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2025 Supreme(Online)(KER) 297
HIGH COURT OF KERALA
Nitin Jamdar, CJ, S.MANU, J
STATE BANK OF INDIA – Appellant
Versus
KARUNAKARAN K.K. – Respondent
WA 86/2025
The High Court should not entertain writ petitions under Article 226 when an effective alternative remedy exists, particularly in financial recovery matters.
Headnote:(A) Kerala High Court Act, 1958 - Section 5 - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Writ petition challenging recovery proceedings - The High Court will not entertain a writ petition under Article 226 when an effective alternative remedy is available - The judgment allowing repayment in installments was quashed. (Paras 2, 4, 6)
(B) Writ Jurisdiction - The High Court's powers under Article 226 are to be exercised with caution when statutory remedies exist - Previous decisions emphasize that the High Court should not interfere with statutory mechanisms established for recovery of dues. (Paras 5, 6)
Facts of the case:
The Petitioner availed a loan of Rs.35,00,000/- secured by equitable mortgage but defaulted, leading to classification as 'Non-Performing Asset' and initiation of recovery proceedings under SARFAESI Act.
Findings of Court:
The impugned judgment allowing repayment in installments was quashed due to the availability of statutory remedies.
Issues: The main issue was whether the High Court should entertain a writ petition when an alternative remedy exists.
Ratio Decidendi: The court reiterated that the High Court should exercise restraint and not entertain writ petitions when alternative statutory remedies are available, emphasizing the importance of the statutory framework for recovery.
Result: Writ appeal allowed; judgment quashed.
JUDGMENT
(Dated this the 10th day of January 2025) NITIN JAMDAR, C.J. Heard Mr.C.Ajith Kumar, learned counsel for the Appellant and Mr.Ajith M. Jiji, learned counsel for Respondent No.1.
2. This Writ Appeal, under Section 5 of the Kerala High Court Act , 1958, challenges the judgment dated 17 December 2024 in W.P.(C) No.44956 of 2024, whereby the Respondent/Original Petitioner is granted an opportunity to repay the outstanding amount in ten equated monthly installments.
3. The Petitioner had availed a loan of Rs.35,00,000/- from the Appellant Bank after securing it by creating an equitable mortgage of his properties. Due to the default made in its repayment, the account was classified as a 'Non-Performing Asset' (NPA). Thereafter, proceedings were initiated u/s 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002. Being aggrieved by the above, a Writ Petition was preferred.
4. It is not in dispute before us that against the action initiated by the Respondent - Bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act , 2002 the Writ Petitioner has the remedy to approach the Debts Recovery Tribunal.
5. The law in respect of entertaining writ petitions under Article 226 of the Constitution of India, when the remedy of approaching the Debts Recovery Tribunal is available, is well settled. 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 110 ) , the 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 entertain a petition filed Under Article 226 of the Constitution and pass interim order ignoring the fact that the Petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance.
46. It must be remembered that stay of an action initiated by the State and/or its agencies/ instrumental
