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2005 Supreme(Mad) 1050

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE F.M. IBRAHIM KALIFULLA
PNL Depositors’ Welfare Association, Registered No. 94/2005, 59, Kamaraj Salai, Pondichery-605 001, rep. by Secretary, Nattaraj
Versus
Union of India by Secretary to Government, Ministry of Finance, New Delhi-110 001 and others
W.Ps. No. 9834, 10077, 13593, 10060, 11715 & 15303 of 2005 and W.P.M.P. Nos. 10659, 14620, 23476, 23511, 10914, 11343, 11344, 11345, 11926, 14137, 14553, 14911, 10897, 14619, 16705 of 2005
Decided on : 12-07-2005

Advocates Appeared:
Mr. K.M. Vijayan, Senior Counsel for M/s. La Law, Advocate for Petitioner. Mr. K.K. Sasidharan, Government Pleader (Pondy) for Respondents No. l, 3 & 4; Mr. A.L. Somayaji, Senior Counsel for Respondent No.4; Mr. V.T. Gopalan, Additional Solicitor General for Jeyesh B. Dolia for M/s. Aiyar & Dolia, Advocates for Respondent No. 5.

Headnote:

Writ Petitions challenging the proceedings initiated by the Indian Bank under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

Fact of the Case:

PNL Depositors’ Welfare Association filed a Writ Petition seeking a direction to safeguard the interest of the depositors of PNL Nithi Limited, Pondicherry by taking appropriate action under the law. Indian Renewable Energy Development Agency Limited (IREDAL) filed a petition to get itself impleaded as a party-respondent. Pondicherry Branch of Bank of Baroda filed a Writ Petition praying for a direction to the Indian Bank to safeguard its interest for appropriating its claim in a sum of Rs.75,73,873. Puduvai Pradesa Sarkarai Aalai Thozhilar Sangam filed a Writ Petition praying for a direction to the Indian Bank and New Horizons Sugar Mills Limited to exercise their discretion under Sections 13(4)(c) and 13(4)(b) of the SARFAESI Act, instead of straight away initiating action under Section 13(4)(a) of the said Act in order to run the third respondent Mills. Pondicherry State Co-operative Bank filed a Writ Petition to set apart a sum of Rs.1,88,56,704 as due and payable to the petitioner out of the auction proceeds realised by the Indian Bank. Indian Bank filed a Writ Petition against the Government of pondicherry as well as New Horizon Sugar Mills Pvt. Ltd. and another for the issuance of a writ of certiorari, to call for the records of the second respondent relating to the order bearing No.10912/DCRS/88/05 dated 21.3.2005 published in Daily Thanthi of Pondicherry Edition, which seeks to restrain the Indian Bank from conducting the sale of Molasses and other immovable properties in the premises of the sixth respondent therein, i.e., New Horizon Sugar Mills Pvt. Ltd.

Finding of the Court:

The Court held that the Writ Petitions were not maintainable as there were efficacious alternate remedies available to the petitioners under the provisions of the Pondicherry Protection of Interests of Depositors in Financial Establishments Act, 2004 (Act No. l of 2005) as well as the various provisions contained in Chapter III-B of the Reserve Bank of India Act, 1934. The Court also held that the action of the Indian Bank in selling the secured assets without intervention of the Court was valid and in accordance with the provisions of the SARFAESI Act.

Issues: Whether the Writ Petitions were maintainable in light of the alternate remedies available to the petitioners.

Ratio Decidendi: The Court held that the Writ Petitions were not maintainable as there were efficacious alternate remedies available to the petitioners under the provisions of the Pondicherry Protection of Interests of Depositors in Financial Establishments Act, 2004 (Act No. l of 2005) as well as the various provisions contained in Chapter III-B of the Reserve Bank of India Act, 1934. The Court also held that the action of the Indian Bank in selling the secured assets without intervention of the Court was valid and in accordance with the provisions of the SARFAESI Act.

Final Decision: All the Writ Petitions and connected W.P.M.Ps. were dismissed.

