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®

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 22ND DAY OF MARCH, 2016

PRESENT

THE HON'BLE MR. JUSTICE S. ABDUL NAZEER

A N D

THE HON'BLE MR. JUSTICE ASHOK B. HINCHIGERI

AND

THE HON'BLE MR. JUSTICE A.N.VENUGOPALA GOWDA

WRIT PETITION NO.28182/2013 (GM-DRT)

BETWEEN:

1. M/s. Deepak Apparels Pvt. Ltd.,

No.526, 6th Block, 2nd Phase, Banashankari III Stage,

Bangalore – 560 085, Rep. by its Managing Director

Sri K. Kotrabasappa.

2. Sri Kotrabasappa, S/o. G. Kotrappa, A/a: 50 years,

Managing Director of M/s. Deepak Apparels Pvt. Ltd.

3. Smt. Kumari G.S., W/o. Kotrabasappa,

A/a: 43 years, Director of M/s. Deepak Apparels Pvt. Ltd.

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Petitioner Nos.2 and 3 are residing at

No.526, 6th Block, 2nd Phase, Banashankari III Stage,

Bangalore – 560 085. …PETITIONERS

(By Sri R.L. Patil, Senior Adv. for Sri Ashish Krupakar, Adv.)

AND:

1. City Union Bank Ltd.,

Having its registered office at: Kumbakonam, Tamil Nadu and

Branch office at No.82, 6th Cross, Malleshwaram,

Bangalore – 560 003.

2. H.R. Varadarajan Shetty, A/a: 65 years.

3. Smt. H.A. Sujatha Varadaraja Shetty,

W/o. H.R. Varadaraja Shetty, A/a: 60 years.

Respondent Nos.2 and 3 are Residing at No.3406/2, 10th Main,

34th “A” cross, 4th Block Jayanagar, Bangalore.

…RESPONDENTS (By Sri R. Ashok Kumar, Adv. for R1;

Sri K.V. Shyam Prasad, Adv. for R2 and R3)

This Writ Petition was referred to a larger Bench by

the learned Single Judge vide order dated 13.09.2013.

This petition referred to this Full Bench by the Hon’ble Chief Justice on 27.01.2014, having been heard

and reserved for pronouncement of ‘order on Reference’ this day, A.N. Venugopala Gowda J., pronounced the following:

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ORDER ON REFERENCE

In view of an order dated 13.09.2013, passed by the

learned Single Judge, raising a question as to ‘whether a writ

petition would be maintainable against an order passed by the Debts

Recovery Tribunal (for short 'the Tribunal'), while disposing of an appeal

filed under S.17 of the Securitisation and Reconstruction of Financial

Assets and Enforcement of Security Interest Act, 2002 (for short 'the

SARFAESI Act'), in view of the alternative and efficacious remedy of an

appeal provided under S.18, the Hon'ble Chief Justice,

constituted this Bench to answer the said question.

2. Reference was made by the learned Single

Judge, in view of the divergent views of the two Division Benches in

W.A.No.6368/2011 decided on 21.11.2011, since reported

in 2013 (1) AKR 370, (for short 'Hotel Vandana Palace case')

and W.A.No.635/2013 decided on 18.03.2013, since

reported in 2014 (1) AKR 40 (for short 'Smt. Lily Joseph case’).

The conflict in the aforementioned two judgments centers

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round the availability of writ remedy against the order

passed by the Tribunal.

3. The petitioners had filed S.A.No.688/2012

before the Tribunal, under S.17 of the Act, to set aside the

sale notice dated 25.09.2012 issued in respect of secured

asset mentioned in the petition, on the premise that the

same is arbitrary and illegal. On 14.06.2013, the said

appeal having been dismissed, this writ petition was filed

to quash the aforesaid order and for issue of a writ of

mandamus directing the respondent – Bank, to consider

‘One Time Settlement’ proposal of the petitioners, and for

grant of the consequential reliefs.

4. As this Bench is only required to answer

the aforesaid question and lay down the principle of law,

it is unnecessary to state the facts of the case in detail.

