# Bench of this Court in Indrapal Singh v. State of U.P. (Supra), an objection was

- **Citation:** (2020) 2 ILRA 60
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-01-28
- **Case number:** Misc. Single No. 2439 of 2020
- **Bench:** Mrs. Sangeeta Chandra
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/bench-of-this-court-in-indrapal-singh-v-state-of-u-p-supra-an-objection-was-45715
- **Pages:** 14

## Headnote

A. SARFAESI Act-Challenging order passed by
CJM-u/s.14-seeking
removal
of
seal-from
petitioner's house-and to restore possession
over
secured
assets-Alternate
Remedy
available-u/s. 17-by filing application before
DRT-writ jurisdiction-extra-ordinary jurisdictionnot to be exercised-where adequate statutory
remedy available. Petition Dismissed.

B. Held, the petitioners have remedy against
such action and the order passed by the Chief
Judicial Magistrate concerned by filing an
application before the Debts Recovery Tribunal
under Section 17 of the Act. The Tribunal
would have the benefit of pleadings already
before it in the Securitization Application
No.530 of 2019 and would be in a better
position to appreciate all aspects of the matter.
Writ Jurisdiction is an extraordinary jurisdiction
and as has been observed by the Supreme
Court in Satyawati Tandon (supra), such
extraordinary jurisdiction ought not to be
exercised in matters where adequate statutory
remedy is available. The writ petition is
dismissed as not maintainable on the grounds
of availability of statutory remedy alone and
the petitioners may, if they so advised, file an
appeal before the appropriate forum.

List of cases cited: -

## Text

_Characters 0–39,733 of 46,820. This is a partial read: ask again with offset=39733 for what follows._

60 INDIAN LAW REPORTS ALLAHABAD SERIES
been
elected
as
Gram
Pradhan
subsequently and it is in this case that a
reference was made to the Full Bench
which was considered in Indarpal Singh's
case (supra) and it was held that the
brother's
licence
was
liable
to
be
cancelled, therefore in view of the dictum
of the Full Bench the reliance placed by
the learned counsel for the opposite party
no.4 upon the judgement in Virender
Singh's case is misplaced and the
aforesaid plea is rejected."
(emphasis supplied)

22. Rather than supporting the case
of the petitioner the judgment in Yogendra
Singh (Supra) goes against the petitioner's
contention.

23. This Court has also considered
the arguments raised by the learned
counsel
for
the
petitioner
that
the
petitioner was never heard and the order
has been passed in violation of the
Principles of Natural Justice. This Court
finds from the order impugned, no
evidence that the petitioner was heard.
However, the Principles of Natural Justice
are not a straitjacket formula that have to
be applied in all cases irrespective of the
consequences. In this case, the petitioner
was ineligible to have participated in the
open general meeting and put-forward his
candidature for allotment of Fair Price
Shop of
the
village
concerned.
In
accordance with law settled by the Full
Bench of this Court in Indrapal Singh Vs.
State of U.P. (Supra), an objection was
raised by the contesting candidate which
was over-ruled. The contesting candidate,
thereafter, filed objection before the Tehsil
Level
Committee,
the
Tehsil
Level
Selection Committee sought advice of the
DGC (Civil) in the matter who gave a
misconceived advice, on the basis whereof
the petitioner was allotted the Fair Price
Shop License.

24.

Writ
jurisdiction
is
a
discretionary jurisdiction and a writ of
certiorari would not ordinarily be issued as
a matter of course. It has been settled by
the Hon'ble Supreme Court that an order
impugned does substantial justice between
the parties, even if it does not strictly
follow niceties of law, may still not be set
aside on mere showing of irregularity in
procedure,
or
want
of
jurisdiction.
Reference can be made to the judgment
rendered by the Hon'ble Supreme Court in
the case of J.P. Builders V. A. Ramadas
Rao, Civil Appeal Nos.9821-9822 of 2010
decided on 22.11.2010.

25. The Hon'ble Supreme Court has
also held in the case of Chandra Singh
and Others Vs. State of Rajasthan and
Another reported in 2003 (6) SCC 545,
that an order which appears to be illegal,
may not be set aside and writ of certiorari
may not issue only to revive an illegal
order as it would be opposed to public
policy. In case, this Court grants the prayer
made by the petitioner and quashes the
order dated 29.11.2019, on the ground that
the petitioner was not heard, it would only
revive an illegal order of allotment of Fair
Price Shop to the petitioner on 19.05.2018
as the petitioner has been found to be
ineligible
to
even put
forward
his
candidature so long as his brother Shri
Malendra Tewari remained sitting Gram
Pradhan of the village concerned.

26. The writ petition is, therefore,
dismissed. No order as to costs.
----------
(2020)02ILR A60
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 28.01.2020
4 All. Shakuntala Devi Jan Kalyan Samiti & Ors. Vs. State of U.P. & Ors.
61
BEFORE
THE HON'BLE MRS. SANGEETA CHANDRA, J.

