SARFAESI; Deepak Apparels Vs. City Union Bank [Karnataka High Court, 22-03-2016]

Contents

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Whether a writ petition would be maintainable against an order passed by the Debts Recovery Tribunal, while disposing of an appeal filed under Section 17 of the Act.


IN THE HIGH COURT OF KARNATAKA AT BENGALURU

PRESENT THE HON’BLE MR. JUSTICE S. ABDUL NAZEER A N D THE HON’BLE MR. JUSTICE ASHOK B. HINCHIGERI AND THE HON’BLE MR. JUSTICE A.N.VENUGOPALA GOWDA

DATED THIS THE 22ND DAY OF MARCH, 2016

WRIT PETITION NO.28182/2013 (GM-DRT)

BETWEEN: 1. M/s. Deepak Apparels Pvt. Ltd., No.526, 6th Block, 2nd Phase, Banashankari III Stage, Bangalore – 560 085, Rep. by its Managing Director Sri K. Kotrabasappa. 2. Sri Kotrabasappa, S/o. G. Kotrappa, A/a:- 50 years, Managing Director of M/s. Deepak Apparels Pvt. Ltd. 3. Smt. Kumari G.S., W/o. Kotrabasappa, A/a:- 43 years, Director of M/s. Deepak Apparels Pvt. Ltd. 2 Petitioner Nos.2 and 3 are residing at No.526, 6th Block, 2nd Phase, Banashankari III Stage, Bangalore – 560 085. …PETITIONERS (By Sri R.L. Patil, Senior Adv. for Sri Ashish Krupakar, Adv.) AND:- 1. City Union Bank Ltd., Having its registered office at:- Kumbakonam, Tamil Nadu and Branch office at No.82, 6th Cross, Malleshwaram, Bangalore – 560 003. 2. H.R. Varadarajan Shetty, A/a:- 65 years. 3. Smt. H.A. Sujatha Varadaraja Shetty, W/o. H.R. Varadaraja Shetty, A/a:- 60 years. Respondent Nos.2 and 3 are Residing at No.3406/2, 10th Main, 34th “A” cross, 4th Block Jayanagar, Bangalore. …RESPONDENTS (By Sri R. Ashok Kumar, Adv. for R1; Sri K.V. Shyam Prasad, Adv. for R2 and R3)

This Writ Petition was referred to a larger Bench by the learned Single Judge vide order dated 13.09.2013. This petition referred to this Full Bench by the Hon’ble Chief Justice on 27.01.2014, having been heard and reserved for pronouncement of ‘order on Reference’ this day, A.N. Venugopala Gowda J., pronounced the following:-

ORDER ON REFERENCE

In view of an order dated 13.09.2013, passed by the learned Single Judge, raising a question as to ‘whether a writ petition would be maintainable against an order passed by the Debts Recovery Tribunal (for short ‘the Tribunal’), while disposing of an appeal filed under S.17 of the

# Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002

(for short ‘the SARFAESI Act’), in view of the alternative and efficacious remedy of an appeal provided under S.18, the Hon’ble Chief Justice, constituted this Bench to answer the said question.

2. Reference was made by the learned Single Judge, in view of the divergent views of the two Division Benches in W.A.No.6368/2011 decided on 21.11.2011, since reported in 2013 (1) AKR 370, (for short ‘Hotel Vandana Palace case’) and W.A.No.635/2013 decided on 18.03.2013, since reported in 2014 (1) AKR 40 (for short ‘Smt. Lily Joseph case’). The conflict in the aforementioned two judgments centers round the availability of writ remedy against the order passed by the Tribunal.

3. The petitioners had filed S.A.No.688/2012 before the Tribunal, under S.17 of the Act, to set aside the sale notice dated 25.09.2012 issued in respect of secured asset mentioned in the petition, on the premise that the same is arbitrary and illegal. On 14.06.2013, the said appeal having been dismissed, this writ petition was filed to quash the aforesaid order and for issue of a writ of mandamus directing the respondent – Bank, to consider ‘One Time Settlement’ proposal of the petitioners, and for grant of the consequential reliefs.

4. As this Bench is only required to answer the aforesaid question and lay down the principle of law, it is unnecessary to state the facts of the case in detail.

5. The petitioners borrowed loan from the respondent No.1 (for short ‘the Bank’) and their account was treated on 30.09.2010, as Non-performing Asset. A demand notice dated 22.12.2010, under S.13(2) of the Act, was issued by the Bank. S.A.No.399/2011 filed on 19.08.2011 by the petitioners was allowed on 22.08.2012 by the Tribunal, on the ground that there is violation of sub-rule(4) of Rule 9 of the Security Interest (Enforcement) Rules, 2002. A fresh auction notice having been issued and proceeding initiated in pursuance of the liberty granted in S.A.No.399/2011 and an auction notice dated 25.09.2012 having been published, S.A.No.688/2012 was filed. The auction having been conducted on 05.11.2012 and the bid submitted by respondent Nos. 2 and 3, in the form of sealed Tenders having been accepted on 14.06.2013 by the Bank, the Tribunal having found the said appeal to be devoid of merit and dismissed the appeal, this writ petition was filed.

6. Respondents having contended that the writ petition is not maintainable on the ground that an appeal remedy is provided to the Debts Recovery Appellate Tribunal, under S.18 of the Act and reliance having been placed on the judgment in the case of Smt. Lily Joseph and the petitioner having relied upon the judgment rendered in the case of Hotel Vandana Palace, wherein, the question raised as to the maintainability of the writ petition without filing an appeal to the Appellate Tribunal as provided under S.18 of the Act was answered in favour of the writ petitioners, on the ground that the pre-deposit is required under S.18 of the SARFAESI Act and in such circumstances, it cannot be considered as an efficacious remedy, the learned Single Judge having felt that the question raised requires to be conclusively addressed by an appropriate Bench to be constituted by the Hon’ble Chief Justice and the Registry having been directed to obtain orders, the Hon’ble Chief Justice has passed the order dated 27.01.2014 and constituted the Special Bench. Hence, the matter is before us.

7. Sri. R.L. Patil, learned Senior Advocate, at the threshold, vehemently contended that the reference itself is bad. He submitted that

# S.9(xii) of the Karnataka High Court Act, 1961

requires all writ petitions, other than Habeas Corpus Petitions, to be heard by a learned Single Judge and that the power and prerogative of the Chief Justice to constitute Benches and allocate the work should, therefore, be read subject to the said statutory provision. He submitted that the learned Single Judge is bound by the judgment passed in the case of Hotel Vandana Palace and the judgment rendered in the case of Smt. Lily Joseph, having not noticed the judgment rendered in the case of Hotel Vandana Palace, the judgment rendered in the case of Smt. Lily Joseph, being per incuriam, an uncalled for reference was made.

