Shamshad K.C. v. The Authorised Officer and Chief Manager, Bank of Baroda, Kasaragod Branch, Kasaragod; Bank of Baroda, Kasaragod Branch, Kasaragod

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE A.M.BADAR** **TUESDAY, THE 16TH DAY OF MARCH 2021 / 25TH PHALGUNA, 1942** ## **WP(C).No.6704 OF 2021(K)** ## **PETITIONER/S:** **SHAMSHAD K.C.,AGED 55 YEARS W/O.MOHAMMED NAZIR, SHAD MANSION, MOGRAL PUTHUR, KASARGOD PIN 671 122** **BY ADV. SRI.P.S.GEORGE** ## **RESPONDENT/S:** - **1 THE AUTHORISED OFFICER AND CHIEF MANAGER THE BANK OF BARODA, KASARGOD BRANCH, KASARGOD PIN 671 121** - **2 THE BANK OF BARODA,KASARGOD BRANCH, KASARGOD PIN 671 121, REP.BY ITS CHIEF MANAGER** ## **SRI. NAJEEB KHAN, STANDING COUNSEL** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 16.03.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** WP(C).No.6704 OF 2021 2 ## **JUDGMENT** ## **Dated this the 16th day of March 2021** The petitioner has filed this writ petition seeking the following reliefs:- _''i) issue a writ of certiorari calling for the records leading to dispossession of the petitioner from the secured assets including Ext.P2 and P7 and to set aside same by declaring the same as illegal._ _ii) Issue a writ of mandamus or any other appropriate writ, order or direction restraining the respondents from proceeding further under the SARFAESI Act till a settlement is arrived within such time to be fixed by this Court.''_ 2. Heard both sides. 3. The document at Ext.P3 is the notice issued by the Advocate Commissioner appointed under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (hereinafter referred to as 'the SARFAESI Act). Communication at Ext.P7 dated 10.03.2021 is from the petitioner to the respondent bank whereby the petitioner has agreed that he is willing to pay Rs.5,00,000/(Rupees five lakhs only) on that day itself, i.e, on 10.03.2021 and Rs.20,00,000/- (Rupees twenty lakhs only) on 20.03.2021, as per the agreement entered into with the bank manager during his visit for taking possession. The document at Ext.P7 is dated 10.03.2021. Learned counsel appearing for the petitioner vehemently argued that the petitioner had taken a loan of WP(C).No.6704 OF 2021 3 Rs.80,00,000/- (Rupees eighty lakhs only) for the purpose of constructing a house. The petitioner as of now has remitted more than Rs.97,63,000/- towards repayment of that loan. It is further argued that the petitioner has thereafter filed an application at Ext.P5 claiming One Time Settlement and that application is still pending with the respondents. Learned counsel appearing for the petitioner, by drawing my attention to Paragraph No.10 of the writ petition, argued that on 10.03.2021, the authorised officer and his team consisting of certain police officers etc., visited the residential property and asked the occupants to vacate the same. Threat of forcible possession was extended to the petitioner. It is contended that the respondents have demanded to remove the age old and bedridden mother of the petitioner from the building by arranging the ambulance. With this, the authorised officer of the respondent bank had compelled the petitioner to prepare an application at Ext.P7 as directed by him stating that an amount of Rs.5 lakhs will be remitted on 10.03.2021 and that of Rs.20 lakhs on 20.03.2021. The learned counsel contended that the said application at Ext.P7 was extracted by force on the applicant. It is further submitted that for a meagre amount, the respondent bank is seeking to take possession of the secured asset though WP(C).No.6704 OF 2021 4 the tenure of loan is not over and despite the fact that the petitioner is ready and willing to regularise the loan. 4. I have considered the submissions so advanced and also perused the materials placed before me including annexures to the petition. 5. Undisputedly the petitioner had obtained a loan by mortgaging the property. It is also reflected from the averments made in the petition as well as from the annexures to the petition that the loan could not be repaid as agreed and therefore, it has turned into the Non Performing Asset. It is seen that resorting to the provisions of the SURFAESI Act, steps under Section 13 of the said Act were taken by the respondent, secured creditor which ultimately resulted in appointing the advocate commissioner by the learned chief Judicial Magistrate, Kasargod by resorting to the powers conferred under Section 14 of the SARFAESI Act. That is how it is seen from the petition that the Authorised Officer is taking steps for securing possession of the secured asset. 