1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 08.04.2011 CORAM: THE HONOURABLE MS.JUSTICE K.SUGUNA AND THE HONOURABLE MR.JUSTICE A.ARUMUGHASWAMY W.P.(MD).No.2800 of 2011 and M.P.Nos.1 to 3 of 2011 K.P.Chinnasamy : Petitioner Vs. 1.The Authorized Officer, State Bank of India, Belur Branch, Thumbal Main Road, Belur, Salem District. 2.M/s.Win Associates, No.C-99, 10-B Cross, West Extension, Thillai Nagar, Trichy 620 018. 3.The Presiding Officer, Debts Recovery Tribunal, IV Floor, Kalyani Towers, Melur Road, Madurai. : Respondents PRAYER: Writ Petition is filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus calling for the records of the first respondent pertaining to 13(4) possession notice issued by the first respondent under SARFAESI Act, 2002, dated 24.03.2010 and quash the same and consequently direct the first respondent to regularize the loan account of the petitioner. For Petitioner : Mr.S.Suresh For Respondent 1 : Mr.S.Sethuraman O R D E R [Order of the Court was made BY K.SUGUNA, J] This Writ Petition is filed challenging 13(4) possession notice dated 24.03.2010 issued by the first respondent bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, [hereinafter referred to as "the Act"]. 2. The stand of the learned counsel appearing for the petitioner is that even as per the possession notice issued by the first respondent bank, the lands comprised in S.F.Nos.28/6 and 28/1 are agricultural lands. Under Section 31(i) of the Act, the agricultural lands cannot be the subject matter of the issue and the same is applicable with reference to the dwelling house of the agriculturist. In support of his contention, the learned counsel for the petitioner has relied on a Judgment of a Division Bench of this Court in J.Malliga v. Authorized Officer, Union Bank of India reported in 2010 (4) MLJ 63, at Paragraph Nos.9 and 10, which read as follows:- https://hcservices.ecourts.gov.in/hcservices/ 2 "9. In the present case, the impugned notice itself refers to the land as "cardamom plantations". The cultivation of the cardamom requires normal agricultural activities, and therefore, applying the normal principles of interpretation in fiscal statutes, according to which, if there are two views possible, one favourable to the assessee should be given. In this case, the one favouorable to the petitioners, who are the borrowers, should be given. Section 31(i) of the SARFAESI Act reads as follows :- "31. Provisions of this Act not to apply in certain cases.– The provisions of this Act shall not apply to– ... (i) any security interest created in agricultural land ..." In D. Ravichandran vs. Manager, Indian Overseas Bank, (2006) 132 Company Cases 803 (Madras), the Bank contended that the asset in that case was not an agricultural land but a barren land. A learned single Judge of this Court held that, "the question whether the secured asset in question is an agricultural land or not, whether any agricultural operations are being carried on by the petitioner therein etc., in the absence of any documentary proof on record are undoubtedly question of fact ..." and refused to go into the question under Article 226 of the Constitution of India. In Model Financial Corporation vs. Indian Bank, W.P. No.3705 of 2007 decided on 20.12.2007, a learned single Judge of the Andhra Pradesh High Court observed that the submissions made "relating to the aspect whether the subject matter of the security would fall within the agricultural lands or not and, at present, whether they are being put to agricultural use or not are predominantly questions of fact and cannot be gone into by a writ court". In the present case, it is admitted that it is a cardamom estate, in paragraph 4 of the counter. The sanction order refers to production of cardamom. The General Comments at column 12 of the sanction order shows that the loan is for "new cardamon planting". The recommendation by the Branch Manager of the Bank for sanctioning the term loan is as follows : "The undersigned inspected the land on 8th May, 2005. The land is well prepared for new planting. For irrigation, sufficient amount of water available in a well within the field. The whole area is irrigated with the help of pipe line. The applicant's husband Mrs. T.K.S. Jothi has good experience in cardamom plantation. He is looking after the land." Therefore, the fact that the mortgaged land is a cardamom