IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 13.09.2010 CORAM THE HONOURABLE Mrs. JUSTICE R.BANUMATHI and THE HONOURABLE Mr. JUSTICE B.RAJENDRAN W.P.No.3361 of 2010 Muthusami Proprietor, M/s.Sri Lakshmi Textiles, 245-247, Salem Main Road, Kailasapuram, Thiruchengodu, Namakkal District. ... Petitioner vs. The Authorised Officer, Andhra Bank, No.20, Siva Shanmugam street, Erode-638 001. ... Respondent. PRAYER: Writ Petition filed under Article 226 of Constitution of India praying to issue Writ of Mandamus or any other Writ directing the Respondent Bank to follow the procedure contemplated under Section 13 (4) of SARFAESI Act, alternatively direct the Respondent Bank to consider the Petitioner's request for one time settlement in terms of he letter dated 09.02.2010 and pass such further other order. For Petitioner : Mr.Jayesh B.Dolia For Respondent : Mr.R.Gowthama Narayanan O R D E R (Order of the Court was made by B.RAJENDRAN,J) Writ Petition has been filed for Mandamus directing the Respondent Bank to follow the procedure contemplated under Section 13(4) of SARFAESI Act and alternatively direct the Respondent Bank to consider Petitioner's request for one time settlement in terms of the letter dated 09.02.2010 and pass such other orders. 2. The only grievance made out by the Writ Petitioner is that he has submitted representation on 19.02.2009 seeking for time, as he was not in a position to clear the entire amount in one lump sum, due to economic crisis. He further would contend that he wrote a letter on 16.4.2009 requesting for permission to settle the due by way of one time settlement. But the Respondent Bank by https://hcservices.ecourts.gov.in/hcservices/ letter dated 28.04.2009 insisted the Writ Petitioner to pay the entire amount in two months which was not possible for him to pay so. It is also admitted that the Respondent Bank by letter dated 16.11.2009 has declined his offers and informed that they would proceed under SARFAESI Act. But subsequently, inspite of efforts to settle the matter, on 09.02.2010 the Respondent Bank with Police came to take physical possession and they have also initiated criminal proceedings by filing Criminal Miscellaneous Petition No.799/2009 before the Chief Judicial Magistrate, Namakkal under Section 14 of SARFAESI Act. Therefore, aggrieved by the same, the Writ Petitioner has come forward with this Writ Petition. 3. Learned counsel appearing for the Respondent Bank specifically contended that no right will flow on the Writ Petitioner to seek any alternative remedy by invoking Article 226 of Constitution of India, especially following the Judgment of the Hon'ble Supreme Court reported in Satyawati Tondon's case. Therefore, he has contended that for one time settlement, it is always open to the Writ Petitioner to pay the money and seek redressal before the Respondent Bank and not by approaching this Court. 4. Heard both sides. Perused the materials available on record and considered the rival submissions of both sides. 5. Both sides agreed to take up the main Writ Petition itself. By consent of both sides, the Writ Petition itself is taken up for final disposal. 6. At the out set, it is very clear that the Hon'ble Supreme Court in the decision reported in III (2010) Banking Cases 495 (SC) [Union Bank of India v. Satyavati Tondon and others] have categorically stated that Writ Court will not ordinarily interfere with the matters pertaining to recovery of money especially under SARFAESI Act. It is also made clear that when there is alternative remedy available, the jurisdiction under Article 226 of Constitution of India cannot be invoked. In Paragraphs 17 and 18, it was held thus:- "17. .... 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 banks and other financial institutions. https://hcservices.ecourts.gov.in/hcservices/ 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 remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute. 18. While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self-imposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal,a revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance. 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 ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely https://hcservices.ecourts.gov.in/hcservices/ 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 Mahehwari v. Antarim Zila Parishad AIR 1969 SC 556, Whirlpool Corporation v. Registrar of Trade Marks, Mumbai (1998) 8 SCC 1 and Harbanslal Sahnia and another v. Indian Oil Corporation Ltd. and others (2003) 2 SCC 107 and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass appropriate interim order. 7. In the said Judgment of the Honourable Supreme Court, in para No.25, referred to the decision of the Supreme Court reported in Raj Kumar Shivhare vs. Assistant Director, Directorate of Enforcement and Another (2010) 4 SCC 772 wherein in Para Nos. 31 and 32, it was held as follows:- 31. When a statutory forum is created by law for redressal of grievance and that too in a fiscal statute, a writ petition should not be entertained ignoring the statutory dispensation. In this case the High Court is a statutory forum of appeal on a question of law. That should not be abdicated and given a go-by by a litigant for invoking the forum of judicial review of the High Court under writ jurisdiction. The High Court, with great respect, fell into a manifest error by not appreciating this aspect of the matter. It has however dismissed the writ petition on the ground of lack of territorial jurisdiction. 32. No reason could be assigned by the appellant’s counsel to demonstrate why the appellate jurisdiction of the High Court under Section 35 of FEMA does not provide an efficacious remedy. In fact there could hardly be any reason since the High Court itself is the appellate forum. It is pertinent to note in this case before taking necessary recourse under Section 14 of the SARFAESI Act, Sections 13(2), 13 (4) and Rule 8(1) procedures have been duly followed which is in accordance with the decision of the Supreme Court. If the Petitioner is aggrieved, he ought to have filed an appeal as against the order passed in Section 13(4). Even as against the order passed under Section 14, the same could be challenged before DRT. Therefore, when there is sufficient safeguard and remedy is available under the Act, it is not made known as to why the Petitioner has chosen to file a Writ Petition seeking the remedy. It is always open to the Writ Petitioner to approach the Respondent Bank in so far as one time settlement is concerned and when so approached, the Respondent Bank may consider the representation of https://hcservices.ecourts.gov.in/hcservices/ the Writ Petitioner, if he is eligible and pass appropriate orders on merits. Therefore, the Writ Petition is not maintainable and liable to be dismissed. 8. As per the interim direction of this Court dated 18.02.2010, Writ Petitioner has deposited a sum of Rs.15,00,000/- towards the credit of his Savings Bank Account which is kept there. Now the Respondent Bank would state that the matter itself is disposed of, they may be permitted to adjust the same towards the loan account. In as much as the Writ Petitioner wants to have one time settlement, it is always open for him to seek the remedy and either if he does not come forward or if it is not accepted by the Respondent Bank, it is always open to the Respondent Bank thereafter to adjust the said sum along with interest directly to the loan account. Till such time, the Writ Petitioner shall not withdraw the said amount. 9. In the result, the Writ Petition is dismissed. Consequently, M.P. Nos. 1 and 2 of 2010 are closed. No order as to costs. Sd/- Asst. Registrar //true copy// Sub Asst.Registrar bbr To The Authorised Officer, Andhra Bank, No.20, Siva Shanmugam street, Erode-638 001. 1 cc to Mr.V.P.Mahammed Moin, Advocate, Sr.No.67974 Order in W.P.No.3361 of 2010 MSM {CO} TP/6.10.2010. https://hcservices.ecourts.gov.in/hcservices/