Misc. Single No. 2439 of 2020

Shakuntala Devi Jan Kalyan Samiti & Ors.
 ...Petitioners
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioners:
Akhilesh Kumar Kalra, Gautam Kumar,
Rahul Kapoor

Counsel for the Respondents:
C.S.C., Prashant Kumar Srivastava

A. SARFAESI Act-Challenging order passed by
CJM-u/s.14-seeking
removal
of
seal-from
petitioner's house-and to restore possession
over
secured
assets-Alternate
Remedy
available-u/s. 17-by filing application before
DRT-writ jurisdiction-extra-ordinary jurisdictionnot to be exercised-where adequate statutory
remedy available. Petition Dismissed.

B. Held, the petitioners have remedy against
such action and the order passed by the Chief
Judicial Magistrate concerned by filing an
application before the Debts Recovery Tribunal
under Section 17 of the Act. The Tribunal
would have the benefit of pleadings already
before it in the Securitization Application
No.530 of 2019 and would be in a better
position to appreciate all aspects of the matter.
Writ Jurisdiction is an extraordinary jurisdiction
and as has been observed by the Supreme
Court in Satyawati Tandon (supra), such
extraordinary jurisdiction ought not to be
exercised in matters where adequate statutory
remedy is available. The writ petition is
dismissed as not maintainable on the grounds
of availability of statutory remedy alone and
the petitioners may, if they so advised, file an
appeal before the appropriate forum.

List of cases cited: -

1. Kanaiyalal Lalchand Sachdev and others vs.
State of Maharashtra and others, 2011 (2) SCC 782

2. United Bank of India vs. Satyawati Tandon
and others 2010 (8) SCC 110

3. Mardia Chemicals Ltd. vs. Union of India
(2004) 4 SCC 311

4. Smt. Asmaa vs. District Magistrate, Faizabad
and others W.P No.6816 (MB) of 2017

5. Khalid vs. State of U.P. and others Writ-C
No.30002 of 2018

6. M/s. Deccan Chronical Holdings Limited vs.
Canara Bank (Mad.)

7. Kumkum Tentiwal vs. State of U.P. and
others, 2019 (2) ADJ 125

8.
Dheerendra
Kumar
and
another
vs.
Authorized Officer, Aadhar Housing Finance Ltd.
and another Writ-C No.11706 of 2018

9. Paisner and others vs. Goorich, [1955] 2
WLR 1071
10.

11. Sakshi vs. Union of India (2004) 5 SCC 518

12. State of Madhya Pradesh vs. Narmada
Bachao Andolan (2011) 7 SCC 639

13. Bhavnagar University vs. Palitana Sugar
Mills 2003 (2) SCC 111

14. Srinivasa Enterprises v. Union of India
[(1980) 4 SCC 507]

15. Jalan Trading Co. (P) Ltd. v. Mill Mazdoor
Sabha [AIR 1967 SC 691 : (1967) 1 SCR 15]

16. Collector of Customs v. Nathella Sampathu
Chetty [AIR 1962 SC 316 : (1962) 3 SCR 786 :
(1962) 1 Cri LJ 364]

17. Fatehchand Himmatlal [(1977) 2 SCC 670]

18. Kishan Chand Arora v. Commr. of Police
[AIR 1961 SC 705 : (1961) 3 SCR 135]

19. Chinta Lingam v. Govt. of India [(1970) 3
SCC 768]
62 INDIAN LAW REPORTS ALLAHABAD SERIES
20. Organo Chemical Industries v. Union of
India [(1979) 4 SCC 573 : 1980 SCC (L&S) 92]

21. Kishan Chand Arora [AIR 1961 SC 705 :
(1961) 3 SCR 135]

22. Lachhman Dass v. State of Punjab [AIR
1963 SC 222 : (1963) 2 SCR 353]

23. Chairman, Board of Mining Examination v.
Ramjee [(1977) 2 SCC 256 : 1977 SCC (L&S)
226]

24. Haryana Financial Corpn. v. Jagdamba Oil
Mills [(2002) 3 SCC 496]
(Delivered by Hon'ble Mrs. Sangeeta
Chandra, J.)

 (Oral)

1. This petition has been filed
challenging the order dated 1.11.2019
passed by the Chief Judicial Magistrate,
Lucknow in Misc. Case no.2620 of 2019
(Bank of Baroda vs. M/s. Shakuntala
Devi), and also praying for a direction to
the respondents to remove the seal from
the lock of the petitioner no.3 on the house
and to restore possession of the secured
asset to the petitioners and to refrain from
taking coercive measures against the
petitioners.

