1 AFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 2025 of 2025 1 - Shreemanthula Kumaraswamy S/o Chandra Shekhar, Aged About 53 Years, R/o Amleshwar, Tahsil Patan, District Durg, Chhattisgarh ... Petitioner versus 1 - Punjab National Bank Through Its Authorized Officer Branch Office Tatibandh District Raipur, Chhattisgarh Pin 492001 2 - The Collector, Durg, District Durg, Chhattisgarh 3 – Tahsildar, Patan, District Durg, Chhattisgarh 4 - Neha Pandey W/o Omprakash Pandey R/o Sheetla Mohalla Mahadev Ghat Road Near Ram Temple, Raaypura Tahsil And District Raipur, Chhattisgarh 5 - Chief General Manager Through Rbi, Financial Inclusion And Development Dept., Central Office 10th Floor, Central Office Bulding Shahid Bhagat Singh Marg, P.B. No. 10014, Mumbai - 400001, Maharashtra 6 - Salil Jha Notary Advocate District Session Court District Durg Chhattisgarh ... Respondents (Cause title is taken from Case Information System) For Petitioner : Shri Raman Mishra, Advocate For Respondent/Punjab National Bank : Shri Sharad Mishra, Advocate For Respondent/State : Shri Shreyansh Mehta, Panel Lawyer Digitally signed by GOPAL SINGH Date: 2025.05.07 19:36:13 +0530 2 Hon’ble Shri Justice Amitendra Kishore Prasad Order on Board 01/05/2025 1. On account of default committed by the petitioner borrower in repayment of the outstanding dues, account of the petitioner borrower was classified as a "Non-performing Asset" (NPA) by the respondent Punjab National Bank. As the petitioner borrower failed and neglected to repay the outstanding dues of the Bank, the Bank issued a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (henceforth ‘the Act of 2002’). 2. By this petition, the petitioner seeks the following reliefs: “10.1 That, this Hon'ble Court may kindly be pleased to call records with respect to the instant writ petition. 10.2 That, this Hon'ble Court may kindly be pleased to issue a appropriate writ to respondent no 1 to provide the document of both loan facilities’ to the petitioner. And issue direction to the respondent no 03 for produce copy of the sale-deed executed through e auction between respondent No.1 and respondent no 04 before this Hon'ble Court. 10.3 That, this Hon'ble Court may kindly be pleased to quash the sale deed executed through e auction/private treaty between respondent No.1 and respondent no 04. 10.4 That, this Hon'ble Court may kindly be pleased to quash the impugned order dated 23/12/2024 annexure A- 01. 10.5 Hon'ble Court may, keeping in view the seriousness of the matter, grant interim injunction to the petitioner 3 against respondent no. 1 and respondent no. 3 with respect to annexure A-12 without issuing any notice to immediately stop the physical possession of the mortgaged property proceeding initiated by the respondent no 01 and 03 till the instant writ petition disposed off. 10.6 Any other relief, which may deem fit in the interest of justice.” 3. Learned counsel appearing for the petitioner submits that notice under Section 13(2) of the Act of 2002 has not been served upon the petitioner and without there being any service of notice, the entire proceedings have been initiated. The petitioner was not at all aware about the fact that his account in respect of such debt is classified as non-performing asset, as such the impugned order passed by the District Magistrate, Durg, Chhattisgarh is not in accordance with law. The procedure as envisaged under Section 13(2) as well as Section 14 of the Act of 2002 has not been complied with and without following any procedure the impugned order has been passed. In two earlier occasions, the District Magistrate, Durg has dismissed the application filed under Section 14 of the Act of 2002 for want of prosecution on 10.6.2024 and thereafter no procedure was followed. Even the documents were not supplied to the petitioner. He placed reliance upon a judgment of the Hon’ble Supreme Court in the matter of Govind Kumar Sharma and others v. Bank of Baroda and others, MANU/SC/0327/2024. As such, the impugned order dated 23.12.2024 is liable to be set aside. 4 4. On the other hand, learned counsel appearing for the respondent/Punjab National Bank, at the outset, submits that the instant petition is not maintainable. The petitioner is required to approach before the concerned Debts Recovery Tribunal (DRT) for redressal of his grievances. Notices have already been served upon the petitioner. The present petition has been filed by the person who is not competent to file this petition. He is neither a borrower nor an owner. He further submits that the present writ petition is absolutely based on ill-founded facts and grounds which are wholly devoid of merits and substance. The order as well as actions which are under challenge in this writ petition are wholly legal and have been passed in strict compliance with the statutory rules and regulations and neither the District Magistrate has committed any illegality in passing the impugned order nor there is any illegality or arbitrariness