No Acts & Articles mentioned in this case
1
* THE HON'BLE Mr. JUSTICE AHSANUDDIN AMANULLAH
&
THE HON'BLE Ms. JUSTICE B. S. BHANUMATHI
+ WRIT PETITION No. 30161 OF 2021
% 18.02.2022
# 1. M/s. Mangalagiri Textile Mills Private Limited,
Rep. by its Chairman, Dr. Goli Nagasaina Rao,
A company registered under Companies Act,
Having its registered office at H. No.6/224/8,
Chinakakani, Mangalagiri - 522 503, Guntur District.
2. Dr. Goli Nagasaina Rao, S/o. Late Mr. G. Viswanadham,
Aged 62 years Occ: Doctor, Chairman and Managing Director of
M/s. Mangalagiri Textile Mills Private Limited,
R/o. H. No.2-2-647/276 Srinivasa Nagar Colony,
Baghamberpet, Hyderabad - 500 013.
…. Petitioners
Versus
$ 1. The State Bank of India,
Rep. by its Authorized Officer,
Stressed Assets Management Branch – II,
Office at H. No.3-4-1013/A, 1
st
Floor,
CAC, TS RTC Bus Station, Kachiguda,
Hyderabad - 500 027.
2. The Authorized Officer,
State Bank of India,
Stressed Assets Management Branch – II,
Office at H. No.3-4-1013/A 1
st
Floor,
CAC, TS RTC Bus Station, Kachiguda,
Hyderabad - 500 027.
…. Respondents
! Counsel for the Petitioners: Mr. T. Lakshmi Narayana, Advocate
^ Counsel for the respondents: Mr. Satyanarayana Moorthy, Advocate
< Gist :
> Head Note:
? Cases Referred:
1. (2021) 2 SCC 392
2. (2010) 8 SCC 110
3. (2014) 6 SCC 1
4. (2018) 3 SCC 85
2
5. (2019) 13 SCC 497
6. Special Leave to Appeal (C) 10911/2021, 16.12.2021
7. 2022 SCC Online SC 44
8. 2020 SCC OnLine Pat 4312
9. 2021 SCC OnLine Pat 1243
10. 2021 SCC OnLine Pat 1205
11. (2013) 9 SCC 620
12. (2019) 20 SCC 47
13. 2021 SCC OnLine Del 5209
14. 2021 SCC OnLine Del 4911
15. MANU/DE/0491/2021
16. (1989) 3 SCC 483
17. (2007) 11 SCC 363
18. (2016) 4 SCC 47
19. (2017) 7 SCC 729
20. (1981) 3 SCC 528
21. (1988) 3 SCC 449
22. (1997) 9 SCC 377
23. (2013) 4 SCC 690
24. (2008) 14 SCC 58
25. 2017 SCC OnLine Del 6394
3
HIGH COURT OF ANDHRA PRADESH
* * * *
WRIT PETITION No. 30161 of 2021
Between:
M/s. Mangalagiri Textile Mills Private Limited and another
…. Petitioners
Versus
The State Bank of India, Rep. by its Authorized Officer
And another
…..Respondents
DATE OF JUDGMENT PRONOUNCED: 18.02.2022
SUBMITTED FOR APPROVAL:
THE HON'BLE Mr. JUSTICE AHSANUDDIN AMANULLAH
&
THE HON'BLE Ms. JUSTICE B. S. BHANUMATHI
1. Whether Reporters of Local newspapers may
be allowed to see the Judgments?
Yes/No
2. Whether the copies of judgment may be
marked to Law Reporters/Journals
Yes/No
3. Whether Your Lordships wish to see the fair
copy of the Judgment?
Yes/No
__________________________
AHSANUDDIN AMANULLAH , J
_____________________
B. S. BHANUMATHI, J
4
THE HON’BLE Mr. JUSTICE AHSANUDDIN AMANULLAH
AND
THE HON’BLE Ms. JUSTICE B. S. BHANUMATHI
WRIT PETITION No. 30161 of 2021
1. M/s. Mangalagiri Textile Mills Private Limited,
Rep. by its Chairman, Dr. Goli Nagasaina Rao,
A company registered under Companies Act,
Having its registered office at H. No.6/224/8,
Chinakakani, Mangalagiri - 522 503, Guntur District.
2. Dr. Goli Nagasaina Rao, S/o. Late Mr. G. Viswanadham,
Aged 62 years Occ: Doctor, Chairman and Managing Director of
M/s. Mangalagiri Textile Mills Private Limited,
R/o.H.No.2-2-647/276 Srinivasa Nagar Colony,
Baghamberpet, Hyderabad - 500 013.
…. Petitioners
Versus
1. The State Bank of India,
Rep. by its Authorized Officer,
Stressed Assets Management Branch – II,
Office at H. No.3-4-1013/A, 1
st
Floor,
CAC, TS RTC Bus Station, Kachiguda,
Hyderabad - 500 027.
2. The Authorized Officer,
State Bank of India,
Stressed Assets Management Branch – II,
Office at H. No.3-4-1013/A 1
st Floor,
CAC, TS RTC Bus Station, Kachiguda,
Hyderabad - 500 027.
…. Respondents
Counsel for the Petitioners : Mr. T. Lakshmi Narayana,
Advocate
Counsel for the respondents : Mr. Satyanarayana Moorthy,
Advocate
ORAL JUDGMENT
Date: 18.02.2022
(Per Hon‟ble Mr. Justice Ahsanuddin Amanullah)
Heard Mr. T. Lakshmi Narayana, learned counsel for the petitioners
and Mr. Satyanarayana Moorthy, learned counsel for the respondents – State
Bank of India (hereinafter referred to as the „SBI‟).
5
2. By the instant writ petition, the petitioners assail the action(s) taken
by the SBI under the Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the
„Act‟) alleging violation of the procedure prescribed therein as well as non-
conformity with The Security Interest (Enforcement) Rules, 2002 (hereinafter
referred to as the „Rules‟).
3. The factual matrix may first be adverted to. The petitioners obtained
loan from the SBI. The account having become a Non -Performing Asset
(hereinafter referred to as „NPA‟), the petitioners applied for One-Time
Settlement (hereinafter referred to as „OTS‟), whereunder the total amount to
be paid was Rs.10,36,25,840.82. The application money of Rs.52,00,000/-
was paid and SBI also issued sanction letter dated 23.11.2020. Though as
per the terms of OTS, the first instalment to be paid was Rs.1.04 crores by
23.12.2020, the petitioners paid only Rs.32,00,000/- on 23.12.2020. As a
consequence, SBI issued letter dated 29.12.2020 informing cancellation of
OTS and asking the petitioners to deposit the entire Bank dues with interest
at contracted rate. The request of the petitioners by letter dated 03.01.2021
for extension of time for payment of balance amount of first instalment of
Rs.72,00,000/- was rejected by the SBI vide letter dated 21.01.2021. The
same is pending challenge in W.P.No.2512 of 2021, before this Court. As the
petitioners had defaulted, the SBI, prior to sanctioning OTS, on 27.02.2019
had already moved before the Chief Metropolitan Magistrate (hereinafter
referred to as the „CMM‟), Guntur, in Crl.M.P. No.201 of 2019, under Section
14 of the Act for taking physical possession of the secured asset/property, in
which the following order was made on 28.12.2020:
“The petition is filed under Section 14(1) of the SARFAESI Act to
appoint an Advocate Commissioner to take possession of the
petition schedule property and to deliver the possession to the
petitioner bank.
6
Heard and perused the record.
It seems that the petitioner bank followed the procedure
contemplated under the Act to proceed against the mortgaged
property for realization of loan amount due to the petitioner bank.
Therefore, the petition has to be allowed.
In the result, the petition is allowed. Sri K. Veera Bhaskar,
Sri P. Koteswara Rao, Sri/Smt. V. Sreelatha, Sri/Smt. J.
Rama Lakshmi , Advocates are appointed as Commissioners to
take possession of the petition schedule property and to deliver
the possession to the petitioner bank. Their fee are fixed at
Rs.10,000/- each payable by the petitioner bank. The
Commissioner shall issue notice to both parties and advocates on
record before execution of warrant. Commissioner is at liberty to
break open the schedule for execution of warrant with aid of
police when ever required. Warrant returnable with Report by
15.02.2021.
Warrant shall be issued on payment of commissioner f ee and
process on or before on 04.01.2021”‟
4. On 04.01.2021, the matter was adjourned , for payment of
Commissioner fee and process, to 05.01.2021, on which date it was recorded
as under:
“Process memo and fee receipt of Commissioner are filed. Hence,
issue warrant along with Police Aid to the Advocate -
Commissioner. Placed before Officer as and when report is filed”‟
5. Thereafter, on 17.12.2021, the Advocate Commissioners took
possession of the property.
6. Learned counsel for the petitioners submitted that the order passed
by the CMM was beyond 60 days of filing of the application under Section
14 of the Act, which is impermissible in view of Section 14 of the Act. It
was further contended that even thereafter, as per order dated
28.12.2020 of the CMM, the warrant was to be executed latest by
15.02.2021, which was the returnable date fixed. He submitted that
„return‟ in Black‟s Law Dictionary has been defined as „A court officer‟s
bringing back of an instrument to the court that issued it‟. Thus, learned
counsel submitted that without the CMM extending the validity of the
warrant, the same lost its force and was incapable of being executed and
7
the same having been done is patently illegal and requires interference by
this Court.
7. Per contra, learned counsel for the SBI opposed the petitioners‟
submissions and urged for dismissal of the petition. His first objection
was that the Advocate Commissioners have not been made party. He
submitted that the delay in execution of the warrant was due to the
petitioners filing a number of cases. Learned counsel submitted that the
period of 60 days was directory, as held by the Hon‟ble Supreme Court in
C Bright v District Collector, (2021) 2 SCC 392.
8. Based on the rival contentions to which learned counsel confined
their submissions, three important questions arise for consideration and
determination:
(a) Whether the instant writ petition ought to be entertained?
(b) Whether the time-limit under Section 14 of the Act of 30 days to
pass an order, extendable in aggregate to 60 days, is mandatory or
directory?
(c) Whether, once the time specified in the warrant had elapsed, could
possession of the property in question still be taken over, under the
same warrant?
9. We survey the judicial precedents first. In United Bank of India v
Satyawati Tondon, (2010) 8 SCC 110, the Hon‟ble Supreme Court
observed:
“43. 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. 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 a 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, the 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.
8
44. 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.
45. 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, revision, etc. and the particular legislation contains a detailed
mechanism for redressal of his grievance.
46. 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 (sic will) ultimately prove detrimental to the
economy of the nation. Therefore, the High Court should be extremely
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
Maheshwari v. Antarim Zila Parishad [AIR 1969 SC 556] , Whirlpool
Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 1] and Harbanslal
Sahnia v. Indian Oil Corpn. Ltd. [(2003) 2 SCC 107] and some other
judgments, then the High Court may, after considering all the relevant
parameters and public interest, pass an appropriate interim order.
