SPA/175/2020 of M/S SHYAM RADIOS RAILWAY BAZAR HALDWANI Vs PUNJAB NATIONAL BANK

IN THE HIGH COURT OF UTTARAKHANDAT NAINITAL

THE HON’BLE THE CHIEF JUSTICE SRI RAGHVENDRA SINGH CHAUHAN AND THE HON’BLE SRI JUSTICE ALOK KUMAR VERMA

SPECIAL APPEAL NO. 175 OF 2020

26[TH] MARCH, 2021

Between:

M/S Shyam Radios Railway Bazar Haldwani, District Nainital and others. …Appellants

…Appellants

and

Punjab National Bank and others. …Respondents

The Court made the following:

JUDGMENT: (per Hon’ble The Chief Justice Sri Raghvendra Singh Chauhan)

For the sake of brevity and convenience, the party

shall be referred to as arrayed in the writ petition.

2. The appellants-writ petitioners are aggrieved by the order dated 11.06.2021 passed by the learned Single Judge in Writ Petition (M/S) No. 841 of 2020, whereby the

learned Single Judge has dismissed the writ petition filed by the appellant-writ petitioner.

3. Briefly the facts of the case are that the petitioners are proprietors of the firm in the name and style of M/S Shyam Radios. For the purpose of running the business, the writ petitioners had taken out certain credit facilities from Punjab National Bank, respondent No.1. The details of these credit facilities are reads as under:-

4. According to the petitioners, when the aforesaid loans/credit limits were extended to them, certain properties were mortgaged, as security with the bank. The details of the said properties are as follows:

5. Moreover, according to the petitioners, they borrowed housing loan from the respondent-Bank. They started paying the installment of the loan. However, due to certain financial hardship, and personal family problems, the petitioners defaulted in payment of installment of loan amount. Therefore, the Bank issued certain notices to the petitioners. The petitioners requested the Bank to co-operate with them, and to permit the repayment of loan amount in easy installments. Despite the fact that petitioners have been making these requests to the Bank since 2016, the Bank has not agreed to such proposal. Instead, on 25.02.2020, the Bank issued the notice to the petitioners under Section 13(2) of theSecuritisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (for short ‘as the SARFAESI Act’). Subsequently, on 27.05.2020, the Bank has issued notices to the petitioners under Section 13(4) of the SARFAESI Act. Aggrieved by the same, the

petitioners filed writ petition before the learned Single Judge. However, by the impugned order dated 11.06.2020, the learned Single Judge has dismissed the writ petition inter alia on the ground that the petitioners, have an efficacious alternative remedy for challenging said notices before the learned Debts Recovery Tribunal (for short ‘DRT’). Therefore, there is no reason for this Court to exercise its writ jurisdiction. Hence, the present Special Appeal.

6. Mr. Xitij Kaushik, the learned counsel for the petitioners, submits that the petitioners had given undertaking before this Court that they will negotiate with the Bank. In pursuance of such undertaking, on 20.11.2020, the Bank had informed the petitioners that the concrete proposals and the prospective buyers for the petitioners’ property have not been received by the Bank. Therefore, the Bank had sought certain undertaking from the petitioners and sought concrete proposals for selling their properties to prospective buyers.

7. According to the learned counsel, the petitioners had replied to the letter dated 28.11.2020 by submitting four undertakings on 01.12.2020. Despite the fact that the undertakings have been submitted by the petitioners, the Bank is yet to approve the steps which are being taken by the petitioners. Moreover, according to the learned

counsel, these aspects have not beennoticed by the learned Single Judge. Therefore, the impugned order deserves to be set aside by this Court.

8. On the other hand, Mr. Siddhartha Jain, the learned counsel for the respondent-Bank, submits that the petitioners have defaulted since 2016 and have been abusing the process of the Court and the process of law to evade their responsibility of repaying the loan. The undertakings given by the petitioners before this Court as well as before the Bank are absolutely sham. Despite the fact that the petitioners claim that they are willing to repay the loan amount, but not single penny has been repaid to the Bank by the petitioners so far. According to the undertaking dated 01.12.2020, the petitioners were supposed to bring forth the prospective buyers and to submit concrete plans for selling the four properties mortgage with the Bank. But so far neither concrete buyer has been brought fourth, nor proposal for selling the properties has been submitted. Moreover, even according to the undertakings, the petitioners had admitted that if they fail to repay the loan amount, the Bank shall be free to take its action under the SARFAESI Act. Since, the petitioners have failed to repay the loan amount, the Bank is well justified to initiate the proceedings under Section 13(2) and 13(4) of the SARFAESI Act. Lastly, the learned

Single Judge is certainly justified that in case there is an efficacious alternate remedy, the writ jurisdiction should not be invoked by this Court. Therefore, the learned counsel has supported the impugned order.

9. Heard learned counsel for the parties, and examined the records, submitted by both the parties, and perused the impugned order.

10. It is, indeed, trite to state that it is the legal and moral duty of borrower to repay the loan amount to the Bank in time. borrower cannot be permitted to abrogate responsibilities towards the Bank. After all, the borrowers having taken the money which belongs to the Public at large. Admittedly, the petitioners have defaulted in paying the loan amount ever since 2016. According to both the learned counsels, the loan amount presently is about `8,12,37,685/-.

11. According to the order-sheets of the learned Single Bench, and the order sheets of this Bench, the petitioners have been promising this Court that they will negotiate with the respondent-Bank. Admittedly, by letter dated 02.11.2020, the petitioners were asked to submit and to bring forth the prospective buyers who are interested to buy the four properties, which the petitioners had mortgaged with the Bank. Moreover, concrete plan

was to be submitted and the amount that the petitioners would deposit after the sale of each property was to be outlined. But according to the respondent-Bank, no such steps have been taken. Merely undertakings have been given on 01.12.2020.

12. bare perusal of undertakings, which have been submitted by the petitioners before this Court clearly reveals that even the names of the proposed purchasers are not mentioned. Moreover, the schedule for repayment of the amount, and even the quantum of the amount have not been mentioned anywhere. Most importantly, according to these undertakings, the petitioners have committed themselves that in case they were be fail in repaying the loan amount, the Bank would be at liberty to initiate the proceedings under the SARFAESI Act. Despite the lapse of many months, the petitioners have not implemented the undertakings given by them. Therefore, the Bank is certainly justified in initiating the proceedings under the SARFAESI Act.

13. It is, indeed, trite to state that once an efficacious alternate remedy is provided by the law, ordinarily the High Court would not exercise its writ jurisdiction, the learned Single Judge is certainly justified in observing that if the petitioners were aggrieved by the notices issued under Section 13(2) and 13(4) of the

SARFAESI Act, the petitioners, they have an efficacious

alternate remedy of approaching the learned Debts Recovery Tribunal.

Therefore, for the reasons stated above, this

Court does not find any illegality or perversity in the order passed by the learned Single Judge. This appeal, being devoid of any merit is, hereby, dismissed.

_____________________________

RAGHVENDRA SINGH CHAUHAN, C.J.

___________________

ALOK KUMAR VERMA, J.