Writ Petition Cannot Be Filed Before Seeking Remedy Under Section 17 Of SARFAESI Act: Madras HC: R Ganesan Vs M/s ASREC (India) Limited

DATE OF JUDGEMENT
23 December 2021

BENCH
The Hon'ble Mr. Justice M. Duraiswamy
The Hon'ble Mr. Justice J.Sathya Narayana Prasad

PARTIES
Petitioner- R. Ganesan
Respondent- M/s. ASREC (India) Limited

SUBJECT

Exhausting the remedy available under Section 17 of SARFESI Act an essential pre-requisite to challenging SARFESI proceedings through a writ petition under Article 226 of the Indian Constitution.

IMPORTANT PROVISIONS

Article 226 of the constitution of India

Power of High Courts to issue certain writs

1. Notwithstanding anything in Article 32 every High Court shall have powers, throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, within those territories’ directions, orders, or writs, including writs in the nature of habeas corpus, mandamus, prohibitions, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose.

Section 17 of the SARFAESI Act

Right to appeal

1. Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, [may make an application along with such fee, as may be prescribed,] to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measure had been taken

OVERVIEW

The petitioner had filed a writ petition in the Madras High Court under Article 226 of the constitution challenging the order passed on 11.11.2021 by the Chief Judicial Magistrate of Tiruppur District.

This order was passed under Section 14 of the SARFAESI Act. It was requested that the order be quashed and respondent 1 be directed to deseal the premises described as Schedule B in the same order.

The petitioner, however, filed this writ petition without exhausting the remedy available under Section 17 of the SARFAESI Act.

ISSUE

Whether the Writ petition is maintainable if the remedy available under section 17 of SARFAESI Act is not exhausted?

ANALYSIS

• The court dismissed the writ petition on the ground that the petitioner had filed the same without exhausting the alternate remedy available under section 17 of the Act.
• The court relied on The Authorized Officer, State Bank of Travancore, and another Vs. Mathew K.C., (2018) 3 SCC 85 and Agarwal Tracom Private Limited Vs. Punjab National Bank and others, (2018) 1 SCC 626 and observed that SARFAESI Proceedings cannot be challenged directly by filing a writ petition under Article 226 and that the aggrieved partymust first exhaust the appeal remedy available to them under Section 17 of the Act.
• Furthermore, the court also relied on the recent Supreme Court judgement, ICICI Bank Limited v. Umakanta Mohapatra, 2018 SCC Online SC 2349 where it was observed by the Apex court that High courts have been entertaining matters which arise under SARFAESI Act and that they continue to grant interim orders in favour of persons who are Non-Performing assets, Here, it was held that a writ petition filed by the aggrieved party is not maintainable until they exhaust the available statutory remedy under the SARFAESI Act and Recovery of Debts Due to Banks and Financial Institutions Act.
• Therefore, the petition was dismissed, and the court held that the petitioner is open to challenge the same before the Debt Recovery Tribunal in accordance with law, raising all the grounds available to him under section 17.

CONCLUSION

The court rightly held that a writ petition cannot be entertained if any other available statutory remedy is not exhausted. Any aggrieved party should first exhaust the alternate remedy before filing a writ petition.

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