47. In Thansingh Nathmal v. Supdt. of Taxes [AIR 1964 SC 1419 :
(1964) 6 SCR 654] the Constitution Bench considered the question
whether the High Court of Assam should have entertained the writ
petition filed by the appellant under Article 226 of the Constitution
questioning the order passed by the Commissioner of Taxes under the
Assam Sales Tax Act, 1947. While dismissing the appeal, the Court
observed as under: (SCC p. 1423, para 7)
“7. … The jurisdiction of the High Court under Article 226 of the
Constitution is couched in wide terms and the exercise thereof is not
subject to any restrictions except the territorial restrictions which are
expressly provided in the articles. But the exercise of the jurisdiction is
discretionary: it is not exercised merely because it is lawful to do so. The
very amplitude of the jurisdiction demands that it will ordinarily be
exercised subject to certain self-imposed limitations. Resort to that
jurisdiction is not intended as an alternative remedy for relief which
may be obtained in a suit or other mode prescribed by statute.
Ordinarily the Court will not entertain a petition for a writ under Article
226, where the petitioner has an alternative remedy, which without
being unduly onerous, provides an equally efficacious remedy. Again
9
the High Court does not generally enter upon a determination of
questions which demand an elaborate examination of evidence to
establish the right to enforce which the writ is claimed. The High Court
does not therefore act as a court of appeal against the decision of a
court or tribunal, to correct errors of fact, and does not by assuming
jurisdiction under Article 226 trench upon an alternative remedy
provided by statute for obtaining relief. Where it is open to the aggrieved
petitioner to move another tribunal, or even itself in another jurisdiction
for obtaining redress in the manner provided by a statute, the High
Court normally will not permit by entertaining a petition under Article
226 of the Constitution the machinery created under the statute to be
bypassed, and will leave the party applying to it to seek resort to the
machinery so set up.”
48. In Titaghur Paper Mills Co. Ltd. v. State of Orissa [(1983) 2 SCC 433
: 1983 SCC (Tax) 131] a three-Judge Bench considered the question
whether a petition under Article 226 of the Constitution should be
entertained in a matter involving challenge to the order of the
assessment passed by the competent authority under the Central Sales
Tax Act, 1956 and corresponding law enacted by the State Legislature
and answered the same in the negative by making the following
observations: (SCC pp. 440-41, para 11)
“11. Under the scheme of the Act, there is a hierarchy of authorities
before which the petitioners can get adequate redress against the
wrongful acts complained of. The petitioners have the right to prefer an
appeal before the prescribed authority under sub-section (1) of Section
23 of the Act. If the petitioners are dissatisfied with the decision in the
appeal, they can prefer a further appeal to the Tribunal under sub-
section (3) of Section 23 of the Act, and then ask for a case to be stated
upon a question of law for the opinion of the High Court under Section
24 of the Act. The Act provides for a complete machinery to challenge an
order of assessment, and the impugned orders of assessment can only
be challenged by the mode prescribed by the Act and not by a petition
under Article 226 of the Constitution. It is now well recognised that
where a right or liability is created by a statute which gives a special
remedy for enforcing it, the remedy provided by that statute only must
be availed of. This rule was stated with great clarity by Willes, J.
in Wolverhampton New Waterworks Co. v. Hawkesford [(1859) 6 CBNS
336 : 141 ER 486] in the following passage: (ER p. 495)
„… There are three classes of cases in which a liability may be
established founded upon a statute. … But there is a third class viz.
where a liability not existing at common law is created by a statute
which at the same time gives a special and particular remedy for
enforcing it. … The remedy provided by the statute must be followed,
and it is not competent to the party to pursue the course applicable to
cases of the second class. The form given by the statute must be
adopted and adhered to.‟
The rule laid down in this passage was approved by the House of Lords
in Neville v. London Express Newspapers Ltd. [1919 AC 368 : (1918-19)
All ER Rep 61 (HL)] and has been reaffirmed by the Privy Council
in Attorney-General of Trinidad and Tobago v. Gordon Grant & Co.
Ltd. [1935 AC 532 (PC)] and Secy. of State v. Mask & Co. [(1939-40) 67
IA 222] It has also been held to be equally applicable to enforcement of
rights, and has been followed by this Court throughout. The High Court
was therefore justified in dismissing the writ petitions in limine.”
10
49. The views expressed in Titaghur Paper Mills Co. Ltd. v. State of
Orissa [(1983) 2 SCC 433 : 1983 SCC (Tax) 131] were echoed
in CCE v. Dunlop India Ltd. [(1985) 1 SCC 260 : 1985 SCC (Tax) 75] in
the following words: (SCC p. 264, para 3)
“3. … Article 226 is not meant to short-circuit or circumvent statutory
procedures. It is only where statutory remedies are entirely ill-suited to
meet the demands of extraordinary situations, as for instance where the
very vires of the statute is in question or where private or public wrongs
are so inextricably mixed up and the prevention of public injury and the
vindication of public justice require it that recourse may be had to Article
226 of the Constitution. But then the Court must have good and
sufficient reason to bypass the alternative remedy provided by statute.
Surely matters involving the revenue where statutory remedies are
available are not such matters. We can also take judicial notice of the
fact that the vast majority of the petitions under Article 226 of the
Constitution are filed solely for the purpose of obtaining interim orders
and thereafter prolong the proceedings by one device or the other. The
practice certainly needs to be strongly discouraged.”
50. In Punjab National Bank v. O.C. Krishnan [(2001) 6 SCC 569] this
Court considered the question whether a petition under Article 227 of
the Constitution was maintainable against an order passed by the
Tribunal under Section 19 of the DRT Act and observed: (SCC p. 570,
paras 5-6)
“5. In our opinion, the order which was passed by the Tribunal directing
sale of mortgaged property was appealable under Section 20 of the
Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for
short „the Act‟). The High Court ought not to have exercised its
jurisdiction under Article 227 in view of the provision for alternative
remedy contained in the Act. We do not propose to go into the
correctness of the decision of the High Court and whether the order
passed by the Tribunal was correct or not has to be decided before an
appropriate forum.
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.”
51. In CCT v. Indian Explosives Ltd. [(2008) 3 SCC 688] the Court
reversed an order passed by the Division Bench of the Orissa High
Court quashing the show-cause notice issued to the respondent under
the Orissa Sales Tax Act by observing that the High Court had
completely ignored the parameters laid down by this Court in a large
number of cases relating to exhaustion of alternative remedy.
11
52. In City and Industrial Development Corpn. v. Dosu Aardeshir
Bhiwandiwala [(2009) 1 SCC 168] the Court highlighted the parameters
which are required to be kept in view by the High Court while exercising
jurisdiction under Article 226 of the Constitution. Paras 29 and 30 of
that judgment which contain the views of this Court read as under: (SCC
pp. 175-76)
“29. In our opinion, the High Court while exercising its extraordinary
jurisdiction under Article 226 of the Constitution is duty-bound to take
all the relevant facts and circumstances into consideration and decide
for itself even in the absence of proper affidavits from the State and its
instrumentalities as to whether any case at all is made out requiring its
interference on the basis of the material made available on record. There
is nothing like issuing an ex parte writ of mandamus, order or direction
in a public law remedy. Further, while considering the validity of
impugned action or inaction the Court will not consider itself restricted to
the pleadings of the State but would be free to satisfy itself whether any
case as such is made out by a person invoking its extraordinary
jurisdiction under Article 226 of the Constitution.
30. The Court while exercising its jurisdiction under Article 226 is duty-
bound to consider whether:
(a) adjudication of 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) 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.
The Court in appropriate cases in its discretion may direct the State or
its instrumentalities as the case may be to file proper affidavits placing
all the relevant facts truly and accurately for the consideration of the
Court and particularly in cases where public revenue and public interest
are involved. Such directions are always required to be complied with
by the State. No relief could be granted in a public law remedy as a
matter of course only on the ground that the State did not file its
counter-affidavit opposing the writ petition. Further, empty and self-
defeating affidavits or statements of Government spokesmen by
themselves do not form basis to grant any relief to a person in a public
law remedy to which he is not otherwise entitled to in law.”
53. In Raj Kumar Shivhare v. Directorate of Enforcement [(2010) 4 SCC
772] the Court was dealing with the issue whether the alternative
statutory remedy available under the Foreign Exchange Management
Act, 1999 can be bypassed and jurisdiction under Article 226 of the
Constitution could be invoked. After examining the scheme of the Act,
the Court observed: (SCC p. 781, paras 31-32)
“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
12
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.”
54. In Modern Industries v. SAIL [(2010) 5 SCC 44 : (2010) 2 SCC (Cri)
280] the Court held that where the remedy was available under the
Interest on Delayed Payments to Small Scale and Ancillary Industrial
Undertakings Act, 1993, the High Court was not justified in entertaining
a petition 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
the 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.”
10. In Harshad Govardhan Sondagar v International Asset
Reconstruction Company Limited, (2014) 6 SCC 1, it was stated:
“29. Sub-section (3) of Section 14 of the SARFAESI Act provides that no
act of the Chief Metropolitan Magistrate or the District Magistrate or any
officer authorised by the Chief Metropolitan Magistrate or the District
Magistrate done in pursuance of Section 14 shall be called in question in
any court or before any authority. The SARFAESI Act, therefore,
attaches finality to the decision of the Chief Metropolitan Magistrate or
the District Magistrate and this decision cannot be challenged before
any court or any authority. But this Court has repeatedly held that
statutory provisions attaching finality to the decision of an authority
excluding the power of any other authority or court to examine such a
decision will not be a bar for the High Court or this Court to exercise
jurisdiction vested by the Constitution because a statutory provision
cannot take away a power vested by the Constitution. To quote, the
observations of this Court in Columbia Sportswear Co. v. Director of
Income Tax [(2012) 11 SCC 224] : (SCC p. 234, para 17)
“17. Considering the settled position of law that the powers of this Court
under Article 136 of the Constitution and the powers of the High Court
under Articles 226 and 227 of the Constitution could not be affected by
the provisions made in a statute by the legislature making the decision
of the tribunal final or conclusive, we hold that sub-section (1) of Section
245-S of the Act insofar as it makes the advance ruling of the authority
binding on the applicant, in respect of the transaction and on the
Commissioner and Income Tax Authorities subordinate to him, does not
bar the jurisdiction of this Court under Article 136 of the Constitution or
the jurisdiction of the High Court under Articles 226 and 227 of the
Constitution to entertain a challenge to the advance ruling of the
authority.”
13
In our view, therefore, the decision of the Chief Metropolitan Magistrate
or the District Magistrate can be challenged before the High Court under
Articles 226 and 227 of the Constitution by any aggrieved party and if
such a challenge is made, the High Court can examine the decision of
the Chief Metropolitan Magistrate or the District Magistrate, as the case
may be, in accordance with the settled principles of law”‟
11. In Authorised Officer, State Bank of Travancore v Mathew K
C, (2018) 3 SCC 85, it was held:
“9. Even prior to the Sarfaesi Act, considering the alternate remedy
available under the DRT Act it was held in Punjab National Bank v. O.C.
