in the high court of karnataka at...
Post on 01-Feb-2018
222 Views
Preview:
TRANSCRIPT
1
®
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 22ND DAY OF MARCH, 2016
PRESENT
THE HON'BLE MR. JUSTICE S. ABDUL NAZEER
A N D
THE HON'BLE MR. JUSTICE ASHOK B. HINCHIGERI
AND
THE HON'BLE MR. JUSTICE A.N.VENUGOPALA GOWDA
WRIT PETITION NO.28182/2013 (GM-DRT)
BETWEEN:
1. M/s. Deepak Apparels Pvt. Ltd.,
No.526, 6th Block, 2nd Phase, Banashankari III Stage,
Bangalore – 560 085, Rep. by its Managing Director
Sri K. Kotrabasappa.
2. Sri Kotrabasappa, S/o. G. Kotrappa, A/a: 50 years,
Managing Director of M/s. Deepak Apparels Pvt. Ltd.
3. Smt. Kumari G.S., W/o. Kotrabasappa,
A/a: 43 years, Director of M/s. Deepak Apparels Pvt. Ltd.
2
Petitioner Nos.2 and 3 are residing at
No.526, 6th Block, 2nd Phase, Banashankari III Stage,
Bangalore – 560 085. …PETITIONERS
(By Sri R.L. Patil, Senior Adv. for Sri Ashish Krupakar, Adv.)
AND:
1. City Union Bank Ltd.,
Having its registered office at: Kumbakonam, Tamil Nadu and
Branch office at No.82, 6th Cross, Malleshwaram,
Bangalore – 560 003.
2. H.R. Varadarajan Shetty, A/a: 65 years.
3. Smt. H.A. Sujatha Varadaraja Shetty,
W/o. H.R. Varadaraja Shetty, A/a: 60 years.
Respondent Nos.2 and 3 are Residing at No.3406/2, 10th Main,
34th “A” cross, 4th Block Jayanagar, Bangalore.
…RESPONDENTS (By Sri R. Ashok Kumar, Adv. for R1;
Sri K.V. Shyam Prasad, Adv. for R2 and R3)
This Writ Petition was referred to a larger Bench by
the learned Single Judge vide order dated 13.09.2013.
This petition referred to this Full Bench by the Hon’ble Chief Justice on 27.01.2014, having been heard
and reserved for pronouncement of ‘order on Reference’ this day, A.N. Venugopala Gowda J., pronounced the following:
3
ORDER ON REFERENCE
In view of an order dated 13.09.2013, passed by the
learned Single Judge, raising a question as to ‘whether a writ
petition would be maintainable against an order passed by the Debts
Recovery Tribunal (for short 'the Tribunal'), while disposing of an appeal
filed under S.17 of the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002 (for short 'the
SARFAESI Act'), in view of the alternative and efficacious remedy of an
appeal provided under S.18, the Hon'ble Chief Justice,
constituted this Bench to answer the said question.
2. Reference was made by the learned Single
Judge, in view of the divergent views of the two Division Benches in
W.A.No.6368/2011 decided on 21.11.2011, since reported
in 2013 (1) AKR 370, (for short 'Hotel Vandana Palace case')
and W.A.No.635/2013 decided on 18.03.2013, since
reported in 2014 (1) AKR 40 (for short 'Smt. Lily Joseph case’).
The conflict in the aforementioned two judgments centers
4
round the availability of writ remedy against the order
passed by the Tribunal.
3. The petitioners had filed S.A.No.688/2012
before the Tribunal, under S.17 of the Act, to set aside the
sale notice dated 25.09.2012 issued in respect of secured
asset mentioned in the petition, on the premise that the
same is arbitrary and illegal. On 14.06.2013, the said
appeal having been dismissed, this writ petition was filed
to quash the aforesaid order and for issue of a writ of
mandamus directing the respondent – Bank, to consider
‘One Time Settlement’ proposal of the petitioners, and for
grant of the consequential reliefs.
4. As this Bench is only required to answer
the aforesaid question and lay down the principle of law,
it is unnecessary to state the facts of the case in detail.
5. The petitioners borrowed loan from the
respondent No.1 (for short 'the Bank') and their account
was treated on 30.09.2010, as Non-performing Asset. A
5
demand notice dated 22.12.2010, under S.13(2) of the
Act, was issued by the Bank. S.A.No.399/2011 filed on
19.08.2011 by the petitioners was allowed on 22.08.2012
by the Tribunal, on the ground that there is violation of
sub-rule(4) of Rule 9 of the Security Interest
(Enforcement) Rules, 2002. A fresh auction notice having
been issued and proceeding initiated in pursuance of the
liberty granted in S.A.No.399/2011 and an auction notice
dated 25.09.2012 having been published,
S.A.No.688/2012 was filed. The auction having been
conducted on 05.11.2012 and the bid submitted by
respondent Nos. 2 and 3, in the form of sealed Tenders
having been accepted on 14.06.2013 by the Bank, the
Tribunal having found the said appeal to be devoid of merit
and dismissed the appeal, this writ petition was filed.
6. Respondents having contended that the writ
petition is not maintainable on the ground that an appeal
remedy is provided to the Debts Recovery Appellate
Tribunal, under S.18 of the Act and reliance having been
6
placed on the judgment in the case of Smt. Lily Joseph and
the petitioner having relied upon the judgment rendered in
the case of Hotel Vandana Palace, wherein, the question raised
as to the maintainability of the writ petition without filing
an appeal to the Appellate Tribunal as provided under S.18
of the Act was answered in favour of the writ petitioners,
on the ground that the pre-deposit is required under S.18 of the
SARFAESI Act and in such circumstances, it cannot be considered as an
efficacious remedy, the learned Single Judge having felt that
the question raised requires to be conclusively addressed by an
appropriate Bench to be constituted by the Hon'ble Chief Justice and
the Registry having been directed to obtain orders, the
Hon'ble Chief Justice has passed the order dated 27.01.2014 and
constituted the Special Bench. Hence, the matter is before us.
7. Sri. R.L. Patil, learned Senior Advocate, at the
threshold, vehemently contended that the reference itself
is bad. He submitted that S.9(xii) of the Karnataka High
Court Act, 1961 requires all writ petitions, other than
Habeas Corpus Petitions, to be heard by a learned Single
7
Judge and that the power and prerogative of the Chief
Justice to constitute Benches and allocate the work should,
therefore, be read subject to the said statutory provision.
He submitted that the learned Single Judge is bound by
the judgment passed in the case of Hotel Vandana Palace and
the judgment rendered in the case of Smt. Lily Joseph, having
not noticed the judgment rendered in the case of Hotel
Vandana Palace, the judgment rendered in the case of Smt. Lily
Joseph, being per incuriam, an uncalled for reference was
made.
8. Sri R. Ashok Kumar, learned advocate, on the
other hand, contended that the Hon’ble Chief Justice has
the absolute prerogative of constituting the Benches and
allocation of the work to the learned Judges. He submitted
that the powers of the Chief Justice to constitute Benches
and allocate the work to the learned Judges is traceable
under Articles 225 and 226 of the Constitution and,
therefore, any provision in any statute concerning the High
Court administration must yield to the powers of the
8
Hon’ble Chief Justice, which flows from Constitution itself
and, therefore, S.9(xii)(a) of the KHC Act, 1961 should
yield to the prerogative of the Chief Justice.
