M/S. Sunaichandran Mills Private Limited v. Indian Bank
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 06.06.2025
CORAM:
THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM AND THE HONOURABLE DR.JUSTICE A.D.MARIA CLETE and W.M.P.(MD)No.3134, 4609 and 11667 of 2025 W.P.(MD)No.4368 of 2025 1.M/s.Sunaichandran Mills P.Ltd., Rep., by its Managing Partner, T.Sunaichandran 2.M.Thalaimuthu Nadar 3.T.Jeyakumar 4.T.Prakasavel 5.T.Sunaichandran ... Petitioner Vs.
Indian Bank, a Body Corporate constituted under the provisions of the Banking Company (Acquisition and Transfer of Undertaking) Act 197, having its Corporate Office at Chennai and one of its branches the Stressed Assets Management Branch (SAMB), Rep., through its Chief Manager, M.Athiyaman
...Respondent
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PRAYER: Petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorari, calling for the records in Crl.M.P.No.9 of 2025 on the file of the Chief Judicial Magistrate Court, Virudhunagar District @ Srivlliputhur against the petitioners initiated by the respondent under Section 14(1) of the Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 and quash the same as illegal, arbitrary and unenforceable. W.P.(MD)No.6259 of 2025 1.M/s.Sunaichandran Mills P.Ltd., Arasiyarpatti Village-626 125, Vaithiyalingapuram Post, Srivilliputhur Taluk, Virudhunagar District-626 122.
2.T.Prakasavel 3.T.Jeyakumar 4.M.Thalaimuthu Nadar 5.T.Sunaichandran ... Petitioner Vs.
The Authorized Officer, Indian Bank, SAM Branch, 100-101, Third Floor, East Avani Moola Street, Madurai.
...Respondent
PRAYER: Petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorarified Mandamus, calling for the records pertaining to the impugned E-Auction Sale Notice dated 19.02.2025 issued by the respondent against the petitioner under Rule 9(1) of the Securitization & Reconstruction of 2/9
Financial Assets and Enforcement of Security Interest Act 2002 and quash the same as illegal, arbitrary and unenforceable and consequently, to direct the respondent to extend moratorium on any further action in respect of the petitioner's mortgaged property.
For Petitioners : Mr.P.Murugesan For Respondent : Mr.S.Suresh, for M/s.Aiyar and Dolia (in both W.Ps.) COMMON ORDER (Order of the Court was made by S.M.SUBRAMANIAM, J.) W.P.(MD)No.4368 of 2025 has been instituted to quash Crl.M.P.No.9 of 2025 pending on the file of the Chief Judicial Magistrate Court, Virudhunagar @ Srivilliputhur. W.P.(MD)No.6259 of 2025 has been instituted to quash the sale notice dated 19.02.2025 issued by the respondent. 2.Admittedly, the subject is falling under the provisions of SARFAESI Act. W.P.(MD)No.4368 of 2025 has been filed to quash the petition filed before the Chief Judicial Magistrate Court. Thus, per se, the same is not maintainable. However, the issues relating to SARFAESI proceedings are not amenable to Writ 3/9
jurisdiction. The remedy for an aggrieved person is under the provisions of SARFAESI Act and Rules. The legal position regarding maintainability of Writ Petition under Article 226 of Constitution of India has been decided by the Hon'ble Supreme Court of India in the case of Celir LLP Vs. Bafna Motors (Mumbai) Private Limited and others reported in (2024) 2 SCC 1. Paragraph Nos.97, 98, 110 and 110.1 would be relevant in this context and have been extracted herein:- "97.This Court has time and again, reminded the High Courts that they should not entertain petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person under the provisions of the SARFAESI Act. This Court in Satyawati Tondon [United Bank of India v.
Satyawati Tondon, (2010) 8 SCC 110 : (2010) 3 SCC (Civ) 260] made the following observations : (SCC pp. 123 & 128, paras 43-45 & 55) "43. Unfortunately, the High Court [Satyawati Tondon 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.
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 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.
45. It is true that the rule of exhaustion of 5/9
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.
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55. 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."
98.In CIT v. Chhabil Dass Agarwal [CIT v. Chhabil Dass Agarwal, (2014) 1 SCC 603] , this Court in para 15 made the following observations : (SCC p. 611, para 15) "15. Thus, while it can be said that this Court has recognised some exceptions to the rule of alternative 6/9
remedy i.e. where the statutory authority 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 the principles of natural justice, the proposition laid down in Thansingh Nathmal case [Thansingh Nathmal v. Supdt. of Taxes, 1964 SCC OnLine SC 13] , Titaghur Paper Mills case [Titaghur Paper Mills Co. Ltd. v.
State of Orissa, (1983) 2 SCC 433 : 1983 SCC (Tax) 131] and other similar judgments 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 still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation." 110.We summarise our final conclusion as under: 110.1. The High Court was not justified in exercising its writ jurisdiction under Article 226 of the Constitution more particularly when the borrowers had already availed the alternative remedy available to them under Section 17 of the SARFAESI Act."
3.As far as W.P.(MD)No.6259 of 2025 is concerned, the learned counsel appearing for the respondent would submit that sale has not taken place. In any event, the Writ Petition is not maintainable. Therefore, granting liberty to the writ petitioners to seek the remedy before the competent forum, these Writ Petitions are dismissed. No costs. Consequently, connected miscellaneous petitions are closed. (S.M.S., J.) & (A.D.M.C., J.) 06.06.2025 (2/2) NCC : Yes / No Index : Yes / No Yuva 8/9
S.M.SUBRAMANIAM, J.
AND DR.A.D.MARIA CLETE, J.
Yuva 06.06.2025 (2/2) 9/9