Case Note & Summary
The appellant, Sri Abdul Khader, filed a writ petition before the High Court of Karnataka challenging an order dated 05.12.2019 passed by the authority under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The order was passed in favour of the respondent, Sadath Ali Siddiqui, and the Bank of Maharashtra. The appellant sought to set aside the Section 14 order, which facilitated the bank's possession of the secured asset. The learned Single Judge dismissed the writ petition on 17.09.2021, holding that the writ petition was not maintainable as the appellant had an efficacious alternative remedy under Section 17 of the SARFAESI Act before the Debts Recovery Tribunal (DRT). Aggrieved, the appellant filed the present writ appeal under Section 4 of the Karnataka High Court Act. The Division Bench, comprising the Chief Justice and Justice Sachin Shankar Magadum, heard the appeal and reserved judgment on 15.11.2021. The court examined the nature of an order under Section 14 of the SARFAESI Act and held that it is an administrative order and not a judicial or quasi-judicial order. The court further held that the remedy under Section 17 of the Act is comprehensive and the borrower can raise all objections before the DRT. The court reiterated the settled principle that the High Court should not entertain a writ petition under Article 226 of the Constitution of India when an efficacious alternative remedy is available under the SARFAESI Act. The court dismissed the appeal, confirming the order of the Single Judge, and held that the writ petition was not maintainable. The court did not express any opinion on the merits of the case and left it open to the appellant to avail the remedy under Section 17 of the SARFAESI Act.
Headnote
A) Constitutional Law - Writ Jurisdiction - Maintainability - Alternative Remedy - Section 14, Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - The appellant challenged an order under Section 14 of the SARFAESI Act before the writ court without exhausting the remedy under Section 17 of the Act. The Single Judge dismissed the writ petition as not maintainable. The Division Bench upheld the order, holding that the writ petition was not maintainable as an efficacious alternative remedy was available under Section 17 of the SARFAESI Act. (Paras 1-10) B) Banking Law - Securitisation - Section 14 Order - Nature - Section 14, Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - The court examined the nature of an order under Section 14 of the SARFAESI Act and held that it is an administrative order and not a judicial or quasi-judicial order. The court further held that the remedy under Section 17 of the Act is comprehensive and the borrower can raise all objections before the Debts Recovery Tribunal. (Paras 5-8) C) Banking Law - Alternative Remedy - Exhaustion - Section 17, Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - The court reiterated the settled principle that the High Court should not entertain a writ petition under Article 226 of the Constitution of India when an efficacious alternative remedy is available under the SARFAESI Act. The court dismissed the appeal, confirming the order of the Single Judge. (Paras 9-10)
Issue of Consideration
Whether a writ petition under Article 226 of the Constitution of India is maintainable against an order passed under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, without exhausting the alternative remedy under Section 17 of the Act.
Final Decision
The appeal is dismissed. The order of the Single Judge dated 17.09.2021 in W.P.No.3628/2021 is confirmed. The appellant is at liberty to avail the remedy under Section 17 of the SARFAESI Act.
Law Points
- Writ jurisdiction under Article 226 not maintainable against Section 14 order of SARFAESI Act
- Alternative remedy under Section 17 of SARFAESI Act must be exhausted
- Section 14 order is administrative in nature
- High Court should not interfere in SARFAESI matters when alternative remedy available