estate is not disputed. The loan is for planting the crop. When it is admitted by the respondent-Bank that the above activities are carried on in the land and that cardamom is planted, then the judgments in A.I.R. 1977 S.C. 113, A.I.R. 1957 S.C. 768 and A.I.R. 1977 S.C. 121 cited supra will necessarily apply, since as stated earlier, cultivation of cardamom requires normal agricultural activities. In these circumstances, it is not https://hcservices.ecourts.gov.in/hcservices/ 3 necessary to direct the petitioner to invoke the alternate remedy since as per the section extracted above, the Act does not apply to agricultural land. 10. In view of the above, the impugned notice is without jurisdiction and the respondent-Bank cannot proceed against the properties of the petitioners under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI), 2002. It is needless to say that the respondent-Bank has the right to recover the amounts due in a manner known to law. The invocation of this Act alone is held to be barred by Section 31(i) of the SARFAESI Act." 3. On the other hand, it is the stand of the learned counsel appearing for the first respondent bank that without exhausting the alternative remedy available under the Act, the petitioner has straight-away approached this Court. According to the learned counsel for the first respondent bank, it is an admitted fact that while filing the present Writ Petition, the Debts Recovery Tribunal was not functioning, consequently, this Writ Petition has been filed. But, now the Debts Recovery Tribunal is functioning, and therefore, the petitioner has to be directed to approach the Debts Recovery Tribunal. In support of his contention, the learned counsel for the first respondent bank has relied on a Judgment of a Division Bench of this Court in Kalpesh P.C.Surana v. Indian Bank reported in 2010 (3) MLJ 849 at Paragraph No.20, which reads as follows:- "20. The issues whether the provisions of the Act are applicable, whether there is any procedural error are all matters to be adjudicated in an application (appeal) under Section 17 of the Act and not in a writ petition. In this regard, we are guided by the decision of the Supreme Court in PUNJAB NATIONAL BANK V. O.C.KRISHNAN (2001) 6 SCC 569), which dealt with a decision of the Calcutta High Court, which exercised jurisdiction under Article 227 of the Constitution and interfered with an order of a Debt Recovery Tribunal ordering sale of mortgaged property under the provisions of Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The Supreme Court held thus: "6. The Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial institutions. There is a hierarchy of appeal provided in the Act, namely, filing of an appeal under Section 20 and this fast-track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision under an Act cannot expressly oust the jurisdiction of the court under Articles 226 and 227 of the Constitution, nevertheless, when there is an alternative remedy available, judicial prudence demands that the Court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have directed the respondent to take recourse to the appeal mechanism provided by the Act." https://hcservices.ecourts.gov.in/hcservices/ 4 4. We have considered the above submissions made by the learned counsel on either side. 5. It is not disputed by the learned counsel appearing for the petitioner that as on date, the Debts Recovery Tribunal is functioning. Since there is a statutory alternative remedy available, we agree with the objection raised by the learned counsel for the first respondent bank. 6. In view of the above, the Writ Petition is disposed of giving liberty to the petitioner to approach the Debts Recovery Tribunal within a period of two weeks from today and for a period of two weeks from today, the first respondent bank is restrained from taking any further steps basing on Section 13(4) possession notice dated 24.03.2010. No costs. Consequently, connected Miscellaneous Petitions are closed. SD DEPUTY REGISTRAR ( LA ) /TRUE COPY/ ASST REGISTRAR NB To 1. The Authorized Officer, State Bank of India, Belur Branch, Thumbal Main Road, Belur, Salem District. 2.The Presiding Officer, Debts Recovery Tribunal, IV Floor, Kalyani Towers, Melur Road, Madurai. DM:2011::APRIL:09::: ORDER MADE IN W.P.(MD).No.2800 of 2011 08.04.2011 4P:3C:: https://hcservices.ecourts.gov.in/hcservices/