whatsoever in any act of the respondent/Bank as alleged in the present writ petition. Therefore, the present writ petition is unsustainable in the eyes of law and is liable to be dismissed at the threshold. Time and again, the Hon'ble Supreme Court in catena of its judgments has deprecated the practice of entertaining writ petitions in a matter which relates to the Act of 2002 where the statute provides/prescribes a particular mode for redressal of grievance and the Courts have observed that an attempt to circumvent the statutory remedy shall not be encouraged by the Writ Courts. In a recent judgment passed in the case of South Indian Bank Ltd. and others v. Naween Mathew 5 Philip and another [Civil Appeal Nos. of 2023 [Arising out of SLP (Civil) Nos. 22021-2022022 of 2022] decided on April 17, 2023 reported in (2023) 17 SCC 311, the Hon'ble Supreme Court while relying on its earlier judgments passed in (i) Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir [Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir, (2022) 5 SCC 345; (ii) Federal Bank Ltd. v. Sagar Thomas [Federal Bank Ltd. v. Sagar Thomas, (2003) 10 SCC 733); (iii) SBI v. Arvindra Electronics (P) Ltd., (2023) 1 SCC 540; (iv) United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110; (v) State Bank of Travancore v. Mathew K.C., (2018) 3 SCC 85 and Varimadugu Obi Reddy v. B. Sreenivasulu, (2023) 2 SCC 168 has held that a writ petition involving proceedings under the Act of 2002 over a financial transaction is not maintainable and has observed as under: "18. While doing so, we are conscious of the fact that the powers conferred under Article 226 of the Constitution of India are rather wide but are required to be exercised only in extraordinary circumstances in matters pertaining to proceedings and adjudicatory scheme qua a statute, more so in commercial matters involving a lender and a borrower, when the legislature has provided for a specific mechanism for appropriate redressal." 5. It was further argued by learned counsel for the respondent/Bank that a sale certificate has already been issued on 16.10.2023 in respect of the subject property. A 6 panchnama was also prepared. As such, the petitioner is required to approach before the concerned DRT for redressal of his grievances. The instant petition is not maintainable on the ground of availability of alternative remedy to the petitioner before the DRT. The grounds raised by the petitioner cannot be adjudicated under extra ordinary jurisdiction of this Court. 6. At this stage, learned counsel for the petitioner submits that for compliance of Section 14 of Act of 2002, no relevant afÏdavit as well as documents have been filed and the provisions of Section 14 of the Act of 2002 has not been followed. As such, the petitioner can very well challenge the order before this Court under Article 226 of the Constitution of India. 7. I have heard learned counsel appearing for the parties and perused the record with due care. 8. Since return as well as rejoinder have been filed, I deem it appropriate to decide the instant petition finally as no case is made out by the petitioner for grant of any interim relief, as such keeping pending this petition would not be fruitful for the petitioner. 9. The petitioner in the instant petition has raised various disputes in respect of sanctioning of loan as well as mortgage of the property. From the averments of the petitioner, it seems 7 that the petitioner as well as his son have taken home loan from the bank, which, according to the petitioner, is Rs.10,85,000 and the house in question, i.e., House No.C-5, Devnagari Residency, Khasra No.92/1 (Part) as per sale-deed Khasra No.92/50 area 1000 square feet, situated at Village Amleshwar, Tahsil Patan, RNM Bhilai-3, District Durg has been granted. The petitioner has raised various grounds and disputes stating that there is illegality in following procedures as envisaged under the law. The statutory authorities have not acted in accordance with the provisions. There is breach of principles of natural justice. According to the petitioner, the son of the petitioner has made default in payment of loan which has been taken under the Pradhan Mantri Mudra Yojna to the tune of Rs.10,00,000. It was the case of the petitioner that in Pradhan Mantri Mudra Yojna, no security is required to be mortgaged in lieu of loan taken by the person concerned, as such the house in question cannot be said to be mortgaged. Notice under Section 13(2) of the Act of 2002 was not issued properly to the proper persons and without granting any opportunity of hearing and further without providing any documents to the petitioner, directly recourse of Section 14 of the Act of 2002 was sought to be availed. It was the case of the petitioner that without apprising about repayment of loan the entire act has been done. 10. Whereas, learned counsel for the respondent/bank submits that after issuance of notice when the petitioner has not 8 repaid the loan, they filed an application under Section 14 of the Act of 2002 which in the first round was dismissed for want of prosecution as no one appeared on behalf of the bank and thereafter again the same was dismissed, but, not on merits. By the impugned order, the concerned District Magistrate has considered the entire aspect of the matter and has allowed the application which cannot be said to be faulted with. The petitioner should have approached before the concerned Debts Recovery Tribunal for redressal of his grievance. 