Krishnan [Punjab National Bank v. O.C. Krishnan, (2001) 6 SCC 569]
that: (SCC p. 570, para 6)
“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.”
10. In Satyawati Tondon [United Bank of India v. Satyawati Tondon,
(2010) 8 SCC 110 : (2010) 3 SCC (Civ) 260] the High Court had
restrained [Satyawati Tondon v. State of U.P., 2009 SCC OnLine All
2608] further proceedings under Section 13(4) of the Act. Upon a
detailed consideration of the statutory scheme under the SARFAESI Act,
the availability of remedy to the aggrieved under Section 17 before the
Tribunal and the appellate remedy under Section 18 before the
Appellate Tribunal, the object and purpose of the legislation, it was
observed that a writ petition ought not to be entertained in view of the
alternate statutory remedy available holding: (SCC pp. 123 & 128,
paras 43 & 55)
“43. 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. 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 a 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, the High
14
Court must insist that before availing remedy under Article 226 of the
Constitution, a person must exhaust the remedies available under the
relevant statute.
***
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
the 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.”
xxx
12. The same view was reiterated in Kanaiyalal Lalchand
Sachdev v. State of Maharashtra [Kanaiyalal Lalchand Sachdev v. State
of Maharashtra, (2011) 2 SCC 782 : (2011) 1 SCC (Civ) 570] , observing:
(SCC p. 789, para 23)
“23. In our opinion, therefore, the High Court rightly dismissed
[Kanaiyalal Lalchand Sachdev v. State of Maharashtra, 2009 SCC
OnLine Bom 2388] 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. [Sadhana Lodh v. National Insurance Co. Ltd., (2003) 3 SCC 524 :
2003 SCC (Cri) 762] , Surya Dev Rai v. Ram Chander Rai [Surya Dev
Rai v. Ram Chander Rai, (2003) 6 SCC 675] and SBI v. Allied Chemical
Laboratories [SBI v. Allied Chemical Laboratories, (2006) 9 SCC 252] .)”
13. In Ikbal [Sri Siddeshwara Coop. Bank Ltd. v. Ikbal, (2013) 10 SCC
83 : (2013) 4 SCC (Civ) 638] it was observed that the action of the bank
under Section 13(4) of the Sarfaesi Act available to challenge by the
aggrieved under Section 17 was an efficacious remedy and the
institution directly under Article 226 was not sustainable, relying
upon Satyawati Tondon [United Bank of India v. Satyawati Tondon,
(2010) 8 SCC 110 : (2010) 3 SCC (Civ) 260] observing: (Ikbal case [Sri
Siddeshwara Coop. Bank Ltd. v. Ikbal, (2013) 10 SCC 83 : (2013) 4 SCC
(Civ) 638] , SCC pp. 94-95, paras 27-28)
“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.
28. … In our view, there was no justification whatsoever for the learned
Single Judge [Ikbal v. Registrar of Coop. Societies, 2011 SCC OnLine Kar
4456] to allow the borrower to bypass the efficacious remedy provided
to him under Section 17 and invoke the extraordinary jurisdiction in his
favour when he had disentitled himself for such relief by his conduct.
The Single Judge was clearly in error in invoking his extraordinary
jurisdiction under Article 226 in light of the peculiar facts indicated
above. The Division Bench [Sri Siddeshwara Coop. Bank Ltd. v. Ikbal,
2012 SCC OnLine Kar 8816] also erred in affirming the erroneous order
of the Single Judge.”
15
14. A similar view was taken in Punjab National Bank v. Imperial Gift
House [Punjab National Bank v. Imperial Gift House, (2013) 14 SCC
622] , observing: (SCC p. 622, paras 3-4)
“3. Upon receipt of notice, the respondents filed representation under
Section 13(3-A) of the Act, which was rejected. Thereafter, before any
further action could be taken under Section 13(4) of the Act by the Bank,
the writ petition was filed before the High Court.
4. In our view, the High Court [Imperial Gift House v. Punjab National
Bank, 2008 SCC OnLine P&H 2209] was not justified in entertaining the
writ petition against the notice issued under Section 13(2) of the Act and
quashing the proceedings initiated by the Bank.”
12. In ICICI Bank Limited v Umakanta Mohapatra , (2019) 13 SCC
497, in view of State Bank of Travancore (supra), the writ petition was
held not maintainable.
13. In State Bar Council of Madhya Pradesh v Union of India ,
Petition for Special Leave to Appeal (C) 10911/2021 , vide Order dated
16.12.2021, the Hon‟ble Supreme Court directed as follows:
“With a view to resolve the problem being faced by the parties, for the
time being and purely as a stop-gap arrangement, we request the
concerned High Court(s) to entertain the matters falling within
jurisdiction of DRTs and DRATs under Article 226 of the Constitution of
India, till further orders.
We make it clear that once the Tribunal(s) is/are constituted, the
matters can be relegated to the Tribunals by the High Court(s).”
14. In Phoenix ARC Private Limited v Vishwa Bharati Vidya
Mandir, 2022 SCC OnLine SC 44 , it was opined:
“38. Assuming that the communication dated 13.08.2015 can be said to
be a notice under Section 13(4) of the SARFAESI Act, in that case also,
in view of the statutory remedy available under Section 17 of the
SARFAESI Act and in view of the law laid down by this Court in the
cases referred to hereinabove, the writ petitions against the notice under
Section 13(4) of the SARFAESI Act was not required to be entertained by
the High Court. Therefore, the High Court has erred in entertaining the
writ petitions against the communication dated 13.08.2015 and also
passing the ex-parte ad-interim orders directing to maintain the status
quo with respect to possession of secured properties on the condition
directing the borrowers to pay Rs. 1 crore only (in all Rs. 3 crores in view
of the subsequent orders passed by the High Court extending the
exparte ad-interim order dated 26.08.2015) against the total dues of
approximate Rs. 117 crores. Even the High Court ought to have
considered and disposed of the application for vacating the ex-parte ad-
16
interim relief, which was filed in the year 2016 at the earliest
considering the fact that a large sum of Rs. 117 crores was involved.
xxx
40. Even otherwise, it is required to be noted that a writ petition against
the private financial institution - ARC - appellant herein under Article
226 of the Constitution of India against the proposed action/actions
under Section 13(4) of the SARFAESI Ac t can be said to be not
maintainable. In the present case, the ARC proposed to take
action/actions under the SARFAESI Act to recover the borrowed amount
as a secured creditor. The ARC as such cannot be said to be performing
public functions which are normally expected to be performed by the
State authorities. During the course of a commercial transaction and
under the contract, the bank/ARC lent the money to the borrowers
herein and therefore the said activity of the bank/ARC cannot be said to
be as performing a public function which is normally expected to be
performed by the State authorities. If proceedings are initiated under the
SARFAESI Act and/or any proposed action is to be taken and the
borrower is aggrieved by any of the actions of the private
bank/bank/ARC, borrower has to avail the remedy under the
SARFAESI Act and no writ petition would lie and/or is maintainable
and/or entertainable. Therefore, decisions of this Court in the cases
of Praga Tools Corporation (supra) and Ramesh Ahluwalia (supra) relied
upon by the learned counsel appearing on behalf of the borrowers are
not of any assistance to the borrowers.”
15. The aforesaid discussion sums up the law. Ordinarily, we must
defer to the procedure under the Act. However, Article 226 is, in no manner,
effaced by the Act, being an integral part of the basic structure of the
Constitution, and still, recourse thereto can be had by an aggrieved party.
16. One of us (Ahsanuddin Amanullah, J.), whilst at the Patna High
Court, taking note of the guidance laid down by the Hon‟ble Supreme Court,
had the occasion to examine, to an extent, the scope and amplitude of
powers under Article 226 in, inter alia, Lalit Narain Mithila University v
National Council for Teacher Education , MANU/BH/0888/2020 | 2020
SCC OnLine Pat 4312 | (2021) 1 BLJ 542 (PHC) | (2021) 1 PLJR 450 and
Sonalika Rani v the Central Board of Secondary Education , 2021 (2)
BLJ 699 | 2021 SCC OnLine Pat 1243 | (2021) 2 PLJR 396.
17. Taking into consideration the discussions made in Lalit Narain
Mithila University (supra) and Sonalika Rani (supra), in Saurav Kumar
17
Sharma v State of Bihar , 2021 SCC OnLine Pat 1205 | (2021) 4 BLJ
165 (PHC) | (2021) 226 AIC 765, Amanullah, J. held:
“10. There is no cavil with the proposition that when a statutory remedy
of appeal is provided under any enactment, ordinarily, the High Court
ought to be circumspect in interfering under Article 226 of the
Constitution of India. However, it is no longer res integra that any such
circumspection and/or restraint is merely self-imposed and is not, nor
can it be, construed as a total bar to exercise of powers in extraordinary
writ jurisdiction.
11. In M.P. State Agro Industries Development Corpn. Ltd. v. Jahan
Khan, (2007) 10 SCC 88, the Hon'ble Supreme Court opined:
„12. Before parting with the case, we may also deal with the submission
of learned counsel for the appellants that a remedy by way of an appeal
being available to the respondent, the High Court ought not to have
entertained his petition filed under Articles 226/227 of the
Constitution. There is no gainsaying that in a given case, the High
Court may not entertain a writ petition under Article 226 of the
Constitution on the ground of availability of an alternative
remedy, but the said rule cannot be said to be of universal
application. The rule of exclusion of writ jurisdiction due to
availability of an alternative remedy is a rule of discretion and
not one of compulsion. In an appropriate case, in spite of the
availability of an alternative remedy, a writ court may still exercise its
discretionary jurisdiction of judicial review, in at least three
contingencies, namely, (i) where the writ petition seeks enforcement of
any of the fundamental rights; (ii) where there is failure of principles of
natural justice; or (iii) where the orders or proceedings are wholly
without jurisdiction or the vires of an Act is challenged. In these
circumstances, an alternative remedy does not oper ate as a bar.
(See Whirlpool Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 1],
HarbanslalSahnia v. Indian Oil Corpn. Ltd. [(2003) 2 SCC 107], State of
H.P. v. Gujarat Ambuja Cement Ltd. [(2005) 6 SCC 499] and Sanjana M.
Wig v. Hindustan Petroleum Corpn. Ltd. [(2005) 8 SCC 242])‟
(emphasis supplied)
12. The principles governing exercise of writ jurisdiction under Article
226, even in the face of other or alternative remedies, have been
considered by the Hon'ble Supreme Court, inter alia, in State of Uttar
Pradesh v. Mohammad Nooh , 1958 SCR 595 and Maharashtra Chess
Association v. Union of India, (2020) 13 SCC 285.
