High Courts should exercise restraint and require exhaustion of statutory remedies under the SARFAESI Act before entertaining writ petitions under Article 226, reaffirming the importance of following legislative procedures.

JUDGMENT

Muralee Krishna S., J.

The petitioner in W.P.(C)No.29621 of 2006 has filed this writ appeal under Section 5 (i) of the Kerala High Court Act , 1958, challenging the judgment dated 16.10.2008 passed by the learned Single Judge in that writ petition.

2. The appellant-writ petitioner is the daughter of Smt. Stella Joseph, one of the guarantors, who had mortgaged her property to secure the loan facility granted by the 1^st respondent bank to one M/s. Surya Sea Products. When the loan availed by M/s. Surya Sea Products became a Non-Performing Asset (‘NPA’ for short), and the bank proceeded against the property of the guarantor, Smt. Stella Joseph under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act , 2002 (‘SARFAESI’ Act for short). Ext.P1 produced in the writ petition is a copy of the notice dated 21.02.2006 issued by the authorised officer of the bank under Section 13 (2) of the SARFAESI Act. According to the appellant, her mother, Smt. Stella Joseph, who mortgaged the property in her capacity as the guarantor to the loan, died on 13.09.2006, and hence the appellant became a co-owner of the property. During her lifetime, the mother of the appellant made Ext.P5 representation dated 20.07.2006 to the 1^st respondent bank, pointing out that she had instructed the partners of M/s. Surya Sea Products to give a better offer to the bank for settlement of the matter. Meanwhile, the banking division of the Union Ministry of Finance had promulgated the One Time Settlement (‘OTS’ for short) for the sick units in the seafood industries, offering a package of OTS to the companies engaged in the seafood business. The State Bank of India issued Ext.P4 OTS Scheme under Ext.P3 Circular dated 03.07.2006 issued by the Government of India, Ministry of Finance, Department of Economic Affairs, Banking Division. The principal borrower M/s. Surya Sea Products had also issued Ext.P2 reply dated 19.04.2006 to the 1^st respondent bank expressing their wish to have a settlement of the debt due to the bank.

2.1. The appellant states that the 1^st respondent had issued Ext.P6 notice dated 27.05.2006 invoking Rule 6(2) of the Security Interest (Enforcement) Rules , 2002, which, according to the appellant is a wrong provision which pertains to movable properties and the actual provision ought to have been incorporated by the bank is Rule 8(6) of the said Rules. Thereafter, the principal debtor M/s. Surya Sea Products had submitted Ext.P8 representation dated 18.09.2006 to the 1^st respondent bank requesting an OTS.

2.2. The appellant further states that she received a message from an Advocate intimating that the 1^st respondent bank has moved Debts Recovery Tribunal, Ernakulam, for releasing the title deed pertaining to the extent of 77 cents of land comprised in Survey No.982/1A of Thiruvaniyur Village, and he handed over a copy of the petition received in the matter to the appellant. On enquiry, the appellant came to know that the 1^st respondent had proposed to sell the property on 21.08.2006 and thereafter, for want of bidders, the sale was adjourned. On receiving the copy of the petition for release of the title deed, the appellant filed Ext.P10 objection dated 19.10.2006 before the Debts Recovery Tribunal (the ‘Tribunal’ for short), opposing the release of the title deed to the 3^rd respondent, who is the purchaser of the property in the auction conducted by the bank. Thereafter, alleging non- compliance with the statutory provisions and illegality in the conduct of sale, the appellant filed W.P.(C)No.29621 of 2006, under Article 226 of the Constitution of India , seeking the following r