Case Note & Summary
The appellants, Union Bank of India and its Chief Manager, filed a writ appeal under Section 4 of the Karnataka High Court Act against the order dated 02.05.2023 passed by a learned Single Judge in W.P.No.8646/2017. The respondents, Sri V. Harish D. Kamath and Sri V. Divakar D. Kamath, had filed the writ petition challenging an endorsement dated 02.07.2016 issued by the Corporation Bank (now Union Bank of India). The endorsement was in response to the petitioners' representation against a notice issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The Single Judge allowed the writ petition, setting aside the endorsement. The bank appealed, contending that the writ petition was not maintainable as the petitioners had an alternative remedy under Section 17 of the SARFAESI Act before the Debts Recovery Tribunal. The Division Bench of the High Court, comprising Justice S.G. Pandit and Justice Ramachandra D. Huddar, heard the appeal. The court observed that the endorsement did not create a fresh cause of action and that the petitioners could have challenged the Section 13(2) notice before the Tribunal. The court held that the writ petition was not maintainable in view of the alternative remedy. Consequently, the appeal was allowed, the Single Judge's order was set aside, and the writ petition was dismissed. The court clarified that the respondents were at liberty to pursue remedies under the SARFAESI Act.
Headnote
A) SARFAESI Act - Maintainability of Writ Petition - Alternative Remedy - The writ petition challenging an endorsement issued by the bank under Section 13(2) of the SARFAESI Act was held not maintainable as the petitioners had an efficacious alternative remedy under Section 17 of the Act before the Debts Recovery Tribunal. The Single Judge's order allowing the writ petition was set aside. (Paras 1-10) B) SARFAESI Act - Endorsement - Section 13(2) Notice - The bank's endorsement dated 02.07.2016 was a communication in response to the petitioners' representation against the Section 13(2) notice. The court held that such an endorsement does not give rise to a fresh cause of action and the petitioners ought to have availed the remedy under Section 17 of the SARFAESI Act. (Paras 3-8)
Issue of Consideration
Whether the writ petition challenging the endorsement issued by the bank under the SARFAESI Act was maintainable in view of the alternative remedy available under the Act.
Final Decision
The appeal is allowed. The order dated 02.05.2023 passed by the learned Single Judge in W.P.No.8646/2017 is set aside. Consequently, the writ petition is dismissed. The respondents are at liberty to pursue remedies available under the SARFAESI Act.
Law Points
- SARFAESI Act
- Section 13(2) notice
- Section 14
- jurisdiction of civil court
- alternative remedy
- writ petition maintainability
