAKOSE, PROPRIETOR, M/S. EAGLE STAR WOOD WORKS, KINFRA SMALL INDUSTRIES PARK, SEETHANGOLI, MAIPADY P.O. KASARGODE 671 124.** **BY ADVS. SRI.ANIL S.RAJ SMT.K.N.RAJANI SRI.RADHIKA RAJASEKHARAN P. SMT.ANILA PETER SMT.C.PRABITHA SRI.SAJEN THAMPAN** ## **RESPONDENT/S:** **THE AUTHORIZED OFFICER SYNDICATE BANK, REGIONAL OFFICE, SYNDICATE BUILDING, OPPOSITE KSRTC BUILDING, KASARAGODE 671 121.** ## **OTHER PRESENT:** ## **SR.K.P.SUJESH KUMAR FOR R1** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 28.07.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WA.No.958 OF 2020** **2** ## **JUDGMENT** ## **SHAJI P.CHALY, J.** This appeal is filed by the petitioner challenging the judgment of a learned Single Judge dated 6.7.2020 in W.P.(C) No.10511/2020, whereby the writ petition was dismissed. The reliefs sought for by the appellant in the writ petition are as follows: - 1) A writ, order or direction in the nature of Mandamus or any other appropriate writ, order or direction directing the respondent to release to the petitioner all timber and other wood products available on his premises at the KINFRA Small Industries Park, Kasaragod. - 2) Grant such other reliefs as this Hon'ble Court may deem fit in the circumstances of the case. 2. The subject issue arises under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The brief facts for the disposal of the appeal are as follows; 3. Appellant, a proprietor of a furniture making unit has availed a loan from Syndicate Bank, Kasaragod. Admittedly repayment was defaulted, consequent to which, proceedings were initiated under section 13(2) of SARFAESI Act, 2002. Thereafter on 18.3.2020, the possession was taken under section 13(4) of Act, 2002 through the Commissioner appointed by the Chief **WA.No.958 OF 2020** **3** Judicial Magistrate, Kasaragod. The grievance highlighted by the appellant was that though in Exts.P1, P9 & P10, what are sought to be taken into possession was only one item of immovable property and eight items of machinery mentioned in Ext.P1, the respondent took all the timber, wood products etc.kept at the premises, into possession. It is also pointed out that notice under section 13(4), evident from Ext.P1, was received by the appellant after the possession was taken over. It is also the case of the appellant that at the time of taking possession, appellant was not present and the respondent has taken possession of the timber entrusted to the appellant by various customers for sawing and manufacture of furniture and fittings. 4. Infact a detailed counter affidavit was filed by the respondent refuting the allegations, and submitted that the entire proceedings initiated by the respondent were in accordance with the procedure prescribed under section 13 r/w.section 14 of Act, 2002 and appellant has not established any circumstances justifying interference of this court by exercising the discretionary powers conferred under Article 226 of the Constitution of India. It is also pointed out that the issue was considered by the Apex Court in **Authorised Officer, State Bank of Travancore and Another v. Mathew.K.C** .[(2018) 3 SCC 83] wherein the Apex Court deprecated the practice of entertaining the writ petition in SARFAESI matters. Therefore, it is submitted that the appellant did not make out any case of arbitrariness or illegality justifying any interference. So also it is **WA.No.958 OF 2020** **4** pointed out that the provisions of Act, 2002 prescribes a clear procedure to tackle the situations arising under the provisions of Act, 2002 and appellant has not made out any extraordinary circumstances so as to invoke the writ jurisdiction of this Court. 5. We have heard Smtp.Radhika Rajasekharan appearing for the appellant and Adv.K.P.Suresh Kumar appearing for the respondent bank, and perused the pleadings and documents on record. 6. The discussion of facts made above would make it clear that, admittedly the appellant has availed a loan from the respondent bank on executing a hypothecation agreement, and it was consequent to the failure on the part of the appellant to repay the same, proceedings were initiated under the provisions of Act, 2002. The sole grievance of the appellant was that the timber and furniture were not hypothecated to the bank, which is evident from Ext.R1(a) hypothecation agreement produced by the bank, wherein one item of immovable property and eight items of movable property alone were hypothecated and therefore, the action of taking possession of timber and other products lying/ kept in the yard was not proper. The learned Single Judge after assimilating the fact situations has entered into a finding that there are no reasons made out for making interference under Article 226 of the constitution of India. True, remedies are available to the appellant in accordance with the provisions of Act, 2002 by approaching the Tribunal constituted thereunder, and **WA.No.958 OF 2020** **5** there are no reasons for the writ court to interfere with the matter. However, the contention advanced by the learned counsel for appellant is that, since the action of taking possession of timber was without jurisdiction, the writ court would have been justified in interfering with the action of the respondent bank. 7.It would be worthwhile to consider the law on the point set at naught by the Apex Court. In **Punjab National Bank v. O.C.Krishnan and Ors.** [(2001)6 SCC 569] it was held that the Act has been enacted with a view to provide a special procedure for recovery of debts due to the bank and financial institutions and there is hierarchy of appeal provided in the Act. It was further held that even though provisions under the Act cannot be expressly oust the jurisdiction of the court under Article 226 & 227 of the Constitution, nevertheless, when there is an alternative remedy available, judicial prudence demands that the Court refrains from exercising its jurisdiction under the said constitutional provision. In **Union Bank of India v. Satyavathi Tandon** [(2010) 8 SCC 110] it was held by the Apex Court that in view of the availability of alternative remedy to the aggrieved person under section 17 of the Act, 2002 before the Tribunal and the appellate remedy under section 18 of Act, 2002 before the appellate tribunal, the writ court ought not to have entertained the writ petition. ## 8. In **Union Bank of India and another v. Panchanan Subudhi** [(2010)15 SCC 552] it was held by the Apex Court that the approach made by **WA.No.958 OF 2020** **6** the High Court entertaining the writ petitions under Article 226 was erroneous, and that too by ignoring the fact that statutory alternative remedy was available to the respondent under section 17 of the Act. 9. A similar view was taken by the Apex Court in **Commissioner of Income Tax and Ors. v. Chhabil Dass Agarwal** [(2014) 1 SCC 603], **General Manager, Sri.Siddeshwara Co-operative Bank Limited and Another v. Ikbal and others** [(2013)10 SCC 83] though in different contexts. In **Authorised Officer, State Bank of Travancore and another v. Mathew K.C.