9. In view of the rival contentions and there being
no dispute that the reference to this Bench is not by the
learned Single Judge and that the Special Bench was
constituted by the Hon’ble Chief Justice, we would address
the preliminary objection raised with regard to the maintainability of the
reference made by the Hon'ble Chief Justice.
10. What a learned Single Judge should do, if he
feels that the decision of the Division Bench is required to
be reconsidered was the subject matter of consideration by
the Apex Court, in LALA SHRI BHAGAWAN AND ANOTHER Vs.
RAM CHAND AND ANOTHER, AIR 1965 SC 1767. Therein, it
has been held as follows:
"It is hardly necessary to emphasise that considerations of judicial
propriety and decorum require that if a learned Single Judge hearing a
matter is inclined to take the view that the earlier decisions of the High
Court, whether of a Division Bench or of a Single Judge, need to be
reconsidered, he should not embark upon that enquiry sitting as a
9
Single Judge, but should refer the matter to a Division Bench or, in a
proper case, place the relevant papers before the Chief Justice to
enable him to constitute a larger Bench to examine the question. That
is the proper and traditional way to deal with such matters and it is
founded on healthy principles of judicial decorum and propriety".
(emphasis supplied)
11. In TRIBHOVANDAS PURUSHOTTAMDAS THAKKAR
Vs. RATILAL MOTILAL PATEL, AIR 1968 SC 372, on the very
same question, Apex Court has held as follows:
"10. ………When it appears to a Single Judge or a Division Bench
that there are conflicting decisions of the same Court, or there are
decisions of other High Courts in India which are strongly persuasive and
take a different view from the view which prevails in his or their High
Court, or that a question of law of importance arises in the trial of a case,
the Judge or the Bench passes an order that the papers be placed before the
Chief Justice of the High Court with a request to form a special or Full
Bench to hear and dispose of the case or the questions raised in the case.
For making such a request to the Chief Justice, no authority of the
Constitution or of the Charter of the High Court is needed, and by making
such a request a Judge does not assume to himself the powers of the Chief
Justice. A Single Judge does not by himself refer the matter to the Full
Bench: he only requests the Chief Justice to constitute a Full Bench for
hearing the matter. Such a Bench is constituted by the Chief Justice. The
Chief Justice of a Court may as a rule, out of deference to the views
10
expressed by his colleague, refer the case; that does not mean, however,
that the source of the authority is in the order of reference…...”
(emphasis supplied)
12. In CENTRAL BOARD OF DAWOODI BOHRA
COMMUNITY AND ANOTHER VS. STATE OF MAHARASHTRA AND
ANOTHER, (2005) 2 SCC 673, Apex Court having examined
the law laid down by the Constitution Benches on the said
question, has summed up the legal position and the
relevant portion reads as follows:
“12(3)……..
(i) the abovesaid rules do not bind the discretion of the Chief
Justice in whom vests the power of framing the roster and who can
direct any particular matter to be placed for hearing before any
particular Bench of any strength.”
(emphasis supplied)
13. In NARASIMHA SETTY Vs. PADMA SETTY, ILR 1998
KARNATAKA 3230, with regard to the competency of a
Single Judge to refer a case to a Full Bench is concerned,
after having noticed the provisions contained in the
Karnataka High Court Act, 1961 and the scope and ambit
of the powers of the Chief Justice with regard to the
posting of the cases before different Benches of the High
11
Court and the decision of Apex Court, rendered in the case
of LALA SHRI BHAGAWAN AND ANOTHER (supra), it has been
held as follows:
“17. Therefore, if a learned Single Judge of a High Court hearing
a matter feels that the earlier judgment of a Division Bench of the Court
requires reconsideration, then in absence of any statutory provision
empowering him to refer the same to a larger bench, he can place the
relevant papers before the Chief Justice to enable him to constitute a larger
bench to examine the question.”
(emphasis supplied)
14. In STATE OF KARNATAKA AND OTHERS Vs. SRI. B.
KRISHNA BHAT AND OTHERS, 2001 (2) KLJ 1 (FB), a Five
Judge Bench, considering the scope of the power and
authority of the Chief Justice in regard to the practice and
procedure of the High Court in hearing and deciding the
cases, and the fact of S.9(xii) and other provisions of the
Karnataka High Court Act and power and authority of the
Chief Justice in the matter of constitution of Benches and
allocation of judicial work and also the validity or otherwise
of the notification dated 08.07.1997 directing listing of all
writ petitions of the nature of Public Interest Litigation
12
before the Division Benches, after detailed consideration,
has concluded as follows:
“96. The above discussions lead to following conclusions:
(i) The Chief Justice's discretion in determining the roster, that
is, constitution of Benches and allocation of judicial work
is absolute.
(ii) But in regard to fixing the quorum for hearing the different
category of cases, the Chief Justice should follow the
statutory provisions or rules. The power of Chief Justice in
regard to constitution of Benches and allocation of judicial
work has nothing to do with fixing of quorum for hearing
of cases, under Section 9(xii) of the H.C. Act.
(iii) However, he has the discretion to refer any matter in regard
to which a quorum has been fixed, to a larger Bench.
Therefore, the Notification dated 8-7-1997 allocating
Single Judge matter to Division Bench is valid.
(emphasis supplied)
15. It is implied that the authority of the Hon’ble
Chief Justice in regard to the constitution of Benches and
allocation of judicial work is absolute. Therefore,
multiplying the previous decisions of this Court or the Apex
Court will be of no advantage to the petitioners.
13
Discussing each of the decisions cited by the learned
advocates will lead to making this order unavoidably
prolix.
16. In view of the authoritative pronouncements,
noticed supra, and the position of law having been well
settled, we are of the opinion that the course adopted by
the learned Single Judge, directing the Registry to place
the matter before the Hon'ble Chief Justice, to pass an
order for constitution of an appropriate Bench to
conclusively address the issue raised, cannot be said to be
incorrect. Learned Single Judge has acted on healthy
principles of judicial decorum and propriety and the order
passed by the Hon’ble Chief Justice is in accordance with
the settled principles of law laid down by the Apex Court
and the Full Benches of this Court. Hence, the preliminary
objection raised by Sri. R.L. Patil, being devoid of merit,
we hold that the reference made is competent and
constitution of the Special Bench on account of the facts
and circumstances stated in para 2 supra, is justified.
