Order

11/03/2025

1. Instant writ petition under Article 226 of Constitution of India was filed way back on 01.05.2014, seeking to quash and set aside the notice dated 24.04.2014, issued to the petitioner under Section 13(4) of Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002), and consequently, a prayer has been made to direct the non-petitioners-Bank to keep in abeyance the proceedings under Section 13(4) of SARFAESI Act, 2002.

2. In respect of exercising the writ jurisdiction by the High Courts, relating to the matters pertaining to Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and SARFAESI Act, 2002, in celebrated judgment of United Bank of India Vs Satyawati Tondon: (2010) 8 SCC 110, the Hon’ble Supreme Court held and observed in Paras No.43, 44 & 45:-

“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 quasi-judicial 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.”

3. In a recent judgment dated 10.04.2024, the Hon’ble Supreme Court in case of in PHR Invent Educational Society Versus UCO Bank & Ors. [(2024) 6 SCC 579] has remind the High Courts to follow the ratio decidendi expounded in case of Satyawati Tondon (supra). In relevant para i.e. Para 41, following directions have been issued:-

“41. While dismissing the writ petition, we will have to remind the High Courts of the following words of this Court in the case of Satyawati Tondon (supra) since we have come across various matters wherein the High Courts have been entertaining petitions arising out of the DRT Act and the SARFAESI Act in spite of availability of an effective alternative remedy:

55. It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the SARFAESI Act and exercise juri