5. The petitioners borrowed loan from the

respondent No.1 (for short 'the Bank') and their account

was treated on 30.09.2010, as Non-performing Asset. A

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demand notice dated 22.12.2010, under S.13(2) of the

Act, was issued by the Bank. S.A.No.399/2011 filed on

19.08.2011 by the petitioners was allowed on 22.08.2012

by the Tribunal, on the ground that there is violation of

sub-rule(4) of Rule 9 of the Security Interest

(Enforcement) Rules, 2002. A fresh auction notice having

been issued and proceeding initiated in pursuance of the

liberty granted in S.A.No.399/2011 and an auction notice

dated 25.09.2012 having been published,

S.A.No.688/2012 was filed. The auction having been

conducted on 05.11.2012 and the bid submitted by

respondent Nos. 2 and 3, in the form of sealed Tenders

having been accepted on 14.06.2013 by the Bank, the

Tribunal having found the said appeal to be devoid of merit

and dismissed the appeal, this writ petition was filed.

6. Respondents having contended that the writ

petition is not maintainable on the ground that an appeal

remedy is provided to the Debts Recovery Appellate

Tribunal, under S.18 of the Act and reliance having been

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placed on the judgment in the case of Smt. Lily Joseph and

the petitioner having relied upon the judgment rendered in

the case of Hotel Vandana Palace, wherein, the question raised

as to the maintainability of the writ petition without filing

an appeal to the Appellate Tribunal as provided under S.18

of the Act was answered in favour of the writ petitioners,

on the ground that the pre-deposit is required under S.18 of the

SARFAESI Act and in such circumstances, it cannot be considered as an

efficacious remedy, the learned Single Judge having felt that

the question raised requires to be conclusively addressed by an

appropriate Bench to be constituted by the Hon'ble Chief Justice and

the Registry having been directed to obtain orders, the

Hon'ble Chief Justice has passed the order dated 27.01.2014 and

constituted the Special Bench. Hence, the matter is before us.

7. Sri. R.L. Patil, learned Senior Advocate, at the

threshold, vehemently contended that the reference itself

is bad. He submitted that S.9(xii) of the Karnataka High

Court Act, 1961 requires all writ petitions, other than

Habeas Corpus Petitions, to be heard by a learned Single

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Judge and that the power and prerogative of the Chief

Justice to constitute Benches and allocate the work should,

therefore, be read subject to the said statutory provision.

He submitted that the learned Single Judge is bound by

the judgment passed in the case of Hotel Vandana Palace and

the judgment rendered in the case of Smt. Lily Joseph, having

not noticed the judgment rendered in the case of Hotel

Vandana Palace, the judgment rendered in the case of Smt. Lily

Joseph, being per incuriam, an uncalled for reference was

made.

8. Sri R. Ashok Kumar, learned advocate, on the

other hand, contended that the Hon’ble Chief Justice has

the absolute prerogative of constituting the Benches and

allocation of the work to the learned Judges. He submitted

that the powers of the Chief Justice to constitute Benches

and allocate the work to the learned Judges is traceable

under Articles 225 and 226 of the Constitution and,

therefore, any provision in any statute concerning the High

Court administration must yield to the powers of the

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Hon’ble Chief Justice, which flows from Constitution itself

and, therefore, S.9(xii)(a) of the KHC Act, 1961 should

yield to the prerogative of the Chief Justice.

9. In view of the rival contentions and there being

no dispute that the reference to this Bench is not by the

learned Single Judge and that the Special Bench was

constituted by the Hon’ble Chief Justice, we would address

the preliminary objection raised with regard to the maintainability of the

reference made by the Hon'ble Chief Justice.

10. What a learned Single Judge should do, if he

feels that the decision of the Division Bench is required to

be reconsidered was the subject matter of consideration by

the Apex Court, in LALA SHRI BHAGAWAN AND ANOTHER Vs.

RAM CHAND AND ANOTHER, AIR 1965 SC 1767. Therein, it

has been held as follows:

"It is hardly necessary to emphasise that considerations of judicial

propriety and decorum require that if a learned Single Judge hearing a

matter is inclined to take the view that the earlier decisions of the High

Court, whether of a Division Bench or of a Single Judge, need to be

reconsidered, he should not embark upon that enquiry sitting as a

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Single Judge, but should refer the matter to a Division Bench or, in a

proper case, place the relevant papers before the Chief Justice to

enable him to constitute a larger Bench to examine the question. That

is the proper and traditional way to deal with such matters and it is

founded on healthy principles of judicial decorum and propriety".

(emphasis supplied)

11. In TRIBHOVANDAS PURUSHOTTAMDAS THAKKAR

Vs. RATILAL MOTILAL PATEL, AIR 1968 SC 372, on the very

same question, Apex Court has held as follows:

"10. ………When it appears to a Single Judge or a Division Bench

that there are conflicting decisions of the same Court, or there are

decisions of other High Courts in India which are strongly persuasive and

take a different view from the view which prevails in his or their High

Court, or that a question of law of importance arises in the trial of a case,

the Judge or the Bench passes an order that the papers be placed before the

Chief Justice of the High Court with a request to form a special or Full

Bench to hear and dispose of the case or the questions raised in the case.

