# Ajay Kumar & Anr v. State of U.P. & Ors

- **Citation:** (2021) 2 ILRA 281
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-11-02
- **Case number:** Writ C No. 17093 of 2020
- **Bench:** Surya Prakash Kesarwani, Dr. Yogendra Kumar Srivastava
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ajay-kumar-anr-v-state-of-u-p-ors-46150
- **Pages:** 7

## Headnote

Constitution
of
India,
Art.226
-
Securitization
and
Reconstruction
of
Financial
Assets
and
Enforcement
of
Security Interest Act (54 of 2002) , S.14,
S.17(1)
-
Writ
petition
-
Petitioner
defaulted in payment of instalments of
housing loan - sought quashing of the
order u/s 14 passed by D.M. & for
direction to the respondents not to
interfere in peaceful possession of the
petitioners
over
his
house
during
pendency of the SARFAESI Application
pending
before
the
Debt
Recovery
Tribunal - Held - Petitioner already availed
an efficacious statutory remedy provided
under
S.17(1),
no
good
reason
to
entertain writ petition- Writ petition,
dismissed. (Para 16)

Writ Petition dismissed. (E-4)

List of Cases cited: -

## Text

2 All. Ajay Kumar & Anr. Vs. State of U.P. & Ors.
281
material which are on record do not in any
manner indicate that it is a public law
remedy which the petitioner is seeking to
invoke so as to pursuade us to exercise our
discretionary jurisdiction.

29. Having regard to aforesaid facts
and circumstances, we are not inclined to
exercise our extra-ordinary jurisdiction
under Article 226 of the Constitution.

30.

The
writ
petition
stands
accordingly dismissed.
----------
(2021)02ILR A281
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 02.11.2020

BEFORE

THE HON'BLE SURYA PRAKASH
KESARWANI, J.
THE HON'BLE DR. YOGENDRA KUMAR
SRIVASTAVA, J.

Writ C No. 17093 of 2020

Ajay Kumar & Anr. ...Petitioners
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioners:
Sri Shri Krishna Mishra

Counsel for the Respondents:
C.S.C., Sri Vivek Mishra

Constitution
of
India,
Art.226
-
Securitization
and
Reconstruction
of
Financial
Assets
and
Enforcement
of
Security Interest Act (54 of 2002) , S.14,
S.17(1)
-
Writ
petition
-
Petitioner
defaulted in payment of instalments of
housing loan - sought quashing of the
order u/s 14 passed by D.M. & for
direction to the respondents not to
interfere in peaceful possession of the
petitioners
over
his
house
during
pendency of the SARFAESI Application
pending
before
the
Debt
Recovery
Tribunal - Held - Petitioner already availed
an efficacious statutory remedy provided
under
S.17(1),
no
good
reason
to
entertain writ petition- Writ petition,
dismissed. (Para 16)

Writ Petition dismissed. (E-4)

List of Cases cited: -

1. United Bank of India Vs Satyawati Tondon &
ors. (2010) 8 SCC 110

2. Kanaiyalal Lalchand Sachdev & ors. Vs St. of
Mah. & ors. (2011) 2 SCC 782

3. Standard Chartered Bank Vs Noble Kumar &
ors. (2013) 9 SCC 620

4. GM, Sri Siddeshwara Co-operative Bank
Limited & anr. Vs Sri Ikbal & ors. (2013) 10 SCC
83

5. Authorized Officer, State Bank of Travancore
& anr. Vs Mathew K.C. (2018) 3 SCC 85

6. ICICI Bank Ltd. Vs Umakanta Mohapatra
(2019) 13 SCC 497

(Delivered by Hon'ble Surya Prakash Kesarwani, J.
&
Hon'ble Dr. Yogendra Kumar Srivastava, J.)

1. Heard Sri S.K. Mishra, learned
counsel for the petitioners, the learned
standing counsel for the State-respondents
and Sri Vivek Mishra, learned counsel for
the respondent No.6.

2. Petitioners have filed the present
writ petition praying to quash the order
dated 02.09.2019 under Section 14 of The
Securitisation
and
Reconstruction
of
Financial Assets and Enforcement of
Securities
Interest
Act,
2002
(the
SARFAESI Act) passed by the District
Magistrate, Prayagraj and the consequential
282 INDIAN LAW REPORTS ALLAHABAD SERIES
letter dated 13.10.2020 issued by the
Additional
District
Magistrate
(II),
Prayagraj. The petitioners have also prayed
for a writ, order or direction in the nature of
mandamus to direct the respondents not to
interfere in peaceful possession of the
petitioners
over
House
No.114/B/3,
Umarpur Niwa, Sulemsarai, Allahabad
during
pendency
of
the
SARFAESI
Application No.29 of 2020 (Ajay Kumar
vs. State Bank of India), pending before the
Debt Recovery Tribunal at Allahabad.