8. Sri R. Ashok Kumar, learned advocate, on the other hand, contended that the Hon’ble Chief Justice has the absolute prerogative of constituting the Benches and allocation of the work to the learned Judges. He submitted that the powers of the Chief Justice to constitute Benches and allocate the work to the learned Judges is traceable under Articles 225 and 226 of the Constitution and, therefore, any provision in any statute concerning the High Court administration must yield to the powers of the 8 Hon’ble Chief Justice, which flows from Constitution itself and, therefore, S.9(xii)(a) of the KHC Act, 1961 should yield to the prerogative of the Chief Justice.

9. In view of the rival contentions and there being no dispute that the reference to this Bench is not by the learned Single Judge and that the Special Bench was constituted by the Hon’ble Chief Justice, we would address the preliminary objection raised with regard to the maintainability of the reference made by the Hon’ble Chief Justice.

10. What a learned Single Judge should do, if he feels that the decision of the Division Bench is required to be reconsidered was the subject matter of consideration by the Apex Court, in

# LALA SHRI BHAGAWAN AND ANOTHER Vs. RAM CHAND AND ANOTHER, AIR 1965 SC 1767.

Therein, it has been held as follows:-

“It is hardly necessary to emphasise that considerations of judicial propriety and decorum require that if a learned Single Judge hearing a matter is inclined to take the view that the earlier decisions of the High Court, whether of a Division Bench or of a Single Judge, need to be reconsidered, he should not embark upon that enquiry sitting as a Single Judge, but should refer the matter to a Division Bench or, in a proper case, place the relevant papers before the Chief Justice to enable him to constitute a larger Bench to examine the question. That is the proper and traditional way to deal with such matters and it is founded on healthy principles of judicial decorum and propriety”.

(emphasis supplied)

11. In

# TRIBHOVANDAS PURUSHOTTAMDAS THAKKAR Vs. RATILAL MOTILAL PATEL, AIR 1968 SC 372

on the very same question, Apex Court has held as follows:-

“10. ………When it appears to a Single Judge or a Division Bench that there are conflicting decisions of the same Court, or there are decisions of other High Courts in India which are strongly persuasive and take a different view from the view which prevails in his or their High Court, or that a question of law of importance arises in the trial of a case, the Judge or the Bench passes an order that the papers be placed before the Chief Justice of the High Court with a request to form a special or Full Bench to hear and dispose of the case or the questions raised in the case. For making such a request to the Chief Justice, no authority of the Constitution or of the Charter of the High Court is needed, and by making such a request a Judge does not assume to himself the powers of the Chief Justice. A Single Judge does not by himself refer the matter to the Full Bench: he only requests the Chief Justice to constitute a Full Bench for hearing the matter. Such a Bench is constituted by the Chief Justice. The Chief Justice of a Court may as a rule, out of deference to the views expressed by his colleague, refer the case; that does not mean, however, that the source of the authority is in the order of reference……”

(emphasis supplied)

12. In

# CENTRAL BOARD OF DAWOODI BOHRA COMMUNITY AND ANOTHER VS. STATE OF MAHARASHTRA AND ANOTHER, (2005) 2 SCC 673

Apex Court having examined the law laid down by the Constitution Benches on the said question, has summed up the legal position and the relevant portion reads as follows:-

“12(3)…….. (i) the abovesaid rules do not bind the discretion of the Chief Justice in whom vests the power of framing the roster and who can direct any particular matter to be placed for hearing before any particular Bench of any strength.”

(emphasis supplied)

13. In

# NARASIMHA SETTY Vs. PADMA SETTY, ILR 1998 KARNATAKA 3230

with regard to the competency of a Single Judge to refer a case to a Full Bench is concerned, after having noticed the provisions contained in the Karnataka High Court Act, 1961 and the scope and ambit of the powers of the Chief Justice with regard to the posting of the cases before different Benches of the High Court and the decision of Apex Court, rendered in the case of LALA SHRI BHAGAWAN AND ANOTHER (supra), it has been held as follows:-

“17. Therefore, if a learned Single Judge of a High Court hearing a matter feels that the earlier judgment of a Division Bench of the Court requires reconsideration, then in absence of any statutory provision empowering him to refer the same to a larger bench, he can place the relevant papers before the Chief Justice to enable him to constitute a larger bench to examine the question.”

(emphasis supplied)

14. In

# STATE OF KARNATAKA AND OTHERS Vs. SRI. B. KRISHNA BHAT AND OTHERS, 2001 (2) KLJ 1 (FB)

a Five Judge Bench, considering the scope of the power and authority of the Chief Justice in regard to the practice and procedure of the High Court in hearing and deciding the cases, and the fact of S.9(xii) and other provisions of the Karnataka High Court Act and power and authority of the Chief Justice in the matter of constitution of Benches and allocation of judicial work and also the validity or otherwise of the notification dated 08.07.1997 directing listing of all writ petitions of the nature of Public Interest Litigation before the Division Benches, after detailed consideration, has concluded as follows:-

“96. The above discussions lead to following conclusions:-

(i) The Chief Justice’s discretion in determining the roster, that is, constitution of Benches and allocation of judicial work is absolute.

(ii) But in regard to fixing the quorum for hearing the different category of cases, the Chief Justice should follow the statutory provisions or rules. The power of Chief Justice in regard to constitution of Benches and allocation of judicial work has nothing to do with fixing of quorum for hearing of cases, under Section 9(xii) of the H.C. Act.

(iii) However, he has the discretion to refer any matter in regard to which a quorum has been fixed, to a larger Bench. Therefore, the Notification dated 8-7-1997 allocating Single Judge matter to Division Bench is valid.

(emphasis supplied)

15. It is implied that the authority of the Hon’ble Chief Justice in regard to the constitution of Benches and allocation of judicial work is absolute. Therefore, multiplying the previous decisions of this Court or the Apex Court will be of no advantage to the petitioners. Discussing each of the decisions cited by the learned advocates will lead to making this order unavoidably prolix.

16. In view of the authoritative pronouncements, noticed supra, and the position of law having been well settled, we are of the opinion that the course adopted by the learned Single Judge, directing the Registry to place the matter before the Hon’ble Chief Justice, to pass an order for constitution of an appropriate Bench to conclusively address the issue raised, cannot be said to be incorrect. Learned Single Judge has acted on healthy principles of judicial decorum and propriety and the order passed by the Hon’ble Chief Justice is in accordance with the settled principles of law laid down by the Apex Court and the Full Benches of this Court. Hence, the preliminary objection raised by Sri. R.L. Patil, being devoid of merit, we hold that the reference made is competent and constitution of the Special Bench on account of the facts and circumstances stated in para 2 supra, is justified.