2. I have heard Sri Akhilesh Kalra,
learned counsel for the petitioners and Sri
Prashant Kumar Srivastava for the Bank.

3. Sri Prashant Kumar Srivastava has
raised a preliminary objection as to the
maintainability of the writ petition under
Articles 226 and 227 of the Constitution of
India, as he has relied upon several
judgments of the Supreme Court and of
this Court and also of various High Courts,
to say that against an action taken under
Section 14 by the District Magistrate or his
authorized officer, the remedy of appeal
under Section 17 of the SARFAESI Act is
available to the aggrieved person.

4.

Learned
counsel
for
the
respondents has relied upon the judgment
in Kanaiyalal Lalchand Sachdev and
others vs. State of Maharashtra and
others, 2011 (2) SCC 782 and Paras 19
and 20 thereof. It has been submitted on
the basis of the said judgment that an
action under Section 14 of the Act
constitute an action taken after the stage of
Section 13(4) of the Act and, therefore, the
same would fall within the ambit of
Section 17(1) of the Act and the
efficacious remedy for the borrower or any
person aggrieved by an action under
Section 13(4) of the Act is to file an appeal
before the Debts Recovery Tribunal. It has
been submitted that in the judgment in
Kanaiyalal Lalchand Sachdev (supra), the
Supreme Court held that Section 14 action
is a continuation of action taken under
Section 13 of the Act and, therefore, they
should be considered as one action.

5.

Learned
counsel
for
the
respondents has placed reliance upon the
judgment in United Bank of India vs.
Satyawati Tandon and others 2010 (8)
SCC 110, to state that in the judgment
rendered
in
Satyawati
Tandon,
the
Supreme
Court
considered
more
specifically action taken under Section 14
of the Act and he has referred Para 17 of
the judgment, wherein it has been
observed by the Supreme Court that if
respondent
no.1
had
any
tangible
grievance against the notice issued under
Section 13(4) or action taken under
Section 14 of the Act, then she should
have
availed
remedy
by
filing
an
application under Section 17(1) of the Act.
The expression "any person" used in
Section 17(1) if of wide import. It takes
4 All. Shakuntala Devi Jan Kalyan Samiti & Ors. Vs. State of U.P. & Ors.
63
within its fold, not only the borrower but
also the guarantor or any other person who
may be affected by the action taken under
Section 13(4) or Section 14 of the Act. In
Satyawati Tandon (supra), the Supreme
Court observed that an action taken under
Section 14 of the Act would be challenged
in appeal before the Tribunal and that the
High Court had overlooked the settled
position in law that it will not ordinarily
entertain a petition under Article 226 of
the Constitution of India if any effective
remedy is available to the aggrieved
person and that this Rule applies with
greater
rigour
in
matters
involving
recovery of the public dues. The Supreme
Court had observed that the High Court
must keep in mind that the legislations
enacted by Parliament and the 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.

6. Learned counsel for the petitioners
has submitted that both the aforesaid
judgments were rendered by the Supreme
Court before the proviso to Section 14 was
added by way of amendment in the Act in
January, 2013.

7. Sri Prashant Kumar Srivastava on
the other hand, has placed reliance upon
the judgment in Standard Chartered Bank
vs. V. Noble Kumar and others (2013) 9
SCC 620, which was decided on 22.8.2013
by the Supreme Court, where the Supreme
Court
also
considered
the
amended
provisions of Section 14 of the Act.
Learned counsel for the respondents has
placed reliance upon Para 8 of the
judgment, where the Supreme Court
considered the grounds taken by the High
Court for allowing the writ petition filed
by the respondent to the civil appeal. The
High Court had observed that the Bank
cannot bye-pass Section 13(4) of the Act
and invoke the provision of Section 14.
Before invoking Section 14, notice under
Section
13(4)
is
necessary
as
the
proceedings under Section 14 cannot be
questioned by filing an appeal before the
Tribunal or before a Court. The second
ground taken by the High Court was that
the procedure contemplated under Rule 8
of the Security, Interest (Enforcement)
Rules, 2002 was not followed before
Section 14 was invoked and therefore, the
order passed by the Chief Judicial
Magistrate was contrary to the Rules and
therefore, liable to be set aside.

8. It has been submitted by Sri
Prashant Kumar Srivastava that both these
aforesaid grounds taken by the contesting
respondents therein and found to be
feasible by the High Court were not found
justified by the Supreme Court. The
Supreme Court observed in Para-11 while
referring to the arguments raised by the
learned counsel for the Bank that the Act
provided for two alternative procedures for
taking possession of the secured assets
under Sections 13(4) and 14 respectively.
While Section 13(4) authorises the creditor
himself to take possession of the secured
assets without the aid of the State's
coercive power, Section 14 enables the
secured creditor to seek the assistance of
the State's coercive power for securing the
possession of the secured assets. It was
always open to the secured creditor to
64 INDIAN LAW REPORTS ALLAHABAD SERIES
choose one of the abovementioned two
procedures in a given case to obtain
possession of the secured asset depending
upon his own assessment of the situation
regarding the possibility of resistance (by
the debtor or guarantor as the case may be)
for taking possession of the secured assets.
The Supreme Court observed that it is not
necessary that the procedure under Section
13(4) should be undertaken before action
under Section 14 can be initiated.