3. Briefly stated, facts of the present
case are that the petitioners are borrowers
who took a housing loan of Rs.3,50,000/-
on 30.07.2004 from the respondent No.6 -
Bank. The petitioners defaulted in payment
of instalments. Consequently, notice under
Section 13(2) of the SARFAESI Act was
issued and thereafter proceedings under
Section 13(4) were initiated and an order
under Section 14 of the Act was passed by
the District Magistrate on 02.09.2019.
Consequently, sale notice dated 03.10.2020
was issued and the auction was conducted
on 05.11.2019. Aggrieved with the sale
notice and the auction, the petitioners filed
the SARFAESI Application No.29 of 2020
under Section 17(1) of the Act, before the
Debt Recovery Tribunal, Allahabad (the
DRT Allahabad) in which the DRT
Allahabad passed an order on 15.01.2020,
as under:

"This S.A. Has been filed by the
Applicant on 07.01.2020 U/s 17(1) of the
S.A.R.F.A.E.S.I. Act, 2002 challenging the
action of the Respondent Bank initiated
against the secured asset which Include
Sale Notice dated 03.10.2019 as well as
auction
dated
05.11.2019
and
consequential
/subsequent
proceedings
thereof for recovery of Rs.6,73,697.88ps.
alongwith
interest
together
with
expenses/charges etc.

I have heard the Ld. Counsel for
the Applicant and perused the S.A. as well
as the documents annexed alongwith it.

Let
notice
be
Issued
to
Respondent Bank for inviting reply, if any.
The Applicant is directed to take steps for
service of summon alongwith complete
paper-book upon Respondent Bank through
Registered A.D. Cover /Speed Post A.D.
Cover as well as Dasti mode against
acknowledgement. The Applicant is further
directed to file proof of service of both
mode including Tracking Report of Postal
Authority & personal acknowledgment
along-with affidavit before the next date
fixed.

Respondent Bank is directed to
file detail reply to the S.A. & I.A, alongwith affidavit with relevant documents in
support, if any, within 15 days from the
date of service of summon with an advance
copy to the opposite counsel. Thereafter,
the Applicant may also file Rejoinder, if
any, before the next date of hearing with an
advance copy to the opposite counsel.

Be listed on 06.02.2020 s at 10.30
A.M. for arguments."

4. Now during pendency of the
aforesaid application under Section 17(1)
of the Act before the DRT Allahabad, the
petitioners have filed the present writ
petition making prayers as briefly noted
above.

5. Learned counsel for the petitioners
submits that the impugned order dated
02.09.2019 has been passed by the District
Magistrate, Prayagraj without affording
opportunity of hearing, which is in the teeth
of the judgment of this court dated
11.12.2018 in Writ-C No.38578 of 2018
2 All. Ajay Kumar & Anr. Vs. State of U.P. & Ors.
283
(Kumkum Tentiwal vs. State Of U.P. And 3
Others).

6. Learned counsel for the respondent
No.6 submits that the application of the
petitioner under Section 17(1) of the Act is
pending before the DRT Allahabad against
the sale notice and the auction and,
therefore, the writ petition itself is not
maintainable.

7. We have carefully considered the
submissions of the learned counsels for the
parties.

8. It is admitted on record by the
petitioners that against the sale notice dated
03.10.2019 and the auction dated 05.11.2019,
the petitioners have filed a SARFAESI
Application No.29 of 2020 in which the
aforequoted order dated 15.01.2020 was
passed by the DRT Allahabad. Under the
circumstances, the present writ petition filed
by the petitioners is not maintainable
inasmuch as the petitioners have already filed
the statutory remedy provided under the Act.

9. The judgment in the case of
Kumkum Tentiwal (supra) relied by the
learned counsel for the petitioners is not
applicable on the facts of the present case. In
the present set of facts, the petitioners have
already availed the statutory remedy under
Section 17(1) of the Act by filing S.A. No.29
of 2020, which is pending before the DRT,
Allahabad.

10. That apart, in the case of United
Bank of India v. Satyawati Tondon and
others, (2010) 8 SCC 110, the Hon'ble
Supreme Court has held as under:

"42. There is another reason why
the impugned order should be set aside. If
respondent
No.1
had
any
tangible
grievance against the notice issued under
Section 13(4) or action taken under
Section 14, then she could have availed
remedy by filing an application under
Section 17(1). The expression `any person'
used in Section 17(1) is of wide import. It
takes within its fold, not only the borrower
but also guarantor or any other person who
may be affected by the action taken under
Section 13(4) or Section 14. Both, the
Tribunal and the Appellate Tribunal are
empowered to pass interim orders under
Sections 17 & 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.

43. Unfortunately, the High
Court 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 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, High
Court must insist that before availing
remedy
under
Article
226
of
the
Constitution, a person must exhaust the
284 INDIAN LAW REPORTS ALLAHABAD SERIES
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 selfimposed 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 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.