17. Undisputedly, the respondent No.1-Bank advanced loan to the petitioners and the loan was secured by way of equitable mortgage executed in respect of the property bearing No.256, III Main, Banashankari III Stage, II Phase, VI Block, Bangalore-85. Original title deeds of the property was deposited with the Bank i.e., at the time of availing the loan. Since the petitioners committed default in repaying the loan, the Bank issued notice under S.13(2) of the Act and took steps under S.13(4) in respect of the said property. Auction notice was published and bid of respondent Nos.2 and 3 was accepted. Feeling aggrieved, the petitioners filed S.A.No.688/2012 before the Tribunal, to set aside the sale notice dated 25.09.2012 and the consequential action. The same having been dismissed, this writ petition was filed, though the statutory remedy of appeal, under S.18 of the Act, is available. The reason assigned in the writ petition for non-availing of appeal remedy before the Debts Recovery Appellate Tribunal is, that it requires deposit of huge court fee, which is neither efficacious nor feasible and it is misnomer to call it an alternative remedy.

18. Undisputedly, security interest, within the meaning of S.2(zf) of the Act, was created in respect of the aforesaid property, which is a ‘secured asset’, within the meaning of S.2(zc), in favour of the ‘secured creditor’ – respondent No.1, within the meaning of S.2(zd). On failure to repay the loan amount, which was declared as nonperforming asset, respondent No.1 enforced its security interest over the secured asset.

19. A perusal of S.13 of the SARFAESI Act shows that without the intervention of the Court or Tribunal, there can be enforcement of security interest by the secured creditor in accordance with the provisions of the Act. Sub-section(4) of S.13 envisages the ‘measures’ to secure the borrowers’ interest, when secured creditor proposes to proceed against the secured asset. One of the ‘measures’ provided by the statute is to take possession of the secured asset of the borrower, including the right of transfer by way of lease, assignment or realizing the secured asset. S.17 confers right to any aggrieved person to question the ‘measures’ referred to in sub-section(4) of S.13 of the Act, when taken by the secured creditor. Thus, if any aggrieved person has got any grievance against any ‘measures’ taken under sub-section(4) of S.13 of the Act, he can approach the Tribunal for the relief.

20. In

# UNION BANK OF INDIA Vs. PANCHANAN SUBUDHI, (2010) 15 SCC 552

the appellant extended financial facility to the respondent upon deposit of the title deeds and the building as security. Default in the matter of repayment having been committed, the loan account of the respondent was declared as ‘non performing asset’. O.A. was filed before the DRT. During the pendency of the O.A., the Bank issued a notice under S.13(2) of the SARFAESI Act and the same was followed by a notice under S.13(4). The Tribunal passed decree in favour of the Bank. The respondent challenged the proceedings initiated under the Act by filing a writ petition and during its pendency, approached the Bank for ‘one time settlement’. The Bank agreed for settlement but the respondent failed to abide by the conditions of the settlement. Consequently, Bank issued notice for possession of the secured assets which was challenged by filing another writ petition, which was disposed of directing the loanee to pay the amount in instalments for liquidating the dues of the Bank. The Bank having assailed the said order, the Apex Court while allowing the appeal and setting aside the impugned order, has held as follows:-

“ 7. …. there was no justification for the High Court to entertain the writ petition and that too by ignoring the fact that a statutory alternative remedy was available to the respondent under Section 17 of the Act.”

21. The object of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short, ‘the RDDB Act’), is to provide for the establishment of Tribunal for expeditious adjudication and recovery of debts due to Banks and financial institutions and for matters connected therewith or incidental thereto. The RDDB Act creates a special machinery for speedy recovery of dues of the Banks and financial institutions. S.17 of the RDDB Act deals with jurisdiction, powers and authority of the Tribunals. S.18 bars the jurisdiction of ordinary Court or Authority, in respect of matters falling within the jurisdiction of the Tribunal, as specified in S.17. An appeal to Appellate Tribunal is provided under S.20. The power of the Tribunal extends to determining the debt due and its realization. The action taken by the Bank(s) or the financial institution(s), under the SARFAESI Act, can be assailed before the Debts Recovery Tribunal and further by way of an appeal before the Debts Recovery Appellate Tribunal. S.22 of RDDB Act makes it clear that the Tribunal and Appellate Tribunal shall not be bound by the procedure laid down by CPC but shall be guided by the principles of natural justice and, subject to the rules framed. The Tribunal and Appellate Tribunal have been conferred with powers to regulate their own procedure. Thus, it is clear that the Tribunal and Appellate Tribunal which are specialized institutions with expertise, have been established to decide the matter(s) preferred before them.

22. While dealing with the purpose of the RDDB Act and how it works, Apex Court, in

# UNITED BANK OF INDIA Vs. SATYAWATI TONDON, (2010) 8 SCC 110

has held as follows:-

“5. An analysis of the provisions of the DRT Act shows that primary object of that Act was to facilitate creation of special machinery for speedy recovery of the dues of banks and financial institutions. This is the reason why the DRT Act not only provides for establishment of the Tribunals and the Appellate Tribunals with the jurisdiction, powers and authority to make summary adjudication of applications made by banks or financial institutions and specifies the modes of recovery of the amount determined by the Tribunal or the Appellate Tribunal but also bars the jurisdiction of all courts except the Supreme Court and the High Courts in relation to the matters specified in Section 17…..”

23. The SARFAESI Act was enacted to regulate securitisation and reconstruction of financial assets and enforcement of security interest and for matters connected therewith or incidental thereto. Inter alia, one of the main objects of the SARFAESI Act is to clothe the Banks and financial institutions with power to take possession of securities and sell them. The significant provisions of the SARFAESI Act have been noted by the Apex Court, in the case of

# MARDIA CHEMICALS LTD. Vs. UNION OF INDIA, (2004) 4 SCC 311

wherein, the vires of the Act was examined and upheld. After referring to the statement of objects and reasons and while upholding the constitutional validity, it has been held as follows:-

“81. In view of the discussion held in the judgment and the findings and directions contained in the preceding paragraphs, we hold that the borrowers would get a reasonably fair deal and opportunity to get the matter adjudicated upon before the Debt Recovery Tribunal. The effect of some of the provisions may be a bit harsh for some of the borrowers but on that ground the impugned provisions of the Act cannot be said to be unconstitutional in view of the fact that the object of the Act is to achieve speedier recovery of the dues declared as NPAs and better availability of capital liquidity and resources to help in growth of economy of the country and welfare of the people in general which would subserve the public interest.

