# M/S Rajdoot Trading Co. & Anr v. Debt. Recovery Tribunal University Road Lko. & Ors

- **Citation:** (2019) 2 ILRA 1591
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-09-20
- **Case number:** Misc. Single No. 25896 of 2019
- **Bench:** Mrs. Sangeeta Chandra
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-rajdoot-trading-co-anr-v-debt-recovery-tribunal-university-road-lko-ors-44611
- **Pages:** 4

## Headnote

C.S.C., Sri Vinay Shanker.

Securitization
and
Reconstruction
of
Financial
Assets
and
Enforcement
of
Security Interest Act, 2002- Sections 13(4),
17 & 14- petitioners took a loan against a
residential property-on failure to repay the loanthe Bank proceeded u/SARFAESI Act, 2002-The
petitioners
preferred
the
Securitization
Application before DRT challenging the sale
notice-rejected on the ground of no jurisdiction
to entertain it.-appeal to be filed u/proviso to sec.
18-Writ petition not maintainable.

Held: - writ not maintainable-the right of appeal is
a remedy created under a statute -the statutory
remedy should have been availed.

Writ Petition Disposed of (E-8)

## Text

2 All. M/S Rajdoot Trading Co. & Anr. Vs Debt. Recovery Tribunal University Road Lko. & Ors. 1591

(9). In para 61, the contention
raised by learned counsel for the petitioner in
this petition was also raised by learned
counsel for petitioner before the Full Bench.

(10). It is upto the D.M. to consider
whether he should entertain the complaint
or not.

(11). It was held in para 63 and para
64 of the judgement as follows:-

"63. If the D.M. can order for
the preliminary enquiry even in a case,
where
a
complaint
could
not
be
entertained, then what is the purpose of
permitting a pradhan to object regarding its
non-conformity with rules 3(1) to 3(4). To us,
it appears to be futile exercise. It is for the
D.M. to consider whether he should
entertain the complaint or not.

64. (i) The word "otherwise" in
Rule 4 means that the D.M. has suo moto
powers to order a preliminary inquiry;

(ii) In an appropriate case, the
D.M. may order a preliminary inquiry even if
there is, No complaint or report; or a
defective complaint, not in accordance with
Rules 3(1) to Rule 3(4);

(iii) A pradhan has no legal right
to object that a complaint is not in
accordance with Rule (1) to Rule 3(4) of the
Enquiry Rules."

(12). Having considered the Full
Bench decision of the Court, this Court is
of the considered opinion that the order
passed by the D.M. dated 29.07.2019
challenged in this writ petition, there is no
ground to show interference under Article
226 of the Constitution of India.

(13). This writ petition is disposed
of with a direction to the D.M. to
endeavour to pass a final order under Section
95 (1)(g), after holding inquiry as per Order 6
of the Rules of 1997 say, within a period of
four months from the date, a certified copy of
the order is produced before her.
----------
(2019)10ILR A 1591

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 20.09.2019

BEFORE

THE HON'BLE MRS. SANGEETA CHANDRA, J.

Misc. Single No. 25896 of 2019

M/S Rajdoot Trading Co. & Anr.
 ...Petitioners
Versus
Debt. Recovery Tribunal University
Road Lko. & Ors. ...Respondents

Counsel for the Petitioners:
Sri Suneet Kumar Sharma, Sri Amarjeet Singh
Rakhra.

Counsel for the Respondents:
C.S.C., Sri Vinay Shanker.

Securitization
and
Reconstruction
of
Financial
Assets
and
Enforcement
of
Security Interest Act, 2002- Sections 13(4),
17 & 14- petitioners took a loan against a
residential property-on failure to repay the loanthe Bank proceeded u/SARFAESI Act, 2002-The
petitioners
preferred
the
Securitization
Application before DRT challenging the sale
notice-rejected on the ground of no jurisdiction
to entertain it.-appeal to be filed u/proviso to sec.
18-Writ petition not maintainable.

Held: - writ not maintainable-the right of appeal is
a remedy created under a statute -the statutory
remedy should have been availed.

Writ Petition Disposed of (E-8)

(Delivered by Hon'ble Mrs. Sangeeta
Chandra, J.)
1592 INDIAN LAW REPORTS ALLAHABAD SERIES

(1). Heard Shri Amarjeet Singh
Rakhra, who appears for the petitioners
and Shri Vinay Shanker, appearing for the
respondent
no.2
Oriental
Bank
of
Commerce, Ghaziabad.