13. This Court had the occasion to consider the said issue, and following
the dicta in Mohammad Nooh (supra) and Maharashtra Chess
Association (supra) in Order dated 22.12.2020 in Lalit Narain Mithila
University v. National Council for Teacher Education, CWJC No. 9421 of
2020 (since reported as CWJC No. 9421 of 2020, order dated 22 -12-
2020 (Pat)) opined:
„16.1. In this context, it is appropriate to refer to the Constitution Bench
judgment in State of Uttar Pradesh v. Mohammad Nooh, 1958 SCR 595,
the relevant paragraph reading:
„10. In the next place it must be borne in mind that there is no rule
with regard to certiorari as there is with mandamus, that it will lie only
18
where there is no other equally effective remedy. It is well established
that, provided the requisite grounds exist, certiorari will lie although a
right of appeal has been conferred by statute, (Halsbury's Laws of
England, 3
rd
Edn., Vol. 11, p. 130 and the cases cited there). The
fact that the aggrieved party has another and adequate remedy
may be taken into consideration by the superior court in arriving
at a conclusion as to whether it should, in exercise of its
discretion, issue a writ of certiorari to quash the proceedings and
decisions of inferior courts subordinate to it and ordinarily the
superior court will decline to interfere until the aggrieved party
has exhausted his other statutory remedies , if any. But this rule
requiring the exhaustion of statutory remedies before the writ
will be granted is a rule of policy, convenience and discretion
rather than a rule of law and instances are numerous where a writ
of certiorari has been issued in spite of the fact that the aggrieved party
had other adequate legal remedies…‟
(emphasis supplied)
16.2. The aforesaid paragraph from Mohammad Nooh (supra) has been
approvingly referred to by the Hon'ble Supreme Court in Maharashtra
Chess Association v. Union of India, 2019 SCC OnLine SC 932 , in the
following words:
„24. The principle that the writ jurisdiction of a High Court can be
exercised where no adequate alternative remedies exist can be traced
even further back to the decision of the Constitution Bench of this Court
in State of Uttar Pradesh v. Mohammad Nooh…‟
(emphasis supplied)
17. It is not required, in present, to cite further authorities of the Hon'ble
Supreme Court on this subject. Suffice it will to state the following
settled principles of law:
(i) Powers under Article 226, being discretionary, may not be
exercised if there exists an alternative efficacious remedy.
However, this is merely a self-imposed restraint.
(ii) In appropriate situations, the High Court in its writ
jurisdiction can entertain writ petitions even if there exists an
alternative efficacious remedy. There is no, nor can there be,
an absolute bar to such exercise of power.
(iii) A fortiori, in the absence of an alternative efficacious remedy, or,
where no remedy lies, recourse to writ jurisdiction of the High Court
would always be available to an aggrieved party.‟
(underlining in original; emphasis supplied)
14. The reasoning in Lalit Narain Mithila University (supra) has been
followed by this Court in Judgment dated 04.03.2021 in Sonalika
Rani v. The Central Board of Secondary Education, New Delhi, CWJC
No. 8887 of 2020 [since reported as CWJC No. 8887 of 2020, decided on
4-3-2021 (Pat) and (2021) 2 BLJ 699]. That apart, while paragraph 21
of Maharashtra Chess Association (supra) has been noticed in Lalit
Narain Mithila University (supra), the following paragraphs,
additionally, from Maharashtra Chess Association (supra) are
instructive:
19
„11. Article 226(1) of the Constitution confers on High Courts the power
to issue writs, and consequently, the jurisdiction to entertain actions for
the issuance of writs. [“226. Power of High Courts to issue certain
writs.-(1) Notwithstanding anything in Article 32, every High Court shall
have power, 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,
prohibition, quo war-ranto and certiorari, or any of them, for the
enforcement of any of the rights conferred by Part III and for any other
purpose.”] The text of Article 226(1) provides that a High Court may
issue writs for the enforcement of the fundamental rights in Part III of
the Constitution, or “for any other purpose”. A citizen may seek out
the writ jurisdiction of the High Court not only in cases where
her fundamental right may be infringed, but a much wider array
of situations. Lord Coke, commenting on the use of writs by courts in
England stated:
“The Court of King's Bench hath not only the authority to
correct errors in judicial proceedings, but other errors and
misdemeanours […] tending to the breach of peace, or oppression of
the subjects, or raising of faction, controversy, debate or any other
manner of misgovernment; so that no wrong or injury, public or
private, can be done, but that this shall be reformed or punished
by due course of law. …” [James Bagg's case, (1572) 11 Co Rep 93b :
77 ER 1271]
12. Echoing the sentiments of Lord Coke, this Court in U.P. State Sugar
Corpn. Ltd. v. Kamal Swaroop Ton -don [U.P. State Sugar Corpn.
Ltd. v. Kamal Swaroop Tondon, (2008) 2 SCC 41 : (2008) 1 SCC (L&S)
352] observed that : (SCC p. 53, para 35)
“35. … It is well settled that the jurisdiction of the High Court
under Article 226 of the Constitution is equitable and
discretionary. The power under that Article can be exercised by
the High Court “to reach injustice wherever it is found”.”
13.The role of the High Court under the Constitution is crucial to
ensuring the rule of law throughout its territorial jurisdiction. In
order to achieve these transcendental goals, the powers of the
High Court under its writ jurisdiction are necessarily broad.
They are conferred in aid of justice. This Co urt has repeatedly
held that no limitation can be placed on the powers of the High
Court in exercise of its writ jurisdiction. In A.V.
Venkateswaran v. Ramchand Sobhraj Wadh-wani [A.V.
Venkateswaran v. Ramchand Sobhraj Wadh-wani, (1962) 1 SCR
753 : AIR 1961 SC 1506] a Constitution Bench of this Court held that
the nature of power exercised by the High Court under its writ
jurisdiction is inherently dependent on the threat to the rule of law
arising in the case before it : (AIR p. 1510, para 10)
“10. … We need only add that the broad lines of the general
principles on which the court should act having been clearly laid down,
their application to the facts of each particular case must necessarily be
dependent on a variety of individual facts which must govern the proper
exercise of the discretion of the Court, and that in a matter which is thus
preeminently one of discretion, it is not possible or even if it were, it
would not be desirable to lay down inflexible rules which should be
applied with rigidity in every case which comes up before the court.”
20
The powers of the High Court in exercise of its writ jurisdiction
cannot be circumscribed by strict legal principles so as to hobble
the High Court in fulfilling its mandate to uphold the rule of
law.
14. While the powers the High Court may exercise under its writ
jurisdiction are not subject to strict legal principles, two clear
principles emerge with respect to when a High Court's writ
jurisdiction may be engaged. First, the decision of the High Court
to entertain or not entertain a particular action under its writ
jurisdiction is fundamentally discretionary. Secondly,
limitations placed on the court's decision to exercise or refuse to
exercise its writ jurisdiction are self-imposed. It is a well-settled
principle that the writ jurisdiction of a High Court cannot be
completely excluded by statute. If a High Court is tasked with
being the final recourse to upholding the rule of law within its
territorial jurisdiction, it must necessarily have the power to
examine any case before it and make a determination of whether
or not its writ jurisdiction is engaged. Judicial review under
Article 226 is an intrinsic feature of the basic structure of the
Constitution. [Minerva Mills Ltd. v. Union of India, (1980) 3 SCC 625; L.
Chandra Kumar v. Union of India, (1997) 3 SCC 261 : 1997 SCC (L&S)
577]
15. These principles are set out in the decisions of this Court in
numerous cases and we need only mention a few to demonstrate the
consistent manner in which they have been r eiterated. In State of
U.P. v. Indian Hume Pipe Co. Ltd. [State of U.P. v. Indian Hume Pipe Co.
Ltd., (1977) 2 SCC 724 : 1977 SCC (Tax) 335] this Court observed that
the High Court's decision to exercise its writ jurisdiction is essentially
discretionary : (SCC p. 728, para 4)
“4. … It is always a matter of discretion with the Court and if
the discretion has been exercised by the High Court not
unreasonably or perversely, it is the settled practice of this
Court not to interfere with the exercise of discretion by the High
Court.”
xxx
19. This argument of the second respondent is misconceived. The
existence of an alternate remedy, whether adequate or not, does
not alter the fundamentally discretionary nature of the High
Court's writ jurisdiction and therefore does not create an
absolute legal bar on the exercise of the writ jurisdiction by a
High Court. The decision whether or not to entertain an action
under its writ jurisdiction remains a decision to be taken by the
High Court on an examination of the facts and circumstances of
a particular case.
20. This understanding has been laid down in several decisions of this
Court. In U.P. State Spg. Co. Ltd. v. R.S. Pandey [U.P. State Spg. Co.
Ltd. v. R.S. Pandey, (2005) 8 SCC 264 : 2006 SCC (L&S) 78] this Court
held : (SCC p. 270, para 11)
“11. Except for a period when Article 226 was amended by the
Constitution (Forty-Second Amendment) Act, 1976, the power relating
to alternative remedy has been considered to be a rule of self -
imposed limitation. It is essentially a rule of policy, convenience
21
and discretion and never a rule of law. Despite the existence of
an alternative remedy it is within the jurisdiction or discretion
of the High Court to grant relief under Article 226 of the
Constitution. At the same time, it cannot be lost sight of that though
the matter relating to an alternative remedy has nothing to do with the
jurisdiction of the case, normally the High Court should not interfere if
there is an adequate efficacious alternative remedy.”
xxx
22. The mere existence of alternate forums where the aggrieved
party may secure relief does not create a legal bar on a High
Court to exercise its writ jurisdiction. It is a factor to be taken
into consideration by the High Court amongst several
factors. Thus, the mere fact that the High Court at Madras is capable of
granting adequate relief to the appellant does not create a legal bar on
the Bombay High Court exercising its writ jurisdiction in the present
matter.‟
(emphasis supplied)
15. On a conspectus of the afore-referred authorities, it is clear that the
principles culled out in Paragraph 17 of Lalit Narain Mithila
University (supra) are in consonance with the law as expounded by the
Hon'ble Supreme Court. As such, it would be in the discretion of the Writ
Court to entertain a petition even when there exists an alternative
remedy, regard being had to all relevant facts and circumstances
peculiar to the concerned case. The position in law stands clarified.”
(underlining and bolding in original)
18. In this backdrop, we are inclined to entertain this writ petition for
more reasons than one. First, the facts compel us to do so. Second, it is no
longer res integra that even in the face of an available alternative efficacious
remedy, a writ petition is maintainable, subject to judicial discretion. Third,
the Order dated 16.12.2021 passed by a Bench of three Hon‟ble Judges in
State Bar Council of Madhya Pradesh (supra) supports us. As such, we
answer Question (a) in the affirmative.