(emphasis supplied)

24. In AUTHORISED OFFICER, INDIAN OVERSEAS BANK Vs. M/S. ASHOK SAW MILL, (2009) 8 SCC 366, with regard to the SARFAESI Act and the jurisdiction of Tribunal, under S.17, Apex Court has held as follows:-

“33. It is clear that while enacting the SARFAESI Act the legislature was concerned with measures to regulate Securitisation and reconstruction of financial assets and enforcement of security interest. The Act enables the Banks and financial institutions to realize long-term assets, manage problems of liquidity, asset liability mismatches and improve recovery by exercising powers to take possession of securities, sell them and reduce non-performing assets by adopting measures for recovery of reconstruction.

*** *** ***

35. In order to prevent misuse of such wide powers and to prevent prejudice being caused to a borrower on account of an error on the part of the Banks or financial institutions, certain checks and balances have been introduced in Section 17 which allow any person, including the borrower, aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor, to make an application to the DRT having jurisdiction in the matter within 45 days from the date of such measures having taken for the reliefs indicated in sub-section (3) thereof.

36. The intention of the legislature is, therefore, clear that while the Banks and financial institutions have been vested with stringent powers for recovery of their dues, safeguards have also been provided for rectifying any error or wrongful use of such powers by vesting the DRT with authority after conducting an adjudication into the matter to declare any such action invalid and also to restore possession even though possession may have been made over to the transferee.”

(emphasis supplied)

25. In SATYAWATI TONDON, Apex court, while restating the purpose of bringing the SARFAESI Act and with regard to the role of Tribunal, has held as follows:-

“23. Sub-section (2) of Section 17 casts a duty on the Tribunal to consider whether the measures taken by the secured creditor for enforcement of security interest are in accordance with the provisions of the Act and the Rules made thereunder. If the Tribunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that the measures taken by the secured creditor are not in consonance with sub-section (4) of Section 13, then it can direct the secured creditor to restore management of the business or possession of the secured assets to the borrower. On the other hand, if the Tribunal finds that the recourse taken by the secured creditor under sub-section (4) of Section 13 is in accordance with the provisions of the Act and the Rules made thereunder, then, notwithstanding anything contained in any other law for the time being in force, the secured creditor can take recourse to one or more of the measures specified in Section 13(4) for recovery of its secured debt.

24. Sub-section (5) of Section 17 prescribes the time-limit of sixty days within which an application made under Section 17 is required to be disposed of. The proviso to this sub-section envisages extension of time, but the outer limit for adjudication of an application is four months. If the Tribunal fails to decide the application within a maximum period of four months, then either party can move the Appellate Tribunal for issue of a direction to the Tribunal to dispose of the application expeditiously.”

(emphasis supplied)

26. Sri R.L. Patil, contended that the power of judicial review under Articles 226 and 227 of the Constitution is an inviolable part of the basic structure of the Constitution and the same cannot be denied much less ousted by the statutes made by the Parliament i.e., the RDDB Act and the SARFAESI Act. He submitted that the existence of statutory remedy is not a rule of law but a law of convenience and discretion and, that in appropriate case, High Court can entertain writ petition and, that this is a case of violation of the principles of natural justice and gross injustice. He further submitted that the statutory remedy provided being conditional, requiring the deposit of huge amount, the same is neither efficacious nor feasible and it being a misnomer to call as an alternate remedy, the writ petition filed is maintainable. (with regard to the tenability or otherwise of the contention requiring the predeposit i.e., to maintain an appeal under S.18 of SARFAESI Act, see para Nos. 47 and 48 infra).

27. Sri Ashok Kumar, on the other hand, contended that the writ petition cannot be entertained contrary to the RDDB Act, which is a special enactment, providing for an appellate remedy, which is efficacious. He submitted that there is no valid reason for bypassing the statutory remedy and the mere insistence of deposit to avail the statutory remedy of appeal, cannot be taken exception to. He submitted that there being no good ground to invoke the extra-ordinary jurisdiction, the writ petition is not entertainable and that the judicial discretion is not absolute or unregulated, much less unguided.

28. Article 226 empowers the High Court to issue prerogative writs. Article 227 relates to the power of superintendence of High Courts over all Courts and Tribunals. However, the power of judicial superintendence under Article 227 of the Constitution has to be exercised sparingly when there is a patent error or gross injustice in the view taken by the subordinate Court / Tribunal (See

# JASBIR SINGH Vs. STATE OF PUNJAB, (2006) 8 SCC 294

Judicial review under the said Articles is a basic feature of the Constitution.

29. In

# L. CHANDRA KUMAR Vs. UNION OF INDIA, (1997) 3 SCC 261

Apex Court, while dealing with the essential and basic feature of the constitution – power of review under Articles 226 and 227 by the High Courts and of the Supreme Court under Article 32, has held as follows:-

75. In Keshav Singh, Re (1965) 1 SCR 413, while addressing this issue, Gajendragadhkar, CJ stated as follows: (SCC at pp. 493-494)

“If the power of the High Courts under Article 226 and the authority of this Court under Article 32 are not subject to any exceptions, then it would be futile to contend that a citizen cannot move the High Courts or this Court to invoke their jurisdiction even in cases where his fundamental rights have been violated. The existence of judicial power in that behalf must necessarily and inevitably postulate the existence of a right in the citizen to move the Court in that behalf; otherwise the power conferred on the High Courts and this Court would be rendered virtually meaningless. Let it not be forgotten that the judicial power conferred on the High Courts and this Court is meant for the protection of the citizens’ fundamental rights, and so, in the existence of the said judicial power itself is necessarily involved the right of the citizen to appeal to the said power in a proper case.”

(emphasis supplied in original)

30. Basic principle for exercising the power under Article 227 was considered by the Apex Court, in

# BABUBHAI MULJIBHAI PATEL Vs. NANDLAL KHODIDAS BAROT, (1974) 2 SCC 706

and it has been held as follows:-

“10. Exercise of the jurisdiction is no doubt discretionary, but the discretion must be exercised on sound judicial principles. When the petition raises complex questions of fact, which may for their determination require oral evidence to be taken, and on that account the High Court is of the view that the dispute should not appropriately be tried in a writ petition, the High Court may decline to try a petition (see

# Gunwant Kaur v. Bhatinda Municipality (1969) 3 SCC 769

(emphasis supplied)

31. In

# MAFATLAL INDUSTRIES LTD. Vs. UNION OF INDIA, (1997) 5 SCC 536

Apex Court, while considering provisions of the Excise Act and the Customs Act, has held, that the jurisdiction of the High Court under Article 226 and the Apex Court under Article 32, though cannot be circumscribed by the provisions of the said enactments, the courts will certainly have due regard to the legislative intent evidenced by the provisions of the statutes and would exercise their jurisdiction consistent with the statutory provisions. In part IV of the Judgment, the legal position has been summarised and the relevant portion reads as follows:-

“108(i)………..While the jurisdiction of the High Courts under Article 226 – and of this Court under Article 32 – cannot be circumscribed by the provisions of the said enactments, they will certainly have due regard to the legislative intent evidenced by the provisions of the said Acts and would exercise their jurisdiction consistent with the provisions of the Act. The writ petition will be considered and disposed of in the light of and in accordance with the provisions of Section 11-B. This is for the reason that the power under Article 226 has to be exercised to effectuate the rule of law and not for abrogating it.”