(2) This petition has been filed by
the petitioners challenging the order dated
09.09.2019 passed by the Debt Recovery
Tribunal, Lucknow, in Securitization
Application No.179 of 2014 (M/s Rajdoot
Trading
Company
&
Others
Vs.
Authorised Officer, Oriental Bank of
Commerce and Another) and a further
prayer has been made for issuance of a
mandamus directing the Debt Recovery
Tribunal, Lucknow to adjudicate the
application on merit.

(3). It has been submitted by the learned
counsel for the petitioners that the application
has been rejected by the Debt Recovery
Tribunal, Lucknow, holding that it has no
jurisdiction to entertain such application, and
such finding has been recorded against the
settled position in law. It has been submitted
by the learned counsel for the petitioners that
the petitioners had taken a loan against a
property from the Respondent no.2-Bank.
When they could not repay the loan, the Bank
proceeded under the Securitization and
Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002,
(hereinafter referred as Act of 2002). The
petitioners
preferred
the
Securitization
Application No.179 of 2014 challenging the
sale notice issued by the Bank on 22.02.2014
with regard to the residential property of the
petitioners.

(4). After pleadings were exchanged,
the impugned order has been passed.

(5). It has been held by the Hon'ble
Supreme Court and by this Court that
even where the statute does not provide so,
the principles of natural justice have to be
read into every statute. Learned counsel for
the petitioners has referred to M/s Dharam
Satyapal Ltd. Vs. Deputy Commissioner of
Central Excise, Gauhati and Others
reported in (2015) 8 SCC 5519. Reliance has
been placed on Paragraph nos.20, 21, 25, 28,
29, 35 and 42 of the said judgments with
regard to importance of following the
principles of natural justice.

(6). It has been submitted that the
District Magistrate had passed an order under
Section 14 of the Act, 2002, on 28.02.2015
without serving any notice, based on incorrect
declaration given by the Bank. The petitioners
came to know only after filing of the
Securitization Application and therefore, filed
an amendment application which was allowed
and the amendments were duly incorporated.
It has been submitted that the Debt Recovery
Tribunal, Lucknow, failed to appreciate that
the District Magistrate Order under Section 14
of the Act, 2002, was one of the modes
available to a secured creditor to take
possession of the secured assets. Therefore,
when the District Magistrate passed such
order taking possession as is contemplated
under Sub-Section 13 (4) of the Act only be
said to be an order passed during the process
initiated under Section 13 which culminates in
the order under Section 17.

(7). Learned counsel for the
petitioners has placed reliance upon the
Division Bench's judgment of the Gujarat
High Court in the case of Devani
Jagdishbhai Vs. District Magistrate,
Surat, in Special Civil Application
No.1805 of 2018, where the Gujarat High
Court has considered the submissions
regarding Section 14 (3) of the Act
excluding the jurisdiction of the Civil
Court but not of the Tribunal.
2 All. M/S Rajdoot Trading Co. & Anr. Vs Debt. Recovery Tribunal University Road Lko. & Ors. 1593

(8). A similar order has been
passed by a Division Bench of Madhya
Pradesh High Court also in Writ Petition
No.19028 of 2017 (Sunil Garg Vs. Bank
of Baroda & Others). Learned counsel
for the petitioners has placed reliance on
Paragraph nos.8 and 15 of the said
judgment.

(9). It has also been submitted that
the Division Bench of this Court in
Manoj Dwivedi and Another Vs. District
Magistrate, Lucknow & Others (in Writ
Petition No.17467 (M/B) of 2018), has
considered the remedy is available for a
party against the order passed by the
District Magistrate under Section 14 of
the Act and directed the petitioners
therein to approach the Tribunal.

(10). Learned counsel for the
petitioners has also placed reliance upon
the judgment rendered by the Hon'ble
Supreme Court in the case of Kanaihyalal
Lalchand Sachdev and Others Vs. State
of Maharashtra and Others reported in
(2011) 2 SCC 782 and in the case of
United Bank of India Vs. Satyawati
Tandon and Others reported in (2010) 8
SCC 110, wherein it has been held that
the District Magistrate under Section 14
of the Act passes an order which is in the
nature of an order facilitating final order
to be passed under Section 17 of the Act,
and the writ petition is not maintainable
under Article 226 of the Constitution of
India. In such cases, the remedy is
available for the petitioners to approach
the Tribunal.