9. In V. Noble Kumar (supra), the
Supreme
Court
also
considered
the
amendments made under Section 13 of the
Act after the judgment rendered in Mardia
Chemicals Ltd. vs. Union of India (2004) 4
SCC 311, but held thereafter that under the
scheme of Section 14, a secured creditor
who desires to seek the assistance of the
State's coercive power for obtaining
possession of the secured asset is required
to make a request in writing to the District
Magistrate or the officer authorized in that
behalf. By way of amendment to the said
Section, a proviso was added with nine
sub-clauses and these amendments were
made to provide safeguard to the interest
of the borrower. Under the proviso, the
secured creditor is required to file an
affidavit,
furnishing
the
information
contemplated under various sub-clauses
(1) to (9) of the said proviso and obligates
the Magistrates to pass suitable orders
regarding taking of possession of secured
asset only after being satisfied with the
contents of the affidavit. The satisfaction
of the Magistrate contemplated under the
second proviso to Section 14(1) of the Act
necessarily requires the Magistrate to
examine the factual correctness of the
assertions made in such an affidavit, but it
does not require any adjudication as such
on the basis of legal niceties.

10. In Para 27 of the judgment
rendered in V. Noble Kumar (supra), the
Supreme Court further observed that under
Section 14, the Magistrate is authorized
only to take possession of the property and
forward the connected documents to 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. It further observed 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.
With regard to observation of the High
Court in its judgment under appeal, that
Rule 8 of the Rules of 2002 provided for
certain procedure to be followed by the
secured creditor taking possession of the
secured asset, the Supreme Court observed
that the High Court was incorrect in
observing that while taking action under
Section 14 of the Act, compliance of Rule
8 is mandatory.

11. It has also been submitted by the
learned counsel for the respondents that a
Division Bench of this Court in Anuradha
Singh and another vs. Chief Metropolitan
Magistrate, Kanpur Nagar and two
others: Writ-C No.13445 of 2018, decided
on 13.4.2018, was considering a similar
case
where
an
auction notice
was
challenged by the petitioners on the
ground that no notice was given by the
Magistrate before passing the order under
Section 14 of the Act. It was observed by
the Division Bench that the petitioners had
a remedy of filing an appeal against the
action taken under Section 13 of the Act,
which they had already availed of. There
4 All. Shakuntala Devi Jan Kalyan Samiti & Ors. Vs. State of U.P. & Ors.
65
was no interim order granted in appeal
and, therefore, the Bank had sought
possession in terms of Section 14 of the
Act. They rejected the contention of the
writ petitioners that opportunity should
have been given to them before passing
the order under Section 14 of the Act by
the Magistrate, by observing that there was
no statutory provision under the Act for
providing an opportunity to the borrower
at the stage of passing of an order under
Section 14 of the Act nor any decision,
either of this Court at Allahabad or the
Apex court that may enable the Court to
read such principles of administrative law
into the statutory provisions of Section 14
of the Act. The Division Bench reiterated
that the remedy under Section 17 was
available even against an action taken
under Section 14 of the Act and the
borrower or any other person aggrieved
can approach the Tribunal to protect his
rights.

12.

Learned
counsel
for
the
respondents has also placed reliance upon
another Division Bench judgment of this
Court rendered on 3.4.2017 in Writ
Petition No.6816 (MB) of 2017: Smt.
Asmaa vs. District Magistrate, Faizabad
and others.

13. Almost similar observations have
been made by two Division Benches of
this Court in Writ-C No.27473 of 2017:
M/s. Glorious Enterprises and others vs.
District Magistrate, Agra and others,
decided
on
20.6.2017,
and
Writ-C
No.30002 of 2018: Khalid vs. State of
U.P. and others, decided on 5.9.2018.

14. A judgment rendered by the High
Court
of
Madras
in
M/s.
Deccan
Chronical Holdings Limited vs. Canara
Bank, decided on 12.6.2015 has also been
relied upon by the learned counsel for the
respondents.

15.

Learned
counsel
for
the
petitioners, on the other hand, has placed
reliance upon a Division Bench judgment
of this Court rendered in Writ-C No.38578
of 2018: Kumkum Tentiwal vs. State of
U.P. and others, decided on 11.12.2018,
reported in 2019 (2) ADJ 125, where the
writ petitioner had challenged the orders
passed by the ADM (Finance and
Revenue), Mathura, directing taking of
possession of the property of the petitioner
under Section 14 of the Act. Learned
counsel for the Bank had argued that the
writ petition was not maintainable as the
remedy of appeal under Section 17 of the
Act was provided. Learned counsel for the
Bank had relied upon the judgment
rendered in V. Noble Kumar (supra) and
Para-27 of the said report, which has been
referred to, hereinabove. The Bank had
also relied upon the judgment rendered in
Writ-C No.11706 of 2018: Dheerendra
Kumar and another vs. Authorized Officer,
Aadhar
Housing
Finance
Ltd.
and
another, decided on 2.4.2018, where this
Court relying upon various judgments of
the Supreme Court had held that the
remedy to the borrower was available
under Section 17 of the Act.