14
17. Undisputedly, the respondent No.1-Bank
advanced loan to the petitioners and the loan was secured
by way of equitable mortgage executed in respect of the
property bearing No.256, III Main, Banashankari III Stage,
II Phase, VI Block, Bangalore-85. Original title deeds of
the property was deposited with the Bank i.e., at the time
of availing the loan. Since the petitioners committed
default in repaying the loan, the Bank issued notice under
S.13(2) of the Act and took steps under S.13(4) in respect
of the said property. Auction notice was published and bid
of respondent Nos.2 and 3 was accepted. Feeling
aggrieved, the petitioners filed S.A.No.688/2012 before
the Tribunal, to set aside the sale notice dated 25.09.2012
and the consequential action. The same having been
dismissed, this writ petition was filed, though the statutory
remedy of appeal, under S.18 of the Act, is available. The
reason assigned in the writ petition for non-availing of
appeal remedy before the Debts Recovery Appellate
Tribunal is, that it requires deposit of huge court fee, which
15
is neither efficacious nor feasible and it is misnomer to call
it an alternative remedy.
18. Undisputedly, security interest, within the
meaning of S.2(zf) of the Act, was created in respect of
the aforesaid property, which is a ‘secured asset’, within
the meaning of S.2(zc), in favour of the ‘secured creditor’ -
respondent No.1, within the meaning of S.2(zd). On failure
to repay the loan amount, which was declared as non-
performing asset, respondent No.1 enforced its security
interest over the secured asset.
19. A perusal of S.13 of the SARFAESI Act shows
that without the intervention of the Court or Tribunal,
there can be enforcement of security interest by the
secured creditor in accordance with the provisions of the
Act. Sub-section(4) of S.13 envisages the ‘measures’ to
secure the borrowers’ interest, when secured creditor
proposes to proceed against the secured asset. One of the
‘measures’ provided by the statute is to take possession of
the secured asset of the borrower, including the right of
16
transfer by way of lease, assignment or realizing the
secured asset. S.17 confers right to any aggrieved person
to question the ‘measures’ referred to in sub-section(4) of
S.13 of the Act, when taken by the secured creditor. Thus,
if any aggrieved person has got any grievance against any
‘measures’ taken under sub-section(4) of S.13 of the Act,
he can approach the Tribunal for the relief.
20. In UNION BANK OF INDIA Vs. PANCHANAN
SUBUDHI, (2010) 15 SCC 552, the appellant extended
financial facility to the respondent upon deposit of the title
deeds and the building as security. Default in the matter
of repayment having been committed, the loan account of
the respondent was declared as ‘non performing asset’.
O.A. was filed before the DRT. During the pendency of the
O.A., the Bank issued a notice under S.13(2) of the
SARFAESI Act and the same was followed by a notice under
S.13(4). The Tribunal passed decree in favour of the
Bank. The respondent challenged the proceedings initiated
under the Act by filing a writ petition and during its
17
pendency, approached the Bank for ‘one time settlement’.
The Bank agreed for settlement but the respondent failed
to abide by the conditions of the settlement.
Consequently, Bank issued notice for possession of the
secured assets which was challenged by filing another writ
petition, which was disposed of directing the loanee to pay
the amount in instalments for liquidating the dues of the
Bank. The Bank having assailed the said order, the Apex
Court while allowing the appeal and setting aside the
impugned order, has held as follows:
“ 7. …. there was no justification for the High Court to entertain the writ
petition and that too by ignoring the fact that a statutory alternative
remedy was available to the respondent under Section 17 of the Act.”
21. The object of the Recovery of Debts Due to
Banks and Financial Institutions Act, 1993 (for short, 'the
RDDB Act'), is to provide for the establishment of Tribunal
for expeditious adjudication and recovery of debts due to
Banks and financial institutions and for matters connected
therewith or incidental thereto. The RDDB Act creates a
special machinery for speedy recovery of dues of the
18
Banks and financial institutions. S.17 of the RDDB Act
deals with jurisdiction, powers and authority of the
Tribunals. S.18 bars the jurisdiction of ordinary Court or
Authority, in respect of matters falling within the
jurisdiction of the Tribunal, as specified in S.17. An appeal
to Appellate Tribunal is provided under S.20. The power of
the Tribunal extends to determining the debt due and its
realization. The action taken by the Bank(s) or the
financial institution(s), under the SARFAESI Act, can be
assailed before the Debts Recovery Tribunal and further by
way of an appeal before the Debts Recovery Appellate
Tribunal. S.22 of RDDB Act makes it clear that the Tribunal
and Appellate Tribunal shall not be bound by the procedure
laid down by CPC but shall be guided by the principles of
natural justice and, subject to the rules framed. The
Tribunal and Appellate Tribunal have been conferred with
powers to regulate their own procedure. Thus, it is clear
that the Tribunal and Appellate Tribunal which are
specialized institutions with expertise, have been
established to decide the matter(s) preferred before them.
19
22. While dealing with the purpose of the RDDB
Act and how it works, Apex Court, in UNITED BANK OF INDIA
Vs. SATYAWATI TONDON, (2010) 8 SCC 110, has held as
follows:
“5. An analysis of the provisions of the DRT Act shows that
primary object of that Act was to facilitate creation of special machinery
for speedy recovery of the dues of banks and financial institutions. This is
the reason why the DRT Act not only provides for establishment of the
Tribunals and the Appellate Tribunals with the jurisdiction, powers and
authority to make summary adjudication of applications made by banks or
financial institutions and specifies the modes of recovery of the amount
determined by the Tribunal or the Appellate Tribunal but also bars the
jurisdiction of all courts except the Supreme Court and the High Courts in
relation to the matters specified in Section 17…..”
23. The SARFAESI Act was enacted to regulate
securitisation and reconstruction of financial assets and
enforcement of security interest and for matters connected
therewith or incidental thereto. Inter alia, one of the main
objects of the SARFAESI Act is to clothe the Banks and
financial institutions with power to take possession of
securities and sell them. The significant provisions of the
SARFAESI Act have been noted by the Apex Court, in the
20
case of MARDIA CHEMICALS LTD. Vs. UNION OF INDIA, (2004)
4 SCC 311, wherein, the vires of the Act was examined and
upheld. After referring to the statement of objects and
reasons and while upholding the constitutional validity, it
has been held as follows:
“81. In view of the discussion held in the judgment and the findings and
directions contained in the preceding paragraphs, we hold that the
borrowers would get a reasonably fair deal and opportunity to get the
matter adjudicated upon before the Debt Recovery Tribunal. The effect of
some of the provisions may be a bit harsh for some of the borrowers but
on that ground the impugned provisions of the Act cannot be said to be
unconstitutional in view of the fact that the object of the Act is to achieve
speedier recovery of the dues declared as NPAs and better availability of
capital liquidity and resources to help in growth of economy of the country
and welfare of the people in general which would subserve the public
interest.”
(emphasis supplied)
24. In AUTHORISED OFFICER, INDIAN OVERSEAS
BANK Vs. M/S. ASHOK SAW MILL, (2009) 8 SCC 366, with
regard to the SARFAESI Act and the jurisdiction of
Tribunal, under S.17, Apex Court has held as follows:
21
“33. It is clear that while enacting the SARFAESI Act the legislature was
concerned with measures to regulate Securitisation and reconstruction of
financial assets and enforcement of security interest. The Act enables the
Banks and financial institutions to realize long-term assets, manage
problems of liquidity, asset liability mismatches and improve recovery by
exercising powers to take possession of securities, sell them and reduce
non-performing assets by adopting measures for recovery of
reconstruction.