(11). Shri Vinay Shanker, on the
other hand, appearing for the Bank, has
pointed out that against the order passed
by the Debt Recovery Tribunal, Lucknow,
under Section 17 of the Act, an Appeal
has been provided under Section 18 of the
Act. It has been submitted that where the
rights have been created under a statutory
provision, the remedy lies in the Statutory
Forum as provided in the Rules. He has
referred to N.P. Poonuswami Vs. Union
of India and others reported in 1952 AIR
64, and also the judgment rendered by the
Hon'ble Supreme Court in the case of
G.P. Siddeshwara Co-operative Bank
Ltd. Vs. Mohd. Iqbal & Others reported
in 2013 (10) SCC 83, and also the
judgment
rendered
by
Hon'ble
the
Supreme Court in United Bank of India
Vs. Satyawati Tandon reported in (2010)
8 SCC 110, to buttress his arguments.

(12). It has been submitted that the
petitioners have avoided filing of the
Appeal as it involves pre-deposit to be
made by the appellant before his Appeal
can be heard.

(13). Learned counsel for the
petitioners has pointed out that the
petitioners from the date of issuance of
the order under Section 14 by the District
Magistrate have deposited the entire
amount that is due to the Bank alongwith
interest i.e. from 2015 upto April, 2019,
he has deposited Rs.60 lacs as demanded
by the Bank in its Demand Notice and the
condition of pre-deposit as given under
Section 18 of the Act before approaching
the Debt Recovery Tribunal and for the
Appeal to be considered under Section 18
would again cast an onerous liability on
the petitioner to deposit at least 25% of
the amount, demanded by the Bank.

(14). Learned counsel for the
respondents on merits has submitted that
the Securitization Application No.179 of
2014 (M/s Rajdoot Trading Company &
Others Vs. Authorised Officer, Oriental
1594 INDIAN LAW REPORTS ALLAHABAD SERIES
Bank of Commerce and Another) was
initially filed only against the sale notice
issued by the Bank and not against any
orders passed under Section 13 or 14 of
the Act. He has referred to the amendment
application which was moved by the
petitioner which also has only challenged
the order passed by the District Magistrate
under Section 14 but has not challenged
the order passed under Section 13 (4) and
13 (2) of the Act, 2002.

(15). This Court is convinced that
when the statutory remedy is available, no
writ petition can be entertained, as
statutory remedy is different from the
alternative remedy. The right of Appeal is
a remedy created under the Statute i.e. the
Act of 2002 has not been availed of by the
petitioners. The petitioners can move an
appropriate application for exemption
from the condition of pre-deposit as given
in the Proviso of Section 18 of the Act.

(16). The writ petition stands
disposed of with a direction to the
petitioners to approach the Debt Recovery
Appellate Tribunal, Lucknow, within a
period of two weeks from today. If such
an application is moved within a period of
two weeks from today, the Debt Recovery
Appellate Tribunal shall also consider the
application made by the petitioner for
exemption from pre-deposit as the Bank
had initially issued demand notice for
only Rs.60 lacs, which has been deposited
by the petitioner, and pass appropriate
orders thereon within a further period of
two weeks.

(17). Till 30.10.2019 or till disposal
of petitioner's application as aforesaid,
whichever is earlier, the petitioner shall
not be dispossessed from his residential
house. It is evident from page no.73 of the
paperbook that the petitioner has still not
been dispossessed from the house in
question.
----------

(2019)10ILR A 1594

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 17.10.2019

BEFORE

THE HON'BLE ABDUL MOIN, J.

Service Single No. 24558 of 2019

Sanjay Srivastava & Ors. ...Petitioners
Versus
Punjab National Bank New Delhi & Ors.
 ...Respondents

Counsel for the Petitioners:
Sri Amrendra Nath Tripathi, Sri Ashutosh
Shahi.

Counsel for the Respondents:
C.S.C., Sri Mayank Pathak, Sri Prashant
Kumar.

A. Constitution of India - Article 12 - PNB -
Nationalized bank - instrumentality of
Government - Punjab
National
Bank
Institute of Information Technology set
up which was governed by a society -
Whether the society falls within the
ambit of State or "other authority" as
provided
under
Article
12
of
the
Constitution or not - PNB given a corpus
of Rs. 2 crores for starting the society -
designated post holder of PNB are
member of Society - PNB has persuasive
and financial control over Society -
Government of India has deep and
persuasive control over the PNB - test
laid down in Ajay Hasia case applied -
only where entire share capital of the
corporation is held by Government then
only
Society
is
said
to
be
the
instrumentality
or
agency
of
the