11. From the aforesaid discussion, it seems that the stage under Section 13(2) as well as Section 14 of the Act of 2002 has been crossed and thereafter sale certificate has also been issued to the petitioner though according to the petitioner possession of the house in question is still with the petitioner. From perusal of the documents, it seems that there are disputed questions of fact in respect of grant of loan, mudra loan account and further to whom the notice was issued and upon whom it was served. In writ jurisdiction under Article 226 of the Constitution of India, disputed questions of fact cannot be adjudicated. For that, the concerned party has to approach before the appropriate forum. In the present case, all these issues which are being raised before this Court is not amenable under Article 226 of the Constitution of India. The petitioner is having alternative efÏcacious remedy under the Act of 2002 and in this respect there are number of judgments 9 according to which all the questions in respect of Section 13(2) and Section 14 of the Act of 2002 can only be adjudicated before the concerned DRT and the High Court is not having power and authority to decide the dispute between the parties in a writ petition. 12. In order to decide the case at hand, the provision of Section 17 of the Act of 2002 is required to be referred to, which reads thus: “17. Application against measures to recover secured debts.–(1) Any person (including borrower), aggrieved by any of the measures referred to in sub- section (4) of section 13 taken by the secured creditor or his authorised ofÏcer under this Chapter, may make an application along with such fee, as may be prescribed to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken: Provided that different fees may be prescribed for making the application by the borrower and the person other than the borrower. Explanation.-For the removal of doubts it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under sub-section (1) of section 17. (1A) An application under sub-section (1) shall be filed before the Debts Recovery Tribunal within the local limits of whose jurisdiction- 10 (a) the cause of action, wholly or in part, arises; (b) where the secured asset is located; or (c) the branch or any other ofÏce of a bank or financial institution is maintaining an account in which debt claimed is outstanding for the time being. (2) The Debts Recovery Tribunal shall consider whether any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor for enforcement of security are in accordance with the provisions of this Act and the rules made thereunder. (3) If, the Debts Recovery Tribunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the conclusion that any of the measures referred to in sub-section (4) of section 13, taken by the secured creditor are not in accordance with the provisions of this Act and the rules made thereunder, and require restoration of the management or restoration of possession, of the secured assets to the borrower or other aggrieved person, it may, by order,- (a) declare the recourse to any one or more measures referred to in sub-section (4) of section 13 taken by the secured creditor as invalid; and (b) restore the possession of secured assets or management of secured assets to the borrower or such other aggrieved person, who has made an application under sub-section (1), as the case may be; and (c) pass such other direction as it may consider appropriate and necessary in relation to any of the recourse taken by the secured creditor under sub-section (4) of section 13. (4) If, the Debts Recovery Tribunal declares the recourse taken by a secured creditor under sub-section (4) 11 of section 13, is in accordance with the provisions of this Act and the rules made thereunder, then, notwithstanding anything contained in any other law for the time being in force, the secured creditor shall be entitled to take recourse to one or more of the measures specified under sub-section (4) of section 13 to recover his secured debt. (4A) Where- (i) any person, in an application under sub-section (1), claims any tenancy or leasehold rights_upon the secured asset, the Debt Recovery Tribunal, after examining the facts of the case and evidence produced by the parties in relation to such claims shall, for the purposes of enforcement of security interest, have the jurisdiction to examine whether lease or tenancy,- (a) has expired or stood determined; or (b) is contrary to section 