*** *** ***
35. In order to prevent misuse of such wide powers and to prevent
prejudice being caused to a borrower on account of an error on the part of
the Banks or financial institutions, certain checks and balances have been
introduced in Section 17 which allow any person, including the borrower,
aggrieved by any of the measures referred to in sub-section (4) of Section
13 taken by the secured creditor, to make an application to the DRT
having jurisdiction in the matter within 45 days from the date of
such measures having taken for the reliefs indicated in sub-section (3)
thereof.
36. The intention of the legislature is, therefore, clear that while the Banks
and financial institutions have been vested with stringent powers for
recovery of their dues, safeguards have also been provided for rectifying
any error or wrongful use of such powers by vesting the DRT with
authority after conducting an adjudication into the matter to declare any
such action invalid and also to restore possession even though possession
may have been made over to the transferee.”
(emphasis supplied)
22
25. In SATYAWATI TONDON, Apex court, while
restating the purpose of bringing the SARFAESI Act and
with regard to the role of Tribunal, has held as follows:
“23. Sub-section (2) of Section 17 casts a duty on the Tribunal to consider
whether the measures taken by the secured creditor for enforcement of
security interest are in accordance with the provisions of the Act and the
Rules made thereunder. If the Tribunal, after examining the facts and
circumstances of the case and evidence produced by the parties, comes to the
conclusion that the measures taken by the secured creditor are not in
consonance with sub-section (4) of Section 13, then it can direct the secured
creditor to restore management of the business or possession of the secured
assets to the borrower. On the other hand, if the Tribunal finds that the
recourse taken by the secured creditor under sub-section (4) of Section 13 is
in accordance with the provisions of the Act and the Rules made thereunder,
then, notwithstanding anything contained in any other law for the time being
in force, the secured creditor can take recourse to one or more of the measures
specified in Section 13(4) for recovery of its secured debt.
24. Sub-section (5) of Section 17 prescribes the time-limit of sixty days
within which an application made under Section 17 is required to be disposed
of. The proviso to this sub-section envisages extension of time, but the outer
limit for adjudication of an application is four months. If the Tribunal fails to
decide the application within a maximum period of four months, then either
party can move the Appellate Tribunal for issue of a direction to the Tribunal
to dispose of the application expeditiously.”
(emphasis supplied)
23
26. Sri R.L. Patil, contended that the power of
judicial review under Articles 226 and 227 of the
Constitution is an inviolable part of the basic structure of
the Constitution and the same cannot be denied much less
ousted by the statutes made by the Parliament i.e., the
RDDB Act and the SARFAESI Act. He submitted that the
existence of statutory remedy is not a rule of law but a law
of convenience and discretion and, that in appropriate
case, High Court can entertain writ petition and, that this
is a case of violation of the principles of natural justice and
gross injustice. He further submitted that the statutory
remedy provided being conditional, requiring the deposit of
huge amount, the same is neither efficacious nor feasible
and it being a misnomer to call as an alternate remedy,
the writ petition filed is maintainable. (with regard to the
tenability or otherwise of the contention requiring the pre-
deposit i.e., to maintain an appeal under S.18 of SARFAESI
Act, see para Nos. 47 and 48 infra).
24
27. Sri Ashok Kumar, on the other hand,
contended that the writ petition cannot be entertained
contrary to the RDDB Act, which is a special enactment,
providing for an appellate remedy, which is efficacious. He
submitted that there is no valid reason for bypassing the
statutory remedy and the mere insistence of deposit to
avail the statutory remedy of appeal, cannot be taken
exception to. He submitted that there being no good
ground to invoke the extra-ordinary jurisdiction, the writ
petition is not entertainable and that the judicial discretion
is not absolute or unregulated, much less unguided.
28. Article 226 empowers the High Court to issue
prerogative writs. Article 227 relates to the power of
superintendence of High Courts over all Courts and
Tribunals. However, the power of judicial superintendence
under Article 227 of the Constitution has to be exercised
sparingly when there is a patent error or gross injustice in
the view taken by the subordinate Court / Tribunal (See
JASBIR SINGH Vs. STATE OF PUNJAB, (2006) 8 SCC 294)
25
Judicial review under the said Articles is a basic feature of
the Constitution.
29. In L. CHANDRA KUMAR Vs. UNION OF INDIA,
(1997) 3 SCC 261, Apex Court, while dealing with the
essential and basic feature of the constitution – power of
review under Articles 226 and 227 by the High Courts and
of the Supreme Court under Article 32, has held as
follows:
75. In Keshav Singh, Re (1965) 1 SCR 413, while addressing this issue,
Gajendragadhkar, CJ stated as follows: (SCC at pp. 493-494)
“If the power of the High Courts under Article 226 and the
authority of this Court under Article 32 are not subject to any exceptions,
then it would be futile to contend that a citizen cannot move the High
Courts or this Court to invoke their jurisdiction even in cases where his
fundamental rights have been violated. The existence of judicial power in
that behalf must necessarily and inevitably postulate the existence of a
right in the citizen to move the Court in that behalf; otherwise the power
conferred on the High Courts and this Court would be rendered virtually
meaningless. Let it not be forgotten that the judicial power conferred on
the High Courts and this Court is meant for the protection of the citizens'
fundamental rights, and so, in the existence of the said judicial power itself
is necessarily involved the right of the citizen to appeal to the said power
in a proper case.”
(emphasis supplied in original)
26
30. Basic principle for exercising the power under
Article 227 was considered by the Apex Court, in BABUBHAI
MULJIBHAI PATEL Vs. NANDLAL KHODIDAS BAROT, (1974) 2
SCC 706 and it has been held as follows:
“10. Exercise of the jurisdiction is no doubt discretionary, but the
discretion must be exercised on sound judicial principles. When the
petition raises complex questions of fact, which may for their
determination require oral evidence to be taken, and on that account the
High Court is of the view that the dispute should not appropriately be tried
in a writ petition, the High Court may decline to try a petition (see
Gunwant Kaur v. Bhatinda Municipality (1969) 3 SCC 769).”
(emphasis supplied)
31. In MAFATLAL INDUSTRIES LTD. Vs. UNION OF
INDIA, (1997) 5 SCC 536, Apex Court, while considering
provisions of the Excise Act and the Customs Act, has held,
that the jurisdiction of the High Court under Article 226
and the Apex Court under Article 32, though cannot be
circumscribed by the provisions of the said enactments,
the courts will certainly have due regard to the legislative
intent evidenced by the provisions of the statutes and
would exercise their jurisdiction consistent with the
27
statutory provisions. In part IV of the Judgment, the legal
position has been summarised and the relevant portion
reads as follows:
“108(i)...........While the jurisdiction of the High Courts under Article
226 - and of this Court under Article 32 - cannot be circumscribed by the
provisions of the said enactments, they will certainly have due regard to
the legislative intent evidenced by the provisions of the said Acts and
would exercise their jurisdiction consistent with the provisions of the Act.
The writ petition will be considered and disposed of in the light of and in
accordance with the provisions of Section 11-B. This is for the reason that
the power under Article 226 has to be exercised to effectuate the rule of
law and not for abrogating it.”