(emphasis supplied)

32. In

# KANAIYALAL LALCHAND SACHDEV Vs. STATE OF MAHARASHTRA, (2011) 2 SCC 782

while considering the question of maintainability of the writ petition, when alternate remedy is available, while upholding the decision of the High Court, dismissing the writ petition filed on the ground of existence of an alternative remedy, under S.17 of the SARFAESI Act, Apex Court has held as follows:-

“23. In our opinion, therefore, the High Court rightly dismissed the petition on the ground that an efficacious remedy was available to the appellants under Section 17 of the Act. It is well settled that ordinarily relief under Articles 226/227 of the Constitution of India is not available if an efficacious alternative remedy is available to any aggrieved person. (See Sadhana Lodh v. National Insurance Co. Ltd., Surya Dev Rai v. Ram Chander Rai and SBI v. Allied Chemical Laboratories.)

24. In City and Industrial Development Corpn. v. Dosu Aardeshir Bhiwandiwala this Court had observed that:

“30. The Court while exercising its jurisdiction under Article 226 is duty- bound to consider whether:

(a) adjudication of the writ petition involves any complex and disputed questions of facts and whether they can be satisfactorily resolved;

(b) the petition reveals all material facts;

(c) the petitioner has any alternative or effective remedy for the resolution of the dispute;

(d) the person invoking the jurisdiction is guilty of unexplained delay and laches;

(e) ex facie barred by any laws of limitation;

(f) grant of relief is against public policy or barred by any valid law; and host of other factors.”

(emphasis supplied)

33. In

# NIVEDITA SHARMA Vs. CELLULAR OPERATORS ASSN. OF INDIA, (2011) 14 SCC 337

Apex Court has held, that when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained, ignoring the statutory dispensation.

34. In

# SOUTHERN ELECTRICITY SUPPLY CO. OF ORISSA LTD. Vs. SRI SEETARAM RICE MILL,(2012) 2 SCC 108

Apex Court has held that it should only be for the specialised tribunal or the appellate authority to examine the merits of assessment or even the factual matrix of the case. The relevant portion of the Judgment reads as follows:-

“80. It is a settled canon of law that the High Court would not normally interfere in exercise of its jurisdiction under Article 226 of the Constitution of India where statutory alternative remedy is available. It is equally settled that this canon of law is not free of exceptions. The courts, including this Court, have taken the view that the statutory remedy, if provided under a specific law, would impliedly oust the jurisdiction of the civil courts. The High Court in exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India can entertain writ or appropriate proceedings despite availability of an alternative remedy. This jurisdiction, the High Court would exercise with some circumspection in exceptional cases, particularly, where the cases involve a pure question of law or vires of an Act are challenged. This class of cases we are mentioning by way of illustration and should not be understood to be an exhaustive exposition of law which, in our opinion, is neither practical nor possible to state with precision. The availability of alternative statutory or other remedy by itself may not operate as an absolute bar for exercise of jurisdiction by the courts. It will normally depend upon the facts and circumstances of a given case. The further question that would inevitably come up for consideration before the Court even in such cases would be as to what extent the jurisdiction has to be exercised.

81. Should the courts determine on merits of the case or should they preferably answer the preliminary issue or jurisdictional issue arising in the facts of the case and remit the matter for consideration on merits by the competent authority? Again, it is somewhat difficult to state with absolute clarity any principle governing such exercise of jurisdiction. It always will depend upon the facts of a given case. We are of the considered view that interest of administration of justice shall be better subserved if the cases of the present kind are heard by the courts only where they involve primary questions of jurisdiction or the matters which go to the very root of jurisdiction and where the authorities have acted beyond the provisions of the Act. However, it should only be for the specialised tribunal or the appellate authorities to examine the merits of assessment or even the factual matrix of the case.”

(emphasis supplied)

35. In

# CICILY KALLARACKAL Vs. VEHICLE FACTORY, (2012) 8 SCC 524

Apex Court has issued a direction of caution, that it will not be a proper exercise of the jurisdiction by the High Court to entertain a writ petition against such orders against which statutory appeal lies. The relevant portion of the Judgment reads as follows:-

“4. Despite this, we cannot help but state in absolute terms that it is not appropriate for the High Courts to entertain writ petitions under Article 226 of the Constitution of India against the orders passed by the Commission, as a statutory appeal is provided and lies to this Court under the provisions of the Consumer Protection Act, 1986. Once the legislature has provided for a statutory appeal to a higher court, it cannot be proper exercise of jurisdiction to permit the parties to bypass the statutory appeal to such higher court and entertain petitions in exercise of its powers under Article 226 of the Constitution of India.

(emphasis supplied)

36. In

# CIT Vs. CHHABIL DASS AGRAWAL, (2014) 1 SCC 603

Apex Court has held, that when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation.

37. In

# UNION OF INDIA AND ANOTHER Vs. GUWAHATI CARBON LIMITED, (2012) 11 SCC 651

the Customs, Excise and Service Tax Appellate Tribunal, passed the order inter alia holding that the Guwahati Carbon Limited is not entitled to include freight and insurance charges in the assessable value and therefore the duty levied under the Central Excise Act, 1944 requires to be recalculated. Aggrieved by the said order, the Guwahati Carbon Limited filed writ petition. The writ petition though admitted on the first date of hearing, was subsequently disposed of on the ground that the petitioner can avail the alternate remedy as provided by the Central Excise Act. The said order having been questioned, in the appeal, the Division Bench allowed the same on the ground that the writ court, in exercise of the power under Article 226 of the Constitution of India, has vast powers to decide any question that may arise under the provisions of the Central Excise Act. The said Judgment having been assailed before the Apex Court, taking note of the principles laid down in the cases of (i)

# MUNSHI RAM Vs. MUNICIPAL COMMITTEE, CHHEHARTA,(1979) 3 SCC 83

(ii)

# TITAGHUR PAPER MILLS CO. LTD. Vs. STATE OF ORISSA, (1983) 2 SCC 433

(iii)

# RASHID AHMED Vs. MUNICIPAL BOARD, KAIRANA, AIR 1950 SC 163

(iv)

# WHIRLPOOL CORPN. Vs. REGISTRAR OF TRADE MARKS, (1998) 8 SCC 1

and S.35-G of the Central Act, 1944 providing for appeal to the High Court from the order passed in an appeal by the Appellate Tribunal, while allowing the appeal, it has been held as follows:-

“15. In our opinion, the assessee ought not to have filed a writ petition before the High Court questioning the correctness or otherwise of the orders passed by the Tribunal. The Excise Law is a complete code in order to seek redress in excise matters and hence may not be appropriate for the writ court to entertain a petition under Article 226 of the Constitution. Therefore, the learned Single Judge was justified in observing that since the assessee has a remedy in the form of a right of appeal under the statute, that remedy must be exhausted first. The order passed by the learned Single Judge, in our opinion, ought not to have been interfered with by the Division Bench of the High Court in the appeal filed by the respondent assessee.”