6. The scope of interference in such matters by this Court in writ jurisdiction is no more _res integra_ . Following are the observations of the Hon'ble Apex Court in the matter of ## _**Authorized Officer, State Bank of Travancore and another**_ WP(C).No.6704 OF 2021 5 ## _vs._ _**Mathew K.C** (2018(1) KLT 784):-_ 5. ….... The discretionary jurisdiction under Article 226 is not absolute but has to be exercised judiciously in the given facts of a case and in accordance with law. The normal rule is that a writ petition under Article 226 of the Constitution ought not to be entertained if alternate statutory remedies are available, except in cases falling within the well defined exceptions as observed in Commissioner of Income Tax and Others vs. Chhabil Dass Agarwal, 2014 (1) SCC 603, as follows: “15. Thus, while it can be said that this Court has recognised some exceptions to the rule of alternative remedy i.e. where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, the proposition laid down in Thansingh Nathmal case, Titaghur Paper Mills case and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation.” 9. Even prior to the SARFAESI Act, considering the alternate remedy available under the DRT Act it was held in Punjab National Bank vs. O.C. Krishnan and others, (2001) 6 SCC 569, that :- “6. The Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial WP(C).No.6704 OF 2021 6 institutions. There is a hierarchy of appeal provided in the Act, namely, filing of an appeal under Section 20 and this fast-track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision under an Act cannot expressly oust the jurisdiction of the court under Articles 226 and 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 provisions. This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have directed the respondent to take recourse to the appeal mechanism provided by the Act.” 10. In Satyawati Tandon (supra), the High Court had restrained further proceedings under Section 13(4) of the Act. Upon a detailed consideration of the statutory scheme under the SARFAESI Act, the availability of remedy to the aggrieved under Section 17 before the Tribunal and the appellate remedy under Section 18 before the Appellate Tribunal, the object and purpose of the legislation, it was observed that a writ petition ought not to be entertained in view of the alternate statutory remedy available holding :- “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 WP(C).No.6704 OF 2021 7 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 quasijudicial 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. **==> picture [78 x 6] intentionally omitted <==** 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.” 11. In Union Bank of India and another V. Panchanan Subudhi, 2010 (15) SCC 552, further proceedings under Section 13(4) were stayed in the writ jurisdiction subject to deposit of Rs.10,00,000/- leading this Court to observe as follows : “7. In our view, the approach adopted by the High Court was clearly erroneous. When the respondent failed to abide by the terms of onetime settlement, there was no justification for the High Court to entertain the writ petition and that too by ignoring the fact that a statutory alternative remedy was available to the respondent under Section 17 of the Act.” WP(C).No.6704 OF 2021 8 12. The same view was reiterated in Kanaiyalal Lalchand Sachdev and Others V. State of Maharashtra and Others, 2011 (2) SCC 782 observing: “23. In our opinion, therefore, the High Court rightly dismissed the petition on the ground that an efficacious remedy was available to the appellants under Section 17 of the Act. It is well settled that ordinarily relief under Articles 226/227 of the Constitution of India is not available if an efficacious alternative remedy is available to any aggrieved person. (See Sadhana Lodh V. National Insurance Co. Ltd; Surya Dev Rai v. Ram Chander Rai and SBI v. Allied Chemical Laboratories.)” 13. In Ikbal (supra), it was observed that the action of the Bank under Section 13(4) of the ‘SARFAESI Act’ available to challenge by the aggrieved under Section 17 was an efficacious remedy and the institution directly under Article 226 was not sustainable, relying upon Satyawati Tandon (Supra), observing : “27. No doubt an alternative remedy is not an absolute bar to the exercise of extraordinary jurisdiction under Article 226 but by now it is well settled that where a statute provides efficacious and adequate remedy, the High Court will do well in not entertaining a petition under Article 226. On misplaced considerations, statutory procedures cannot be allowed to be circumvented. 