(emphasis supplied)
32. In KANAIYALAL LALCHAND SACHDEV Vs. STATE OF
MAHARASHTRA, (2011) 2 SCC 782, while considering the
question of maintainability of the writ petition, when
alternate remedy is available, while upholding the decision
of the High Court, dismissing the writ petition filed on the
ground of existence of an alternative remedy, under S.17
of the SARFAESI Act, Apex Court has held as follows:
"23. In our opinion, therefore, the High Court rightly dismissed the
petition on the ground that an efficacious remedy was available to the
28
appellants under Section 17 of the Act. It is well settled that ordinarily
relief under Articles 226/227 of the Constitution of India is not available if
an efficacious alternative remedy is available to any aggrieved person.
(See Sadhana Lodh v. National Insurance Co. Ltd., Surya Dev Rai v. Ram
Chander Rai and SBI v. Allied Chemical Laboratories.)
24. In City and Industrial Development Corpn. v. Dosu Aardeshir
Bhiwandiwala this Court had observed that:
"30. The Court while exercising its jurisdiction under Article 226
is duty- bound to consider whether:
(a) adjudication of the writ petition involves any complex and disputed
questions of facts and whether they can be satisfactorily resolved;
(b) the petition reveals all material facts;
(c) the petitioner has any alternative or effective remedy for the resolution
of the dispute;
(d) the person invoking the jurisdiction is guilty of unexplained delay and
laches;
(e) ex facie barred by any laws of limitation;
(f) grant of relief is against public policy or barred by any valid law; and
host of other factors."
(emphasis supplied)
33. In NIVEDITA SHARMA Vs. CELLULAR OPERATORS
ASSN. OF INDIA, (2011) 14 SCC 337, Apex Court has held,
that when a statutory forum is created by law for redressal of grievances,
a writ petition should not be entertained, ignoring the statutory
dispensation.
29
34. In SOUTHERN ELECTRICITY SUPPLY CO. OF
ORISSA LTD. Vs. SRI SEETARAM RICE MILL,(2012) 2 SCC 108,
Apex Court has held that it should only be for the
specialised tribunal or the appellate authority to examine
the merits of assessment or even the factual matrix of the
case. The relevant portion of the Judgment reads as
follows:
"80. It is a settled canon of law that the High Court would not normally
interfere in exercise of its jurisdiction under Article 226 of the Constitution of
India where statutory alternative remedy is available. It is equally settled that
this canon of law is not free of exceptions. The courts, including this Court,
have taken the view that the statutory remedy, if provided under a specific
law, would impliedly oust the jurisdiction of the civil courts. The High Court
in exercise of its extraordinary jurisdiction under Article 226 of the
Constitution of India can entertain writ or appropriate proceedings despite
availability of an alternative remedy. This jurisdiction, the High Court would
exercise with some circumspection in exceptional cases, particularly, where
the cases involve a pure question of law or vires of an Act are challenged.
This class of cases we are mentioning by way of illustration and should not be
understood to be an exhaustive exposition of law which, in our opinion, is
neither practical nor possible to state with precision. The availability of
alternative statutory or other remedy by itself may not operate as an absolute
bar for exercise of jurisdiction by the courts. It will normally depend upon the
facts and circumstances of a given case. The further question that would
inevitably come up for consideration before the Court even in such cases
would be as to what extent the jurisdiction has to be exercised.
81. Should the courts determine on merits of the case or should they
preferably answer the preliminary issue or jurisdictional issue arising in the
facts of the case and remit the matter for consideration on merits by the
competent authority? Again, it is somewhat difficult to state with absolute
clarity any principle governing such exercise of jurisdiction. It always will
depend upon the facts of a given case. We are of the considered view that
interest of administration of justice shall be better subserved if the cases of
the present kind are heard by the courts only where they involve primary
30
questions of jurisdiction or the matters which go to the very root of
jurisdiction and where the authorities have acted beyond the provisions of the
Act. However, it should only be for the specialised tribunal or the appellate
authorities to examine the merits of assessment or even the factual matrix of
the case."
(emphasis supplied)
35. In CICILY KALLARACKAL Vs. VEHICLE FACTORY,
(2012) 8 SCC 524, Apex Court has issued a direction of caution,
that it will not be a proper exercise of the jurisdiction by
the High Court to entertain a writ petition against such
orders against which statutory appeal lies. The relevant portion of
the Judgment reads as follows:
"4. Despite this, we cannot help but state in absolute terms that it is not
appropriate for the High Courts to entertain writ petitions under Article
226 of the Constitution of India against the orders passed by the
Commission, as a statutory appeal is provided and lies to this Court under
the provisions of the Consumer Protection Act, 1986. Once the legislature
has provided for a statutory appeal to a higher court, it cannot be proper
exercise of jurisdiction to permit the parties to bypass the statutory appeal
to such higher court and entertain petitions in exercise of its powers under
Article 226 of the Constitution of India.”
(emphasis supplied)
31
36. In CIT Vs. CHHABIL DASS AGRAWAL, (2014) 1
SCC 603, Apex Court has held, that when a statutory forum is
created by law for redressal of grievances, a writ petition should not be
entertained ignoring the statutory dispensation.
37. In UNION OF INDIA AND ANOTHER Vs. GUWAHATI
CARBON LIMITED, (2012) 11 SCC 651, the Customs, Excise
and Service Tax Appellate Tribunal, passed the order inter
alia holding that the Guwahati Carbon Limited is not entitled
to include freight and insurance charges in the assessable
value and therefore the duty levied under the Central
Excise Act, 1944 requires to be recalculated. Aggrieved by
the said order, the Guwahati Carbon Limited filed writ
petition. The writ petition though admitted on the first
date of hearing, was subsequently disposed of on the
ground that the petitioner can avail the alternate remedy
as provided by the Central Excise Act. The said order
having been questioned, in the appeal, the Division Bench
allowed the same on the ground that the writ court, in
exercise of the power under Article 226 of the Constitution
32
of India, has vast powers to decide any question that may
arise under the provisions of the Central Excise Act. The
said Judgment having been assailed before the Apex
Court, taking note of the principles laid down in the cases
of (i) MUNSHI RAM Vs. MUNICIPAL COMMITTEE, CHHEHARTA,(1979)
3 SCC 83; (ii) TITAGHUR PAPER MILLS CO. LTD. Vs. STATE OF
ORISSA, (1983) 2 SCC 433; (iii) RASHID AHMED Vs. MUNICIPAL
BOARD, KAIRANA, AIR 1950 SC 163; (iv) WHIRLPOOL CORPN. Vs.
REGISTRAR OF TRADE MARKS, (1998) 8 SCC 1 and S.35-G of the
Central Act, 1944 providing for appeal to the High Court
from the order passed in an appeal by the Appellate
Tribunal, while allowing the appeal, it has been held as
follows:
“15. In our opinion, the assessee ought not to have filed a writ
petition before the High Court questioning the correctness or otherwise of
the orders passed by the Tribunal. The Excise Law is a complete code in
order to seek redress in excise matters and hence may not be appropriate
for the writ court to entertain a petition under Article 226 of the
Constitution. Therefore, the learned Single Judge was justified in
observing that since the assessee has a remedy in the form of a right of
appeal under the statute, that remedy must be exhausted first. The order
passed by the learned Single Judge, in our opinion, ought not to have been
33
interfered with by the Division Bench of the High Court in the appeal filed
by the respondent assessee.”
