ORDER:

(Per the Hon’ble the Chief Justice Alok Aradhe)

Mr. M.V.Pratap Kumar, learned counsel representing Mr. Naren Sai.C, learned counsel for the petitioners.

Mr. Gadi Praveen Kumar, learned Deputy Solicitor General of India for the respondent No.1.

Mr. Manav Gecil Thomas, learned counsel for the respondents No.2 to 4.

2. In this writ petition, the petitioners have assailed the validity of the impugned notice dated 12.11.2024 issued by the Canara Bank (hereinafter referred to as, “the bank”) under Section 13(8) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as, “the SARFAESI Act”).

3. Facts leading to filing of this petition briefly stated are that the petitioner No.1 is a partnership firm which is engaged in the business of undertaking civil contract works, real estate and construction works. The petitioners had obtained loan from the bank for an amount of Rs.15,00,00,000/-. The petitioners had provided collateral security by mortgaging six immovable assets situated at Nellore and Hyderabad in favour of the bank. After the onset of COVID-19 pandemic, an additional amount of loan to the tune of Rs.1,50,00,000/- was sanctioned on 29.09.2020 to the petitioners. The petitioners did not repay the amount of loan. Thereupon, the bank has invoked the provisions of the SARFAESI Act for recovery of the amount. The bank has issued a notice dated 12.11.2024 by which the petitioners have been provided the last and final opportunity to redeem and reclaim the assets in possession of the secured creditor within a period of thirty days by discharging the outstanding liability of Rs.4,83,29,337.46.

Hence, this writ petition.

4. Learned counsel for the petitioners submitted that the action of the bank is arbitrary and is violative of Article 14 of the Constitution of India and therefore, this Court, in exercise of powers under Article 226 of the Constitution of India, should entertain the writ petition even though there exists an alternative remedy of approaching the Debts Recovery Tribunal.

5. We have considered the submissions made by the learned counsel for the petitioners.

6. The Supreme Court in United Bank of India v. Satyawati Tondon, [(2010) 8 SCC 110] has deprecated the practice of the High Courts in entertaining the writ petitions despite availability of an alternative remedy. The aforesaid view has also been reiterated by the Supreme Court in Varimadugu Obi Reddy v. B.Sreenivasulu, [(2023) 2 SCC 168]. The relevant extract of paragraph 36 in Varimadugu Obi Reddy (supra)

reads as under:

“36. In the instant case, although the respondent borrowers initially approached the Debts Recovery Tribunal by filing an application under Section 17 of the SARFAESI Act, 2002, but the order of the Tribunal indeed was appealable under Section 18 of the Act subject to the compliance of condition of pre-deposit and without exhausting the statutory remedy of appeal, the respondent borrowers approached the High Court by filing the writ application under Article 226 of the Constitution. We deprecate such practice of entertaining the writ application by the High Court in exercise of jurisdiction under Article 226 of the Constitution without exhausting the alternative statutory remedy available under the law. This circuitous route appears to have been adopted to avoid the condition of pre-deposit contemplated under 2^nd proviso to Section 18 of the

2002 Act.”

7. The view taken in Satyawati Tondon (supra) has been reaffirmed by a three-Judge Bench of the Supreme Court in PHR Invent Educational Society v. UCO Bank and others3. In PHR Invent Educational Society (supra), the Supreme Court in paragraph 37 of its decision has carved out the exceptions, notwithstanding the availability of an alternative remedy under the SARFAESI Act, when

3 (2024) 6 SCC 579 : 2024 SCC OnLine SC 528

this Court can entertain the writ petition. Paragraph 37 of the aforesaid order reads as under:

“37. It could thus c