16. The Division Bench in Kumkum
Tentiwal (supra) however, observed that
the Division Bench in Dheerendra Kumar
(supra) did not consider the scope of
procedure to be adopted while passing
orders under Section 14 of the SARFAESI
Act as well as the remedy available against
the order passed under Section 14 of the
SARFAESI Act. It was observed by the
Division Bench in Kumkum Tentiwal
(supra) that the judgment rendered by the
Supreme Court in Harsh Govardhan
66 INDIAN LAW REPORTS ALLAHABAD SERIES
Sondagar
v.
International
Assets
Reconstruction Company Ltd., (2014) 6
SCC 1, was not considered by the Division
Bench in Dheerendra Kumar (supra). In
the case of Harsh Govardhan Sondagar
(supra),
the
Supreme
Court
was
considering the rights of a person
emanating from the validly created lease
and had observed that the District
Magistrate or the officer authorized would
have to give a notice and an opportunity of
hearing to the person claiming to be a
lessee, consistent with the principles of
natural justice, and then take a decision. In
the said judgment of Harsh Govardhan
Sondagar (supra), the Supreme Court
observed that the decision of the Chief
Metropolitan Magistrate or the District
Magistrate can be challenged before the
High Court under Articles 226 and 227 of
the Constitution of India by any aggrieved
person.

17. The Division Bench in Kumkum
Tentiwal (supra), after placing reliance
upon Harsh Govardhan Sondagar (supra),
observed that the borrower is also entitled
to right of hearing prior to any order being
passed by the District Magistrate while
exercising powers under section 14 of the
Act.
It
observed
that
the
District
Magistrate has to record a satisfaction with
regard to contents of the affidavits filed by
the Bank under proviso to sub-section (1)
of Section 14 of the Act and such
satisfaction can only be recorded after
hearing the parties. It further observed in
Para-12 that from the scheme of the Act, it
is implicit that the procedure of Sections
13(2) and 13(4) is mandatory before
initiating action under Section 14 of the
Act. The borrower on initiation of action
under section 14 of the Act, may at times
plead that he was not provided any
opportunity of hearing as envisaged under
Section 13(2) of the Act, entitling him to
payment of the dues within 60 days and
therefore, the action under section 14 is
illegal and misconceived. Thus, notice or
opportunity of hearing is also necessary to
the borrower or guarantor, although it may
be as a formality at times, before initiating
action under Section 14 of the Act.

18. The Division Bench in Kumkum
Tentiwal
(supra)
relied
upon
the
observations made by the Supreme Court
in Harsh Govardhan Sondagar (supra)
that the only recourse available against an
order passed under Section 14 of the Act is
under Articles 226 and 227 of the
Constitution of India.

19. It has been submitted by Sri
Akhilesh Kalra that the judgment rendered
by the Division Bench in Kumkum
Tentiwal (supra) on 11.12.2018 was
challenged in SLP by the Bank, which
SLP has been dismissed by the Supreme
Court on 6.5.2019 and the judgment of the
Division Bench has been affirmed.

20. Sri Prashant Kumar Srivastava
has argued that the Division Bench in the
case of Kumkum Tentiwal (supra) did not
consider the law as propounded by the
Supreme Court in the case of V. Noble
Kumar (supra) in the right perspective. He
has also argued that Harsh Govardhan
Sondagar (supra) was a judgment rendered
by the Supreme Court in the facts of the
case where a person, who was in
possession of the secured asset on the
basis of valid lease, was sought to be
dispossessed by the action taken under
Section 14 of the Act. He has also argued
that the judgment rendered in Anuradha
Singh (supra) by a Division Bench of this
Court, which was a judgment by a
coordinate Bench and much prior in time,
4 All. Shakuntala Devi Jan Kalyan Samiti & Ors. Vs. State of U.P. & Ors.
67
was not considered in the judgment
rendered in Kumkum Tentiwal (supra).

21. Sri Akhilesh Kalra has further
relied upon the judgment rendered by the
High Court of Uttarakhand at Nainital in
Special Appeal No.901 of 2018: The
Nainital Bank Ltd. vs. Naveen Kisan Rice
Mill and others, decided on 10.1.2019,
which relates to whether the power under
Section 14 of the Act could have been
delegated by the District Magistrate or the
or the Chief Metropolitan Magistrate to
any other officer. It relied upon the
doctrine
of
"delegatus
non
potest
delegare", which says that a delegatee
cannot further delegate his powers, to
come to a conclusion that the power under
Section 14 of the Act could not have been
exercised by the Additional District
Magistrate.

