Important Point
Article 226 is not meant to short-cut or circumvent statutory procedures.

Anant S. Dave, J.

The petitioners, in both these petitions being guarantors of respondent No. 2 company and defaulters to the tune of more than Rs. 75 crores, have filed these petitions and as common question of law about exercise of powers under Article 226 of the Constitution of India vis-a-vis availability of alternative remedy under the statute arise for consideration, with consent of learned counsel for the parties, both the petitions are taken up for hearing.

2. In Special Civil Application No. 13529 of 2015, the petitioners/original defendant Nos. 2 and 3 are the directors of respondent No. 2 – original defendant No. 1 – M/s. Electrotherm [India] Ltd. and guarantors in the loan transaction entered into by the respondent No. 2 company with respondent No. 1 - Uco Bank on 04.09.2010 for short-term loan of Rs.50 Crores. The respondent No. 2 company through its authorised director, has signed and executed security documents viz. demand promissory note, letter of waiver, agreement relating to term loan, guarantee agreement executed by the petitioners/original defendant Nos. 2 and 3 and undertaking.

3. That Special Civil Application No. 14480 of 2015 is preferred by the petitioners with a prayer to quash and set aside order dated 06.07.2015 passed by the DRT-I, Ahmedabad in Original Application No.192 of 2011, which was filed by Syndicate Bank, respondent No.1. The facts of Special Civil Application No. 14480 of 2015 being similar to that of earlier Special Civil Application No. 13529 of 2015, except the amount of total claim of Rs. 25,51,45,359-34, in this case also, cheque of Rs. 25 crores given by the defendant No.1 i.e. M/s. Electrotherm (India) Limited came to be returned unpaid for which defendant Nos. 2 and 3 i.e. petitioners herein stood as guarantors for short term loans. In this Original Application No. 192 of 2011, where judgment is delivered by the DRT on 06.07.2015 in which contentions raised by learned advocate on facts and law and findings, reasonings and conclusions of DRT are almost same to that of order dated 13.05.2015 passed in Original Application No. 125 of 2011 and, therefore, to avoid repetition, same are not reproduced in this order.

4. Even after completion of six months, the petitioners being guarantors and the principal borrower company failed to pay even principal amount and in spite of repeated requests and issuance of legal notice dated 10.08.2011 calling upon them to regularise the account, no heed was paid, and therefore, Original Application No. 125 of 2011 was preferred under provisions of Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 [for short, 'RDDB Act, 1993'] before the Debts Recovery Tribunal, Ahmedabad-I at Ahmedabad with a prayer to issue recovery certificate of Rs. 51,47,38,549-80. In written statement filed by defendant No. 1 and defendant Nos. 2 and 3, who are petitioners in writ petitions, denied to have signed and executed any security document in favour of the bank. Upon consideration of facts as well as law and specific plea raised by learned counsel appearing for the petitioners/defendant Nos. 2 and 3 that in view of proceedings pending before AAIFR with regard to subject dispute and that by virtue of operation of Section 22 of The Sick Industries Companies [Special Provisions] Act, 1985 [for short, 'SICA, 1985], recovery against the guarantors viz. defendant Nos. 2 and 3 is prohibited and the Tribunal lacked jurisdiction to adjudicate original application. It was emphasised that in view of decision of the Apex Court in the case of K.S.L. Industries Limited v. Arihant Threads Limited & Ors. [AIR 2015 SC 498], SICA, 1985 has primacy over the RDDB Act, 1993 and particularly Section 22 shall prevail over the provisions of the RDDB Act, 1993.

4.1. However, the learned Presiding Officer, DRT-I, Ahmedabad allowed Original Application No. 125 of 2011 filed by the UCO Bank by determining the debt with costs against the defendant Nos. 2 a