XXXX XXXXX XXXX

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.

56. Insofar as this case is
concerned, we are convinced that the High
Court was not at all justified in injuncting
the appellant from taking action in
furtherance of notice issued under Section
13(4) of the Act. In the result, the appeal is
allowed and the impugned order is set
aside. Since the respondent has not
appeared to contest the appeal, the costs
are made easy."

11. In the case of Kanaiyalal
Lalchand Sachdev and others Vs. State
of Maharashtra and others, (2011) 2
SCC 782, the Hon'ble Supreme Court held
as under:

"24. In City and Industrial
Development
Corporation
Vs.
Dosu
Aardeshir Bhiwandiwala & Ors. (2009) 1
SCC 168, this Court had observed that:

"30. The Court while exercising
its jurisdiction under Article 226 is dutybound to consider whether:

(a) adjudication of writ petition
involves
any
complex
and
disputed
questions of facts and whether they can be
satisfactorily resolved;

(b)
the
petition
reveals
all
material facts;

(c)
the
petitioner
has
any
alternative or effective remedy for the
resolution of the dispute;

(d)
person
invoking
the
jurisdiction is guilty of unexplained delay
and laches;

(e) ex facie barred by any laws of
limitation;

(f) grant of relief is against public
policy or barred by any valid law; and host
of other factors."

25. In the instant case, apart from
the fact that admittedly certain disputed
questions of fact viz. non-receipt of notice
under Section 13(2) of the Act, non-
2 All. Ajay Kumar & Anr. Vs. State of U.P. & Ors.
285
communication of the order of the Chief
Judicial Magistrate, etc. are involved, an
efficacious statutory remedy of appeal
under Section 17 of the Act was available
to the appellants, who ultimately availed
of the same. Therefore, having regard to
the facts obtaining in the case, the High
Court was fully justified in declining to
exercise its jurisdiction under Articles 226
and 227 of the Constitution."

12. In the case of Standard
Chartered Bank Vs. Noble Kumar &
Ors., reported in (2013) 9 SCC 620, the
Hon'ble Supreme Court held as under:

"27. The "appeal" under Section
17 is available to the borrower against any
measure taken under Section 13(4). Taking
possession of the secured asset is only one
of the measures that can be taken by the
secured creditor. Depending upon the
nature of the secured asset and the terms
and conditions of the security agreement,
measures other than taking the possession
of the secured asset are possible under
Section 13(4). Alienating the asset either by
lease or sale, etc. and appointing a person
to manage the secured asset are some of
those possible measures. On the other
hand, Section 14 authorises the Magistrate
only to take possession of the property and
forward the asset along with the connected
documents to the borrower (sic the secured
creditor). Therefore, the borrower is always
entitled to prefer an "appeal" under Section
17 after the possession of the secured asset
is handed over to the secured creditor.
Section 13(4)(a) declares that the secured
creditor may take possession of the secured
assets. It does not specify whether such a
possession is to be obtained directly by the
secured creditor or by resorting to the
procedure under Section 14. We are of the
opinion that by whatever manner the
secured creditor obtains possession either
through the process contemplated under
Section 14 or without resorting to such a
process obtaining of the possession of a
secured asset is always a measure against
which a remedy under Section 17 is
available."

13. In the case of GM, Sri
Siddeshwara Co-operative Bank Limited
and another Vs Sri Ikbal and others,
(2013) 10 SCC 83, the Hon'ble Supreme
Court observed that although alternative
remedy is not an absolute bar to the
exercise of extraordinary jurisdiction under
Article 226 of the Constitution of India,
yet, it is well settled that where a statute
provides efficacious and adequate remedy,
the High Court will do well in not
entertaining a petition under Article 226.

14. In the case of Authorized
Officer, State Bank of Travancore & Anr.
Vs. Mathew K.C., (2018) 3 SCC 85, the
Hon'ble Supreme Court while considering
the
question
of
invoking
the
writ
jurisdiction in matters of realisation of loan
by financial institutions, considered earlier
judicial pronouncements and held as under:

"16. It is the solemn duty of the
Court to apply the correct law without
waiting for an objection to be raised by a
party, especially when the law stands well
settled. Any departure, if permissible, has
to be for reasons discussed, of the case
falling under a defined exception, duly
discussed after noticing the relevant law. In
financial matters grant of ex-parte interim
orders can have a deleterious effect and it
is not sufficient to say that the aggrieved
has the remedy to move for vacating the
interim
order.
Loans
by
financial
institutions are granted from public money
generated at the tax payers expense. Such
286 INDIAN LAW REPORTS ALLAHABAD SERIES
loan does not become the property of the
person taking the loan, but retains its
character of public money given in a
fiduciary capacity as entrustment by the
public. Timely repayment also ensures
liquidity to facilitate loan to another in
need, by circulation of the money and
cannot be permitted to be blocked by
frivolous litigation by those who can afford
the luxury of the same. The caution
required, as expressed in Satyawati Tandon
(supra), has also not been kept in mind
before passing the impugned interim
order:-

"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
Vs
Antarim Zila Parishad, AIR 1969 SC 556;
Whirlpool Corporation VS Registrar of
Trade Marks, (1998) 8 SCC 1; and
Harbanslal
Sahnia
Vs
Indian
Oil
Corporation Ltd., (2003) 2 SCC 107 and
some other judgments, then the High
Court may, after considering all the
relevant parameters and public interest,
pass an appropriate interim order."