(emphasis supplied)
38. Sri R.L.Patil, contended that the view
expressed in Hotel Vandana Palace case with regard to the
maintainability of writ petition i.e., without filing the appeal
before the DRAT, under S.18 of the Act being the correct
position of law, the decision in the case of Smt.Lily Joseph,
expressing a contrary view is unsound and is liable to be
declared as per incuriam.
39. Sri R. Ashok Kumar, on the other hand
supported the conclusion arrived at in Smt.Lily Joseph case
and contended that the finding recorded on point (ii), in
the case of Hotel Vandana Place case, being in ignorance of
well settled principles of law and also the binding decision
in the case of SATYAWATI TONDON, is liable to be declared
as per incuriam. Learned advocate submitted that the Hotel
Vandana Palace case having been decided in the peculiar
facts, which can be seen from the opening sentence of
34
para 23, does not constitute a binding precedent especially
on account of not noticing and following the decision of the
Apex Court in SATYAWATI TONDON, wherein, the material
aspects and the significance of S.18 of SARFAESI Act has
been adverted to in detail. He submitted that the decision
in the case of KANAIYALAL LALCHAND SACHDEV has been
misread and misinterpreted without any attempt being
made to understand the legislative intent behind the
SARFAESI Act and true purport of the ratio of law laid
down in the said decision by the Division Bench which has
decided Hotel Vandana Place case. He further submitted that
the judgment in Smt.Lily Joseph case has been correctly
rendered, based on the law laid down in KANAIYALAL
LALCHAND SACHDEV and hence is a binding precedent.
40. In view of the rival contentions and the
reference made by the learned Single Judge, extracted
supra, the question for determination is “Whether the view
expressed by the Division Bench of this Court in Hotel Vandana Palace
case, with regard to the maintainability of writ petition, despite the
35
availability of an alternative remedy of appeal, lays down the correct law
or the contrary view in Smt.Lily Joseph case is the correct law?”
41. The Division Bench, while answering point
No.(ii) formulated for consideration, at para 11, in the case
of Hotel Vandana Palace, has stated (at paras 24, 25 and 26)
as follows:
(i) The writ petition was not been dismissed on the ground of
maintainability of non exercising the power (must be read as non availing
the remedy) granted under S.18 of the Act, but was rejected on the ground
that the earlier writ petition challenging the sale notice had been
dismissed.
(ii) Without deposit of either 50% or 25%, as required under
S.18 of the SARFAESI Act, an appeal cannot be filed.
(iii) Decision of Apex Court rendered in KANAIYALAL LALCHAND
SACHDEV has no application, on account of the fact that there is no
disputed questions of fact and the question arising for decision is only
“whether the Bank has followed the Rules before selling the property”.
(iv) In the special circumstances of the case i.e., the property
worth several crores was sold in public auction, without following the
procedure, and in such a case, the person who has lost the property in a
sale conducted by the Bank for non payment of more than 5 crores of
rupees, it is difficult for a person like appellant to approach the Tribunal to
file an appeal by depositing 50% or 25% of the amount due.
36
In the peculiar facts and circumstances of the case, with the
aforesaid reasoning, the writ petition was held as
maintainable.
42. In Smt.Lily Joseph case, the challenge in the writ
petition was to an order passed by the Tribunal under S.17
of the SARFAESI Act. The writ petition was dismissed by
the learned Single Judge on the ground of availability of
alternative remedy of appeal to the DRAT. By referring to
the decision of the Apex Court in KANAIYALAL LALCHAND
SACHDEV, the Division Bench has dismissed the writ
appeal, by stating that the law is well settled on the issue.
It is to be pointed out that without raising a point for
consideration and assigning reasons, the conclusion has
been arrived at. There is no express declaration of law or
authority of a general nature, to reckon the decision as
binding, as is contemplated by Article 141 of the
Constitution.
43. Presently, we shall deal with the concept of per
incuriam.
37
44. A decision rendered in ignorance of a binding
precedent and/or in ignorance of the statutory provision,
would be held to have been rendered per incuriam (See para
98 of the decision in SUBHASH CHANDRA AND ANOTHER Vs.
DELHI SUBORDINATE SERVICES SELECTION BOARD AND
OTHERS, (2009) 15 SCC 458).
45. In GOVT. OF A.P. AND ANOTHER Vs. B.
SATYANARAYANA RAO (DEAD) BY LRS. AND OTHERS, (2004) 4
SCC 262, while dealing with the concept of per incuriam,
Apex Court has held as follows:
“8………The rule of per incuriam can be applied where a court
omits to consider a binding precedent of the same court or the superior
court rendered on the same issue or where a court omits to consider any
statute while deciding that issue…….”
46. In GENERAL MANAGER, SRI SIDDESHWARA
COOPERATIVE BANK LIMITED AND ANOTHER, Vs. IKBAL AND
OTHERS, (2013) 10 SCC 83, the material facts were that the
respondent availed housing loan from the appellant by
mortgaging certain immovable property. As the respondent
committed default in repayment of the loan, the Bank
38
issued notice to him under S.13(2) of the SARFAESI Act.
Later, the Bank published auction notice and the highest
bid received was accepted. The auction-purchaser
deposited 25% of the sale consideration and did not make
payment of the balance amount within 15 days of the
confirmation of sale. The auction-purchaser made delayed
final payment and the Bank issued in his favour a sale
certificate. The proceeds realised by auction sale having
fallen short of the total outstanding amount against the
borrower, the Bank filed a dispute before the Registrar of
Co-Operative Societies for recovery of outstanding amount
and an exparte award was passed. At that stage, by filing
a writ petition, the borrower challenged the sale certificate
issued in favour of the auction-purchaser. The learned
Single Judge held that the mandatory requirement of Rule
9 was not followed and that therefore despite the remedy
of appeal to the borrower, provided under S.17 of the
SARFAESI Act, a case was made out under S.226 of the
Constitution and the same was affirmed by the Division
Bench. Feeling aggrieved, the Bank and the auction-
39
purchaser approached the Apex Court. While allowing the
appeal and setting aside the impugned orders and by
taking note of the law laid down in SATYAWATI TONDON’S
case, it was held as follows:
“23. There is one more aspect in the matter which has troubled us.
Against the action of the Bank under Section 13(4) of the SARFAESI Act,
the borrower had a remedy of appeal to the Debts Recovery Tribunal
(DRT) under Section 17. The remedy provided under Section 17 is an
efficacious remedy. The borrower did not avail of that remedy and further
remedies from that order and instead directly approached the High Court
in extraordinary jurisdiction under Article 226 of the Constitution of India.
