The main legal point established in the judgment is the need to exhaust statutory remedies before seeking relief under Article 226 of the Constitution of India, particularly in matters involving the SARFAESI Act, 2002.

ORDER :

1. By way of this petition, the petitioner has prayed for issuing a writ of Certiorari and/or any other appropriate writ, order or direction to quash and set aside the order dated 30.08.2023 qua the present petitioners passed by the Debt Recovery Tribunal - I at Ahmedabad in O.A. No. 7 of 2020. The petitioners have also prayed that this Court may by way of appropriate writ, order or direction, hold that there is no valid mortgage over the Properties of the Petitioner no. 1, included in the Schedule I as mentioned in the impugned order dated 30.08.2023.

2. The matter was listed and heard on 26.10.2023 and on that day, following order was passed:

“Heard learned advocate Mr. Mitul Shelat with learned advocate Mr. Pavan S. Godiawala for the petitioners.

Reserved for orders.”

3. The brief facts giving rise to the present petition are stated as under:

3.1. According to the petitioners, the revised partnership deed was entered into between the petitioners and respondent no. 5 to carry on the business under the name of Vardhman Enterprise wherein the share of the petitioner no. 1 as partner was having 35% of share of profit/loss, the petitioner no. 2 was partner having 5% of share in profit/loss in the firm and respondent no. 5 as partner was having 60% of share in profit/loss of the respondent no. 4-firm.

3.2. The petitioner no. 1 and respondent no. 5 in capacity of mortgagor approached the respondent no. 3-Bank i.e. Punjab National Bank in the year 2015 in order to acquire finance for their business. Initially a cash credit facility of Rs. 3,00,00,000/- was sanctioned. However, later it was enhanced to Rs. 4,80,00,000/-. For the aforesaid cash credit facility, necessary security was provided by petitioners and respondents no. 4 and 5.

3.3. The respondent no. 4 - Partnership Firm executed hypothecation of goods and book debts to secure the cash credit facility while the petitioners and respondent no. 5 in their capacity as Guarantors and mortgaged their properties as mentioned in schedule I in favour of the respondent no. 3-Bank. The properties mentioned in the schedule no. I also includes personal properties of the petitioner no. 1 as per the petitioner.

3.4. Schedule no. I as stated in the impugned order is reproduced as under:

SCHEDULE-I

(HYPOTHECATION MOVABLE PROPERTIES)

Defendant No. 1

Goods

Various raw materials viz. manufacturing material, raw materials including excisable raw material stocks in process, semi-finished goods. finished goods (including bought out finished goods) viz. sugar.

Book Debts - Book debts outstanding decree, money receivables, government subsidies, claims, bill contracts and investments etc.

(IMMOVABLE PROPERTIES)

Renudevi Arunkumar Jain

Defendant No. 2

“All that piece and parcel of the immovable property being Shop No. GF/3, admeasuring 243 sq. fts. i.e. 22.57.52 sq. mtrs. on the ground floor in the scheme known as ‘Thirthjal apartment’ of Avantika part cooperative housing society limited vibhag-2 situate on the land bearing final plot no. 65 paikee of town planning scheme no. 5 of revenue survey (Vejalpur) no. 290/2 paikee and revenue survey (Jodhpur) no. 195/2 paikee lying and being at mouje jodhpur (formerly Vejalpur), taluka city (west) within limit of registration district Ahmedabad and sub-district Ahmedabad - 4 (Paldi)”

East: Shop No. GF/4

West: Shop No. GF/2

North: Marginal space

South: Open to sky

“All that piece and parcel of the immovable property being Shop No. GF/4, admeasuring 392 sq. fts. i.e. 36.41.76 sq. mtrs. on the ground floor in the scheme known as ‘Thirthjal apartment’ of Avantika park cooperative housing society limited vibhag-2 situates on the land bearing final plot no. 65 paikee of town planning scheme no. 5 of revenue survey (Vejalpur) no. 290/2 paikee and revenue survey (Jodhpur) no. 195/2 paikee lying and being at mouje jodhpur (formerly Vejalpur), taluka city (west) within limit of registration district Ahmedabad and sub-district Ahmedabad - 4 (Paldi)”

East : Common margin

West: Shop No. G