Point of law: Supreme Court held that if a borrower is aggrieved by any of actions of private bank or ARC, it has to avail remedy under SARFAESI Act; no writ petition would lie and/or would be maintainable and/or entertainable.

JUDGMENT:

(Ujjal Bhuyan, J.)

1. Heard Mr. Dammalapati Srinivas, learned Senior Counsel appearing for the appellant and Ms. B.Saroj, learned counsel representing Ms. Shireen Sethna Baria, learned counsel for the respondent.

2. This writ appeal has been filed assailing the legality and correctness of the final order dated 20.04.2022 passed by the learned Single Judge dismissing W.P.No.8272 of 2021. The appeal also assails the order dated 08.07.2022 passed by the learned Single Judge dismissing the review petition i.e., Review I.A.No.1 of 2022 in W.P.No.8272 of 2021 filed by the appellant for review of the final order dated 20.04.2022.

3. Respondent before us is a Non-Banking Financial Company (NBFC). Appellant is a public limited company. Appellant had availed financial assistance from the respondent by way of medium term loan to the extent of Rs.15.00 crores on 27.10.2014. The loan was obtained by mortgaging various immovable properties of the appellant and by depositing title deeds.

4. It is submitted that for various reasons there was default in repayment of the loan availed of. As a result, respondent classified the loan account of the appellant as Non Performing Asset (NPA) on 29.11.2016. Proceedings were initiated by the respondent for recovery of outstanding dues from the appellant under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (briefly, ‘the SARFAESI Act’ hereinafter). When notice was issued to auction sale the mortgaged property by the respondent, appellant filed securitisation application under Section 17 of the SARFAESI Act before the jurisdictional Debts Recovery Tribunal, being S.A.No.229 of 2017. Though the jurisdictional Debts Recovery Tribunal had initially granted stay vide order dated 26.04.2017 subject to deposit of 30% of the outstanding dues in two instalments of 15% each, appellant could not deposit the second instalment. Thereafter, W.P.No.16719 of 2017 questioning the order dated 26.04.2017 was filed. This Court declined the prayer of the appellant for stay and granted liberty to the respondent to proceed with the auction sale with the caveat that the auction sale should not be confirmed till the next date of hearing. Since the scheduled auction did not materialise for want of bidders, the writ petition was dismissed as infructuous. In the meanwhile, appellant had deposited a sum of Rs.50,00,000.00 on 11.05.2017.

5. Respondent filed an application under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993 (briefly, ‘the 1993 Act’ hereinafter), before the Debts Recovery Tribunal – I, Hyderabad, for recovery of outstanding dues quantified at Rs.14,20,22,506.00 with interest, which was registered as O.A.No.325 of 2017. The same was decreed on 19.08.2019 with costs.

6. When auction notice dated 01.06.2017 was issued, appellant filed W.P.No.21629 of 2017 challenging the auction notice. However, the same was dismissed as infructuous as the auction did not take place.

7. At that stage, appellant approached the respondent for restructuring of loan. By letter dated 06.01.2020, appellant submitted improved One Time Settlement (OTS) proposal for settlement of outstanding dues for principal loan amount at Rs.9.72 crores and simple interest and other penalty/additional interest at Rs.2.78 crores. This was accepted by the respondent on 28.01.2020. Thereafter, appellant submitted fresh proposal for extension of time limit for making payment in terms of OTS which was also accepted by the respondent on 24.11.2020. Additionally it was mentioned that respondent would release 14 plots of mortgaged land mentioned in the letter dated 24.11.2020, subject to appellant making down payment of Rs.1.00 crore.

8. According to the appellant, it had deposited Rs.1.00 crore but notwithstanding such deposit, mentioned plots of mortgaged land were not released to the appellant which adversely affected the appellant from adhering to the extended OTS schedule. Finally r