*** *** ***
27. No doubt an alternative remedy is not an absolute bar to the
exercise of extraordinary jurisdiction under Article 226 but by now it is
well settled that where a statute provides efficacious and adequate remedy,
the High Court will do well in not entertaining a petition under Article
226. On misplaced considerations, statutory procedures cannot be allowed
to be circumvented.”
(emphasis supplied)
47. In NARAYAN CHANDRA GHOSH Vs. UCO BANK AND
OTHERS, (2011) 4 SCC 548, the material facts were, that the
appellant/borrower, filed an appeal before the DRAT and in
that appeal, an application was filed under S.18(1) of the
40
SARFAESI Act. The DRAT exempted the appellant from
making any deposit in terms of the second proviso to S.18
of the Act, before entertaining the appeal against the order
passed by the DRT. The said order, when questioned by
the Bank having been set aside by the High Court and the
borrower having approached the Apex Court, the question
raised for consideration was “whether the Appellate Tribunal
has the jurisdiction to exempt the person, preferring an appeal under
Section 18 of the Act from making any pre-deposit in terms of the
said provision?”. While deciding the case, Apex Court has
held as follows:
“7. Section 18(1) of the Act confers a statutory right on a person
aggrieved by any order made by the Debts Recovery Tribunal under
Section 17 of the Act to prefer an appeal to the Appellate Tribunal.
However, the right conferred under Section 18(1) is subject to the
condition laid down in the second proviso thereto. The second proviso
postulates that no appeal shall be entertained unless the borrower has
deposited with the Appellate Tribunal fifty per cent of the amount of debt
due from him, as claimed by the secured creditors or determined by the
Debts Recovery Tribunal, whichever is less. However, under the third
proviso to the sub-section, the Appellate Tribunal has the power to reduce
the amount, for the reasons to be recorded in writing, to not less than
twenty-five per cent of the debt, referred to in the second proviso. Thus,
there is an absolute bar to entertainment of an appeal under Section 18 of
the Act unless the condition precedent, as stipulated, is fulfilled. Unless
the borrower makes, with the Appellate Tribunal, a pre-deposit of fifty per
cent of the debt due from him or determined, an appeal under the said
41
provision cannot be entertained by the Appellate Tribunal. The language
of the said proviso is clear and admits of no ambiguity.
8. It is well-settled that when a Statute confers a right of appeal,
while granting the right, the Legislature can impose conditions for the
exercise of such right, so long as the conditions are not so onerous as to
amount to unreasonable restrictions, rendering the right almost illusory.
Bearing in mind the object of the Act, the conditions hedged in the said
proviso cannot be said to be onerous. Thus, we hold that the requirement
of pre-deposit under sub-section (1) of Section 18 of the Act is mandatory
and there is no reason whatsoever for not giving full effect to the
provisions contained in Section 18 of the Act. In that view of the matter,
no court, much less the Appellate Tribunal, a creature of the Act itself, can
refuse to give full effect to the provisions of the Statute. We have no
hesitation in holding that deposit under the second proviso to Section
18(1) of the Act being a condition precedent for preferring an appeal under
the said section, the Appellate Tribunal had erred in law in entertaining the
appeal without directing the appellant to comply with the said mandatory
requirement.”
(emphasis supplied)
48. In the case of PARSN MEDICINAL PLANTS
PRIVATE LIMITED AND ANOTHER Vs. INDIAN BANK AND
OTHERS, (2011) 15 SCC 253, the material facts were, the
finding of the Debts Recovery Appellate Tribunal that the
appellants / guarantors need not make any deposit to
maintain the appeal was assailed by the Bank and also by
the auction-purchaser by filing writ petitions and by
contending that the amount paid / deposited by the
auction-purchaser cannot be adjusted towards the deposit
42
to be made by the borrowers / guarantors, while preferring
appeal under S.18 of the SARFAESI Act and also that there
cannot be complete waiver of the deposit, as was prayed
on the part of the guarantors, before the Appellate
Tribunal and was accepted by the Appellate Tribunal.
Repelling the contention urged on behalf of the guarantors
that the issue of waiver is a matter completely between
the appellant / guarantors and the Appellate Tribunal and
no prejudice, whatsoever, has been caused to the Bank so
as to knock the doors of the writ court and that the
Appellate Tribunal is completely within its bounds in
passing the order, by finding that the entire controversy is
with regard to waiver of deposit amount, Apex Court, after
extracting S.18 of the SARFAESI Act, has held as follows:
“17………..The language used in this section is very plain and clear,
making it unambiguously clear that any person aggrieved by the order of the
Debts Recovery Tribunal passed under Section 17 may prefer appeal to the Debts
Recovery Appellate Tribunal by paying necessary fee and the second proviso to
sub-section (1) makes it clear that no appeal shall be entertained unless the
borrower has deposited with the Appellate Tribunal fifty per cent of the amount
of debt due from him. However, under the third proviso to sub-section (1),
power has been given to the Appellate Tribunal to reduce the deposit amount, for
the reasons to be recorded in writing, to not less than twenty-five per cent of debt
43
referred to in the second proviso. Thus, though a discretionary power has been
conferred on the Debts Recovery Appellate Tribunal under the third proviso to
sub-section (1), the discretion is not an absolute one, but a limited one. While
exercising the discretion conferred on it, provided for under the third proviso to
sub-section (1), the Appellate Tribunal has been mandated not to reduce the
deposit amount to not less than twenty-five per cent of the debt referred to in the
second proviso.
18. While such is the legal mandate, in the impugned order, the first
respondent Appellate Tribunal has granted complete waiver of the deposit
amount to the appellants/guarantors, which has not been contemplated under law.
In the interpretation of statutes, the courts always presume that the legislature
inserted every part thereof for a purpose and the legislative intention is that every
part of the statute should have effect. The legislature is deemed not to waste its
words or to say anything in vain. By an interpretative process, the Court cannot
reach a conclusion which makes it impossible for remedies provided for under
the law to be worked out. The purposive interpretation requires that any
interpretation which is unjust or absurd must be eschewed and the Court must
adopt principles of reasonable and harmonious construction in consonance with
the avowed statutory purpose. Hence, impugned order passed by the first
respondent Appellate Tribunal is absolutely bereft of any power granted to it and
therefore, the same needs to be set aside.”
(emphasis supplied)
49. In T.P.VISHNU KUMAR Vs. CANARA BANK, P.N.
ROAD, TIRUPPUR AND OTHERS, (2013) 10 SCC 652, the
material facts were that the Bank filed O.A. before the DRT
to pass a decree directing the defendants, to pay the
44
quantified sum along with interest. I.As. were filed to
produce the extract of the accounts and the documents
relating to the loan transactions. The applications having
been contested were rejected by the Tribunal, against
which, the writ petitions were filed and the same was
opposed on the ground of availability of alternative remedy
under the Act. Writ petitions having been allowed, the
Bank took up the matter in appeal and the Division Bench
having allowed the writ appeals by holding that the
borrower had not availed the alternative remedy available
under S.20 of the RDDB Act, Apex Court was approached
for relief. Considering the purpose for which the Tribunal
has been established and the Act providing for a
mechanism by way of appeal as per S.20 to the Appellate
Tribunal, it was held as follows:
“10……When the Act itself provides for a mechanism, by an
appeal under Section 20 of the Act, in our view, the High Court is not
justified in invoking jurisdiction under Article 226 of the Constitution of
India to examine that the rejection of the applications by the Tribunal was
correct or not…….”
