Writ petition not ordinarily maintainable against order of DRT under S. 17 of SARFAESI Act: Karnataka HC (FB) [Read Order]

Writ petition not ordinarily maintainable against order of DRT under S. 17 of SARFAESI Act: Karnataka HC (FB) [Read Order]

Karnataka High Court in M/S Deepak Apparels Pvt Ltd vs City Union Bank Ltd has held that writ petition is not ordinarily maintainable against the order of the Debt Recovery Tribunal, passed in exercise of the jurisdiction under S.17 of the SARFAESI Act. Full Bench answering a reference held that it can be entertained only if the court is convinced that it falls within the exceptional categories recognized by Apex Court

Single Bench has expressed his doubts about the correctness in decision of Hotel Vandana Palace case wherein it was held that a writ petition is maintainable without filing an appeal to the Appellate Tribunal as provided under S.18 of the Act, 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 Full Bench referring to various rulings of the Apex Court observed “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 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or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of principles of natural justice, or when the vires of the statute is under challenge.”

The Bench further held “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 the SARFAESI Act and RDDB Act and the ratio of law laid down by the Apex Court”.

Read the order here.