19. Insofar as Question (b) is concerned, the same is settled. We need
only refer to C Bright (supra), rightly relied upon by learned counsel for SBI,
the relevant paragraphs being instructive, stand extracted below:
“8. A well-settled rule of interpretation of the statutes is that the use of
the word “shall” in a statute, does not necessarily mean that in every
case it is mandatory that unless the words of the statute are literally
followed, the proceeding or the outcome of the proceeding, would be
invalid. It is not always correct to say that if the word “may” has been
used, the statute is only permissive or directory in the sense that non-
compliance with those provisions will not render the proceeding invalid
22
[State of U.P. v. Manbodhan Lal Srivastava, AIR 1957 SC 912] and that
when a statute uses the word “shall”, prima facie, it is mandatory, but
the Court may ascertain the real intention of the legislature by carefully
attending to the whole scope of the statute [State of U.P. v. Babu Ram
Upadhya, AIR 1961 SC 751] . The principle of literal construction of the
statute alone in all circumstances without examining the context and
scheme of the statute may not serve the purpose of the statute
[RBI v. Peerless General Finance & Investment Co. Ltd., (1987) 1 SCC
424].
9. The question as to whether, a time-limit fixed for a public officer to
perform a public duty is directory or mandatory has been examined
earlier by the courts as well. A question arose before the Privy Council in
respect of irregularities in the preliminary proceedings for constituting a
jury panel. The Municipality was expected to revise the list of qualified
persons but the jury was drawn from the old list as the Sheriff neglected
to revise the same. It was in these circumstances, the decision of the
jury drawn from the old list became the subject-matter of consideration
by the Privy Council. It was thus held that it would cause greater public
inconvenience if it were held that neglecting to observe the provisions of
the statute made the verdicts of all juries taken from the list ipso facto
null and void so that no jury trials could be held until a duly revised list
had been prepared [Montreal Street Railway Co. v. Normandin, 1917
SCC OnLine PC 3 : AIR 1917 PC 142].
10. The Constitution Bench of this Court held that when the provisions
of a statute relate to the performance of a public duty and the case is
such that to hold acts done in neglect of this duty as null and void,
would cause serious general inconvenience or injustice to persons who
have no control over those entrusted with the duty, the practice of the
courts should be to hold such provisions as directory [Dattatraya
Moreshwar `Pangarkar v. State of Bombay, AIR 1952 SC 181 : 1952 Cri
LJ 955] . In a seven-Bench judgment, this Court was considering as to
whether the power of the Returning Officer to reject ballot papers is
mandatory or directory. The Court examined well-recognised rules of
construction to observe that a statute should be construed as directory if
it relates to the performance of public duties, or if the conditions
prescribed therein have to be performed by persons other than those on
whom the right is conferred [Hari Vishnu Kamath v. Syed Ahmad
Ishaque, AIR 1955 SC 233].
11. In a judgment reported as Remington Rand of India
Ltd. v. Workmen [Remington Rand of India Ltd. v. Workmen, AIR 1968
SC 224], Section 17 of the Industrial Disputes Act, 1947 came up for
consideration. The argument raised was that the time-limit of 30 days of
publication of award by the Labour Court is mandatory. This Court held
that though Section 17 is mandatory, the time-limit to publish the award
within 30 days is directory inter alia for the reason that the non-
publication of the award within the period of thirty days does not entail
any penalty.
12. In T.V. Usman v. Food Inspector, Tellicherry Municipality [T.V.
Usman v. Food Inspector, Tellicherry Municipality, (1994) 1 SCC 754 :
1994 SCC (Cri) 187] , the time period during which report of the analysis
of a sample under Rule 7(3) of the Prevention of Food Adulteration
Rules, 1955 was to be given, was held to be directory as there was no
23
time-limit prescribed within which the prosecution had to be instituted.
When there was no such limit prescribed then there was no valid reason
for holding the period of 45 days as mandatory. Of course, that does not
mean that the Public Analyst can ignore the time-limit prescribed under
the Rules. He must in all cases try to comply with the time-limit. But if
there is some delay, in a given case, there is no reason to hold that the
very report is void and, on that basis, to hold that even prosecution
cannot be launched.
13. This Court distinguished between failure of an individual to act in a
given time-frame and the time-frame provided to a public authority, for
the purposes of determining whether a provision was mandatory or
directory, when this Court held that it is a well-settled principle that if
an act is required to be performed by a private person within a specified
time, the same would ordinarily be mandatory but when a public
functionary is required to perform a public function within a time-frame,
the same will be held to be directory unless the consequences therefor
are specified [Nasiruddin v. Sita Ram Agarwal, (2003) 2 SCC 577].
14. In P.T. Rajan v. T.P.M. Sahir [P.T. Rajan v. T.P.M. Sahir, (2003) 8
SCC 498] , this Court examined the effect of non-publication of final
electoral rolls before the time of acceptance of nomination papers. The
Court held as under : (SCC p. 516, para 48)
“48. Furthermore, even if the statute specifies a time for publication of
the electoral roll, the same by itself could not have been held to be
mandatory. Such a provision would be directory in nature. It is a well-
settled principle of law that where a statutory functionary is asked to
perform a statutory duty within the time prescribed therefor, the same
would be directory and not mandatory. (See Shiveshwar Prasad
Sinha v. District Magistrate [Shiveshwar Prasad Sinha v. District
Magistrate, 1965 SCC OnLine Pat 43 : AIR 1966 Pat 144 : ILR 45 Pat
436] , Nomita Chowdhury v. State of W.B. [Nomita Chowdhury v. State
of W.B., 1999 SCC OnLine Cal 235 : (1999) 2 Cal LJ 21] and Garbari
Union Coop. Agricultural Credit Society Ltd. v. Swapan Kumar
Jana [Garbari Union Coop. Agricultural Credit Society Ltd. v. Swapan
Kumar Jana, 1996 SCC OnLine Cal 209 : (1997) 1 CHN 189] .)”
15. A recent Constitution Bench held that the provisions of the
Consumer Protection Act granting 30 days' time to file response by the
opposite party or such extended period not exceeding 15 days is
mandatory as the object of the statute is for the benefit and protection of
the consumer. It observed that such Act had been enacted to provide
expeditious disposal of consumer disputes. In this case, an individual
was called upon to file his written statement in contradiction for a pubic
authority to decide the issue before it [New India Assurance Co.
Ltd. v. Hilli Multipurpose Cold Storage (P) Ltd., (2020) 5 SCC 757 :
(2020) 3 SCC (Civ) 338].
16. The Full Bench of the Patna High Court in Shiveshwar Prasad
Sinha [Shiveshwar Prasad Sinha v. District Magistrate, 1965 SCC
OnLine Pat 43 : AIR 1966 Pat 144 : ILR 45 Pat 436] was examining the
provisions of the Bihar Buildings (Lease, Rent and Eviction) Control Act,
1947 which permitted a government servant in occupation of a building
as a tenant to serve a notice of 15 days on the landlord and the District
Magistrate of his intention to vacate the premises. The High Court held
that the government servant to whom the house was allotted had no
24
control over the District Magistrate, therefore, the time-limit required by
the provision was not mandatory.
17. A Single Bench of the Madhya Pradesh High Court [ Manish
Makhija v. Central Bank of India, 2018 SCC OnLine MP 553] examined
the provisions of Section 14 of the Act as amended. The Court held that
the second proviso to sub-section (1) of Section 14 was inserted in order
to ensure that Chief Metropolitan Magistrate or District Magistrate pass
the order within a stipulated time. The bank/secured creditor has no
control over the District Magistrate. After filing an application under sub-
section (1) of Section 14, the bank had no authority to compel the Chief
Metropolitan Magistrate or District Magistrate to pass orders within
reasonable time. The legislature, in order to bind the said authorities,
inserted the said proviso. Thus, the basic object and purpose was to fix
a time-limit for the Magistrate concerned to pass an order and not to give
a clean chit to an unscrupulous borrower/guarantor, who had not
repaid the debts.
18. Now, coming to the judgments referred to by Mr Khan. In A.K.
Pandey [Union of India v. A.K. Pandey, (2009) 10 SCC 552 : (2010) 1
SCC (L&S) 68] , the respondent was not provided 96 hours of interval
time as contemplated by the relevant rules, before commencing a trial by
the court martial. This Court held that such proceedings were vitiated as
the purpose of the time-limit was that before the accused is called upon
for trial, he must be given adequate time to give a cool thought to the
charge or charges for which he is to be tried, decide about his defence
and ask the authorities, if necessary, to take reasonable steps in
procuring the attendance of his witnesses. He may even decide not to
defend the charge(s) but before he decides his line of action, he must be
given clear ninety-six hours.
19.Harshad Govardhan Sondagar [Harshad Govardhan
Sondagar v. International Assets Reconstruction Co. Ltd., (2014) 6 SCC
1 : (2014) 3 SCC (Civ) 1] was a case where the person in possession
claimed tenancy rights in the premises as well as a protected tenancy,
being a tenant prior to creation of a mortgage. It was held that the
remedy of an aggrieved person against a decision of Chief Metropolitan
Magistrate or a District Magistrate lay only before the High Court.
However, after the aforesaid judgment was rendered on 3-4-2014, the
Act had been amended and sub-section (4-A) was inserted in Section 17
with effect from 1-9-2016. This provided a right to move an application
to the Debts Recovery Tribunal by a person who claimed tenancy or
leasehold rights.
20.Dipak Babaria [Dipak Babaria v. State of Gujarat, (2014) 3 SCC 502]
was a case wherein agricultural land was sold by an agriculturist to
another person for industrial purposes. Permission was to be granted by
the Collector for the same. In these circumstances, it was held that
when a statute provides for a thing to be done in a particular manner
then it should be done in that manner itself. Such proposition does not
arise for consideration in the present case.
21. The Act was enacted to provide a machinery for empowering banks
and financial institutions, so that they may have the power to take
possession of secured assets and to sell them. The DRT Act was first
enacted to streamline the recovery of public dues but the proceedings
25
under the said Act have not given desirous results. Therefore, the Act in
question was enacted. This Court in Mardia Chemicals [Mardia
Chemicals Ltd. v. Union of India , (2004) 4 SCC
311], Transcore [Transcore v. Union of India, (2008) 1 SCC 125 : (2008)
1 SCC (Civ) 116] and Hindon Forge (P) Ltd. [Hindon Forge (P)
Ltd. v. State of U.P., (2019) 2 SCC 198 : (2019) 1 SCC (Civ) 551] has held
that the purpose of the Act pertains to the speedy recovery of dues, by
banks and financial institutions. The true intention of the legislature is a
determining factor herein. Keeping the objective of the Act in mind, the
time-limit to take action by the District Magistrate has been fixed to
impress upon the authority to take possession of the secured assets.
However, inability to take possession within time-limit does not render
the District Magistrate functus officio. The secured creditor has no
control over the District Magistrate who is exercising jurisdiction under
Section 14 of the Act for public good to facilitate recovery of public dues.
