Excelsior Correspondent
SRINAGAR, Nov 24: The State High Court today expressed serious concern over courts exercising powers in loan recovery cases, which has adverse impact on banks for recovery of loans from defaulters.
Justice M K Hanjura while hearing petition for directing the banks to restrain from recovery of loan amount or by taking the mortgaged property of defaulters said that the Courts are ignoring the availability of DRT Act and SARFAESI Act and passing orders which causes serious impact on banks for recovery of loan amount.
“It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues”, Justice Hanjura recorded and dismissed the writ petition of petitioners (defaulters) with the observation they do have alternative remedy available.
“The petition entails dismissal and is, therefore, dismissed. However, the petitioners shall be free to avail the alternative remedy as provided under the Debts Due to Banks and Financial Institution Act, 1993 as such the petition cannot be maintained before this court”, Justice Hanjura said.
Justice Hanjura hoped that in future, the High Courts will exercise their discretion in such matters with greater caution, care and circumspection. “Insofar as this case in concerned, we are convinced that the High Court was not at all justified in injuncting the appellant from taking action in furtherance of notice issued under Section 13 (4) of the Act”, read the judgment.
Elaborating the principles of law on the subject as well as the Supreme Court ruling, court held that where the remedy was available under the interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, the High Court was not justified in entertaining a petition under Article 226 of the Constitution.
Counsel appearing for bank, Z A Shah, vehemently argued before the court that the petition of the petitioners is misconceived on the face of the provisions contained in the Debts Due to Banks and Financial Institution Act, 1993, in view of the inbuilt mechanism provided therein and, as such, it is liable to be dismissed.
“Counsel for the petitioners has not been able to persuade this Court as to how and in what manner this writ petition can be entertained on the anvil of the availability of alternative remedy in the form of filing a statutory appeal under the statute”, court said.
“There can be no denial of the fact that the existence of an alternative remedy does not ‘ipsofacto’ curtail or bar the jurisdiction vested in the High Court under Article 226 of the Constitution of India. The remedy under Article 226 is in general a discretionary one and the High Court has the power to refuse to grant it where the alternative remedy which is equally efficient and adequate is in existence unless there are good grounds”, the judgment read.
Court on entertaining the petition filed under Section 226 of the Indian constitution said the rule of exhaustion of alternative remedy is a rule of discretion but it is difficult to comprehend as to why this Court should entertain the petition filed under Section 226 of the Constitution of India and pass the orders thereon by remaining oblivious to the fact that the petitioners have the right to file an appeal provided by the legislation/statute in which a detailed mechanism has been evolved.
The account of the petitioners was declared as a Non-performing Asset (NPA). The mortgaged land was valued by the surveyors of the J&K Bank from time to time. The respondent-Bank filed an application under Section 19 of the Recovery of Debts Due to Banks and Financial Institution Act, 1993 against the petitioners and some other defaulters, for the recovery of an amount of Rs. 2,14,16,865.75 in the year 2012.
The Tribunal vide order dated 29.06.2016, had allowed the application of the Bank and the petitioners along with other defaulters were directed to pay jointly to the Bank, within 30 days, a sum of Rs. 2,14,16,865 & 75 paisa together with cost charges and future interest @ 19% p.a. from the date of filing the application till such time that the same is released, failing which it was directed that the Bank shall be entitled to recover the same from the sale of the mortgaged property.
The Tribunal had also directed that in case of shortfall, the same shall be recovered from the sale of the movable and immoveable assets of the petitioners. The Bank acting upon the said order assessed the cost of the mortgaged land and evaluated it at the rate of Rs 1,05,000 per kanal.
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