** [ (2018) 3 SCC 85], the Apex Court has disapproved the approach of the High Court interfering in SARFAESI matters under writ jurisdiction by quoting the judgment of the Apex Court in **Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engg. Works (P) Ltd.** [(1997) 6 SCC 450]. Paragraph 32 of the judgment is relevant, which read thus: "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. Later in **Union of India v. Concord Fortune Minerals India (P) Ltd.** **WA.No.958 OF 2020** **7** [(2018) 12 SCC 279], an issue under the Customs Act, it was held that the High Court while deciding the writ petition has to take note of the provisions of the Act and , it should exercise its discretion consistent with those provisions and ordinarily writ jurisdiction cannot be invoked for directing the authorities to act contrary to law. In this regard a reference to paragraphs 23, 24 and 25 of the judgment of the Apex Court in **Sri.Siddeshwara Co-operative Bank Limited** (supra) would also be relevant, which read thus: " 23. There is one more aspect in the matter which has troubled us. Against the action of the Bank under Section 13(4) of the SARFAESI Act, the borrower had a remedy of appeal to the Debts Recovery Tribunal (DRT) under Section 17. The remedy provided under Section 17 is an efficacious remedy. The borrower did not avail of that remedy and further remedies from that order and instead directly approached the High Court in extraordinary jurisdiction under Article 226 of the Constitution of India. 24. The learned Single Judge brushed aside the argument of alternative remedy by holding as follows: “16. As regards alternate remedy submitted by the learned counsel for Respondents 2 to 4, in the decision cited supra, the Supreme Court has held that the rule of exhaustion of alternate remedy is a rule of discretion and not a rule of compulsion. The court has to assign reasons for entertaining writ petition without exhausting alternate remedy. The petitioner has been victimised by fraudulent acts of Respondents 3 and 4. The 3rd respondent had misused his official position and the petitioner has been deprived of his property in the manner not known to law. There is violation of Article 21 of the Constitution of India. The petitioner has been deprived of his shelter. The right to livelihood is an integral facet of the right to life under Article 21 of the Constitution (Narendra Kumar Chandla v. State of Haryana). Therefore, the submission of the learned counsel for Respondents 2 to 4 that the petitioner should have availed alternate remedy cannot be **WA.No.958 OF 2020** **8** accepted.” " ## 25. The learned Division Bench in this regard observed thus: “14. Though the petitioner could agitate these matters in an appeal filed under Section 17 of the Act, it is settled law that when a constitutional right of an individual is affected by statutory authorities by trampling upon the mandatory requirements of law, this Court cannot be a silent spectator. It becomes not only a right, but the duty of this Court to interfere and strike at these illegal activities and uphold the constitutional right of a citizen of this country. Therefore, the learned Single Judge rightly interfered with these illegal acts of statutory authorities in its jurisdiction under Article 226 and it cannot be found fault with.” 11. Taking into account the facts and circumstances involved in the case at hand and the proposition of law laid down by the Apex Court, we are of the considered view that, it cannot be said that, the learned Single Judge was not legally correct in declining to redress the grievance of the appellant invoking the writ jurisdiction under Article 226 of the Constitution Of India. Therefore, we do not think any interference is required in the judgment impugned. However the remedy of the appellant to redress the grievances if any, under Act, 2002, as of right cannot be shut out. In that regard, learned counsel for appellant has invited our attention to paragraph 4 of the impugned judgment, wherein the learned Single Judge has held “that there is no force and merit in the argument that non-mentioning of unfinished goods in notices and request to Magistrate, as referred above would be ground for accepting prayer, as reflection of finished and unfinished goods in Schedule 3 would be construed as secured assets disentitling the appellant for release of the timber. The execution of mortgaged **WA.No.958 OF 2020** **9** documents, its terms and conditions are sacrosanct between the parties and cannot be interpreted as wish and choice of the petitioner”. 12.Therefore, having regard to the facts and circumstances of the case and since the aggrieved person has a remedy under the provisions of Act, 2002, we are of the view that, the question with respect to taking possession of the timber, allegedly outside the hypothecated/mortgaged goods thus eliminating the powers of the authority under Act, 2002, as submitted by learned counsel for the appellant is left open to be considered by the Tribunal, if and when the appellant invokes jurisdiction of the Tribunal. Upshot of the above discussion is that, writ appeal fails, and we decline to interfere with the judgment of the learned Single Judge, however, keeping the question raised by the appellant in respect of taking possession of timber without any charge/mortgage under theAct, 2002 left open to be agitated by the appellant before appropriate Forum, and in accordance with law. ## **Sd/** ## **S.MANIKUMAR** ## **CHIEF JUSTICE** ## **Sd/** ## **SHAJI P.CHALY** **JUDGE** **smv**