45
50. The Division Bench which decided the Hotel
Vandana Palace case, while recording finding on point No.(ii)
unfortunately, has not noticed the binding decision in
SATYAWATI TONDON’S case, wherein, the Apex Court while
being conscious that the powers conferred upon the High
Court under Article 226 of the Constitution to issue
prerogative writs being very wide and that there can be no
express limitation on exercise of that power, by expressing
serious concern, has held as follows:
“ 44…..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 the power under Article 226 of the Constitution.
*** *** ***
“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 SARFAESI Act
and exercise jurisdiction under Article 226 for passing orders which have
serious adverse impact on the right of Banks and other financial
institutions to recover their dues. We hope and trust that in future the High
Courts will exercise their discretion in such matters with greater caution,
care and circumspection.”
(emphasis supplied)
46
51. Article 141 of the Constitution of India reads as
follows:
“141. Law declared by Supreme Court to be binding on all
courts.- The law declared by Supreme Court shall be binding on
all courts within the territory of India.”
Article 141 of the Constitution provides that the law
declared by the Apex Court shall be binding on all Courts
within the territory of India. Therefore, the ratio decidendi
declared in SATYAWATI TONDON’S case was binding and
ought to have been applied, when Hotel Vandana Palace case
was decided.
52. The finding recorded on point No.(ii) in the
case of Hotel Vandana Palace having been rendered, as is
evident from para 23 of the judgment itself, on the special
facts and circumstances of the said case, cannot be a binding
precedent. In the case of Smt.Lily Joseph, the Division Bench
has not assigned reasons, while holding the writ petition as
not maintainable, except making reference to the decision
in the case of KANAIYALAL LALCHAND SACHDEV.
47
52.1. Sri R.L. Patil, submitted that the Judgment
rendered in Hotel Vandana Palace case was questioned before
the Apex Court and the appeal was dismissed, in the case
of VASU P. SHETTY Vs. HOTEL VANDANA PALACE, (2014) 5 SCC
660 and hence the doctrine of merger applies. He further
submitted that the decision in Hotel Vandana Palace case, thus,
having attained finality is a binding precedent.
52.2. Sri R. Ashok Kumar, on the other hand,
submitted that, the mere fact that appeal preferred against
the decision in VASU P. SHETTY case was dismissed by the
Apex Court does not mean that the issue under
consideration viz., point No.(ii) raised in Hotel Vandana Palace
case as having been determined by the Apex Court. He
submitted that the Division Bench while deciding Hotel
Vandana Palace case, having overlooked the decision in
SATYAWATI TONDON’S case and also misinterpreted the
ratio of law laid down in KANAIYALAL LALCHAND SACHDEV
case, it is open to this Bench to go into the issue and differ
from the conclusion reached on point No.(ii) in Hotel Vandana
Palace case by the Division Bench.
48
52.3. In view of the rival contentions, the question
that arises is ‘whether, the decision in VASU P. SHETTY case has
approved the view of the Division Bench on point No.(ii) raised in Hotel
Vandana Palace case’?
52.4. In KUNHAYAMMED Vs. STATE OF KERALA, (2000)
6 SCC 359, Apex Court has reiterated that the doctrine of
merger is not of universal application or unlimited
application; the nature of jurisdiction exercised by the
superior Forum and the content or subject matter of
challenge laid or which could have been laid, shall have to
be kept in view.
52.5. The decision in VASU P. SHETTY’s case clearly
reveals that neither there is any consideration with regard
to the writ being not entertainable on account of
availability of alternative remedy under S.18 of the
SARFAESI Act nor the validity of finding on point No.(ii)
recorded by the Division Bench has been gone into.
49
52.6. In VASU P. SHETTY’s case, the opinion of the
Division Bench in Hotel Vandana Palace case on the
interpretation of sub-rules (5) and (6) of Rule 8 of the
Rules was held as flawless and the only question
considered as can be seen from para 19 of the decision is,
as to whether it can be held that the borrower in the case had waived the
mandatory provisions of Rules 8 and 9 of the Rules. Hence, it
cannot be said that the remaining part of the decision in
the case of Hotel Vandana Palace as having merged in the
order passed by the Apex Court in the case of Vasu P. Shetty.
Thus, the view expressed by the Division Bench of this
Court in Hotel Vandana Palace, on point No.(ii), is open to
reconsideration by a coram of more than two Judges.
53. When extraordinary writ remedy is invoked,
despite the availability of an alternative remedy, the Court
should at the threshold, examine, whether the petition can
be entertained having regard to the pleading in the
petition, more particularly, the reason(s) stated for bypassing
of the alternative remedy. In a catena of decisions, it has
50
been held by the Apex Court, that writ petition under
Article 226 of the Constitution should not be entertained
when the alternate remedy is available under the Act,
unless exceptional circumstances are made out. The writ
remedy cannot be permitted to be availed as a routine /
matter of course, but only in exceptional circumstances.
The Apex Court has recognized some exceptions to the
rule of alternative remedy i.e., where the statutory body
has not acted in accordance with the provisions of the
enactment in question or in defiance of the fundamental
principles of judicial procedure, or has resorted to invoke
the provisions which are repealed, or when an order has
been passed in total violation of principles of natural
justice, or when the vires of the statute is under challenge.
54. Unless the Court is convinced that the case
falls under the exceptional categories, the writ petition
filed against the order of the Tribunal, passed in exercise
of the jurisdiction under S.17 of the SARFAESI Act, on
account of the legislative intent behind the enactment of
51
the SARFAESI Act and RDDB Act and the ratio of law laid
down by the Apex Court in the cases of (1) Kanaiyalal Lalchand
Sachdev (2) Satyawati Tondon and (3) Sri Siddeshwara Co.Op. Bank
Ltd., cannot be entertained, as the approach of the High
Court should be consistent with the provisions of the
statutes and also the law laid down by the Apex Court,
mandated by Article 141 of the Constitution.
In view of the aforesaid discussion, we are of the
opinion that Hotel Vandana Palace case does not lay down the
correct position of law i.e., in so far as point No.(ii) answered
therein. Hence, the finding recorded on point No.(ii), in
Hotel Vandana Palace case, is declared as per incuriam. Needless
to say that any decision(s) of this Court which take(s) the
view contrary to the law laid down by the Apex Court, in
(1) Kanaiyalal Lalchand Sachdev (2) Satyawati Tondon and (3) Sri
Siddeshwara Co.Op. Bank Ltd., does not lay down the correct
law on the question involved in this Reference. The
Reference is answered accordingly.
52
The petition be now listed before the learned Single
Judge, to decide in the first instance, the entertainability or
otherwise of the writ petition by keeping in view the
position of law, as above.
Sd/-
JUDGE
Sd/-
JUDGE
Sd/-
JUDGE
sac*
top related