Judgment :

1. In all these Writ Petitions and Writ Petition Miscellaneous Petitions, the controversy centres around the proceedings initiated by the Indian Bank (Petitioner in W.P. No. 10077 of 2005) (hereinafter referred to as “Indian Bank”) under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short, “SARFAESI Act”).

2. W.P. No. 9834 of 2005 has been filed by PNL Depositors’ Welfare Association. The prayer is for the issuance of a Writ of Mandamus, to direct the respondents 1 to 4 therein to initiate necessary action to safeguard the interest of the depositors of the sixth respondent, namely, PNL Nithi Limited, Pondicherry by taking appropriate action under the provisions of law. In this Writ Petition, W.P.M.P. No. 14620 of 2005 has been filed by the Indian Renewable Energy Development Agency Limited (in short, “IREDAL”) for getting itself impleaded as one of the party-respondents. A similar petition has been filed in W.P.M.P. No.23476 of 2005 by Pondicherry Non-Banking Investors’ Protection Association.

3. W.P. No. 13593 of 2005 has been filed by Pondicherry Branch of Bank of Baroda, praying for the issuance of a writ of Mandamus, to direct the fourth respondent therein, i.e., the Indian Bank, to safeguard the interests of the petitioner-bank for appropriating its claim in a sum of Rs.75,73,873 vide its letter dated 8.3.2005 from the sale money deposited or to be deposited by the fifth respondent therein, namely, EID Parry (India) Ltd.

4. W.P. No. 10060 of 2005 has been filed by Puduvai Pradesa Sarkarai Aalai Thozhilar Sangam, praying for the issuance of a Writ of Certiorarified Mandamus, to call for the records relating to Tender Notification issued by the Indian Bank, dated 15.2.2005 published in The Hindu, dated 16.2.2005, to quash the same and consequently direct the Indian Bank and the other respondents, namely, New Horizons Sugar Mills Limited, to exercise their discretion under Section 13(4)(c) and 13(4)(b) of the SARFAESI Act, i nstead of straight away initiating action under Section 13(4)(a) of the said Act in order to run the third respondent Mills, namely, New Horizons Sugar Mills Limited. In this writ Petition also, W.P.M.P. No. 14619 of 2005 has been filed by ‘IREDAL’ for getting themselves impleaded as one of the party-respondents, W.P.M.P. No. 12743 of 2005 has been filed in the said Writ Petition by ‘Ariyur Sarkarai Alai Thozhilalar Nala Sangam’ for getting themselves impleaded in the said Writ Petition as one of the pa rtyrespondents.

5. W.P. No. 15303 of 2005 has been filed by Greata Enterprises & Developers (P) Ltd. as against the Indian Bank and M/s. Eid Parry Ltd., wherein, the petitioner seeks for the issuance of a writ of certiorarified Mandamus, to call for the records of the Authorised Officer of the Indian Bank, i.e., second respondent therein, in his letter dated 24.3.2005, to quash the same and consequently direct the second respondent to receive the balance sale consideration and to execute necessary documents of sale in favour of that petitioner.

6. W.P. No. 11715 of 2005 has been filed by the Pondicherry State Co-operative Bank as against New Horizon Sugar Mills Pvt. Ltd. and the Indian Bank, to set apart a sum of Rs.1,88,56,704 as due and payable to the said petitioner out of the auction proceeds realised by the Indian Bank.

7. W.P. No. 10077 of 2005 has been filed by the Indian Bank as against the Government of pondicherry as well as New Horizon Sugar Mills Pvt. Ltd. and another for the issuance of a writ of certiorari, to call for the records of the second respondent therein relating to the order bearing No.10912/DCRS/88/05 dated 21.3.2005 published in Daily Thanthi of Pondicherry Edition, which seeks to restrain the Indian Bank from conducting the sale of Molasses and other immovable properties in the premises of the sixth respondent therein, i.e., New Horizon Sugar Mills Pvt. Ltd. In the above said writ Petitio





































































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