For making such a request to the Chief Justice, no authority of the

Constitution or of the Charter of the High Court is needed, and by making

such a request a Judge does not assume to himself the powers of the Chief

Justice. A Single Judge does not by himself refer the matter to the Full

Bench: he only requests the Chief Justice to constitute a Full Bench for

hearing the matter. Such a Bench is constituted by the Chief Justice. The

Chief Justice of a Court may as a rule, out of deference to the views

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expressed by his colleague, refer the case; that does not mean, however,

that the source of the authority is in the order of reference…...”

(emphasis supplied)

12. In CENTRAL BOARD OF DAWOODI BOHRA

COMMUNITY AND ANOTHER VS. STATE OF MAHARASHTRA AND

ANOTHER, (2005) 2 SCC 673, Apex Court having examined

the law laid down by the Constitution Benches on the said

question, has summed up the legal position and the

relevant portion reads as follows:

“12(3)……..

(i) the abovesaid rules do not bind the discretion of the Chief

Justice in whom vests the power of framing the roster and who can

direct any particular matter to be placed for hearing before any

particular Bench of any strength.”

(emphasis supplied)

13. In NARASIMHA SETTY Vs. PADMA SETTY, ILR 1998

KARNATAKA 3230, with regard to the competency of a

Single Judge to refer a case to a Full Bench is concerned,

after having noticed the provisions contained in the

Karnataka High Court Act, 1961 and the scope and ambit

of the powers of the Chief Justice with regard to the

posting of the cases before different Benches of the High

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Court and the decision of Apex Court, rendered in the case

of LALA SHRI BHAGAWAN AND ANOTHER (supra), it has been

held as follows:

“17. Therefore, if a learned Single Judge of a High Court hearing

a matter feels that the earlier judgment of a Division Bench of the Court

requires reconsideration, then in absence of any statutory provision

empowering him to refer the same to a larger bench, he can place the

relevant papers before the Chief Justice to enable him to constitute a larger

bench to examine the question.”

(emphasis supplied)

14. In STATE OF KARNATAKA AND OTHERS Vs. SRI. B.

KRISHNA BHAT AND OTHERS, 2001 (2) KLJ 1 (FB), a Five

Judge Bench, considering the scope of the power and

authority of the Chief Justice in regard to the practice and

procedure of the High Court in hearing and deciding the

cases, and the fact of S.9(xii) and other provisions of the

Karnataka High Court Act and power and authority of the

Chief Justice in the matter of constitution of Benches and

allocation of judicial work and also the validity or otherwise

of the notification dated 08.07.1997 directing listing of all

writ petitions of the nature of Public Interest Litigation

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before the Division Benches, after detailed consideration,

has concluded as follows:

“96. The above discussions lead to following conclusions:

(i) The Chief Justice's discretion in determining the roster, that

is, constitution of Benches and allocation of judicial work

is absolute.

(ii) But in regard to fixing the quorum for hearing the different

category of cases, the Chief Justice should follow the

statutory provisions or rules. The power of Chief Justice in

regard to constitution of Benches and allocation of judicial

work has nothing to do with fixing of quorum for hearing

of cases, under Section 9(xii) of the H.C. Act.

(iii) However, he has the discretion to refer any matter in regard

to which a quorum has been fixed, to a larger Bench.

Therefore, the Notification dated 8-7-1997 allocating

Single Judge matter to Division Bench is valid.

(emphasis supplied)

15. It is implied that the authority of the Hon’ble

Chief Justice in regard to the constitution of Benches and

allocation of judicial work is absolute. Therefore,

multiplying the previous decisions of this Court or the Apex

Court will be of no advantage to the petitioners.

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Discussing each of the decisions cited by the learned

advocates will lead to making this order unavoidably

prolix.

16. In view of the authoritative pronouncements,

noticed supra, and the position of law having been well

settled, we are of the opinion that the course adopted by

the learned Single Judge, directing the Registry to place

the matter before the Hon'ble Chief Justice, to pass an

order for constitution of an appropriate Bench to

conclusively address the issue raised, cannot be said to be

incorrect. Learned Single Judge has acted on healthy

principles of judicial decorum and propriety and the order

passed by the Hon’ble Chief Justice is in accordance with

the settled principles of law laid down by the Apex Court

and the Full Benches of this Court. Hence, the preliminary

objection raised by Sri. R.L. Patil, being devoid of merit,

we hold that the reference made is competent and

constitution of the Special Bench on account of the facts

and circumstances stated in para 2 supra, is justified.

