Remedies Under SARFAESI Act Are Expeditious & Effective: Gujarat High Court Declines Writ Petition Against Rejection Of Early Hearing By DRT

The Gujarat High Court has declined to exercise its writ jurisdiction under Article 226 in a petition challenging order of the Debt Recovery Tribunal which rejected Petitioner's application for preponement of hearing, fearing dispossession from property.Justice Vaibhavi D. Nanavati observed that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective and thus court must refrain from exercising its writ jurisdiction in such matters."It is open for the writ petitioners to avail the statutory alternative remedy available under the Act...This Court is not inclined to exercise the powers under Article 226 of the Constitution of India."The petition sought that the DRT be directed to hear its case expeditiously and stay the enforcement and execution of the impugned notice issued by the Mamlatdar for dispossessing the Petitioner. The Petitioners insisted that the impugned order by the Respondent Bank from the Mamlatdar be quashed since it would dispossess the Petitioner from the residential property. The Petitioners had approached the Respondent authority with a request to seek preponement of the hearing but the Authority found no reason for urgency in taking up the matter. The matter was scheduled for hearing on 16th September 2022. The Respondent, per contra, referred to the Tribunal's order wherein interim relief qua property in question was declined. It was stated that those who avail the loan from the Bank are duty bound to repay the amount strictly in accordance with the terms of the contract. Further, a stay against the Respondent Bank for initiating recovery would disable it from discharging its constitutional duties. Having heard these contentions, Justice Nanavati opined that the Petitioners had accepted the order of the Tribunal declining interim relief, since the same was not challenged. Therefore, the issue was no longer 'res integra.' Accordingly, the Petitioners ought to have filed an appeal before DRAT. Reference was made to United Bank of India vs. Satyawati Tondon and Ors to reiterate: "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." In the same case the Supreme Court had cautioned thus: "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." Further, in Phoenix ARC Private Limited vs. Vishwa Bharati Vidya Mandir & Ors, the High Court observed: "Even otherwise, it is required to be noted that a writ petition against the private financial institution – ARC – appellant herein under Article 226 of the Constitution of India against the proposed action/actions under Section 13(4) of the SARFAESI Act can be said to be not maintainable." Accordingly, the petition was dismissed with the option of availing the alternative statutory remedy. Case No.: C/SCA/14092/2022 Case Title: M/S. MAHEE COTEX v/s CENTRAL BANK OF INDIA, AUTHORISED OFFICERCitation: 2022 LiveLaw (Guj) 298 Click Here To Read/Download Order

Remedies Under SARFAESI Act Are Expeditious & Effective: Gujarat High Court Declines Writ Petition Against Rejection Of Early Hearing By DRT

PRIYANKA PREET

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