Therefore, Section 14 of the Act is not to be interpreted literally without
considering the object and purpose of the Act. If any other interpretation
is placed upon the language of Section 14, it would be contrary to the
purpose of the Act. The time-limit is to instil a confidence in creditors
that the District Magistrate will make an attempt to deliver possession
as well as to impose a duty on the District Magistrate to make an
earnest effort to comply with the mandate of the statute to deliver the
possession within 30 days and for reasons to be recorded within 60
days. In this light, the remedy under Section 14 of the Act is not
rendered redundant if the District Magistrate is unable to handover the
possession. The District Magistrate will still be enjoined upon, the duty
to facilitate delivery of possession at the earliest”‟
(emphasis supplied)
20. In terms of C Bright (supra), Question (b) is answered holding that
the time limit stipulated in Section 14 of the Act is directory and not
mandatory. The conclusion of the Hon‟ble 3-Judge Bench in C Bright
(supra) would cover Chief Metropolitan Magistrates as well.
21. As such, the petitioners‟ contention that the CMM ought not to
have passed the order dated 28.12.2020 on SBI‟s application filed on
27.02.2019 under Section 14 of the Act is negatived. In this view, the CMM‟s
order dated 28.12.2020 does not suffer from any illegality, and cannot be
faulted with.
22. Turning to Question (c), we reproduce Section 14 of the Act in toto:
“14. Chief Metropolitan Magistrate or District Magistrate to assist
secured creditor in taking possession of secured asset.—
(1) Where the possession of any secured assets is required to be taken
by the secured creditor or if any of the secured asset is required to be
sold or transferred by the secured creditor under the provisions of this
Act, the secured creditor may, for the purpose of taking possession or
26
control of any such secured assets, request, in writing, the Chief
Metropolitan Magistrate or the District Magistrate within whose
jurisdiction any such secured asset or other documents relating thereto
may be situated or found, to take possession thereof, and the Chief
Metropolitan Magistrate or, as the case may be, the District Magistrate
shall, on such request being made to him—
(a) take possession of such asset and documents relating thereto; and
(b) forward such asset and documents to the secured creditor:
Provided that any application by the secured creditor shall be
accompanied by an affidavit duly affirmed by the authorised officer of
the secured creditor, declaring that—
(i) the aggregate amount of financial assistance granted and the total
claim of the Bank as on the date of filing the application;
(ii) the borrower has created security interest over various properties
and that the Bank or Financial Institution is holding a valid and
subsisting security interest over such properties and the claim of the
Bank or Financial Institution is within the limitation period;
(iii) the borrower has created security interest over various properties
giving the details of properties referred to in sub-clause (ii) above;
(iv) the borrower has committed default in repayment of the financial
assistance granted aggregating the specified amount;
(v) consequent upon such default in repayment of the financial
assistance the account of the borrower has been classified as a non-
performing asset;
(vi) affirming that the period of sixty days notice as required by the
provisions of sub-section (2) of Section 13, demanding payment of the
defaulted financial assistance has been served on the borrower;
(vii) the objection or representation in reply to the notice received from
the borrower has been considered by the secured creditor and reasons
for non-acceptance of such objection or representation had been
communicated to the borrower;
(viii) the borrower has not made any repayment of the financial
assistance in spite of the above notice and the Authorised Officer is,
therefore, entitled to take possession of the secured assets under the
provisions of sub-section (4) of Section 13 read with Section 14 of the
principal Act;
(ix) that the provisions of this Act and the rules made thereunder had
been complied with:
Provided further that on receipt of the affidavit from the Authorised
Officer, the District Magistrate or the Chief Metropolitan Magistrate, as
the case may be, shall after satisfying the contents of the affidavit pass
suitable orders for the purpose of taking possession of the secured
assets within a period of thirty days from the date of application:
Provided also that if no order is passed by the Chief Metropolitan
Magistrate or District Magistrate within the said period of thirty days for
reasons beyond his control, he may, after recording reasons in writing
for the same, pass the order within such further period but not
exceeding in aggregate sixty days.
Provided also that the requirement of filing affidavit stated in the first
proviso shall not apply to proceeding pending before any District
Magistrate or the Chief Metropolitan Magistrate, as the case may be, on
the date of commencement of this Act.
(1-A) The District Magistrate or the Chief Metropolitan Magistrate may
authorise any officer subordinate to him,—
(i) to take possession of such assets and documents relating thereto;
and
27
(ii) to forward such assets and documents to the secured creditor.
(2) For the purpose of securing compliance with the provisions of sub-
section (1), the Chief Metropolitan Magistrate or the District Magistrate
may take or cause to be taken such steps and use, or cause to be used,
such force, as may, in his opinion, be necessary.
(3) No act of the Chief Metropolitan Magistrate or the District
Magistrate any officer authorised by the Chief Metropolitan Magistrate
or District Magistrate done in pursuance of this section shall be called in
question in any court or before any authority.”
23. A succinct exposition on Section 14 of the Act can be found in
Standard Chartered Bank v V Noble Kumar, (2013) 9 SCC 620 and
Authorised Officer, Indian Bank v D Vishalakshi, (2019) 20 SCC 47.
However, as the recourse to Section 14 by SBI is not in controversy herein,
the need to dwell thereupon is obviated.
24. Learned counsel for SBI has vehemently relied on the judgement
by a learned Single Judge of the Delhi High Court in Housing Development
Finance Corporation Ltd. v Rakesh Kumar, 2021 SCC OnLine Del 5209,
to contend that there is no requirement for the CMM to fix a time limit for
taking possession of the secured asset in exercise of power under Section 14
of the Act. He, therefore, urges us that no interference is called for in the
present matter. He would canvass that as no time-limit was required to be
fixed, taking over of possession after expiry of the time in the warrant would
not render the taking over illegal.
25. The relevant paragraphs from Housing Development Finance
Corporation (supra), as relied on by learned counsel for SBI, read:
“I. Whether there is any requirement or justification to fix a time
limit by the CMM for taking possession of the secured asset while
exercising jurisdiction under Section 14 of the SARFAESI Act?
14. Section 14 of the SARFAESI Act is an enabling provision through
which the secured creditor may seek the assistance of the CMM in
taking physical possession of the secured asset, which is within the
jurisdiction of the CMM. There is no provision under Section 14 that
requires imposition of any time limit for the aforesaid purpose. The only
time limit provided in Section 14 is in the proviso to Section 14, that the
CMM is required to pass an order within thirty days from the date the
application has been filed before the CMM by the secured creditor. In
28
terms of the second proviso, the said period of thirty days is extendable
by a further period of thirty days, and therefore, the maximum period
provided is sixty days. There is justification for providing this time limit,
so that the CMM expeditiously decides applications filed under Section
14 of the SARFAESI Act.
15. On many occasions, it is noticed that CMMs, in exercise of
jurisdiction under Section 14 of the SARFAESI Act, while appointing
court receivers, fix time limits for the said receivers to take possession of
the mortgaged property. It has further been noticed that due to a variety
of reasons, the physical possession of the property is not acquired in the
time limit fixed by the CMM, which results in applications for extension
being filed before the CMM. To illustrate, sometimes, the borrower files a
petition under Section 17 of the SARFAESI Act before the DRT and the
DRT grants an interim stay on taking over possession because of which
possession of the secured asset is not taken within the time limit set by
the CMM. This results in applications being filed before the CMM for
extension of time for taking physical possession of the secured asset.
16. Reference may be made to the judgment dated 15
th
March, 2021 of
this Court in CM(M) 210/2021 titled Jammu and Kashmir Bank
Limited v. Trans Asian Industries Exposition Private Limited, wherein a
petition was filed before this Court on account of the CMM declining
extension of time for taking over physical possession of the properties of
the debtor, as sought by the bank. While allowing the said petition, this
Court observed as under:
“10. This Court has considered the matter. There is no doubt that the
time period of 30 days, extendable to 60 days, fixed under section 14 of
the SARFAESI Act, are for executing the order of the Chief Metropolitan
Magistrate, concerning the taking over of physical possession of the
properties by the Bank. However, if the court receivers did not cooperate
with the Bank, in lieu of taking over the possession of the said
properties, it cannot be held that the Court would be rendered powerless
and the order directing the taking over of physical possession would be
set at naught.
11. In order to secure the asset of the Bank, it is in the interest of justice
that the physical possession of the concerned properties, ought to be
taken so as to ensure that the asset is not frittered away by the debtor.”
(emphasis supplied)
17. The aforesaid judgment in Jammu and Kashmir Bank (supra) was
followed by me in Sansar Chand Sharma v. Kotak Mahindra Bank Ltd.,
through Chief Manager Sh. G.S. Pander, 2021 SCC OnLine Del 4911,
wherein it was held that there are no provisions of law in terms of which
the CMM could not extend the time period granted for taking physical
possession of the secured asset and technicalities cannot come to the
aid of the borrower to frustrate the object behind the SARFAESI Act.
18. Keeping in mind the objective of the SARFAESI Act i.e., to enable the
secured borrowers to take physical possession of the assets of the
defaulting borrowers in an expeditious manner, there is no requirement
or justification for the CMM to impose time limits for the receiver to take
physical possession of the secured asset. This would also curtail
unnecessary litigation wherein applications for extension are filed before
the CMM and upon the said applications being either allowed or
29
declined by the CMM, petitions are filed before this Court challenging the
said decision of the CMM.
19. No submissions have been made by the respondents on this issue.
This Court finds merit in the submissions made by the petitioner, that
there is no requirement or rationale in providing a time limit in orders
passed by the CMM under Section 14 of the SARFAESI Act, in respect of
taking possession of the secured asset. In fact, setting of a time limit by
the CMM for taking possession of a secured asset is contrary to the
legislative intent.
20. Therefore, the impugned order dated 30
th
March, 2021 passed by
the CMM, to the extent that it imposes a time limit of ninety days for the
court receiver to take physical possession, is set aside.
xxx
36. To summarise, the issues formulated by the Court stand answered
in the following manner:
(i) There is no requirement or justification for the CMM to fix a time limit
for taking possession of the secured asset while exercising jurisdiction
under Section 14 of the SARFAESI Act;
…..”
26. We point out that though Question (c) as framed by us, is on
whether possession can be taken after elapse of the time fixed by the
warrant, yet still, we are further called upon to answer, in light of the
reliance placed by SBI on Housing Development Finance Corporation
(supra), whether CMMs are or are not required to fix time-limits for taking
possession of the secured asset exercising power vested by Section 14 of the
Act.