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17. Undisputedly, the respondent No.1-Bank

advanced loan to the petitioners and the loan was secured

by way of equitable mortgage executed in respect of the

property bearing No.256, III Main, Banashankari III Stage,

II Phase, VI Block, Bangalore-85. Original title deeds of

the property was deposited with the Bank i.e., at the time

of availing the loan. Since the petitioners committed

default in repaying the loan, the Bank issued notice under

S.13(2) of the Act and took steps under S.13(4) in respect

of the said property. Auction notice was published and bid

of respondent Nos.2 and 3 was accepted. Feeling

aggrieved, the petitioners filed S.A.No.688/2012 before

the Tribunal, to set aside the sale notice dated 25.09.2012

and the consequential action. The same having been

dismissed, this writ petition was filed, though the statutory

remedy of appeal, under S.18 of the Act, is available. The

reason assigned in the writ petition for non-availing of

appeal remedy before the Debts Recovery Appellate

Tribunal is, that it requires deposit of huge court fee, which

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is neither efficacious nor feasible and it is misnomer to call

it an alternative remedy.

18. Undisputedly, security interest, within the

meaning of S.2(zf) of the Act, was created in respect of

the aforesaid property, which is a ‘secured asset’, within

the meaning of S.2(zc), in favour of the ‘secured creditor’ -

respondent No.1, within the meaning of S.2(zd). On failure

to repay the loan amount, which was declared as non-

performing asset, respondent No.1 enforced its security

interest over the secured asset.

19. A perusal of S.13 of the SARFAESI Act shows

that without the intervention of the Court or Tribunal,

there can be enforcement of security interest by the

secured creditor in accordance with the provisions of the

Act. Sub-section(4) of S.13 envisages the ‘measures’ to

secure the borrowers’ interest, when secured creditor

proposes to proceed against the secured asset. One of the

‘measures’ provided by the statute is to take possession of

the secured asset of the borrower, including the right of

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transfer by way of lease, assignment or realizing the

secured asset. S.17 confers right to any aggrieved person

to question the ‘measures’ referred to in sub-section(4) of

S.13 of the Act, when taken by the secured creditor. Thus,

if any aggrieved person has got any grievance against any

‘measures’ taken under sub-section(4) of S.13 of the Act,

he can approach the Tribunal for the relief.

20. In UNION BANK OF INDIA Vs. PANCHANAN

SUBUDHI, (2010) 15 SCC 552, the appellant extended

financial facility to the respondent upon deposit of the title

deeds and the building as security. Default in the matter

of repayment having been committed, the loan account of

the respondent was declared as ‘non performing asset’.

O.A. was filed before the DRT. During the pendency of the

O.A., the Bank issued a notice under S.13(2) of the

SARFAESI Act and the same was followed by a notice under

S.13(4). The Tribunal passed decree in favour of the

Bank. The respondent challenged the proceedings initiated

under the Act by filing a writ petition and during its

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pendency, approached the Bank for ‘one time settlement’.

The Bank agreed for settlement but the respondent failed

to abide by the conditions of the settlement.

Consequently, Bank issued notice for possession of the

secured assets which was challenged by filing another writ

petition, which was disposed of directing the loanee to pay

the amount in instalments for liquidating the dues of the

Bank. The Bank having assailed the said order, the Apex

Court while allowing the appeal and setting aside the

impugned order, has held as follows:

“ 7. …. there was no justification for the High Court to entertain the writ

petition and that too by ignoring the fact that a statutory alternative

remedy was available to the respondent under Section 17 of the Act.”

