UUMER K.K v 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** **FRIDAY, THE 13TH DAY OF MARCH 2020 / 23RD PHALGUNA, 1941** ## **WA.No.461 OF 2020** **AGAINST THE ORDER/JUDGMENT IN WP(C) 2781/2020(W) OF HIGH COURT OF KERALA** ## **APPELLANT/PETITIONER:** **UMMER K.K AGED 42 YEARS S/O.AHAMEDKUTTY HAJI, KURIYANIKUNNUMMAL, VAVAD POST, KODUVALLY, KOZHIKODE-673572(PROPRIETOR, YOHANA COMPUTERS, DARUSSALAM COMPLEX, MAVOOR ROAD, KOZHIKODE-673004)** **BY ADVS. SRI.K.M.FIROZ SMT.M.SHAJNA** ## **RESPONDENT:** ## **STATE BANK OF INDIA** **RASMEC, KOZHIKODE, 2ND FLOOR, THAVOT PALACE, KANNUR ROAD, KOZHIKODE-673001 REPRESENTED BY ITS ASSISTANT GENERAL MANAGER/AUTHORIZED OFFICER** ## **SMT. BINDUMOL JOSEPH, SC FOR RESPONDENT** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 13.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** WA.No.461 OF 2020 2 ## **JUDGMENT** ## **S.MANIKUMAR** Instant writ appeal is filed against the judgment dated 17.2.2020 in W.P.(C) No.2325/2017. 2. Appellant herein is the writ petitioner in W.P.(C) No. 2781/2020. According to the appellant, he had availed a cash credit facility of Rs.20,00,000/- from the Mavoor Road, Kozhikode Branch of the erstwhile State Bank of Travancore, (which was later acquired by the State Bank of India), offering properties of the petitioner, as well as surety, as collateral security, and subsequently, the amount was enhanced to Rs.45,00,000/- in 2014. Consequently, petitioner/appellant could not repay the installments in time, due to acute financial difficulties. On default, the respondent bank initiated proceedings under Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 against the property of the petitioner. 3. Being aggrieved, writ petitioner approached this court by filing W.P.(C) No.2781/2020 and writ court vide judgment dated 17.2.2020, dismissed the writ petition observing that; “Learned counsel for the bank submits that, the bank has not WA.No.461 OF 2020 3 instructed any proposal for regularisation of the account subject to any terms and conditions. The bank further submits that, the overdue amount as on today is Rs.19 lakhs. The bank has initiated steps for recovery of the amount resulting into a notice by Advocate Commissioner in pursuance to the order under Section 14 of the SARFAESI Act. The petitioner has the remedy to approach the Debt Recovery Tribunal under section 17 of the Act. No ground for interference is made out by the petitioner. With the above observations, the writ petition is dismissed.” 4. According to the learned counsel for appellant, pursuant to the impugned judment, appellant has approached the bank and it is understood that respondent bank was ready to grant some more time to settle the dues. He further contended that the writ court, without taking into account the entire submission of the respondent bank, dismissed the writ petition. It is in this background, instant appeal is filed. 4. On the last day of hearing, Mr.K.M.Firoz, learned counsel for appellant, submitted that the entire arrears will be paid, if sufficient time is granted. Responding to the above, on instructions, Ms.Bindu learned standing counsel for bank submitted that if the appellant makes any representation to the bank, the same would be considered, provided tat the entire arrears with interest is paid on or before 15.4.2020. 5. Hon'ble Supreme Court time and again held that a writ against the proceedings under Securitisation and Reconstruction of Financial WA.No.461 OF 2020 4 Assets and Enforcement of Security Interest Act, 2002, is not maintainable, when there is an alternative efficacious remedy provided under the said Act. Reliance can be made on a decision of the Honourable Supreme 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 WA.No.461 OF 2020 5 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 W.A.No.1958 OF 2019 : 6 : 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.” 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 WA.No.461 OF 2020 6 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. 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.” ## 4. In **United Bank of India v. Satyawati Tondon and others** [(2010) 8 SCC 110], upon 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 WA.No.461 OF 2020 7 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 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.” ## 5. In **Civil Appeal Nos.10243-10250 of 2018 [ICICI Bank Ltd.** **v. Umakanta Mohapatra and Others]** , by an 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.461 OF 2020 8 2002, where a statutory remedy is available by filing an application under Section 17 of the said Act. 6. However, in as much as bank has conceded to the extent of granting liberty to the appellant making a representation and for consideration of the same as stated above, we permit the appellant to make a representation to the bank, which shall be considered and decision is taken by the bank. We make it clear that, the judgment in this appeal is passed on consensus and the same shall not be treated as a precedent, in future. In the light of the above decisions and observations, the instant appeal is dismissed. **Sd/-** ## **S.MANIKUMAR** ## **CHIEF JUSTICE** **Sd/-** smv **SHAJI P.CHALY JUDGE**