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2012 Supreme(Cal) 310
High Court of Calcutta
Joymalya Bagchi, J.
East India Chemical Products – Appellant
Versus
State Bank of India – Respondent
W.P. No. 20360 (W) OF 2007
Decided on : Apr 17, 2012
Ashish Kumar Bhattacharyya, Amir S. Molla, Udayan Sen, Sailajananda Bhattacharjee
The main legal point established is that the High Court should be slow in exercising its extraordinary powers under Article 226 of the Constitution in the face of an alternate statutory remedy under the SARFAESI Act.
Headnote:
SARFAESI Act - Writ Petition Challenging Bank's Notice of Sale and Possession of Land
Fact of the Case:
The petitioner challenged the notice of sale issued by the bank under the SARFAESI Act and sought release of excess land wrongfully possessed by the bank. The petitioner argued that no notice under Section 13(2) of the SARFAESI Act was served, and the bank wrongfully possessed more land than mortgaged.
Finding of the Court:
The court found that the writ petition was not maintainable due to the existence of an alternative statutory remedy under Section 17 of the SARFAESI Act. The court dismissed the petition, allowing the petitioner to seek remedy before the appropriate forum.
Issues: The issues involved disputed questions of fact, including the service of notice under the SARFAESI Act and the possession of land by the bank.
Ratio Decidendi: The court relied on the precedent that the High Court should be slow in exercising its extraordinary powers under Article 226 of the Constitution in the face of an alternate statutory remedy under the SARFAESI Act.
Final Decision: The court held that the writ petition was not maintainable and dismissed it, allowing the petitioner to seek remedy before the appropriate forum.
Joymalya Bagchi, J.
1. STATE Bank of India, Ektissal Branch (hereinafter referred to as the bank) sanctioned credit facilities to one of the concerns of the petitioner, namely, East India Chemical Products, in the following manner :
(i) Cash credit to the tune of 3 lakhs;
(ii) Clean medium loan to the tune of 1 lakh 95 thousand and;
(iii) Medium term loan for RS. 95,000/- against STDR of Rs.1,000,00/- as collateral security and by creating equitable mortgage in respect of 30 Cottahs of land at Dabgram in the district of Jalpaiguri.
2. OTHER credit facilities were also sanctioned by the bank to another concern of the petitioner, namely East India Trading Company and a personal vehicle loan was also advanced to the petitioner.
The petitioner has filed the instant writ petition, inter alia challenging the notice of sale issued by the bank under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (hereinafter referred to as the SARFAESI Act) being Annexure Petitioner-8 to the writ petition, and with a further prayer for release of excess land which has been wrongfully possessed by the bank.
3. THE contention of the petitioner is that no notice under Section 13 (2) of the SARFAESI Act was served upon him and that the respondents have taken possession of 21 bighas of land instead of 1 bighas or 30 cottahs of land which was mortgaged to the bank. THE petitioner strenuously argued that he has repaid the loan of the bank and the debt payable to the bank had not become a non-performing asset, various provisions, like Section 15, of the SARFESI Act, were violated when the secured asset was wrongfully possessed and the bank could not have proceeded to sale the secured asset after having instituted a Title (Mortgage) Suit No. 33 of 2004 before the Civil Court with regard to the self-same asset.
4. THE respondent resisted the contentions of the petitioner and contested the matter by filing affidavit. With leave of this Court, another supplementary affidavit was also filed by the respondents. THE respondents argued that the writ petition was not maintainable on the ground of existence of alternative statutory remedy under SARFSI Act. THE respondents also disputed the factual claims of the petitioner. At the time of admission of this writ petition, this Court by order dated 28.09.2007 had kept the point of maintainability of the writ petition open.
5. THE Apex Court in the case reported in 2010 (8) SCC 110 (United Bank of India Vs. Satyawati Tandon and Others) has unequivocally held that the High Court shall be extremely slow in exercising its extraordinary powers under Article 226 of the Constitution of India in the face of the alternate statutory remedy under section 17 of the SARFESI Act. THE ratio of the aforesaid decision applies with full force to the instant case and hence I am unwilling to exercise my discretionary powers under Article 226 of the Constitution of India.
6. IT is pertinent to mention that the petitioner had similarly challenged in W.P. No. 3624 (W) of 2007 a sale notice issued by the bank under the provision of SARFESI Act against another concern of the petitioner. This Hon’ble Court by order dated 04.07.2008 dismissed that writ petition on the ground of existence of alternative remedy. Such order was affirmed by the Division Bench by order dated 15.09.2008 in M.A.T. No. 736 of 2008. I find no reason to arrive at a different conclusion in the instant case wherein facts are similar.
That apart, the issues raised by the parties involve disputed questions of fact which cannot be decided in this proceeding by mere exchange of affidavits and can be more effectively dealt with under the statutory remedy under Section 17 of the SARFESI Act.
7. FOR the aforesaid reasons, I hold that the writ petition is not maintainable on the ground of existence of alternative statutory remedy and I dismiss the same. This order will not prevent the petitioner from seeking rem