22. The judgment rendered in the
case of The Nainital Bank Ltd. (supra)
cannot be said to be applicable in the case
of the petitioners as it related to the
question
whether
delegation
in
contravention of Statute of power under
Section 14 of the Act would be legal or
not.

23. Sri Akhilesh Kalra has also relied
upon a judgment rendered by the Court of
Appeal in Paisner and others vs. Goorich,
[1955] 2 WLR 1071 and has relied upon
the observations made by Lord Denning
with regard to precedential value of the
judgments and observations that when the
Judges of the Court of Appeal gave a
decision on the interpretation of an Act of
Parliament, the decision itself was binding
on them and their successors, but the
words, which the Judges use in giving the
decision
are
not
binding.
When
interpreting a Statute, the sole function of
the Court is to apply the words of the
Statute to a given situation. Once a
decision has been reached on that
situation,
the
doctrine
of
precedent
requires us to apply the statute in the same
way in any similar situation, but not in a
different situation. Whenever a new
situation
emerges,
not
governed
by
previous decisions, the Courts must be
governed by the Statute and not by the
words of the Judges.

24. In Sakshi vs. Union of India
(2004) 5 SCC 518, the Supreme Court
considered the precedential value of
foreign precedents and held that such
decisions must be construed in the context
in which they are decided. In State of
Madhya Pradesh vs. Narmada Bachao
Andolan (2011) 7 SCC 639, the Supreme
Court observed that a judgment cannot be
read as a Statute as judicial utterances are
made in the settings of facts of a particular
case. A little difference in facts or
additional facts may make a lot of
difference to the precedential value of a
decision.

25. The Supreme Court in the case of
Bhavnagar University vs. Palitana Sugar
Mills 2003 (2) SCC 111, has also made
certain observations on the principles of
"stare decisis" and binding precedent. It
has been observed by the Supreme Court
that a decision is an authority for that
which it deduced and not what can
logically be deduced therefrom. No doubt
the ratio decidendi of a judgment rendered
by a Bench of larger coram or even by a
coordinate
Bench
is
binding
upon
subsequent coordinate Benches. Each case
has to be dealt with on the facts as
mentioned therein and one additional fact
by its mere presence or absence may
68 INDIAN LAW REPORTS ALLAHABAD SERIES
change the very precedential value of an
otherwise binding precedent.

26. This Court has considered also
the judgments rendered by the Supreme
Court in V. Noble Kumar (supra). The
judgment of the Supreme Court deals
clearly with the amended provisions of
Section 14(1) of the Act and still observes
that the remedy lies for an action taken
under Section 14(1) of the Act to a person
aggrieved under Section 17 of the Act.
Also, under the language of Section 14(1)
of the Act, the Supreme Court had
observed that the procedure under Rule 8
of the Rules of 2002 cannot be read.

27. The Division Bench judgment in
the case of Anuradha Singh (supra) deals
sufficiently with the question of notice
being issued to the borrower, after the
Bank initiates action under Section 14 of
the Act by filing affidavit before the
officer
authorized
or
the
District
Magistrate.

28. In the judgment rendered by the
Division
Bench
in
Anuradha Singh
(supra), the facts of the case are similar to
the facts of the petitioners' case inasmuch
as proceedings under Sections 13(2) and
13(4) were challenged by the petitioners
by
filing
Securitization
Application
No.530 of 2019 before the Debts Recovery
Tribunal, Lucknow, praying for setting
aside the recovery proceedings. A copy of
the Securitization Application has been
filed as Annexure-8 to the petition.

29. In Kumkum Tentiwal (supra), the
petitioner had filed the writ petition
against the order passed by the Additional
District Judge (Finance and Revenue),
Mathura under Section 14 of the Act. It
was not the case of the petitioner that the
petitioner had challenged the notice and
auction under Section 13(4) of the Act
before the Debts Recovery Tribunal in
Securitization Application, which was
pending and where no interim order was
granted.

30. Faced with such a situation
where there are two Division Benches of
this Court; one prior in point of time
having been rendered on 13.4.2018 and the
other rendered on 11.12.2018, this Court
has gone through the judgment rendered in
Mardia Chemicals Ltd. (supra), where
validity of the Act was challenged and
while dealing with the question of
violation of principles of natural justice
with respect to an action taken under
Section 13(4) of the Act, the supreme
Court observed that no doubt, the
borrower is entitled to file its objections,
which objections have to be considered by
the secured creditor and reasons stated
briefly for rejecting the same, but that
would not give borrower any right to
challenge the reasons given by the Bank or
the secured creditor as an independent
cause of action.