17. The writ petition ought not to
have been entertained and the interim
order granted for the mere asking without
assigning special reasons, and that too
without even granting opportunity to the
Appellant to contest the maintainability of
the writ petition and failure to notice the
subsequent
developments
in
the
interregnum. The opinion of the Division
Bench that the counter affidavit having
subsequently been filed, stay/modification
could be sought of the interim order cannot
be considered sufficient justification to
have declined interference.

18.
We
cannot
help
but
disapprove the approach of the High Court
for reasons already noticed in Dwarikesh
Sugar Industries Ltd Vs Prem Heavy
Engineering Works (P) Ltd and another,
1997 (6) SCC 450, observing:

"32. When a position, in law, is
well settled as a result of judicial
pronouncement of this Court, it would
amount to judicial impropriety to say the
least, for the subordinate courts including
the High Courts to ignore the settled
decisions and then to pass a judicial order
which is clearly contrary to the settled
legal position. Such judicial adventurism
cannot be permitted and we strongly
deprecate the tendency of the subordinate
courts in not applying the settled principles
and in passing whimsical orders which
necessarily has the effect of granting
wrongful and unwarranted relief to one of
the parties. It is time that this tendency
stops."

19. The impugned orders are
therefore contrary to the law laid down by
this Court under Article 141 of the
Constitution and unsustainable. They are
2 All. Amir Kumar Mishra Vs. Union of India & Ors.
287
therefore set aside and the appeal is
allowed.

20. All questions of law and fact
remain open for consideration in any
application by the aggrieved before the
statutory forum under the SARFAESI Act."

15. In a recent judgment in the case of
ICICI
Bank
Ltd
Vs
Umakanta
Mohapatra, (2019) 13 SCC 497, the
Hon'ble Supreme Court has disapproved
the practice of granting interim orders in
reference to the matters arising out of the
SARFAESI Act, and held as under:-

"2. Despite several judgments of
this Court, including a judgment by
Hon'ble Mr.Justice Navin Sinha, as recently
as on 30.01.2018, in Authorized Officer,
State Bank of Travancore and Another VS
Mathew KC., (2018) 3 SCC 85, the High
Courts continue to entertain matters
which arise under Securitisation and
Reconstruction of Financial Assets and
Enforcement of Security Interest Act,
2002 (SARFAESI), and keep granting
interim orders in favour of persons who
are Non-Performing Assets (NPAs).

3. The writ petition itself was not
maintainable, as a result of which, in view
of our recent judgment, which has followed
earlier judgments of this Court, held as
follows:-

"17.
We
cannot
help
but
disapprove the approach of the High Court
for reasons already noticed in Dwarikesh
Sugar Industries Ltd. Vs Prem Heavy
Engineering Works (P) Ltd and another,
(1997) 6 SCC 450, observing:-

"32. When a position, in law, is
well settled as a result of judicial
pronouncement of this Court, it would
amount to judicial impropriety to say the
least, for the subordinate courts including
the High Courts to ignore the settled
decisions and then to pass a judicial order
which is clearly contrary to the settled
legal position. Such judicial adventurism
cannot be permitted and we strongly
deprecate the tendency of the subordinate
courts in not applying the settled principles
and in passing whimsical orders which
necessarily has the effect of granting
wrongful and unwarranted relief to one of
the parties. It is time that this tendency
stops."

4. The writ petition, in this case,
being not maintainable, obviously, all
orders passed must perish, including the
impugned order, which is set aside."

16. Considering the facts of the
present case particularly that the petitioners
have already availed the remedy under
Section 17(1) of the Act, we do not find
any good reason to entertain this writ
petition.

17. Consequently, the writ petition is
dismissed.
----------
(2021)02ILR A287
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 07.12.2020

BEFORE

THE HON'BLE ANJANI KUMAR MISHRA, J.
THE HON'BLE PRAKASH PADIA, J.

Writ C No. 17754 of 2020

Amir Kumar Mishra ...Petitioner
Versus
Union of India & Ors. ...Respondents

Counsel for the Petitioner:
Sri Rahul Jain, Sri Tushar Kant

Counsel for the Respondents: