IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.8599 of 2011 Jhankar Devi Jain, widow of late Mohan Lal Pugalia, resident of village & P.O. Rajgarh, P.S.Rajgarh, District Churu (Rajasthan), presently residing at 61, Kaveri Apartment, Bandar Bagicha, P.S.Kotwali, District Patna … Petitioner Versus 1. The State Bank Of India registered under the Banking Companies State Bank of India Act, 1985 having its Corporate Office at Nariman Point, Mumbai 2. The Chief General Manager, The State Bank Of India, Local Head Office, J. C. Road, Patna- 800001. 3. The Authorized Officer, The State Bank Of India, Stressed Assets Resolution Centre, Patna 4. The Chief Manager, The State Bank Of India (C&I), Main Branch, West Gandhi Maidan, Patna-800001. … Respondents ------ For the Petitioner : Mr. Gautam Kejriwal, Advocate For the Respondents : Mr. Ashok Kumar Choudhary, Advocate ------ 12/ 16.08.2011 Heard learned counsel for the petitioner and learned counsel for the respondent-State Bank of India and its authorities. 2. This writ petition has been filed by the petitioner for the following reliefs :- (i) For issuance of writ/order/direction for quashing of the entire proceeding initiated by the Respondent Bank against the assets of the petitioner under section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ( hereinafter referred to as `the Act’ for the sake of brevity ) for recovery of the purported loan dues of M/s Allied Corporation without and in absence of any guarantee offered by the petitioner and without the petitioner having executed any document ensuring the repayment of loan dues by the said firm to the Respondent-Bank; (ii) For issuance of a writ in the nature of writ of 2 Mandamus directing the respondent-Bank to release the title documents of the petitioner’s property lying in original with the respondent-Bank only for a limited purpose of assessment of family assets of the petitioner at the time of grant of financial assistance to the said M/s Allied Corporation, Patna and the petitioner having not executed a single document of offering guarantee (security) to the respondent-Bank. (iii) For issuance of a writ in the nature of writ of Mandamus directing the respondent-Bank to pay appropriate compensation to the petitioner for undue harassment caused by way of withholding the title document for the property of the petitioner without any valid contract or legal obligation to be discharged by the petitioner against any liability; (iv) For issuance of a writ in the nature of writ of declaration that the respondents carried with them no authority in the eye of law to retain and withhold the title documents of the property of the petitioner without and in absence of any contractual obligation owned by the petitioner or any due under any law; and for any other relief(s) for which the petitioner may legally be found entitled to in the facts and circumstances of the present case. 3. Learned counsel for the petitioner submits that although the respondents claimed that demand notice under section 13(2) of the Act dated 12.11.2009 (Annexure `C’ ) was issued against the petitioner, but even according to their case, it was not served upon the petitioner and returned unserved due to defect in the address. He further submits that in the aforesaid admitted situation, the petitioner could not file any objection under section 3 13(3)(A) of the Act and hence the subsequent possession notice under section 13(4) of the Act published in the news paper of 28.03.2010 (Annexure 7) was not valid. 4. Learned counsel for the petitioner also submits that although she is the mother of the borrowers but she was not the guarantor and the genuineness of her alleged signature over the document is to be verified and decided in Title (Mortgage) Suit No. 195 of 2005, which was filed by the respondents against the borrowers and the petitioner for recovery of the loan amount from the mortgaged property on the basis of the alleged deed of agreement He further submits that the petitioner has appeared in the said title suit, but it was dismissed for default on 21.01.2011 by Subordinate Judge-IX, Patna and for restoration of the same Misc. Case No. 16 of 2011 is pending before Subordinate Judge-IX, Patna, but it is not being disposed of due to non-availability of the court at present. 5. Learned counsel for the petitioner also submits that the petitioner had filed representations before the authorities concerned (Annexures, 1,2,3 & 6), but respondent-authorities did not pay any heed to them and are bent upon harassing the petitioner and taking action against her, which is absolutely illegal, arbitrary and perverse. 6. On the other hand, learned counsel for the respondents vehemently opposes the contentions of learned counsel for the petitioner and submits that the possession notice under section 13(4) of the Act has been published and the petitioner, 4 admittedly, has the knowledge thereof and hence she could have filed an appeal under section 17 of the Act before the appellate authority, where the entire matter could have been considered including the question as to whether the petitioner was the signatory to the agreement. 