M/S. Mennonite Brethren Property Association Of India v. Union Of India Rep

The Hon'ble Sri Justice C.V.Nagarjuna Reddy and The Hon'ble Sri Justice G.Shyam Prasad Writ Petition No.25171 of 2016 Date: 28.07.2016 Between:

M/s.Mennonite Brethren Property Association of India Pvt. Ltd., rep. by its General Director Mr.P.A.John ..Petitioner and Union of India Rep. by its Secretary Ministry of Banking & Finance New Delhi and 3 others ..Respondents Counsel for the Petitioner: Mr.Ch.Samson Babu Counsel for respondent No.1: Mr.B.Narayana Reddy, Asst.Solicitor General Counsel for respondent Nos.2 to 4: Mr.Ambadipudi Satyanarayana The Court made the following:

Order: (Per the Hon'ble Sri Justice C.V.Nagarjuna Reddy)

The borrower of three individual loans, which have swelled to about Rs.22,43,81,398/- as on 30th November, 2015, filed this Writ Petition feeling aggrieved by the E-Auction Sale Notice, dated 2706-2016, issued by respondent No.2- Bank on behalf of respondent Nos.3 and 4- Banks.

Mr.Ch.Samson Babu, learned Counsel for the petitioner, submitted that, without recovering the physical possession of the properties proposed to be auctioned, respondent Nos.2 to 4 are seeking to proceed with the E-Auction of the same.

Mr.Ambadipudi Satyanarayana, learned Counsel for respondent Nos.2 to 4, which have lent separate loans to the petitioner, submitted that the petitioner has approached this Court with false averments. He submitted that in pursuance of an order passed in Crl.M.P.No.21 of 2014 by the Chief Judicial Magistrate, Mahabubnagar, physical possession was taken on 26-11-2015; that, in all, three attempts were made for sale of the properties; and that the petitioner has set up one organization viz., Centenary Mennoniote Brethren Church, which

filed WP.No.2376 of 2016 and obtained an order of status quo regarding possession; that as physical possession was already taken by respondent Nos.2 to 4, by the time, the said order was passed by this Court, the said Church has filed another Writ Petition i.e., WP.No.7951 of 2016 and obtained a conditional order; and that it has failed to comply with the conditions contained in the said Order. The learned Counsel further submitted that having failed in its attempts to prevent sale of the properties in the said two Writ Petitions, the petitioner itself has now jumped into the fray by filing the present Writ Petition. The learned Counsel has, accordingly, submitted that the petitioner lacks bona fides. Mr.Ch.Samson Babu, learned Counsel for the petitioner, submitted that his client has nothing to do with the previous two Writ Petitions and that it is making earnest endeavour to repay the loans.

Under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the Act'), if the borrower or any person is aggrieved by any of the measures taken under Section 13(4) thereof by

the creditor, he is entitled to approach the Debt Recovery Tribunal by way of an application.

Admittedly, the petitioner has not availed the said remedy. We are of the opinion that respondent Nos.2 to 4 being the creditors are entitled to initiate all such measures as envisaged under Sections 13(2) and 13(4) of the Act for recovery of the debts. If, in the process, respondent Nos.2 to 4 have committed any illegality, the petitioner is entitled to avail the remedy under Section 17 of the Act. The Supreme Court in United Bank of India vs. Satyawati Tondon and others[1] held as under: "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.

.....

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 the 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."

In the light of the legal position referred to above and having regard to the facts discussed above, we have no reason to interfere with the proposed sale by respondent Nos.2 to 4.

The Writ Petition is, accordingly, dismissed. As a sequel to dismissal of the Writ Petition, WPMP.No.31066 of 2016, filed by the petitioner for interim relief, is disposed of as infructuous. ______________________ (C.V.Nagarjuna Reddy, J) _________________ (G.Shyam Prasad, J) Dt: 28th July, 2016

lur [1] (2010) 8 Supreme Court Cases 110