65A of the Transfer of Property Act, 1882 (4 of 1882); or (c) is contrary to terms of mortgage; or (d) is created after the issuance of notice of default and demand by the Bank under sub-section (2) of section 13 of the Act; and (ii) the Debt Recovery Tribunal is satisfied that tenancy right or leasehold rights claimed in secured asset falls under the sub-clause (a) or sub-clause (b) or sub- clause (c) or sub-clause (d) of clause (i), then notwithstanding anything to the contrary contained in any other law for the time being in force, the Debt Recovery Tribunal may pass such order as it deems fit in accordance with the provisions of this Act. (5) Any application made under sub-section (1) shall be dealt with by the Debts Recovery Tribunal as 12 expeditiously as possible and disposed of within sixty days from the date of such application: Provided that the Debts Recovery Tribunal may, from time to time, extend the said period for reasons to be recorded in writing, so, however, that the total period of pendency of the application with the Debts Recovery Tribunal, shall not exceed four months from the date of making of such application made under sub-section (1). (6) If the application is not disposed of by the Debts Recovery Tribunal within the period of four-months as specified in sub-section (5), any party to the application may make an application, in such form as may be prescribed, to the Appellate Tribunal for directing the Debts Recovery Tribunal for expeditious disposal of the application pending before the Debts Recovery Tribunal and the Appellate Tribunal may, on such application, make an order for expeditious disposal of the pending application by the Debts Recovery Tribunal. (7) Save as otherwise provided in this Act, the Debts Recovery Tribunal shall, as far as may be, dispose of application in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and the rules made thereunder.” 13. In the matter of Phoenix ARC Private Limited v. Vishwa Bharati Vidya Mandir and others, (2022) 5 SCC 345, the Hon’ble Supreme Court has observed as under: “9. While considering the issue regarding the maintainability of and/or entertainability of the writ petitions by the High Court in the instant case, a few decisions of this Court relied upon by the learned Senior Advocate appearing on behalf of the appellant ARC are required to be referred to. 13 10. In United Bank of India v. Satyawati Tandon, (2010) 8 SCC 110, it was observed and held by this Court that c the remedies available to an aggrieved person against the action taken under Section 13(4) or Section 14 of the SARFAESI Act, by way of appeal under Section 17, can be said to be both expeditious and effective. On maintainability of or entertainability of a writ petition under Article 226 of the Constitution of India, in a case where the effective remedy is available to the aggrieved person, it is observed and held in the said decision in paras 43 to 46 as under: (SCC pp. 123-24) "43. Unfortunately, the High Court in Satyawati Tandon v. State of U.P., 2009 SCC OnLine All 2608 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 a 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, the 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. 44. While expressing the aforesaid view, we are conscious that g 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 14 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. 45. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difÏcult 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. 46. 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 (sic will) 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 Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, AIR 1969 SC 556, Whirlpool Corpn. v. Registrar of Trade Marks, (1998) 8 SCC 1 and Harbanslal Sahnia v. Indian Oil Corpn. Ltd., (2003) 2 SCC 107 and some other judgments, then the High Court may, after considering all the relevant 15 parameters and public interest, pass an appropriate interim order." 11. In City and Industrial Development Corpn. v. Dosu Aardeshir Bhiwandiwala, (2009) 1 SCC 168, it was observed by this Court in SCC p. 175, para 30 that the Court while exercising its jurisdiction under Article 226 is duty-bound to consider whether the petitioner has any alternative or effective remedy for the resolution of the dispute. 12. In Kanaiyalal Lalchand Sachdev V. State of Maharashtra, (2011) 2 SCC 782 after referring to the earlier decisions of this Court in Sadhana Lodh v. National Insurance Co. Ltd., (2003) 3 SCC 524, Surya Dev Rai v. Ram Chander Rai, (2003) 6 SCC 675 and SBI v. Allied Chemical Laboratories, (2006) 9 SCC 252 while upholding the order passed by the High Court dismissing the writ petition on the ground that an efÏcacious remedy is available under Section 17 of the SARFAESI Act, it was observed that ordinarily relief under Articles 226/227 of the Constitution of India is not available if an efÏcacious alternative remedy is available to any aggrieved person. 