28…….In our view, there was no justification whatsoever for the learned Single Judge to allow the borrower to bypass the efficacious remedy provided to him under Section 17 and invoke the extraordinary jurisdiction in his favour when he had disentitled himself for such relief by his conduct. The Single Judge was clearly in error in invoking his extraordinary jurisdiction under Article 226 in light of the WP(C).No.6704 OF 2021 9 peculiar facts indicated above. The Division Bench also erred in affirming the erroneous order of the Single Judge.” 14. A similar view was taken in Punjab National Bank and another V. Imperial Gift House and Others, (2013) 14 SCC 622, observing:- “3. Upon receipt of notice, the respondents filed representation under Section 13(3-A) of the Act, which was rejected. Thereafter, before any further action could be taken under Section 13(4) of the Act by the Bank, the writ petition was filed before the High Court. 4. In our view, the High Court was not justified in entertaining the writ petition against the notice issued under Section 13(2) of the Act and quashing the proceedings initiated by the Bank.” 15. It is the solemn duty of the Court to apply the correct law without waiting for an objection to be raised by a party, especially when the law stands well settled. Any departure, if permissible, has to be for reasons discussed, of the case falling under a defined exception, duly discussed after noticing the relevant law. In financial matters grant of ex-parte interim orders can have a deleterious effect and it is not sufficient to say that the aggrieved has the remedy to move for vacating the interim order. Loans by financial institutions are granted from public money generated at the tax payers expense. Such loan does not become the property of the person taking the loan, but retains its character of public money given in a fiduciary capacity as entrustment by the public. Timely repayment also ensures liquidity to facilitate loan to another in need, by circulation of the money and cannot be permitted to be blocked by frivolous litigation by those who can afford the luxury of the same. The caution required, as expressed in Satyawati Tandon WP(C).No.6704 OF 2021 10 (supra), has also not been kept in mind before passing the impugned interim order:- “46. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which (sic will) ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, Whirlpool Corpn. V. Registrar of Trade Marks and Harbanslal Sahnia v. Indian Oil Corpn. Ltd. and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass an appropriate interim order.” 17. We cannot help but disapprove the approach of the High Court for reasons already noticed in Dwarikesh Sugar Industries Ltd. vs. 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 WP(C).No.6704 OF 2021 11 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.” In the wake of these observations, the writ petition as framed and filed is not maintainable because it is challenging the action taken by the secured creditor under the SARFAESI Act. The petitioner has alternative and most efficacious remedy of approaching the forum prescribed under the SARFAESI Act for redressal of his grievances. 7. So far as the request for One Time Settlement is concerned, it is so prerogative of the respondent bank to consider the same as per the norms prescribed for the same. This Court cannot compel the secured creditor to go for One Time Settlement with the debtor. The writ petition as such is devoid of merits and the same is dismissed. Needless to mention that the petitioner is free to seek alternative remedy in the matter. Sd/- A.M.BADAR, JUDGE ajt WP(C).No.6704 OF 2021 12 ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 COPY OF STATEMENT OF ACCOUNTS RELATING TO HOUSING LOAN OF RS 60 LAKHS** **EXHIBIT P2 COPY OF STATEMENT OF ACCOUNTS RELATING TO HOUSING LOAN OF RS 20 LAKHS** **EXHIBIT P3 NOTICE ISSUED BY THE ADVOCATE COMMISSIONER DT. 1.1.2021** **EXHIBIT P4 COPY OF RECEIPT DT. 29.1.2021 REGARDING REMITTANCE OF RS. 15 LAKHS.** **EXHIBIT P5 COPY OF ONE TIME SETTLEMENT APPLICATION DT. 29.1.2021 BY THE PETITIONER EXHIBIT P6 COPY OF RECEIPT DT. 10.3.2021 REGARDING REMITTANCE OF RS 5 LAKHS. EXHIBIT P7 COPY OF APPLICATION DT. 10.3.2021 OBTAINED BY THE AUTHORISED OFFICER FROM THE PETITIONER.**