Remedy of appeal under Section 17(1) of the SARFAESI Act is not available to secured creditors against District Magistrate orders but only to aggrieved parties.

ORDER :

Vivek Agarwal, J.

This matter is referred by the Division Bench of this High Court which was hearing this writ petition with a request to Hon'ble The Chief Justice to constitute a larger Bench to decide the following questions :-

(1). Whether remedy of appeal under Section 17 (1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is available to the secured creditor against an order passed by the District Magistrate under Section 14 of the said Act ?

(2). Whether in judgment/order passed in W.A. No. 489/2016 and W.P. No. 15608/2020, the Division Benches have correctly interpreted Section 17 (1) of the said Act and whether the said judgments can be said to be good law ?

2. The factual matrix of the matter is that the Hon'ble Division Bench while deciding W.A. No. 489/2016 ( India Sem Asset Reconstruction Co. Ltd. Vs. State of M.P. and others ) decided on 21st day of December, 2017 were dealing with the order passed in W.P. No. 6131/2016 by which the learned Writ Court relying on the decision of the Supreme Court in KanhaiyaLal Lalchand Sachdev and others Vs. State of Maharashtra and others (2011) 2 SCC 782 held that an action under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (In short 'SARFAESI Act') constitutes an action taken after the stage of Section 13 (4) and, therefore, the same would fall within the ambit of Section 17 (1) of the SARFAESI Act and dismissed the writ petition as not maintainable with liberty to the petitioner Financial institution to approach the Debts Recovery Tribunal under Section 17 of the SARFAESI Act.

3. While deciding the writ appeal and taking into consideration the law laid down by the five Judges Bench of this High Court in the case of Jabalpur Bus Operators Association and others Vs. State of M.P. and another (2003) 1 MPLJ 513 , so also taking into consideration that the judgment of United Bank of India Vs. Satyawati Tondon (2010) 8 SCC 110 , Jagdish Singh Vs. Heeralal and others (2014) 1 SCC 479 were not considered while upholding the view taken in the matter of M/s Sri Ambika Solvex Ltd. Vs. State Bank of India & others 2016 SCC Online MP 5772, held that they would like to follow the earlier judgment of the Hon'ble Supreme Court where the question of maintainability of the writ petition was considered in great detail and held that appellant has an effective alternate remedy to approach the Debt Recovery Tribunal under Section 17 of the SARFAESI Act and accordingly held that the writ appeal filed by the appellant/creditor India Sem Asset Reconstruction Co. Ltd. has no merit and it accordingly dismissed the writ appeal with liberty to the appellant to avail the remedy of appeal under Section 17 of the SARFAESI Act in accordance with law.

4. This judgment of the Division Bench of the High Court came to be followed by another Division Bench of this High Court in W.P. No. 15608/2020 decided on 21/10/2020 wherein it is held that "IDBI infact has approached the District Magistrate and the order has been passed by the District Magistrate on 29/09/2020. The petitioner is having the remedy to approach the Debt Recovery Tribunal. Keeping in view the aforesaid, the admission is declined and liberty is granted to the petitioner to approach the DRT for redressal of his grievance."

5. Shri Shreyas Dubey, learned counsel for the petitioner submits that Bank of Baroda had extended facility of credit in favour of M/S Life Guard Food and Drinks, a Proprietorship concern through its proprietor Ms. Pooja Sharma W/o Rajkumar Sharm