Case Note & Summary
The petitioners, Smt. Aruna DTS Moorthy and M/s AMGC Logistic Pvt. Ltd., filed a writ petition before the Bombay High Court, Nagpur Bench, challenging a sale notice dated 26.07.2021 issued by UCO Bank under Section 32 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The notice demanded payment of outstanding dues of Rs.5,87,10,380.23 within 15 days, failing which the bank would auction two mortgaged properties: an apartment at Nirman Enclave, Nagpur, and an office/chamber at the same location. The petitioners had already filed an application under Section 17 of the SARFAESI Act before the Debts Recovery Tribunal (DRT), Nagpur, on the same day, questioning the sale notice. The court noted that the sale notice was annexed to the second set of the petition but missing from the first set. The petitioners argued that the notice was illegal and sought interim relief from the High Court. The court, however, held that the remedy under Section 17 of the SARFAESI Act is an efficacious alternative remedy and that the petitioners must pursue their application before the DRT. The court found no exceptional circumstances to entertain the writ petition under Article 226 of the Constitution. Consequently, the writ petition was dismissed, and the petitioners were directed to approach the DRT for interim relief. The court clarified that it had not expressed any opinion on the merits of the case and that the DRT would decide the application in accordance with law.
Headnote
A) Constitutional Law - Alternative Remedy - Writ Jurisdiction - Availability of Efficacious Alternative Remedy - The petitioners challenged a sale notice under Section 32 of the SARFAESI Act, 2002, by filing a writ petition despite having already filed an application under Section 17 of the Act before the Debts Recovery Tribunal. The High Court held that the remedy under Section 17 is an efficacious alternative remedy and the petitioners must pursue it, as the writ petition does not disclose any exceptional circumstances warranting interference under Article 226 of the Constitution. (Paras 6-8) B) Securitisation Law - Sale Notice - Section 32 SARFAESI Act - Validity of Notice - The sale notice issued by the bank called upon the petitioners to pay outstanding dues of Rs.5,87,10,380.23 within 15 days, failing which the secured assets would be sold. The court found no illegality or irregularity in the notice and noted that the petitioners had already approached the DRT under Section 17, which is the appropriate forum to challenge the notice. (Paras 5-7)
Issue of Consideration
Whether the High Court should entertain a writ petition challenging a sale notice under Section 32 of the SARFAESI Act when an alternative remedy under Section 17 of the Act is available and has already been availed.
Final Decision
The writ petition is dismissed. The petitioners are directed to approach the Debts Recovery Tribunal, Nagpur, for interim relief. The DRT is requested to decide the application under Section 17 of the SARFAESI Act expeditiously, preferably within four weeks. No order as to costs.
Law Points
- Alternative remedy
- Section 17 SARFAESI Act
- Section 32 SARFAESI Act
- Writ jurisdiction
- Interim relief
