Personal guarantors are not protected under Section 14 of the IBC and have an alternative remedy to challenge actions taken under the SARFAESI Act by filing a petition before the Debts Recovery Tribunal.

ORDER :

Akula Venkata Sesha Sai, J.

1. This Writ Petition is filed, under Article 226 of the Constitution of India, for a Writ of Mandamus, challenging the proceedings of the 2nd respondent, vide letter SAMB-II/HYD/JMK/823, dated 2.10.2020.

2. Heard Sri G. Kalyan Chakravarthy, learned counsel for the petitioners and Sri Satyanarayana Murthy, learned counsel for the respondents 1 & 2/bank, apart from perusing the material available before the Court.

3. The 3rd respondent herein is a corporate creditor for the loan advanced by the 1st respondent herein to M/s. SPY Agro Industries Limited. In view of the default committed by the said industry, one of the creditors i.e., IDBI Trusteeship Services Limited, Mumbai, initiated proceedings before the National Company Law Tribunal, Amaravati Bench, under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short 'IBC'). The petitioners herein are the persons, who offered their personal guarantee to the credit availed by 3rd respondent from 1st respondent.

4. The sum and substance of the case of the petitioners is that in view of the pendency of the proceedings before the National Company Law Tribunal, Amaravati Bench and the orders passed by the Tribunal in CP (IB) No. 187/7/AMR/2019, dated 14.5.2020 and in view of Section 14 of the said IBC, the 1st respondent herein cannot proceed with the sale of the properties offered by the petitioners towards guarantee.

5. On the contrary, Sri Satyanarayana Murthy, learned counsel for the respondents 1 & 2/bank contends that the safeguard provided under Section 14 of IBC cannot be extended to the personal guarantors and is applicable only to the corporate creditors. It is also the submission of the learned counsel for the respondents that when the said question fell for consideration before the Hon'ble Apex Court in Civil Appeal No. 3595 of 2018 reported in (2018) 17 SCC 394, the Hon'ble Apex Court held that "the protection under Section 14 of the Code is applicable only for the corporate guarantors, but not to the personal guarantors". The said legal position is not disputed by the learned counsel for the petitioners. Therefore, the contention of learned counsel for the petitioners with regard to the benefit under Section 14 of the IBC, cannot be sustained in the eye of law.

6. Another objection taken by the learned counsel for the respondents-bank is that even as per the affidavit filed in support of the Writ Petition, the 2nd respondent, vide letter dated 2.10.2020, sent e-Auction sale notice for sale of immovable properties under Rule 8 (6) of Security Interest (Enforcement) Rules, 2002. Issuance of said sale notice by the Bank is not in dispute. It is also the submission of the learned counsel for the respondents/bank that having regard to the provisions of Section 17(1) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'SARFAESI Act'), the petitioners herein need to approach the Debts Recovery Tribunal, if they want to assail the said steps taken under the provisions of SARFAESI Act, but not before this Court under Article 226 of the Constitution of India.

7. According to Section 17(1) of the SARFAESI Act, any person aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor may make an application before the Debts Recovery Tribunal.

8. In view of the said alternative remedy available to the petitioners herein under the said provision of law, this Court is not inclined to entertain the present Writ Petition for the purpose of examining the validity of the proceedings initiated under the provisions of SARFAESI Act.

9. During the course of hearing, it is brought to the notice of this Court by the learned counsel for the petitioners that in order to prove their bonafides, the petitioners herein will deposit a sum of Rs. 2,00,00,000/- within a period of ten (10) days from today.

10. Taking into consideration of the submissions of the lear