(emphasis supplied)

38. Sri R.L.Patil, contended that the view expressed in Hotel Vandana Palace case with regard to the maintainability of writ petition i.e., without filing the appeal before the DRAT, under S.18 of the Act being the correct position of law, the decision in the case of Smt.Lily Joseph, expressing a contrary view is unsound and is liable to be declared as per incuriam.

39. Sri R. Ashok Kumar, on the other hand supported the conclusion arrived at in Smt.Lily Joseph case and contended that the finding recorded on point (ii), in the case of Hotel Vandana Place case, being in ignorance of well settled principles of law and also the binding decision in the case of SATYAWATI TONDON, is liable to be declared as per incuriam. Learned advocate submitted that the Hotel Vandana Palace case having been decided in the peculiar facts, which can be seen from the opening sentence of para 23, does not constitute a binding precedent especially on account of not noticing and following the decision of the Apex Court in SATYAWATI TONDON, wherein, the material aspects and the significance of S.18 of SARFAESI Act has been adverted to in detail. He submitted that the decision in the case of KANAIYALAL LALCHAND SACHDEV has been misread and misinterpreted without any attempt being made to understand the legislative intent behind the SARFAESI Act and true purport of the ratio of law laid down in the said decision by the Division Bench which has decided Hotel Vandana Place case. He further submitted that the judgment in Smt.Lily Joseph case has been correctly rendered, based on the law laid down in KANAIYALAL LALCHAND SACHDEV and hence is a binding precedent.

40. In view of the rival contentions and the reference made by the learned Single Judge, extracted supra, the question for determination is “Whether the view expressed by the Division Bench of this Court in Hotel Vandana Palace case, with regard to the maintainability of writ petition, despite the availability of an alternative remedy of appeal, lays down the correct law or the contrary view in Smt.Lily Joseph case is the correct law?”

41. The Division Bench, while answering point No.(ii) formulated for consideration, at para 11, in the case of Hotel Vandana Palace, has stated (at paras 24, 25 and 26) as follows:-

(i) The writ petition was not been dismissed on the ground of maintainability of non exercising the power (must be read as non availing the remedy) granted under S.18 of the Act, but was rejected on the ground that the earlier writ petition challenging the sale notice had been dismissed.

(ii) Without deposit of either 50% or 25%, as required under S.18 of the SARFAESI Act, an appeal cannot be filed.

(iii) Decision of Apex Court rendered in KANAIYALAL LALCHAND SACHDEV has no application, on account of the fact that there is no disputed questions of fact and the question arising for decision is only “whether the Bank has followed the Rules before selling the property”.

(iv) In the special circumstances of the case i.e., the property worth several crores was sold in public auction, without following the procedure, and in such a case, the person who has lost the property in a sale conducted by the Bank for non payment of more than 5 crores of rupees, it is difficult for a person like appellant to approach the Tribunal to file an appeal by depositing 50% or 25% of the amount due.

In the peculiar facts and circumstances of the case, with the aforesaid reasoning, the writ petition was held as maintainable.

42. In Smt.Lily Joseph case, the challenge in the writ petition was to an order passed by the Tribunal under S.17 of the SARFAESI Act. The writ petition was dismissed by the learned Single Judge on the ground of availability of alternative remedy of appeal to the DRAT. By referring to the decision of the Apex Court in KANAIYALAL LALCHAND SACHDEV, the Division Bench has dismissed the writ appeal, by stating that the law is well settled on the issue. It is to be pointed out that without raising a point for consideration and assigning reasons, the conclusion has been arrived at. There is no express declaration of law or authority of a general nature, to reckon the decision as binding, as is contemplated by Article 141 of the Constitution.

43. Presently, we shall deal with the concept of per incuriam.

44. A decision rendered in ignorance of a binding precedent and/or in ignorance of the statutory provision, would be held to have been rendered per incuriam (See para 98 of the decision in

# SUBHASH CHANDRA AND ANOTHER Vs. DELHI SUBORDINATE SERVICES SELECTION BOARD AND OTHERS, (2009) 15 SCC 458

45. In

# GOVT. OF A.P. AND ANOTHER Vs. B. SATYANARAYANA RAO (DEAD) BY LRS. AND OTHERS, (2004) 4 SCC 262

while dealing with the concept of per incuriam, Apex Court has held as follows:-

“8………The rule of per incuriam can be applied where a court omits to consider a binding precedent of the same court or the superior court rendered on the same issue or where a court omits to consider any statute while deciding that issue…….”

46. In

# GENERAL MANAGER, SRI SIDDESHWARA COOPERATIVE BANK LIMITED AND ANOTHER, Vs. IKBAL AND OTHERS, (2013) 10 SCC 83

the material facts were that the respondent availed housing loan from the appellant by mortgaging certain immovable property. As the respondent committed default in repayment of the loan, the Bank issued notice to him under S.13(2) of the SARFAESI Act. Later, the Bank published auction notice and the highest bid received was accepted. The auction-purchaser deposited 25% of the sale consideration and did not make payment of the balance amount within 15 days of the confirmation of sale. The auction-purchaser made delayed final payment and the Bank issued in his favour a sale certificate. The proceeds realised by auction sale having fallen short of the total outstanding amount against the borrower, the Bank filed a dispute before the Registrar of Co-Operative Societies for recovery of outstanding amount and an exparte award was passed. At that stage, by filing a writ petition, the borrower challenged the sale certificate issued in favour of the auction-purchaser. The learned Single Judge held that the mandatory requirement of Rule 9 was not followed and that therefore despite the remedy of appeal to the borrower, provided under S.17 of the SARFAESI Act, a case was made out under S.226 of the Constitution and the same was affirmed by the Division Bench. Feeling aggrieved, the Bank and the auction- purchaser approached the Apex Court. While allowing the appeal and setting aside the impugned orders and by taking note of the law laid down in SATYAWATI TONDON’S case, it was held as follows:-

“23. There is one more aspect in the matter which has troubled us. Against the action of the Bank under Section 13(4) of the SARFAESI Act, the borrower had a remedy of appeal to the Debts Recovery Tribunal (DRT) under Section 17. The remedy provided under Section 17 is an efficacious remedy. The borrower did not avail of that remedy and further remedies from that order and instead directly approached the High Court in extraordinary jurisdiction under Article 226 of the Constitution of India.