27. With great respect to the learned Single Judge, we express our
inability to concur with the proposition of law in Housing Development
Finance Corporation (supra). We are of the opinion that Housing
Development Finance Corporation (supra) could lead to anomalous
scenarios. Illustratively, if the CMM passes an order under Section 14 with
no stipulated time to carry out the taking over, it could result in possession
being taken over, in the guise of such order, months after the passing of
such order. The borrower/occupier/person(s) in possession of the secured
asset concerned, cannot be left in the lurch. This, surely, could never have
been the intent of the Legislature. Further, as the learned Single Judge has
30
himself indicated, and rightly so, the main objective of the Act is to enable
the secured borrowers to take physical possession of the assets of the
defaulting borrowers in an expeditious manner; if no time limit is fixed it
would be self-defeating inasmuch as though the statute indicates a time
frame for the CMM/District Magistrate to pass an order, if the
person/authority who is required to carry out the order does not do so
within the time fixed, it would lead to an anomalous position in law as there
is no remedy prescribed under the statute. It would, thus, border on to
extremity, as the authorised person/authority would be more powerful, in
real terms, than the authority which passed the order conferring such power
to take physical possession. Even otherwise, since an order passed by the
CMM/District Magistrate under Section 14 of the Act has the force of law, a
warrant issued giving authority for taking over physical possession is
circumscribed and limited to what has been actually written in the order,
which, obviously and rightly, should and would include the time limit of
such authorisation for taking possession.
28. An incongruous position cannot be countenanced where the
authority conferred power under Section 14 of the Act is required to exercise
that within a maximum period of sixty days, or at the very least, as a result
of C Bright (supra), endeavour so to do, but the actual taking over of
physical possession, to be done through a person appointed by the Chief
Metropolitan Magistrate/District Magistrate, would be at such person‟s will.
This is not the intent of the Act.
29. The learned Single Judge of the Delhi High Court in Sansar
Chand Sharma v Kotak Mahindra Bank Limited , 2021 SCC OnLine Del
4911, referred to in Housing Development Finance Corporation (supra),
opined that „… No provisions of law have been pointed out by the counsel for
the petitioner in terms of which the CMM could not extend the time period
31
granted for taking physical possession of the property. It has righty been
contended on behalf of the respondent that the respondent had only sought
extension of the time granted to the Receiver appointed by the CMM and had
not sought any fresh appointment of a Receiver. Technicalities cannot come to
the aid of the petitioner in frustrating the object behind the SARFAESI Act.‟
30. Moreover, in Sansar Chand Sharma (supra), a decision of
another learned Single Judge of the Delhi High Court, in Jammu and
Kashmir Bank Limited v Trans Asian Industries Exposition Private
Limited, MANU/DE/0491/2021 has been referred to. In Jammu and
Kashmir Bank Limited (supra), it was stated:
“10. This Court has considered the matter. There is no doubt that the
time period of 30 days, extendable to 60 days, fixed under section 14 of
the SARFAESI Act, are for executing the order of the Chief Metropolitan
Magistrate, concerning the taking over of physical possession of the
properties by the Bank. However, if the court receivers did not cooperate
with the Bank, in lieu of taking over the possession of the said
properties, it cannot be held that the Court would be rendered powerless
and the order directing the taking over of physical possession would be
set at naught.
11. In order to secure the asset of the Bank, it is in the interest of justice
that the physical possession of the concerned properties, ought to be
taken so as to ensure that the asset is not frittered away by the debtor.”
31. An essential component of judicial orders is certainty. If a CMM
imposes a time-limit for taking over possession, such stipulated time has to
be mandatorily adhered to. If the same is not done, be it for whatever reason,
the appropriate course of action is to re-approach the CMM concerned for
extension of time. We are of the clear view that a reasonable time limit
should be imposed by the CMMs, in their wisdom and discretion. Although
in the context of recovery of excise duties, the Hon‟ble Supreme Court, in
Government of India v Citedal Fine Pharmaceuticals, Madras, (1989) 3
SCC 483, had held that „In the absence of any period of limitation it is settled
that every authority is to exercise the power within a reasonable period. What
32
would be reasonable period, would depend upon the facts of each case… No
hard and fast rules can be laid down in this regard as the determination of the
question will depend upon the facts of each case.‟
32. In judging what is to be a reasonable period for reopening an
order of assessment under the Punjab General Sales Tax Act, 1948, in State
of Punjab v Bhatinda District Cooperative Milk Producers Union Ltd.,
(2007) 11 SCC 363, the Hon‟ble Supreme Court observed that „It is trite that
if no period of limitation has been prescribed, statutory authority must exercise
its jurisdiction within a reasonable period. What, however, shall be the
reasonable period would depend upon the nature of the statute, rights and
liabilities thereunder and other relevant factors.‟
33. The same principle would hold the field. We would, thus, hold and
direct that the CMMs shall, when passing orders under Section 14 of the
Act, mandate a reasonable time-limit for taking over possession of the
secured asset in question. This, to our mind, appropriately secures the
interests of all concerned parties. Needless to state, it will be open to the
bank or financial institution to approach the CMM for extension of time, if
need be.
34. In the present case, the learned CMM, in fact, adopted the correct
approach in law by fixing a date by which the warrant was to be executed.
Further, the time-limit is in the interest of the secured creditor, as the
Advocate Commissioner would also be bound to act within the stipulated
time-frame. As already observed, the CMM can be re -approached for
extension of time, if required.
35. Therefore, Question (c) is answered thus - once the time specified
in the warrant has elapsed, possession of the property in question cannot be
taken over, under the same warrant.
33
36. It is well-settled that the Act is a complete code in itself. [See State
Bank of Travancore (supra) and Pegasus Assets Reconstruction (P) Ltd. v
Haryana Concast Ltd., (2016) 4 SCC 47]. That the Act intends to facilitate
recovery of loans given by banks and financial institutions is not doubted.
The Act confers a special right and a faster mechanism of quick mode of
recovery to banks and financial institutions. However, justice cannot be side-
tracked, and the provisions of and actions done under the Act cannot be
stretched outside the ken of permitted judicial review.
37. We are conscious of the economic impact of our decisions, subject
to deference to our principal duty to apply and uphold the law, apropos the
observations made in Shivashakti Sugars Limited v Shree Renuka Sugar
Limited, (2017) 7 SCC 729:
“43. It has been recognised for quite some time now that law is an
interdisciplinary subject where interface between law and other
sciences (social sciences as well as natural/physical sciences) come into
play and the impact of other disciplines on Law is to be necessarily kept
in mind while taking a decision (of course, within the parameters of
legal provisions). Interface between Law and Economics is much more
relevant in today's time when the country has ushered into the era of
economic liberalisation, which is also termed as "globalisation" of
economy. India is on the road of economic growth. It has been a
developing economy for number of decades and all efforts are made, at
all levels, to ensure that it becomes a fully developed economy. Various
measures are taken in this behalf by the policy-makers. The judicial
wing, while undertaking the task of performing its judicial function, is
also required to perform its role in this direction.
It calls for an economic analysis of law approach, most commonly
referred to as "Law and Economics" [Richard A. Posner in his book
Frontiers of Legal Theory explains this concept as follows: "Economic
analysis of law has heuristic, descriptive and normative aspects. As a
heuristic, it seeks to display underlying unities in legal doctrines and
institutions; in its descriptive mode, it seeks to identify the economic
logic and effects of doctrines and institutions and the economic causes
of legal change; in its normative aspect it advises Judges and other
policy-makers on the most efficient methods of regulating conduct
through law. The range of its subject-matter has become wide, indeed
all-encompassing. Exploiting advances in the economics of nonmarket
behaviour, economic analysis of law has expanded far beyond its
original focus on antitrust, taxation, public utility regulation, corporate
finance, and other areas of explicitly economic regulation. (And within
that domain, it has expanded to include such fields as property and
contract law.) The "new" economic analysis of law embraces such
34
nonmarket, or quasi-nonmarket, fields of law as tort law, family law,
criminal law, free speech, procedure, legislation, public international
law, the law of intellectual property, the rules governing the trial and
appellate process, environmental law, the administrative process, the
regulation of health and safety, the laws forbidding discrimination in
employment, and social norms viewed as a source of, an obstacle to,
and a substitute for formal law." Posner also mentioned that this
interface between Law and Economics might grandly be called
"Economic Theory of Law", which is built on a pioneering article by
Ronald Coase [R.H. Coase, "The Problem of Social Cost", 3 Journal of
Law and Economics 1 (1960)]:"The "Coase Theorem" holds that where
market transaction costs are zero, the law's initial assignment of rights
is irrelevant to efficiency, since if the assignment is inefficient the parties
will rectify it by a corrective transaction. There are two important
corollaries. The first is that the law, to the extent interested in promoting
economic efficiency, should try to minimize transaction costs, for
example by defining property rights clearly, by making them readily
transferable, and by creating cheap and effective remedies for breach of
contract. ...The second corollary of the Coase Theorem is that where,
despite the law's best efforts, market transaction costs remain high, the
law should simulate the market's allocation of resources by assigning
property rights to the highest-valued users. An example is the fair-use
doctrine of copyright law, which allows writers to publish short
quotations from a copyrighted work without negotiating with the
copyright holder. The costs of such negotiations would usually be
prohibitive; if they were not prohibitive, the usual result would be an
agreement to permit the quotation, and so the doctrine of fair use brings
about the result that the market would bring about if market
transactions were feasible."]. In fact, in certain branches of Law there is
a direct impact of Economics and economic considerations play
predominant role, which are even recognised as legal principles.
Monopoly laws (popularly known as "Antitrust Laws" in USA) have been
transformed by Economics. The issues arising in competition laws
(which has replaced monopoly laws) are decided primarily on economic
analysis of various provisions of the Competition Commission Act.
Similar approach is to be necessarily adopted while inte rpreting
bankruptcy laws or even matters relating to corporate finance, etc. The
impress of Economics is strong while examining various facets of the
issues arising under the aforesaid laws. In fact, economic evidence
plays a big role even while deciding environmental issues. There is a
growing role of Economics in contract, labour, tax, corporate and other
laws. Courts are increasingly receptive to economic arguments while
deciding these issues. In such an environment it becomes the bounden
duty of the Court to have the economic analysis and economic impact of
its decisions.
44. We may hasten to add that it is by no means suggested that while
taking into account these considerations, specific provisions of law are
to be ignored. First duty of the Court is to decide the case by applying
the statutory provisions. However, on the application of law and while
interpreting a particular provision, economic impact/effect of a decision,
wherever warranted, has to be kept in mind. Likewise, in a situation
where two views are possible or wherever there is a discretion given to
the Court by law, the Court needs to lean in favour of a particular view
which subserves the economic interest of the nation. Conversely, the
Court needs to avoid that particular outcome which has a potential to
35
create an adverse effect on employment, growth of infrastructure or
economy or the revenue of the State. It is in this context that economic
analysis of the impact of the decision becomes imperative.”
38. The order to take possession was issued by the learned CMM on
28.12.2020 fixing the returnable date as 15.02.2021. However, without any
prayer/application being made before the learned CMM by the SBI and the
CMM also not having extended time or the life of the warrant, the same was
still acted upon and executed by the Advocate Commissioner on 17.12.2021 ,
by which physical possession of the asset in question has been taken over.
