HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
Mahendar Kumar Goyal, J.
Surbhi Mehta – Appellant
Versus
Iifl Home Finance Ltd. & Ors. – Respondents
S.B. Civil Writ Petition No. 4568/2020 Connected with S.B. Civil Writ Petition No. 4569/2020, S.B. Civil Writ Petition No. 4570/2020 & S.B. Civil Writ Petition No. 4572/2020
Decided On : 01-09-2022
Appeal - Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - The court held that any person aggrieved by an order made by the Debts Recovery Tribunal may prefer an appeal, and the remedy of appeal is not confined to the parties to the litigation only. The court also clarified that the jurisdiction of the Civil Court is saved only to a very limited extent, and the High Court under Article 226 of the Constitution of India cannot entertain disputed questions of fact involving allegations of fraud.
Fact of the Case:
The writ petition is directed against the order passed by the Debts Recovery Tribunal and the Chief Metropolitan Magistrate. The petitioners argued that they were not parties to the securitization application before the learned DRT and hence, the remedy of appeal is unavailable to them.
Finding of the Court:
The court found that the petitioners have a remedy of statutory appeal under Section 18 of the SARFAESI Act, 2002 against the order passed by the learned DRT, Jaipur. The court dismissed all the writ petitions for the availability of alternative remedy of statutory appeal to the petitioners.
Issues: The main issue was the maintainability of the writ petition despite the availability of the statutory remedy of appeal against the order passed by the learned DRT, Jaipur under Section 18 of SARFAESI Act, 2002.
Ratio Decidendi: The court held that any person aggrieved by any order made by the learned DRT may prefer an appeal, and the remedy of appeal is not confined to the parties to the litigation only. The court also clarified the limited extent of jurisdiction of the Civil Court and the High Court under Article 226 of the Constitution of India.
Final Decision: All the writ petitions were dismissed for the availability of the alternative remedy of statutory appeal to the petitioners.
JUDGMENT
1. Since, this batch of writ petition shares common facts and questions of law, they have been heard together and are being decided vide this common order.
2. For convenience, on the request of learned counsels for the respective parties, file of S.B. Civil Writ Petition No.4568/2020; Surbhi Mehta v. IIFL Home Finance Ltd., is taken as the lead case.
3. This writ petition is directed against the order dated 27.12.2019 passed by the learned Debts Recovery Tribunal, Jaipur (for brevity, "the DRT") in Securitization Application No.329/2019 as also the order dated 22.10.2019 passed by the learned Chief Metropolitan Magistrate, Jaipur Metropolitan in Civil Miscellaneous Case No.385/2019.
4. With regard to maintainability of the writ petition despite availability of statutory remedy of appeal against the order passed by the learned DRT, Jaipur under Section 18 of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for brevity, "SARFAESI Act,2002"), learned counsel for the petitioners submits that they were not the parties to the securitization application before the learned DRT and hence, the remedy of appeal is unavailable to them. Referring to Para 51 of the judgement of the Supreme Court of India in case of Mardia Chemicals Ltd. & Ors. v. Union of India & Ors.; (2004) 4 SCC 311, he submits that jurisdiction of this Court is saved therein. He also relied upon a judgement of Hon'ble Apex Court of India dated 24.09.2021 in CiviL Appeal No.5728/2021: M/s Magadh Sugar & Energy Ltd. v. The State of Bihar & Ors. to canvass that alternative remedy is no bar. Learned counsel further submits that since, the issue of fraud is involved in the matter, the learned DRT or for that matter, the learned DRAT is not competent to enquire into the allegations of fraud and hence, the petitioners cannot be relegated to the remedy of appeal.
5. Heard. Considered.
6. The petitioners have a remedy of statutory appeal under Section 18 of the SARFAESI Act, 2002 against the order passed by the learned DRT, Jaipur. Section 18 (1) reads as under:-
"Section 18: Appeal to Appellate Tribunal.
18. (1) Any person aggrieved, by any order made by the Debts Recovery Tribunal [under section 17, may prefer an appeal along with such fee, as may be prescribed] to an Appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery Tribunal."
7. Thus, from the aforesaid provision, it is apparent that any person aggrieved by any order made by the learned DRT may prefer an appeal and remedy of appeal is not confined to the parties to the litigation only. In view thereof, contention of the learned counsel for the petitioners that not being parties to the securitization application, remedy of appeal is unavailable to them, cannot be countenanced.
8. In case of Mardia Chemicals Ltd. (supra), the Hon'ble Apex Court has saved jurisdiction of the Civil Court only, though, to a very limited extent. It nowhere deals with jurisdiction of the High Court under Article 226 of the Constitution of India against an order passed by the learned DRT.
9. Further, learned counsel for the petitioners could not satisfy this Court that the learned DRT or the learned DRAT has no jurisdiction to enquire into the allegations of fraud. Be it as it may be, in any case, the allegation of fraud necessarily involves disputed questions of fact which cannot be entertained by this Court under its writ jurisdiction.
10. In view thereof, even the judgement of the Hon'ble Apex Court in case of M/s Magadh Sugar & Energy Ltd. (supra) is of no help to the petitioners.
11. The upshot of the aforesaid discussion is that all these writ petitions are dismissed for availability of alternative remedy of statutory appeal to the petitioners.
Mardia Chemicals Ltd. & Ors. v. Union of India & Ors.; (2004) 4 SCC 311
The main legal point established in the judgment is that any person aggrieved by an order made by the Debts Recovery Tribunal may prefer an appeal, and the remedy of appeal is not confined to the par....
The main legal point established in the judgment is that when a petitioner has an alternative remedy of statutory appeal under Section 18 of the Act of 2002, the writ petition may not be maintainable....
The High Court should not interfere in matters arising under the SARFAESI Act when an effective alternative remedy is available, reinforcing the principle of exhausting statutory remedies before seek....
Writ jurisdiction under Article 226 should not be exercised when an effective alternative remedy exists under statutory provisions, thereby emphasizing self-restraint by High Courts in recovery matte....
The main legal point established in the judgment is that actions under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 are amena....
Writ petitions against SARFAESI proceedings not entertainable due to efficacious alternative remedy before Debts Recovery Tribunal.
Writ petitions against proceedings initiated under the SARFAESI Act are not maintainable when an efficacious alternative remedy is available before the Debts Recovery Tribunal.
Writ petitions against proceedings initiated under the SARFAESI Act, 2002, are generally not maintainable when there exists an effective and efficacious alternative remedy available before the Debts ....
Writ petitions are not maintainable against recovery proceedings initiated under the SARFAESI Act, 2002, as the Act provides a comprehensive and efficacious alternative remedy before the Debts Recove....
High Courts should not entertain writ petitions against SARFAESI Act proceedings as an efficacious alternative remedy is available before the Debts Recovery Tribunal.
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