1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD WRIT PETITION NO.5581 OF 2008 1) Shri Pantayya Irayya Diddi, R/o-Vidyanagar, Sangamner, Dist-Ahmednagar, 2) Shri Tukaram Irayya Diddi, r/o-Vidyanagar, Sangamner, Dist-Ahmednagar, 3) Shri Pandurang Irayya Diddi, R/o-Vidyanagar, Sangamner, Dist-Ahmednagar. ...PETITIONERS. VERSUS 1) The Sangamner Merchants Co-operative Bank Ltd., Indira Gandhi Marg, Sangamner, Through its General Manager, 2) The Authorized Officer, The Sangamner Merchants Co-operative Bank Ltd., Indira Gandhi Marg, Sangamner. ...RESPONDENTS. ... Shri.S.V. Adwant Advocate for Petitioners. Shri.A.S. Bajaj Advocate for Respondents. ... 2 CORAM: NARESH H. PATIL AND N.D. DESHPANDE, JJ. DATE : 20TH APRIL, 2010. PER COURT : 1. Heard learned counsel for the parties. 2. The Petitioners seek a direction that notice dated 8th September, 2008 issued by Respondents to Shri Sidram Irayya Diddi be held as illegal and unenforceable and further declaration that the same does not bind the Petitioners. 3. The Petitioners' contention is that neither they were guarantors nor mortgagor to the loan amount of Rs.24 Lakhs alleged to have been advanced by Respondent No.1 to one Shri Sidram Irayya Diddi for the purpose of his business. The Respondents are seeking to attach properties of Petitioners under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "the Act 3 of 2002"). Initially, the Respondent No.1 had advanced loan facility of Rs.50 Lakhs to Shri Sidram Irayya Diddi for the purpose of business. Out of the said loan facility, an amount of Rs.20 Lakhs was advanced for the purpose of furniture and the remaining amount of Rs.30 Lakhs was advanced in the form of cash credit, which was availed by Shri Sidram Irayya Diddi, according to the Petitioners. The said loan facility granted to Shri Sidram Irayya Diddi was guaranteed by the Petitioners and also secured by creating a charge of the bank over their properties mentioned in the registered mortgage deed No.4543 dated 19th November, 1998. The Petitioners contend that Shri Sidram Irayya Diddi has paid off the loan facility on 31st March, 2005. The Petitioners got discharged of the guarantee executed by them in favour of Respondent No.1 Bank for the repayment of loan facility granted to Shri Sidram Irayya Diddi. The contract therefore, was got concluded and the charge of the Bank created on the mortgaged properties of the Petitioners was 4 redeemed. 4. The Petitioners submit that Shri Sidram Irayya Diddi thereafter seems to have obtained further loan amount of Rs.24 Lakhs, for which the Petitioners are not responsible. The Petitioners have neither guaranteed the said loan nor created a charge nor executed a mortgage of their properties in favour of the Respondent No.1 Bank. The Bank had issued a notice to the borrower Shri Sidram Irayya Diddi, Exhibit C. The Petitioners apprehend that their properties would be attached and sold by the Bank and therefore the present Writ Petition was preferred for seeking directions as prayed for. 5. The learned counsel for the Petitioners submitted that the Petitioners have no remedy than to approach this Court under Article 226 of the Constitution of India. The counsel submitted that in the facts of the case, remedy of appeal provided under Section 17 of the Act of 2002 is 5 also not available to them as they are third parties, their mortgage is redeemed and the contract is concluded. The learned counsel referred to the definitions appearing in Section 2 of the Act of 2002 in respect of 'borrower', 'secured creditor', 'secured debt', 'security interest'. The counsel further referred to the provisions of Section 13(4) of the Act of 2002. It is further submitted that the Petitioners even if approaches the Tribunal, they may not be in a position to protect their properties. 