39. At the cost of repetition, the Court would note that the order
passed by the CMM was a judicial order and conferred upon the Advocate
Commissioner authority to take over physical possession. Thus, the
Advocate Commissioner could not have exceeded jurisdiction beyond the
time specifically stipulated by the Court. It is true that the CMM‟s order of
05.01.2021records that the matter be placed before the Officer as and when
report is filed. But the same has to be read harmoniously and contextually
juxtaposed with the earlier orders dated 28.12.2020 and 04.01.2021 passed
by the CMM.
40. On 28.12.2020, the CMM appointed four Advocate Commissioners
and a warrant was issued for taking over possession of the premises and it
was specifically mentioned that the warrant was returnable with report by
15.01.2021 with the stipulation that the warrant shall be issued on payment
of Commissioner fee and process on or before 04.01.2021.Hence, on
04.01.2021 also there is an endorsement that the matter was adjourned for
the next day for payment of Commissioner fee and process and on
05.01.2021, the process memo and fee receipt of Commissioner having been
filed, a warrant was issued along with police aid to the Advocate
Commissioner. In this regard, it was further written that as and when the
report is filed, the same shall be placed before the Officer. The words “place
36
before the Officer as and when report is filed” cannot be read bereft of context
to be interpreted as a blanket perpetual warrant issued to the Advocate
Commissioner for taking over possession of the premises in question. The
true import was simply that the case would be listed upon the report being
filed by the Advocate Commissioner upon due execution of the warrant by
taking over physical possession. However, this exercise had necessarily, to
be completed by 15.02.2021, as per the substantive order dated 28.12.2020.
We note at this juncture, that the parties are ad idem that the same has not
been done and the warrant has been „executed‟ after almost one year from
the passing of the order and over ten months (ten months and two days, to
be precise) from the date on which the warrant was made returnable along
with the report.
41. Thus, we have no hesitation to hold that the action of the Advocate
Commissioner in taking over physical possession of the asset on 17.12.2021,
purportedly in terms of the order dated 28.12.2020 passed in Crl.M.P.
No.201 of 2020 by the learned CMM cannot be sustained as it was clearly
devoid of the authority of law and, accordingly, is declared illegal.
42. Here, it is necessary to indicate that the writ petition was filed on
17.12.2021 itself seeking the following relief:
“….. issue a Writ, Order or direction more particularly one in the
nature of „Writ of Mandamus‟ declaring the action initiated by the
respondent bank under Section 13(4)(a) and 14 of the
Securitization an s Reconstruction of Financial Assets and
Enforcement of Security Act 2002 r/w Rule 8 of the Security
Interest (Enforcement) Rules 2002, without following the statutory
procedure thereunder, for taking possession of the 1
st
petitioner
industry, taking un due advantage of the absence of the Presiding
Officer of the Debts Recovery Tribunal at Vishakhapatnam, before
whom the S.A.No.334 of 2021 filed by the 1
st
petitioner, is
pending consideration from 17.09.2021 onwards with a next date
of hearing on dt.28.11.2021, as illegal, arbitrary and violative of
Article 14, 19 (1)(g), 21 and 300-A of the Constitution of India,
apart from being violative of principles of natural justice,
consequently direct the respondents not to take any coercive steps
against the 1
st
petitioner industry, and to pass such other or
orders as this Hon‟ble court may deem fit and proper in the
circumstances of the case”.
37
43. IA 1 of 2021 in this petition prayed for:
“…..to direct the respondent bank not to dispossess the 1
st
petitioner industry situated in an extent of Ac.12-12 cents of lands
with a spinning Mill constructed therein with bearing
D.No.6/224/8, situated at Chinakakani Village , Mangalagiri
Mandal, Guntur District, except in accordance with law, pending
final disposal of the main Writ Petition, and to pass such other
order or orders as this Hon‟ble court may deem fit an d proper in
the circumstances of the case.”
44. However, on the first hearing itself on 21.12.2021, the contours of
the lis were indicated, which is evident from paragraph no. 3 of the order
recorded on that day, which reads thus:
“3. Learned counsel for the petitioners submitted that in terms of
such order, a warrant was issued to the Advocate Commissioner
to take physical possession of the premises. However, learned
counsel submitted that the life of the warrant was till 15.02.2021,
which was never extended or renewed, but still the respondents
using the said order have forcibly taken possession of the secured
assets on 17.12.2021, which is totally illegal, arbitrary, and a
clear-cut case of highhandedness by the respondents.”
45. The power to mould relief is an inherent and intrinsic component
of Article 226. At Paragraph 5 of B R Ramabhadraiah v Secretary, Food
and Agriculture Dept., AP, (1981) 3 SCC 528 and Paragraph 4 of State of
Rajasthan v Hindustan Sugar Mills Ltd. , (1988) 3 SCC 449, it has been
held that under Article 226, the High Court‟s power includes the capacity to
mould relief to remedy injustice and as per the demand of the situation. In
Air India Statutory Corporation v United Labour Union, (1997) 9 SCC
377, it was observed:
“59. The Founding Fathers placed no limitation or fetters on the power of
the High Court under Article 226 of the Constitution except self-imposed
limitations. The arm of the Court is long enough to reach injustice
wherever it is found. The Court as sentinel on the qui vive is to mete out
justice in given facts. On finding that either the workmen were engaged
in violation of the provisions of the Act or were continued as contract
labour, despite prohibition of the contract labour under Section 10(1), the
High Court has, by judicial review as the basic structure, a
constitutional duty to enforce the law by appropriate directions. The
right to judicial review is now a basic structure of the Constitution by a
38
catena of decisions of this Court starting from Indira Nehru
Gandhi v. Raj Narain [1975 Supp SCC 1 : AIR 1975 SC 2299] to Bommai
case [(1994) 3 SCC 1] . It would, therefore, be necessary that instead of
leaving the workmen in the lurch, the Court properly moulds the relief
and grants the same in accordance with law.”
(emphasis supplied)
46. Moreover, in Rajesh Kumar v State of Bihar, (2013) 4 SCC 690,
particularly at Paragraphs 14-16, it has been held that the power to mould
relief is well-recognised and is available to a Writ Court to render complete
justice.
47. We have noticed an injustice and a violation of law. We, thus,
proceed to fashion out the appropriate relief, despite no formal application
for the same being made via pleadings. However, in the course of arguments,
learned counsel for the petitioner did urge us to pass an order that would
subserve justice.
48. In Ramesh Chandra Sankla v Vikram Cement, (2008) 14 SCC
58, the Hon‟ble Supreme Court was pleased to state:
“98. From the above cases, it clearly transpires that powers under
Articles 226 and 227 are discretionary and equitable and are required
to be exercised in the larger interest of justice. While granting relief in
favour of the applicant, the court must take into account the balancing of
interests and equities. It can mould relief considering the facts of the
case. It can pass an appropriate order which justice may demand and
equities may project. As observed by this Court in Shiv Shankar Dal
Mills v. State of Haryana [(1980) 2 SCC 437 : (1980) 1 SCR 1170] courts
of equity should go much further both to give and refuse relief in
furtherance of public interest. Granting or withholding of relief may
properly be dependent upon considerations of justice, equity and good
conscience.
99. In our considered opinion, taking into account facts and
circumstances in their entirety, the order passed and direction issued by
the Division Bench of the High Court was in furtherance of justice. Not
only has it not resulted in miscarriage of justice, in fact it has attempted
to put status quo ante by balancing interests and leaving the matter to
be decided by a competent authority in accordance with law.”
(emphasis supplied)
49. We are cognizant that our directions may, perhaps, result in
adding to the case docket, but that cannot be a consideration while
39
rendering substantive justice, which we are duty-bound by virtue of our
office to do so. The Courts of law cannot sacrifice the cause of justice itself.
We concur with the following observation of the learned Division Bench of
the Delhi High Court in Bright Enterprises Private Limited v MJ Bizcraft
LLP, 2017 SCC OnLine Del 6394 :
“…..we would like to make a brief comment on the court's concern with
“docket explosion”. No doubt, it is a problem for the judicial system to
contend with. But, that does not concern the individual litigant who
comes to court seeking justice. Our endeavour must never be to deny
justice to anyone in our over zealousness to dispose cases. As Benjamin
Franklin said—great haste makes great waste, courts while
endeavouring to deliver speedy justice, must not hand out hasty
decisions without any concern for justice.”
50. Therefore, we direct that status quo ante as on 16.12.2021 be
restored forthwith. Necessary consequences in law shall entail. The SBI is at
liberty to approach the CMM concerned seeking an appropriate order to
extend time for taking possession of the secured asset within four weeks
from today. The learned CMM shall proceed further in accordance with law,
after giving both parties an opportunity of hearing. All questions of fact and
law in this regard, and the rights and contentions thereto of both sides,
remain open for consideration by the learned CMM , and we have not
expressed any opinion, either way, thereon. This order, however, shall not
result in any recoveries being made from the Advocate Commissioners of any
fees paid in terms of the CMM‟s order.
51. The Registry shall circulate a copy of this Judgement to all Chief
Metropolitan Magistrates/Chief Judicial Magistrates and District Magistrates
in the State of Andhra Pradesh, for ensuring that while passing order under
Section 14 of the Act, a reasonable time is fixed for the person authorised to
execute/carry out/implement/give effect to such order by actual taking over
and delivery of physical possession of the properties covered under such
order and further, to obviate any ambiguity or chance of transgression, such
40
time shall also be incorporated in the consequential warrant/authorisation
issued to such authorised person.
52. We note that an objection was raised on behalf of the SBI that the
Advocate Commissioner concerned ought to have been made a party in the
instant proceeding. Such stand was adopted in the counter-affidavit. This, in
the considered opinion of the Court is not required since, in the present
case, this Court is not considering the reasons and/or the justification for
the Advocate Commissioner having executed/given effect to the order
authorising him to take over physical possession of the property in question,
much beyond the time fixed/granted by the CMM to do so. As has been held
by us, the order under Section 14 of the Act loses its force/effect, in law,
upon expiry of the returnable date, as fixed by the CMM, unless extended.
Thus, for the instant adjudication, the Advocate Commissioner is not a party
required to be heard. Moreover, the Advocate Commissioner, being conferred
only the power, limited, of taking over physical possession by the CMM
under Section 14 of the Act, has no vested right of being heard with regard
to the validity/life thereof.
53. Ergo, this writ petition is disposed of in the afore-stated terms.
Pending application(s), if any, do not survive for consideration and,
accordingly, stand consigned to records. In these facts and circumstances,
there shall be no order as to costs.
_________________________________
(AHSANUDDIN AMANULLAH, J)
_________________________
(B. S. BHANUMATHI, J)
Mjl/*
L.R. Copy to be marked
41
THE HON’BLE Mr. JUSTICE AHSANUDDIN AMANULLAH
AND
THE HON’BLE Ms. JUSTICE B. S. BHANUMATHI
WRIT PETITION No. 30161 of 2021
(disposed of)
18.02.2022
Mjl/*
LR copy to be marked.
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