31. In Mardia Chemicals Ltd.
(supra),
the
Supreme
Court
was
considering the validity of the SARFAESI
Act and the main question that arose
before the Supreme Court in civil appeals,
writ petitions and transfer petitions, were
as under:

"(i) Whether it is open to
challenge the statute on the ground that it
was not necessary to enact it in the
prevailing background particularly when
another statute was already in operation?

(ii)
Whether
provisions
as
contained under Sections 13 and 17 of the
Act provide adequate and efficacious
4 All. Shakuntala Devi Jan Kalyan Samiti & Ors. Vs. State of U.P. & Ors.
69
mechanism to consider and decide the
objections/disputes raised by a borrower
against the recovery, particularly in view
of bar to approach the civil court under
Section 34 of the Act?

(iii)
Whether
the
remedy
available under Section 17 of the Act is
illusory for the reason it is available only
after the action is taken under Section
13(4) of the Act and the appeal would be
entertainable only on deposit of 75% of
the claim raised in the notice of demand?

(iv)
Whether
the
terms
or
existing rights under the contract entered
into by two private parties could be
amended by the provisions of law
providing certain powers in a one-sided
manner in favour of one of the parties to
the contract?

(v) Whether provision for sale of
the properties without intervention of the
court under Section 13 of the Act is akin to
the English mortgage and its effect on the
scope of the bar of the jurisdiction of the
civil court?

(vi)
Whether
the
provisions
under Sections 13 and 17(2) of the Act are
unconstitutional on the basis of the
parameters
laid
down
in
different
decisions of this Court?

(vii) Whether the principle of
lender's liability has been absolutely
ignored while enacting the Act and its
effect?"

32. In the said case, the Supreme
Court
while
allowing
the
appeals,
answered the questions framed by it in
Paras 80 and 81 of the judgment as
follows:

"80.
Under
the
Act
in
consideration, we find that before taking
action a notice of 60 days is required to be
given and after the measures under
Section 13(4) of the Act have been taken, a
mechanism has been provided under
Section 17 of the Act to approach the
Debts Recovery Tribunal. The abovenoted
provisions are for the purpose of giving
some
reasonable
protection
to
the
borrower. Viewing the matter in the above
perspective, we find what emerges from
different provisions of the Act, is as
follows:

1. Under sub-section (2) of
Section 13 it is incumbent upon the
secured creditor to serve 60 days' notice
before proceeding to take any of the
measures as provided under sub-section
(4) of Section 13 of the Act. After service
of notice, if the borrower raises any
objection or places facts for consideration
of the secured creditor, such reply to the
notice must be considered with due
application of mind and the reasons for
not accepting the objections, howsoever
brief they may be, must be communicated
to the borrower. In connection with this
conclusion we have already held a
discussion in the earlier part of the
judgment. The reasons so communicated
shall only be for the purposes of the
information/knowledge of the borrower
without giving rise to any right to
approach the Debts Recovery Tribunal
under Section 17 of the Act, at that stage.

2. As already discussed earlier,
on measures having been taken under subsection (4) of Section 13 and before the
date of sale/auction of the property it
would be open for the borrower to file an
appeal (petition) under Section 17 of the
Act before the Debts Recovery Tribunal.

3. That the Tribunal in exercise
of
its
ancillary
powers
shall
have
jurisdiction to pass any stay/interim order
subject to the condition as it may deem fit
and proper to impose.
70 INDIAN LAW REPORTS ALLAHABAD SERIES

4. In view of the discussion
already held in this behalf, we find that the
requirement of deposit of 75% of the
amount claimed before entertaining an
appeal (petition) under Section 17 of the
Act is an oppressive, onerous and
arbitrary condition against all the canons
of reasonableness. Such a condition is
invalid and it is liable to be struck down.

5. As discussed earlier in this
judgment, we find that it will be open to
maintain a civil suit in civil court, within
the narrow scope and on the limited
grounds on which they are permissible, in
the matters relating to an English
mortgage enforceable without intervention
of the court.

81. In view of the discussion held
in the judgment and the findings and
directions contained in the preceding
paragraphs, we hold that the borrowers
would get a reasonably fair deal and
opportunity to get the matter adjudicated
upon before the Debts Recovery Tribunal.
The effect of some of the provisions may
be a bit harsh for some of the borrowers
but on that ground the impugned
provisions of the Act cannot be said to be
unconstitutional in view of the fact that
the object of the Act is to achieve speedier
recovery of the dues declared as NPAs
and better availability of capital liquidity
and resources to help in growth of the
economy of the country and welfare of
the people in general which would
subserve the public interest." (Emphasis
supplied)

33. Thereafter, the Supreme Court
upheld the validity of the Act and its
provisions except that of sub-section (2) of
Section 17 of the Act, which was declared
ultra vires of Article 14 of the Constitution
of India.