6. Shri. Bajaj, the learned counsel for the Respondent Bank has referred to the decision of the Division Bench of this Court in the case of Trade Well and another vs. Indian Bank and another, 2007(1) Bom. C.R. (Cri.) Page 783. The counsel submitted that the issue in respect of alternate remedy as provided under Section 17 of the Act of 2002 was specifically considered by the Division Bench of this Court in the case of Trade Well and another vs. Indian Bank and another, 6 cited supra. The counsel submitted that in view of the provisions of the Act of 2002, the secured creditor is entitled to issue notice to borrower and not to other persons, third persons/ parties. In the submissions of the learned counsel, there is efficacious alternate statutory remedy under the provisions of Section 17 of the Act of 2002, which the Petitioners can avail. The pleas raised before this Court includes disputed question of facts, which involves leading of evidence, consideration of documents, entries in the books of accounts, which may not be permissible in exercise of extra ordinary writ jurisdiction of this Court and the facts of the case. 7. We have considered the submissions advanced by the learned counsel for the parties. The issue in respect of scope of Section 17 of the Act of 2002 was considered by the Division Bench of this Court in the case of Trade Well and another vs. Indian Bank and another, cited supra. In Para 70 and 71, the Division Bench observed 7 thus: "70. It is also not possible for us to hold that remedy provided under section 17 is not available to a third party. This section begins with the words 'Any person (including borrower) aggrieved by any of the measures referred to in sub-section (4) of section 13'. In our opinion the words 'Any person (including borrower)' cover third parties also. Under section 13(3A), the secured creditor is required to communicate to the borrower reasons for not accepting his objection to the notice under section 13(2) but the reasons so communicated does not confer any right on the borrower to make an application before the DRT under section 17. Explanation to section 17 states that communication of reasons to the borrower does not entitle the person 8 (including borrower) to make an application to DRT under section 17(1) at the stage of communication. This supports our conclusion that even a third party can make an application under section 17. In fact Ms. Maravarman, the learned Counsel appearing for the respondent-bank has drawn our attention to the Judgments of the DRT where rights of third parties are dealt with and relief is granted to them. 71. There is also no substance in the submission that no relief can be given to a third party because section 17(3) speaks only for restoration of possession of the secured asset to the borrower. Section 17(3) states that if the DRT comes to the conclusion that any of the measures stated in section 13(4), taken by the secured creditor are not in accordance with the NPA Act and the Rules 9 made thereunder, it can restore possession of the secured assets to the borrower or restore the management of the secured asset to the borrower. Section 17(3) further goes on to say that DRT can pass such order as it may consider appropriate and necessary in relation to any of the recourse taken by the secured creditor under sub-section (4) of section 13. Therefore, there is no reason to conclude that no orders can be passed in respect of third parties by DRT under section 17. Section 18 which provides for appeal to Appellate Tribunal also states that any person aggrieved, by any order made by DRT under section 17, may prefer an appeal to an Appellate Tribunal." 8. In the light of the Judgment in the case of Trade Well and another vs. Indian Bank and another, cited supra and in the facts of the case, 10 we find that the Petitioners have efficacious statutory remedy under Section 17 of the Act of 2002 and the Petitioners could approach the D.R.T. or any other appropriate forum even if they claim that the contract is concluded or the mortgage is redeemed. In the light of the issue of the availability of alternate efficacious remedy being settled, we do not find that the issues on merits of the matter need to be discussed, as the same may cause prejudice to either of the parties. 9. We therefore, observe that in the light of the alternate efficacious statutory remedy available to the Petitioners and in the facts of the case, we are not inclined to entertain the Petition. The Writ Petition is dismissed. 10. At this stage, Shri Adwant, learned counsel for the Petitioners submits that ad interim relief granted on 22nd September, 2008 be continued till the Petitioners decide to avail of alternate remedy. The ad interim relief granted by 11 this Court to continue for a period of further two weeks. 11. In case the Petitioners approach the D.R.T. or any other Forum, the same will deal with the matter in accordance with law. We express no opinion on the merits of the matter. [N.D. DESHPANDE, J.] [NARESH H. PATIL, J.] asb/APR10/wp5581.08