@JUDGMENTTAG-ORDER
B. Rajendran, J.@mdashThe petitioner, who alleges to be the owner of the property bearing Plot No. 72 and 73, Vemba Avenue, Sitalapakkam, Chennai - 600 073, has filed this writ petition praying for a Writ of Certiorarified Mandamus connected with the notice of intended sale issued under Rule 6(2) and 8 (6) of the Security Interest (Enforcement) Rules 2002 under SARFAESI Act, 2002 dated 23.08.2010 on the file of the first respondent, quash the same and direct the first respondent to refrain from initiating any proceedings under the provisions of SARFAESI Act with respect to the house and ground premises bearing Plot Nos. 72 and 73, Vemba Avenue, Sithalapakkam.
2. According to the petitioner, he purchased the property from the third respondent as early as on 21.07.1999 under a registered document and also obtained patta. Thereafter, he had put up a super structure after getting necessary plan sanctioned for which purpose, he has also availed loan from the fourth respondent society. While so, in the first week of July 2010, some unknown persons came to his premises and had thrown a notice into his house and went away. When he picked up the notice and went through its content, he came to know that it is a sale notice issued by the first respondent to his vendor, the second respondent herein, fixing the date of auction sale in respect of the property on 09.07.2010. Immediately, he approached the Debts Recovery Tribunal, Chennai and filed S.A. No. 167 of 2010 challenging the sale notice. Pending S.A. No. 167 of 2010, he had taken out an application for granting interim stay and the same was also granted by the Tribunal on 09.07.2010 only in respect of confirmation of sale alone as the application itself was filed on 09.07.2010. Before the Debt Recovery Tribunal, Madras, the petitioner contended that the sale notice itself is defective in nature as it did not specify actual outstanding amount on the date of issuance of the sale notice. It was further contended that the sale did not take place on 09.07.2010 as scheduled, however, he would contend that some unknown persons have thrown a notice into his house again and on reading the contents of the notice, he came to know that the date of auction sale is fixed on 29.09.2010. According to the petitioner, the service of notice is totally not in accordance with law. Moreover, after the sale notice, he came to know that the claim has been made in respect of the original loan granted to the third respondent long back for a sum of Rs. 1,82,000/-for purchase of hotel equipments, for which hypothication made in respect of the movable properties of the third respondent. He would further admit that equitable mortgage has been created in respect of the property, but the same was not registered and therefore it is legally not sustainable. Since he is not aware of the equitable mortgage, he purchased the property after obtaining encumbrance certificate. Since the equitable mortgage was not registered, the encumbrance certificate did not disclose the prior encumbrances. According to the petitioner, the loan was granted long back in the year 1988 and the present auction sale notice is barred by limitation. He has also filed S.A. No. 167 of 2010 before the Tribunal on the ground that the mortgage executed by the third respondent for availing loan is not binding on him as it was not registered. Moreover, the claim made by the bank itself is barred by limitation and therefore, the property should not be brought under auction sale.
3. When the writ petition was taken up for admission, it was found that the writ petition is bereft of any material particulars and it is not legally sustainable. First of all, it is admitted by the petitioner himself that in respect of the very same property, earlier, a sale notice was issued by the bank and the property was sought to be brought under auction on 09.07.2010. Immediately, the petitioner has filed S.A. No. 167 of 2010 before the Tribunal, Chennai challenging the auction sale notice issued by the bank and obtained interim order of confirmation of sale alone. By virtue of the interim stay granted by the Tribunal, the auction sale could not be conducted since the competent Forum namely the Debt Recovery Tribunal has passed an interim order on 09.07.2010. Under those circumstance, the bank has issued the present sale notice fixing the date of auction on 27.09.2010. When the S.A. No. 167 of 2010 filed by the petitioner in respect of the very same subject matter of property is pending before the competent Forum namely the Debt Recovery Tribunal, Chennai, it is not open to the petitioner to file this writ petition invoking Article 226 of The Constitution of India. In all fairness, the petitioner should have filed an application before the Tribunal bringing forth to the notice of the Tribunal the new developments by filing a separate application. Even otherwise, if auction sale is conducted by the bank pursuant to the present auction sale notice, the bank could not confirm the auction in favour of a highest bidder as interim stay granted by the Tribunal is still in force. When this being the position, it is not known as to how the petitioner could challenge the present auction notice before this Court by filing the writ petition invoking Article 226 of The Constitution of India.
4. In this connection, we are fortified by the latest decision of the Honourable Supreme Court in
18. There is another reason why the impugned order should be set aside. If respondent No. 1 had any tangible grievance against the notice issued u/s 13(4) or action taken u/s 14, then she could have availed remedy by filing an application u/s 17(1). The expression ''any person'' used in Section 17(1) is of wide import. It takes within its fold, not only the borrower but also guarantor or any other person who may be affected by the action taken u/s 13(4) or Section 14. Both, the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective. 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 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, 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.
18. 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. 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. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in
5. In the said Judgment of the Honourable Supreme Court, in para No. 25, referred to the decision of the Supreme Court reported in
31. When a statutory forum is created by law for redressal of grievance and that too in a fiscal statute, a writ petition should not be entertained ignoring the statutory dispensation. In this case the High Court is a statutory forum of appeal on a question of law. That should not be abdicated and given a go-by by a litigant for invoking the forum of judicial review of the High Court under writ jurisdiction. The High Court, with great respect, fell into a manifest error by not appreciating this aspect of the matter. It has however dismissed the writ petition on the ground of lack of territorial jurisdiction.
32. No reason could be assigned by the appellant''s counsel to demonstrate why the appellate jurisdiction of the High Court u/s 35 of FEMA does not provide an efficacious remedy. In fact there could hardly be any reason since the High Court itself is the appellate forum.
6. Therefore, following the decision of the Honourable Supreme Court mentioned supra, the writ petition filed by the petitioner in respect of matters which are to be adjudicated by the Debt Recovery Tribunal should not be entertained. Moreover, the petitioner himself has moved the Debt Recovery Tribunal by filing S.A. No. 126 of 2007 in respect of the very same subject matter of the property and the same is pending, therefore, nothing prevented the petitioner from proceeding further before the Tribunal. In any event, the writ petition filed under Article 226 of The Constitution of India is not maintainable, the writ petition is devoid of merits, liable to be dismissed and accordingly it is dismissed. No costs. Consequently, connected miscellaneous petition is closed.