7. Learned counsel for the respondents also relies upon a decision of the Apex Court in case of United Bank of India vs. Satyawati Tondon & Ors., reported in A.I.R. 2010 Supreme Court 3413, in paragraph no. 17 of which it has been held as follows :- “17. There is another reason why the impugned order should be set aside. If respondent no.1 had any tangible grievance against the notice issued under section 13(4) or action taken under section 14, then she could have availed remedy by filing an application under section 17(1). The expression `any person’ used in section 17(1) is of wide import. It takes within its fold, not only the borrower but also guarantor or any other person who may be affected by the action taken under section 13(4) or section 14. Both the Tribunal and the Appellate Tribunal are empowered to pass interim orders under sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective. 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 5 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 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, High Court must insist that before availing remedies under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute.” 8. Learned counsel for the respondents further argues that the petitioner apart from being guarantor is also mother of the borrowers and is living with one of the borrowers, hence there is no question of any absence of knowledge to her, specially when there is no other security given by the borrowers to the Bank for the equitable mortgage, therefore, the respondents were quite justified in filing Title (Mortgage) Suit No. 195 of 2005 for the reliefs claimed thereunder and the matter is subjudice in Misc. Case No. 16 of 2011, which is for restoration of the said title suit. 9. Learned counsel for the respondents also avers that that demand notice under section 13(2) of the Act was sent by the respondents to the petitioner on her last address available, but the same could not be delivered as the borrowers or their mother, namely, the guarantor did not inform the respondents about the change of address. He also avers that the petitioner, who is guarantor, is raising issues of 6 technicalities only with a view to delay the entire matter of recovery of the amount, to which the respondents are legally entitled. 10. Considering the averments made by learned counsel for the parties and the materials on record, the law is well-settled by several decisions of the Apex Court including the aforesaid decision relied upon by the respondents in the case of Union of India vs. Satyawati Tondon & Ors. (supra) that SARFAESI proceeding is an independent proceeding and it should be allowed to take its own course as per the intention of the Legislature, which enacted the aforesaid Statute and hence it was observed that High Court must insist that before availing remedies under Article 226 of the constitution, a person must exhaust the remedies available under the relevant statute. 11. Since the matter has not been finally decided by the authorities concerned, this Court does not intend to interfere into the disputed question of facts with regard to the genuineness of the signature of the petitioner as guarantor over the agreement specially when the same is being adjudicated by a competent authority, namely, the civil court. 12. However, it is an admitted fact that the demand notice under section 13(2) of the Act was not served upon the petitioner and it had returned unserved. In such circumstances, it was the duty of respondent-authorities either to send a fresh demand notice after ascertaining the present address of the petitioner or to publish the same in newspaper widely circulated in the area to justify that they had fulfilled their duties. Non-service of demand notice under section 7 13(2) of the Act resulted in deprivation of the petitioner from filing an objection as provided under section 13(3)(A) of the Act. Hence issuance of possession notice under section 13(4) of the Act is clearly against the principles of equity and rules of natural justice. 13. It may be noted that this Court under the powers guaranteed under Article 226 of the Constitution of India can interfere rather is bound to interfere in any matter whatsoever where it finds that the principle of natural justice or rules of equity have been violated. The instant case is exactly one of such cases in view of the above mentioned facts and circumstances. Accordingly, the possession notice under section 13(4) of the Act published on 23.08.2010 (Annexure 7) is hereby quashed. 14. A copy of the demand notice under section 13(2) of the Act dated 12.11.2009 (Annexure-C) has been served by learned counsel for the respondents upon learned counsel for the petitioner long with counter-affidavit dated 10.06.2011. Hence now he cannot say that he has no copy or information of the said notice under section 13(2) of the Act. 15. Accordingly, this writ petition is disposed of with an opportunity to the petitioner to file an objection under section 13(3)(A) of the Act before the authorized officer of the State Bank of India along with all the requisites as well as a copy of this order within fifteen days from today. If such an application is filed by the petitioner within the aforesaid time, the said authority shall decide the same as early as possible, whereafter, steps should be taken in accordance with the provisions of the Act keeping in view all the 8 relevant facts and circumstances and principles of law involved. 16. It transpires that the decision in Title (Mortgage) Suit No. 195 of 2005 is very important for the instant matter, but the said suit remained pending for six years and was dismissed for default on 21.01.2011, against which restoration petition vide Misc. Case No. 16 of 2011 is pending due to the court in question being vacant. In the said circumstances, the District Judge, Patna is directed to transfer the said miscellaneous case to an available court asking it to decide the said case expeditiously without any further delay. MPS/ ( S. N. Hussain, J.)