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2025 Supreme(Online)(KER) 4454
HIGH COURT OF KERALA
Nitin Jamdar, CJ, S.MANU, J
THE SOUTH INDIAN BANK LIMITED – Appellant
Versus
LALU VARGHESE – Respondent
WA 53/2025
SUNIL SHANKER, JERIN GEORGE, VIDYA GANGADHARAN
The High Court should not entertain writ petitions when an effective alternative remedy exists under the SARFAESI Act, emphasizing the importance of statutory procedures for recovery of dues.
Headnote:(A) Kerala High Court Act, 1958 - Section 5 - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Writ jurisdiction - The court reiterated that the High Court should not entertain petitions under Article 226 when an effective alternative remedy exists under the SARFAESI Act. (Paras 5, 6, 7)
(B) Jurisdiction - The court emphasized the importance of exhausting statutory remedies before seeking relief through writ petitions, particularly in matters involving recovery of dues by banks. (Paras 5, 6)
Facts of the case:
The Petitioners availed a KCC OD facility of ₹30,00,000/- secured by an equitable mortgage. Due to default, the account was classified as NPA, leading to proceedings under the SARFAESI Act. The Respondents sought relief through a writ petition.
Findings of Court:
The court found that the Appellant-Bank's contention regarding the availability of alternative remedies was valid, and the writ petition should not have been entertained.
Issues: The main issue was whether the High Court should exercise its writ jurisdiction when an alternative remedy under the SARFAESI Act was available.
Ratio Decidendi: The court ruled that the High Court must respect the statutory framework and not interfere when an effective remedy exists, emphasizing the need for caution in exercising writ jurisdiction.
Result: The impugned order was set aside, and the Respondents were directed to approach the DRT.
| Table of Content |
|---|
| 1. contention of appellant-bank (Para 4) |
| 2. legal position reiterated (Para 5 , 6 , 7) |
| 3. appeal disposed of (Para 8) |
JUDGMENT
Dated this the 7th day of January, 2025
Nitin Jamdar, C.J.
This Writ Appeal, under Section 5 of the Kerala High Court Act , 1958, challenges the judgment dated 10 December 2024 in W.P.(C) No.41833 of 2024, whereby the Respondents / Original Petitioners are granted an opportunity to repay the outstanding amount in six equated monthly instalments.
2. The Petitioners availed a KCC OD facility on 24 November 2019 ₹ for 30,00,000/- from the Ayur Branch of Appellant No.1 after securing it by creating an equitable mortgage of their properties. Due to the default made in its repayment, the account was classified as a Non-Performing Asset (NPA) on 20 March 2024. Thereafter, proceedings were initiated under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act , 2002 (SARFAESI Act) vide a demand notice dated 12 November 2024. Being aggrieved, the Respondents / Original Petitioners have preferred the writ petition.
3. Heard Mr. Sunil Shanker, learned counsel for the Appellants and Mr. Anchal C. Vijayan, learned counsel for the Respondents / Original Petitioners.
4. We note from the impugned order dated 10 December 2024 in W.P.(C)No.41833 of 2024 itself that the Appellant-Bank had contended that if the Respondents / Original Petitioners are aggrieved by any action taken under the SARFAESI Act, it is for the Original Petitioners to approach the Debts Recovery Tribunal (DRT). This contention is supported by various decisions of the Hon’ble Supreme Court and this Court.
5. The law regarding interference in writ jurisdiction in cases where the Bank has initiated proceedings under the SARFAESI Act is more than settled to be reiterated. Again to recapitulate the legal position, reference is made to the following decisions of the Hon’ble Supreme Court:
(i) In United Bank of India v. Satyawati Tondon and Others ,(2010) 8 SCC 110the Hon’ble Supreme Court held thus:
“43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition Under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this Rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc. the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasijudicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, the High Court must insist that before availing remedy Under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute.
44. While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court Under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the Rules of self-imposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power Under Article 226 of the Constitution.
45. It is true that the Rule of exhaustion of alternative remedy is a Rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should