21. Applying the law laid down by this Court in State Bank of Travancore v. Mathew K.C., (2018) 3 SCC 85 to the facts on hand, we are of the opinion that filing of the writ petitions by the borrowers before the High Court under Article 226 of the Constitution of India is an abuse of process of the court. The writ petitions have been filed against the e proposed action to be taken under Section 13(4). As observed hereinabove, even assuming that the communication dated 13-8-2015 was a notice under Section 13(4), in that case also, in view of the statutory, efÏcacious remedy available by way of appeal under Section 17 of the SARFAESI Act, the High Court ought not to have entertained the writ petitions. Even the impugned orders passed by the High Court directing to maintain the status quo with f respect to the possession of the secured properties on payment of Rs 1 crore only (in all Rs 3 16 crores) is absolutely unjustifiable. The dues are to the extent of approximately Rs 117 crores. The ad interim relief has been continued since 2015 and the secured creditor is deprived of proceeding further with the action under the SARFAESI Act. Filing of the writ petition by the borrowers before the High Court is nothing but an abuse of process of court. It appears that the g High Court has initially granted an ex parte ad interim order mechanically and without assigning any reasons. The High Court ought to have appreciated that by passing such an interim order, the rights of the secured creditor to recover the amount due and payable have been seriously prejudiced. The secured creditor and/or its assignor have a right to recover the amount due and payable to it from the borrowers. The stay granted by the High Court would have serious adverse impact on the financial health of the secured creditor/assignor. Therefore, the High Court should have been extremely careful and circumspect in exercising its discretion while granting stay in such matters. In these circumstances, the proceedings before the High Court deserve to be dismissed.” 14. It would be profitable to refer to relevant judgment of the Hon’ble Supreme Court in which it has been categorically stated that in respect of any question raised under Section 13(2) and Section 14 of the Act of 2002 the petitioner has to approach before the concerned DRT for adjudication of the matter. While referring and relying its earlier judgments in the matter of PHR Invent Educational Society v. UCO Bank and others, (2024) 6 SCC 579, the Hon’ble Supreme Court has observed as follows: “37. It could thus clearly be seen that the Court has carved out certain exceptions when a petition under Article 226 of the Constitution could be entertained in 17 spite of availability of an alternative remedy. Some of them are thus: (i) where the statutory authority has not acted in accordance with the provisions of the enactment in question; (ii) it has acted in defiance of the fundamental principles of judicial procedure; (iii) it has resorted to invoke the provisions which are repealed; and (iv) when an order has been passed in total violation of the principles of natural justice. 38. It has however been clarified that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance." 15. So far as the case law cited by the learned counsel for the petitioner is concerned, in that case also, the concerned party has approached before the DRT as well as the DRT Appellate Tribunal and thereafter certain orders have been passed. In the present matter, the petitioner has not availed the alternative remedy. He has come out with some disputed questions of fact which cannot be adjudicated before this Court. 16. In Olinda Femandes v. Goa State Co-operative Bank Ltd. and others, MANU/SC/0424/2016 the mortgage-deed was signed by three co-owners though the property belonged to four co-owners and in the mortgage-deed only three of the co- 18 owners have signed. Further, the property mortgaged was worth Rs.41,97,500. However, it was auctioned only for a sum of Rs.5,50,000 which creates a serious doubt, as such the Hon’ble Supreme Court has interfered with the matter, which is not the case of the present petitioner. As such, the entire proceeding is vitiated. 17. In the light of aforesaid submissions and from the dictum of the Hon’ble Supreme Court, this Court finds it appropriate to direct the petitioner to approach before the concerned Debts Recovery Tribunal raising all the disputes which have been raised in the instant petition. Accordingly, the petitioner is directed to approach before the concerned Debts Recovery Tribunal within 30 days from the date of receipt of a copy of this order and till the petitioner approaches before the concerned Debts Recovery Tribunal within the aforesaid period, the respondent/bank is directed to maintain status quo in respect of possession of the house in question. 18. With the aforesaid observations and directions, the writ petition is disposed of. Sd/- (Amitendra Kishore Prasad) JUDGE Gopal Singh