21. The object of the Recovery of Debts Due to

Banks and Financial Institutions Act, 1993 (for short, 'the

RDDB Act'), is to provide for the establishment of Tribunal

for expeditious adjudication and recovery of debts due to

Banks and financial institutions and for matters connected

therewith or incidental thereto. The RDDB Act creates a

special machinery for speedy recovery of dues of the

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Banks and financial institutions. S.17 of the RDDB Act

deals with jurisdiction, powers and authority of the

Tribunals. S.18 bars the jurisdiction of ordinary Court or

Authority, in respect of matters falling within the

jurisdiction of the Tribunal, as specified in S.17. An appeal

to Appellate Tribunal is provided under S.20. The power of

the Tribunal extends to determining the debt due and its

realization. The action taken by the Bank(s) or the

financial institution(s), under the SARFAESI Act, can be

assailed before the Debts Recovery Tribunal and further by

way of an appeal before the Debts Recovery Appellate

Tribunal. S.22 of RDDB Act makes it clear that the Tribunal

and Appellate Tribunal shall not be bound by the procedure

laid down by CPC but shall be guided by the principles of

natural justice and, subject to the rules framed. The

Tribunal and Appellate Tribunal have been conferred with

powers to regulate their own procedure. Thus, it is clear

that the Tribunal and Appellate Tribunal which are

specialized institutions with expertise, have been

established to decide the matter(s) preferred before them.

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22. While dealing with the purpose of the RDDB

Act and how it works, Apex Court, in UNITED BANK OF INDIA

Vs. SATYAWATI TONDON, (2010) 8 SCC 110, has held as

follows:

“5. An analysis of the provisions of the DRT Act shows that

primary object of that Act was to facilitate creation of special machinery

for speedy recovery of the dues of banks and financial institutions. This is

the reason why the DRT Act not only provides for establishment of the

Tribunals and the Appellate Tribunals with the jurisdiction, powers and

authority to make summary adjudication of applications made by banks or

financial institutions and specifies the modes of recovery of the amount

determined by the Tribunal or the Appellate Tribunal but also bars the

jurisdiction of all courts except the Supreme Court and the High Courts in

relation to the matters specified in Section 17…..”

23. The SARFAESI Act was enacted to regulate

securitisation and reconstruction of financial assets and

enforcement of security interest and for matters connected

therewith or incidental thereto. Inter alia, one of the main

objects of the SARFAESI Act is to clothe the Banks and

financial institutions with power to take possession of

securities and sell them. The significant provisions of the

SARFAESI Act have been noted by the Apex Court, in the

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case of MARDIA CHEMICALS LTD. Vs. UNION OF INDIA, (2004)

4 SCC 311, wherein, the vires of the Act was examined and

upheld. After referring to the statement of objects and

reasons and while upholding the constitutional validity, it

has been held as follows:

“81. In view of the discussion held in the judgment and the findings and

directions contained in the preceding paragraphs, we hold that the

borrowers would get a reasonably fair deal and opportunity to get the

matter adjudicated upon before the Debt Recovery Tribunal. The effect of

some of the provisions may be a bit harsh for some of the borrowers but

on that ground the impugned provisions of the Act cannot be said to be

unconstitutional in view of the fact that the object of the Act is to achieve

speedier recovery of the dues declared as NPAs and better availability of

capital liquidity and resources to help in growth of economy of the country

and welfare of the people in general which would subserve the public

interest.”

(emphasis supplied)

24. In AUTHORISED OFFICER, INDIAN OVERSEAS

BANK Vs. M/S. ASHOK SAW MILL, (2009) 8 SCC 366, with

regard to the SARFAESI Act and the jurisdiction of

Tribunal, under S.17, Apex Court has held as follows:

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“33. It is clear that while enacting the SARFAESI Act the legislature was

concerned with measures to regulate Securitisation and reconstruction of

financial assets and enforcement of security interest. The Act enables the

Banks and financial institutions to realize long-term assets, manage

problems of liquidity, asset liability mismatches and improve recovery by

exercising powers to take possession of securities, sell them and reduce

non-performing assets by adopting measures for recovery of

reconstruction.

*** *** ***

35. In order to prevent misuse of such wide powers and to prevent

prejudice being caused to a borrower on account of an error on the part of

the Banks or financial institutions, certain checks and balances have been

introduced in Section 17 which allow any person, including the borrower,

aggrieved by any of the measures referred to in sub-section (4) of Section

13 taken by the secured creditor, to make an application to the DRT

having jurisdiction in the matter within 45 days from the date of

such measures having taken for the reliefs indicated in sub-section (3)

thereof.

36. The intention of the legislature is, therefore, clear that while the Banks

and financial institutions have been vested with stringent powers for

recovery of their dues, safeguards have also been provided for rectifying

any error or wrongful use of such powers by vesting the DRT with

authority after conducting an adjudication into the matter to declare any

such action invalid and also to restore possession even though possession

may have been made over to the transferee.”