While
dealing
with
these
questions
and
the
arguments
raised
regarding the entitlement of the borrower
to be heard before notice under sub-section
(2) of Section 13 is issued, the Supreme
Court in Paras 74 to 77 of the judgment in
Mardia Chemicals Ltd. (supra) observed
as under:

"74. A reference has also been
made for similar observations in Srinivasa
Enterprises v. Union of India [(1980) 4
SCC 507] at SCC pp. 513-14 and in Jalan
Trading Co. (P) Ltd. v. Mill Mazdoor
Sabha [AIR 1967 SC 691 : (1967) 1 SCR
15] at SCR p. 36. While referring to the
observations
made
in
Collector
of
Customs v. Nathella Sampathu Chetty
[AIR 1962 SC 316 : (1962) 3 SCR 786 :
(1962) 1 Cri LJ 364] at SCR pp. 829-30 it
is submitted that the intent of Parliament
shall not be defeated merely for the reason
that it may operate a bit harshly on a
small section of public where it may be
necessary to make such provisions of
achieving the desired objectives to ensure
that the nefarious activities of smuggling,
etc. had to be necessarily curbed. In
Fatehchand Himmatlal [(1977) 2 SCC
670] where debts of the agriculturists were
wiped off, this Court observed:

"44. Every cause claims its
martyr and if the law, necessitated by
practical
considerations,
makes
generalizations which hurt a few, it cannot
be helped by the Court. Otherwise, the
enforcement of the Debt Relief Act will
turn into an enquiry into scrupulous and
unscrupulous
creditors,
frustrating
through endless litigation, the instant
relief to the indebted which is the promise
of the legislature.? (SCC p. 689, para 44)

Yet in another decision referred
to, in Kishan Chand Arora v. Commr. of
Police [AIR 1961 SC 705 : (1961) 3 SCR
135] it has been held that absence of
4 All. Shakuntala Devi Jan Kalyan Samiti & Ors. Vs. State of U.P. & Ors.
71
appeal does not necessarily render the
legislation unreasonable. Provision for
appeal is not an absolute necessity. For
same propositions a reference has also
been made to Chinta Lingam v. Govt. of
India [(1970) 3 SCC 768] , SCC at p. 772,
where it has been observed that when the
power has to be exercised by one of the
highest officers the fact that no appeal has
been provided is not material. In respect of
the appellate provision once again our
attention
has
been
drawn
to
the
observations made by this Court in SCC at
pp. 582-83, paras 15 and 16 in Organo
Chemical Industries v. Union of India
[(1979) 4 SCC 573 : 1980 SCC (L&S) 92]
to the effect that an appeal is a desirable
corrective
but not
an
indispensable
imperative.
It
is,
however,
further
observed in this decision that it may all
depend upon the nature of the subjectmatter, other available correctives and the
possible harm flowing from the wrong
orders.

75. In relation to the argument
on behalf of the petitioners that they are
entitled to be heard before a notice under
sub-section (2) of Section 13 is issued
failing which there is denial of the
principles of natural justice, a reference
has been made to certain decisions to
submit that in every case, it is not
necessary to make a provision for
providing a hearing. For example, in the
case of a licensing statute, see Kishan
Chand Arora [AIR 1961 SC 705 : (1961) 3
SCR 135] . The other decisions referred to
are: Lachhman Dass v. State of Punjab
[AIR 1963 SC 222 : (1963) 2 SCR 353] ,
Chairman, Board of Mining Examination
v. Ramjee [(1977) 2 SCC 256 : 1977 SCC
(L&S) 226] , SCC at p. 262 and Haryana
Financial Corpn. v. Jagdamba Oil Mills
[(2002) 3 SCC 496] , SCC at p. 504, para
7 to submit that concept of natural justice
is not a straitjacket formula. It, on the
other hand, depends upon the facts of the
case, nature of the enquiry, the rules under
which the Tribunal is acting and what is to
be seen is that no one should be hit below
the belt. Relationship between the creditor
and the debtor, it is submitted, is
essentially in the realm of a contract.

76. In regard to the submission
made by the parties as indicated in the
preceding paragraphs, we would like to
make it clear that issue of a notice to the
debtor by the creditor does not attract the
application of the principles of natural
justice. It is always open to tell the debtor
what he owes to repay. No hearing can be
demanded from the creditor at this stage.
So far as the provision of appeal is
concerned, we have already discussed in
the earlier part of the judgment that
proceedings under Section 17 of the Act
have been wrongly described as appeal
before the Debts Recovery Tribunal. It is
in fact a forum where proceedings are
originally initiated in case of any
grievance against the creditor in respect
of any measure taken under sub-section
(4) of Section 13 of the Act. Hence, the
decisions on the point as to whether
provision for an appeal is essential or not
are not of any assistance in the facts of the
present case.

77. It is also true that till the
stage of making of the demand and notice
under Section 13(2) of the Act, no hearing
can be claimed for by the borrower.