*** *** ***

27. No doubt an alternative remedy is not an absolute bar to the exercise of extraordinary jurisdiction under Article 226 but by now it is well settled that where a statute provides efficacious and adequate remedy, the High Court will do well in not entertaining a petition under Article 226. On misplaced considerations, statutory procedures cannot be allowed to be circumvented.

(emphasis supplied)

47. In

# NARAYAN CHANDRA GHOSH Vs. UCO BANK AND OTHERS, (2011) 4 SCC 548

the material facts were, that the appellant/borrower, filed an appeal before the DRAT and in that appeal, an application was filed under S.18(1) of the SARFAESI Act. The DRAT exempted the appellant from making any deposit in terms of the second proviso to S.18 of the Act, before entertaining the appeal against the order passed by the DRT. The said order, when questioned by the Bank having been set aside by the High Court and the borrower having approached the Apex Court, the question raised for consideration was “whether the Appellate Tribunal has the jurisdiction to exempt the person, preferring an appeal under Section 18 of the Act from making any pre-deposit in terms of the said provision?”. While deciding the case, Apex Court has held as follows:-

“7. Section 18(1) of the Act confers a statutory right on a person aggrieved by any order made by the Debts Recovery Tribunal under Section 17 of the Act to prefer an appeal to the Appellate Tribunal. However, the right conferred under Section 18(1) is subject to the condition laid down in the second proviso thereto. The second proviso postulates that no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal fifty per cent of the amount of debt due from him, as claimed by the secured creditors or determined by the Debts Recovery Tribunal, whichever is less. However, under the third proviso to the sub-section, the Appellate Tribunal has the power to reduce the amount, for the reasons to be recorded in writing, to not less than twenty-five per cent of the debt, referred to in the second proviso. Thus, there is an absolute bar to entertainment of an appeal under Section 18 of the Act unless the condition precedent, as stipulated, is fulfilled. Unless the borrower makes, with the Appellate Tribunal, a pre-deposit of fifty per cent of the debt due from him or determined, an appeal under the said provision cannot be entertained by the Appellate Tribunal. The language of the said proviso is clear and admits of no ambiguity.

8. It is well-settled that when a Statute confers a right of appeal, while granting the right, the Legislature can impose conditions for the exercise of such right, so long as the conditions are not so onerous as to amount to unreasonable restrictions, rendering the right almost illusory. Bearing in mind the object of the Act, the conditions hedged in the said proviso cannot be said to be onerous. Thus, we hold that the requirement of pre-deposit under sub-section (1) of Section 18 of the Act is mandatory and there is no reason whatsoever for not giving full effect to the provisions contained in Section 18 of the Act. In that view of the matter, no court, much less the Appellate Tribunal, a creature of the Act itself, can refuse to give full effect to the provisions of the Statute. We have no hesitation in holding that deposit under the second proviso to Section 18(1) of the Act being a condition precedent for preferring an appeal under the said section, the Appellate Tribunal had erred in law in entertaining the appeal without directing the appellant to comply with the said mandatory requirement.”

(emphasis supplied)

48. In the case of

# PARSN MEDICINAL PLANTS PRIVATE LIMITED AND ANOTHER Vs. INDIAN BANK AND OTHERS, (2011) 15 SCC 253

the material facts were, the finding of the Debts Recovery Appellate Tribunal that the appellants / guarantors need not make any deposit to maintain the appeal was assailed by the Bank and also by the auction-purchaser by filing writ petitions and by contending that the amount paid / deposited by the auction-purchaser cannot be adjusted towards the deposit to be made by the borrowers / guarantors, while preferring appeal under S.18 of the SARFAESI Act and also that there cannot be complete waiver of the deposit, as was prayed on the part of the guarantors, before the Appellate Tribunal and was accepted by the Appellate Tribunal. Repelling the contention urged on behalf of the guarantors that the issue of waiver is a matter completely between the appellant / guarantors and the Appellate Tribunal and no prejudice, whatsoever, has been caused to the Bank so as to knock the doors of the writ court and that the Appellate Tribunal is completely within its bounds in passing the order, by finding that the entire controversy is with regard to waiver of deposit amount, Apex Court, after extracting S.18 of the SARFAESI Act, has held as follows:-

“17………..The language used in this section is very plain and clear, making it unambiguously clear that any person aggrieved by the order of the Debts Recovery Tribunal passed under Section 17 may prefer appeal to the Debts Recovery Appellate Tribunal by paying necessary fee and the second proviso to sub-section (1) makes it clear that no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal fifty per cent of the amount of debt due from him. However, under the third proviso to sub-section (1), power has been given to the Appellate Tribunal to reduce the deposit amount, for the reasons to be recorded in writing, to not less than twenty-five per cent of debt referred to in the second proviso. Thus, though a discretionary power has been conferred on the Debts Recovery Appellate Tribunal under the third proviso to sub-section (1), the discretion is not an absolute one, but a limited one. While exercising the discretion conferred on it, provided for under the third proviso to sub-section (1), the Appellate Tribunal has been mandated not to reduce the deposit amount to not less than twenty-five per cent of the debt referred to in the second proviso.

18. While such is the legal mandate, in the impugned order, the first respondent Appellate Tribunal has granted complete waiver of the deposit amount to the appellants/guarantors, which has not been contemplated under law. In the interpretation of statutes, the courts always presume that the legislature inserted every part thereof for a purpose and the legislative intention is that every part of the statute should have effect. The legislature is deemed not to waste its words or to say anything in vain. By an interpretative process, the Court cannot reach a conclusion which makes it impossible for remedies provided for under the law to be worked out. The purposive interpretation requires that any interpretation which is unjust or absurd must be eschewed and the Court must adopt principles of reasonable and harmonious construction in consonance with the avowed statutory purpose. Hence, impugned order passed by the first respondent Appellate Tribunal is absolutely bereft of any power granted to it and therefore, the same needs to be set aside.”

