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2011 Supreme(MP) 545
IN THE HIGH COURT OF MADHYA PRADESH
Sujoy Paul, J.
Kasturi Devi Jain
Vs.
Union Bank of India and others
W.P. No. 1494 of 2011
Decided On: 27.07.2011
The SARFAESI Act provides an additional and permissible remedy, and the Doctrine of Election does not apply when the remedies available have different scopes and are not inconsistent.
Headnote:
Doctrine of Election - SARFAESI Act - 13(2), 36 - The court discussed the applicability of the SARFAESI Act and the Code of Civil Procedure, and the Doctrine of Election. It highlighted the additional remedy provided under the SARFAESI Act and the absence of repugnancy or inconsistency between the remedies available in the Code of Civil Procedure and under the SARFAESI Act.
Fact of the Case:
The respondent bank filed a civil suit for recovery of a term loan, which was decreed in the bank's favor. The petitioner and other respondents failed to pay the amount, leading to the bank's application under Order 21 Rule 11 of the Civil Procedure Code. The petitioner challenged the bank's action under the SARFAESI Act, citing the bank's alleged illegality and impropriety.
Finding of the Court:
The court found that the bank's action under the SARFAESI Act was permissible and not barred by limitation. It emphasized the availability of statutory appellate remedies under the SARFAESI Act and the need to exhaust such remedies before seeking relief under Article 226 of the Constitution.
Issues: The issues involved the applicability of the SARFAESI Act, the Doctrine of Election, and the availability of statutory remedies for the petitioner.
Ratio Decidendi: The court held that the SARFAESI Act provides an additional remedy and does not conflict with the remedies available under the Code of Civil Procedure. It also emphasized the need for the petitioner to exhaust statutory appellate remedies before seeking relief under Article 226 of the Constitution.
Final Decision: The writ petition was dismissed, and the court found no justification for interfering in the matter.
Sujoy Paul, J.
1. Learned counsel for the petitioner submits that the respondent No. 1-Union Bank of India filed a civil suit before Fourth Additional District Judge, Morena for recovery of term loan. The said suit was decreed in favour of the Bank with direction to the present petitioner to pay Rs.4,57,543/- within six months along with interest ' 17.35% per annum. It is further directed that if the aforesaid amount is not paid, the mortgaged property can be auctioned and a final decree can be passed in this regard. This document is filed as Annexure P-1.
2. Admittedly, the petitioner and respondents No. 3 and 4 have not paid the said amount and, therefore, the respondent No. 1-Bank preferred an application under Order 21 Rule 11 of Civil Procedure Code, which was allowed by order dated 13-4-2006 (Annexure P/2) and the Bank was permitted to auction the property.
3. Against the order (Annexure P-2) a Civil Revision No. 105/2006 was filed by the petitioner before this Court and this Court vide order (Annexure P/3) dated 22-4-2010 quashed and set aside the preliminary decree/order dated 6-5-2006. The relevant portion of the order passed by this Court reads as under :--
17. Consequently, the revision petition is allowed and the impugned order passed by the Executing Court on Date 13-4-2006, in Execution Case No. 2-A/2000 x 2004 is set aside and as the Bank has preferred the execution proceedings under Order 21 Rule 11 of Civil Procedure Code, without applying for obtaining a Final Decree, the main Execution Application is also rejected on being premature, on the ground that such a Preliminary Decree would not be executable without obtaining the Final Decree.
4. Shri R. K. Goyal, learned counsel for the petitioner submits that in the light of the judgment passed by this Court, it is not open for the respondents to invoke section 13(2) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the SARFAESI Act'). Learned counsel for the petitioner has raised following points while arguing the matter:
(i) Since the Bank has already invoked the remedy under the Code of Civil Procedure, it is not open for the Bank to take recourse of the remedy under the SARFAESI Act.
(ii) As per section 36 of the SARFAESI Act, the action of the Bank is barred by limitation and, accordingly, the provisions of the SARFAESI Act are not attracted.
5. Per contra, Shri Praveen N. Surange, learned counsel for the Bank submits that there is no infirmity, illegality or impropriety in action of the Bank in invoking section 13(2) of the SARFAESI Act. Learned counsel supports Annexure P-6, whereby the Bank has invoked section 13(2) and published a document in the newspaper.
6. Further stand of the Bank is that the petitioner has not approached this Court with clean hands and suppressed the material facts. The stand of the Bank is that the petitioner has illegally sold the property, which was mortgaged with the Bank. Copy of registered sale deed is enclosed as Annexure R/1 with the Bank's return. The Bank has relied on the judgment of Apex Court in the case of Prestige Lights Limited vs. State Bank of India, reported in (2007) 139 Comp. Case 169 (SC). The relevant portion of the said judgment reads as under :
It is well settled that a prerogative remedy is not a matter of course. In exercising extraordinary power, therefore, a writ Court will indeed bear in the conduct of the party who is invoking such jurisdiction. If the applicant does not disclose full facts or suppress relevant materials or is otherwise guilty of misleading the Court, the Court may dismiss the action without adjudicating the matter. The rule has been evolved in larger public interest to deter unscrupulous litigants from abusing the process of Court by deceiving it. The very basis of the writ jurisdiction rest in disclosure of true, complete and correct facts. If the material facts are not candidly stated or are suppressed or are distorted, t
