Suja J. v. Authorized Officer under SARFAESI Act, State Bank of India & Senior Manager, State Bank of India

# **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 22ND DAY OF SEPTEMBER 2020 / 31ST BHADRA, 1942** **WA.No.1210 OF 2020** ## **AGAINST THE JUDGMENT IN WP(C) 14522/2020(M) OF HIGH COURT OF KERALA** ## **APPELLANT/4th RESPONDENT:** **SUJA J. AGED 35 YEARS W/O.BABU K., VADAKKADATHU THEKKATHIL, PANAYAM, INCHUVILA P.O., KOLLAM - 691 601.** **BY ADVS. SRI.C.UNNIKRISHNAN (KOLLAM) SRI.JOHNSON GOMEZ SMT.UTHARA A.S SMT.A.V.INDIRA** ## **RESPONDENT/WRIT PETITIONER AND RESPONDENTS IN W.P.:** **1 THE AUTHORIZED OFFICER UNDER SECURITIZATION ACT, STATE BANK OF INDIA, THRIKKADAVUR BRANCH, PB NO.1, NELLIYIL ROYAL BUILDING, ANCHALUMMOODU, PERINAD P.O., KOLLAM- 691 601.** **2 THE SENIOR MANAGER STATE BANK OF INDIA, THRIKKADAVOOR BRANCH PB NO.1, NELLIYIL ROYAL BUILDING, ANCHALUMMOODU, PERINAD P.O., KOLLAM - 691 601.** ## **SRI.JAWAHAR JOSE, STANDING COUNSEL FOR RESPONDENTS** **THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 22.09.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** WA.No.1210 OF 2020 2 ## **JUDGMENT** ## **S.MANIKUMAR,CJ** Instant writ appeal is filed against the judgment dated 24[th] July, 2020 in W.P.(C) No.14522 of 2020. Material on record discloses that appellant, who had availed a loan from the respondent bank, defaulted in repayment of the same. Consequently, the respondent bank initiated proceedings under the Securtisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, to recover the loan amounts, evident from Ext.P1. Hence the appellant has approached this court seeking the following reliefs: 1) To issue a writ of mandamus, or any other appropriate writ or direction or order directing the respondents to allow the petitioner to pay the loan amount in monthly installments. 2) Such other writ, orders or directions deem it on facts and in the interest of justice. 2. Considering the rival submissions and going through the material on record, writ court disposed of the writ petition with the following directions: - (i) If the petitioner pays the said amount of Rs.10,98,915/- together WA.No.1210 OF 2020 3 with accrued interest in 12 equal and successive monthly installments commencing from 10.08.2020, and continues to keep up the regular installments as per the original loan schedule, then further proceedings for recovery as against the petitioner shall be kept in abeyance. (ii) It is made clear that, if the petitioner commits a default in respect of any of the installments, he will lose the benefit of this judgment and the respondent bank will be free to continue the recovery proceedings against him from the stage at which they presently stand. (iii) It is further made clear that inasmuch as it is in exceptional cases that this Court would grant the reliefs aforementioned, no further petition for modification/extension of time will be entertained. 3. Though Mr.C.Unnikrishnan, learned counsel for appellant, made submissions on the grounds raised in the appeal and sought for interference with the impugned judgment dated 24.7.2020. We are not inclined to interfere with the same, for the reason that, time and again the Hon'ble Supreme Court has held that a writ against the proceedings under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, is not maintainable, when there is an alternative efficacious remedy provided under the said Act. 4. Reliance can be made on a decision of the Hon'ble Supreme WA.No.1210 OF 2020 4 ## Court in **Authorised Officer, State Bank of Travancore and another v. Mathew K.C.** reported in (2018) 3 SCC 85. Relevant portions read as under: “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 (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 WA.No.1210 OF 2020 5 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.” 16. The writ petition ought not to have been entertained and the interim order granted for the mere asking without assigning special reasons, and that too without even granting opportunity to the Appellant to contest the maintainability of the writ petition and failure to notice the subsequent developments in the interregnum. The opinion of the Division Bench that the counter affidavit having subsequently been filed, stay/modification could be sought of the interim order cannot be considered sufficient justification to have declined interference. 17. The writ petition ought not to have been entertained and the interim order granted for the mere asking without assigning special reasons, and that too without even granting opportunity to the Appellant to contest the maintainability of the writ petition and failure to notice the subsequent developments in the interregnum. The opinion of the Division Bench that the counter affidavit having subsequently been filed, stay/modification could be sought of the interim order cannot be considered sufficient justification to have declined interference. WA.No.1210 OF 2020 6 18. 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 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.” ## 5. In **United Bank of India v. Satyawati Tondon and others** [(2010) 8 SCC 110], on a detailed consideration of the statutory scheme under the SARFAESI Act, 2002, availability of a 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 availability of an alternative statutory remedy, “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 WA.No.1210 OF 2020 7 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.” 6. In Civil Appeal Nos.10243-10250 of 2018 **[ICICI Bank Ltd. v. Umakanta Mohapatra and Others]** , by order dated 5.10.2018, the Hon'ble Apex Court reaffirmed the legal 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, WA.No.1210 OF 2020 8 2002, where a statutory remedy is available by filing an application under Section 17 of the said Act. In the light of the above discussion and decisions, instant appeal is dismissed. **Sd/-** **S.MANIKUMAR CHIEF JUSTICE** **Sd/-** smv **SHAJI P.CHALY JUDGE**