(emphasis supplied)

49. In

# T.P.VISHNU KUMAR Vs. CANARA BANK, P.N. ROAD, TIRUPPUR AND OTHERS, (2013) 10 SCC 652

the material facts were that the Bank filed O.A. before the DRT to pass a decree directing the defendants, to pay the quantified sum along with interest. I.As. were filed to produce the extract of the accounts and the documents relating to the loan transactions. The applications having been contested were rejected by the Tribunal, against which, the writ petitions were filed and the same was opposed on the ground of availability of alternative remedy under the Act. Writ petitions having been allowed, the Bank took up the matter in appeal and the Division Bench having allowed the writ appeals by holding that the borrower had not availed the alternative remedy available under S.20 of the RDDB Act, Apex Court was approached for relief. Considering the purpose for which the Tribunal has been established and the Act providing for a mechanism by way of appeal as per S.20 to the Appellate Tribunal, it was held as follows:-

“10……When the Act itself provides for a mechanism, by an appeal under Section 20 of the Act, in our view, the High Court is not justified in invoking jurisdiction under Article 226 of the Constitution of India to examine that the rejection of the applications by the Tribunal was correct or not…….”

50. The Division Bench which decided the Hotel Vandana Palace case, while recording finding on point No.(ii) unfortunately, has not noticed the binding decision in SATYAWATI TONDON’S case, wherein, the Apex Court while being conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue prerogative writs being very wide and that there can be no express limitation on exercise of that power, by expressing serious concern, has held as follows:-

“ 44…..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 the power under Article 226 of the Constitution.

*** *** ***

“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 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.”

(emphasis supplied)

51. Article 141 of the Constitution of India reads as follows:-

“141. Law declared by Supreme Court to be binding on all courts.- The law declared by Supreme Court shall be binding on all courts within the territory of India.”

Article 141 of the Constitution provides that the law declared by the Apex Court shall be binding on all Courts within the territory of India. Therefore, the ratio decidendi declared in SATYAWATI TONDON’S case was binding and ought to have been applied, when Hotel Vandana Palace case was decided.

52. The finding recorded on point No.(ii) in the case of Hotel Vandana Palace having been rendered, as is evident from para 23 of the judgment itself, on the special facts and circumstances of the said case, cannot be a binding precedent. In the case of Smt.Lily Joseph, the Division Bench has not assigned reasons, while holding the writ petition as not maintainable, except making reference to the decision in the case of KANAIYALAL LALCHAND SACHDEV.

52.1. Sri R.L. Patil, submitted that the Judgment rendered in Hotel Vandana Palace case was questioned before the Apex Court and the appeal was dismissed, in the case of

# VASU P. SHETTY Vs. HOTEL VANDANA PALACE, (2014) 5 SCC 660

and hence the doctrine of merger applies. He further submitted that the decision in Hotel Vandana Palace case, thus, having attained finality is a binding precedent.

52.2. Sri R. Ashok Kumar, on the other hand, submitted that, the mere fact that appeal preferred against the decision in VASU P. SHETTY case was dismissed by the Apex Court does not mean that the issue under consideration viz., point No.(ii) raised in Hotel Vandana Palace case as having been determined by the Apex Court. He submitted that the Division Bench while deciding Hotel Vandana Palace case, having overlooked the decision in SATYAWATI TONDON’S case and also misinterpreted the ratio of law laid down in KANAIYALAL LALCHAND SACHDEV case, it is open to this Bench to go into the issue and differ from the conclusion reached on point No.(ii) in Hotel Vandana Palace case by the Division Bench.

52.3. In view of the rival contentions, the question that arises is ‘whether, the decision in VASU P. SHETTY case has approved the view of the Division Bench on point No.(ii) raised in Hotel Vandana Palace case’? 52.4. In KUNHAYAMMED Vs. STATE OF KERALA, (2000) 6 SCC 359, Apex Court has reiterated that the doctrine of merger is not of universal application or unlimited application; the nature of jurisdiction exercised by the superior Forum and the content or subject matter of challenge laid or which could have been laid, shall have to be kept in view.

52.5. The decision in VASU P. SHETTY’s case clearly reveals that neither there is any consideration with regard to the writ being not entertainable on account of availability of alternative remedy under S.18 of the SARFAESI Act nor the validity of finding on point No.(ii) recorded by the Division Bench has been gone into.

52.6. In VASU P. SHETTY’s case, the opinion of the Division Bench in Hotel Vandana Palace case on the interpretation of sub-rules (5) and (6) of Rule 8 of the Rules was held as flawless and the only question considered as can be seen from para 19 of the decision is, as to whether it can be held that the borrower in the case had waived the mandatory provisions of Rules 8 and 9 of the Rules. Hence, it cannot be said that the remaining part of the decision in the case of Hotel Vandana Palace as having merged in the order passed by the Apex Court in the case of Vasu P. Shetty. Thus, the view expressed by the Division Bench of this Court in Hotel Vandana Palace, on point No.(ii), is open to reconsideration by a coram of more than two Judges.

53. When extraordinary writ remedy is invoked, despite the availability of an alternative remedy, the Court should at the threshold, examine, whether the petition can be entertained having regard to the pleading in the petition, more particularly, the reason(s) stated for bypassing of the alternative remedy. In a catena of decisions, it has been held by the Apex Court, that writ petition under Article 226 of the Constitution should not be entertained when the alternate remedy is available under the Act, unless exceptional circumstances are made out. The writ remedy cannot be permitted to be availed as a routine / matter of course, but only in exceptional circumstances. The Apex Court has recognized some exceptions to the rule of alternative remedy i.e., where the statutory body has not acted in accordance with the provisions of the enactment in question or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of principles of natural justice, or when the vires of the statute is under challenge.

54. Unless the Court is convinced that the case falls under the exceptional categories, the writ petition filed against the order of the Tribunal, passed in exercise of the jurisdiction under S.17 of the SARFAESI Act, on account of the legislative intent behind the enactment of the SARFAESI Act and RDDB Act and the ratio of law laid down by the Apex Court in the cases of (1) Kanaiyalal Lalchand Sachdev (2) Satyawati Tondon and (3) Sri Siddeshwara Co.Op. Bank Ltd., cannot be entertained, as the approach of the High Court should be consistent with the provisions of the statutes and also the law laid down by the Apex Court, mandated by Article 141 of the Constitution.

In view of the aforesaid discussion, we are of the opinion that Hotel Vandana Palace case does not lay down the correct position of law i.e., in so far as point No.(ii) answered therein. Hence, the finding recorded on point No.(ii), in Hotel Vandana Palace case, is declared as per incuriam. Needless to say that any decision(s) of this Court which take(s) the view contrary to the law laid down by the Apex Court, in (1) Kanaiyalal Lalchand Sachdev (2) Satyawati Tondon and (3) Sri Siddeshwara Co.Op. Bank Ltd., does not lay down the correct law on the question involved in this Reference. The Reference is answered accordingly.

The petition be now listed before the learned Single Judge, to decide in the first instance, the entertainability or otherwise of the writ petition by keeping in view the position of law, as above.

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