(emphasis supplied)

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25. In SATYAWATI TONDON, Apex court, while

restating the purpose of bringing the SARFAESI Act and

with regard to the role of Tribunal, has held as follows:

“23. Sub-section (2) of Section 17 casts a duty on the Tribunal to consider

whether the measures taken by the secured creditor for enforcement of

security interest are in accordance with the provisions of the Act and the

Rules made thereunder. If the Tribunal, after examining the facts and

circumstances of the case and evidence produced by the parties, comes to the

conclusion that the measures taken by the secured creditor are not in

consonance with sub-section (4) of Section 13, then it can direct the secured

creditor to restore management of the business or possession of the secured

assets to the borrower. On the other hand, if the Tribunal finds that the

recourse taken by the secured creditor under sub-section (4) of Section 13 is

in accordance with the provisions of the Act and the Rules made thereunder,

then, notwithstanding anything contained in any other law for the time being

in force, the secured creditor can take recourse to one or more of the measures

specified in Section 13(4) for recovery of its secured debt.

24. Sub-section (5) of Section 17 prescribes the time-limit of sixty days

within which an application made under Section 17 is required to be disposed

of. The proviso to this sub-section envisages extension of time, but the outer

limit for adjudication of an application is four months. If the Tribunal fails to

decide the application within a maximum period of four months, then either

party can move the Appellate Tribunal for issue of a direction to the Tribunal

to dispose of the application expeditiously.”

(emphasis supplied)

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26. Sri R.L. Patil, contended that the power of

judicial review under Articles 226 and 227 of the

Constitution is an inviolable part of the basic structure of

the Constitution and the same cannot be denied much less

ousted by the statutes made by the Parliament i.e., the

RDDB Act and the SARFAESI Act. He submitted that the

existence of statutory remedy is not a rule of law but a law

of convenience and discretion and, that in appropriate

case, High Court can entertain writ petition and, that this

is a case of violation of the principles of natural justice and

gross injustice. He further submitted that the statutory

remedy provided being conditional, requiring the deposit of

huge amount, the same is neither efficacious nor feasible

and it being a misnomer to call as an alternate remedy,

the writ petition filed is maintainable. (with regard to the

tenability or otherwise of the contention requiring the pre-

deposit i.e., to maintain an appeal under S.18 of SARFAESI

Act, see para Nos. 47 and 48 infra).

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27. Sri Ashok Kumar, on the other hand,

contended that the writ petition cannot be entertained

contrary to the RDDB Act, which is a special enactment,

providing for an appellate remedy, which is efficacious. He

submitted that there is no valid reason for bypassing the

statutory remedy and the mere insistence of deposit to

avail the statutory remedy of appeal, cannot be taken

exception to. He submitted that there being no good

ground to invoke the extra-ordinary jurisdiction, the writ

petition is not entertainable and that the judicial discretion

is not absolute or unregulated, much less unguided.

28. Article 226 empowers the High Court to issue

prerogative writs. Article 227 relates to the power of

superintendence of High Courts over all Courts and

Tribunals. However, the power of judicial superintendence

under Article 227 of the Constitution has to be exercised

sparingly when there is a patent error or gross injustice in

the view taken by the subordinate Court / Tribunal (See

JASBIR SINGH Vs. STATE OF PUNJAB, (2006) 8 SCC 294)

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Judicial review under the said Articles is a basic feature of

the Constitution.

29. In L. CHANDRA KUMAR Vs. UNION OF INDIA,

(1997) 3 SCC 261, Apex Court, while dealing with the

essential and basic feature of the constitution – power of

review under Articles 226 and 227 by the High Courts and

of the Supreme Court under Article 32, has held as

follows:

75. In Keshav Singh, Re (1965) 1 SCR 413, while addressing this issue,

Gajendragadhkar, CJ stated as follows: (SCC at pp. 493-494)

“If the power of the High Courts under Article 226 and the

authority of this Court under Article 32 are not subject to any exceptions,

then it would be futile to contend that a citizen cannot move the High

Courts or this Court to invoke their jurisdiction even in cases where his

fundamental rights have been violated. The existence of judicial power in

that behalf must necessarily and inevitably postulate the existence of a

right in the citizen to move the Court in that behalf; otherwise the power

conferred on the High Courts and this Court would be rendered virtually

meaningless. Let it not be forgotten that the judicial power conferred on

the High Courts and this Court is meant for the protection of the citizens'

fundamental rights, and so, in the existence of the said judicial power itself

is necessarily involved the right of the citizen to appeal to the said power

in a proper case.”

(emphasis supplied in original)

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30. Basic principle for exercising the power under

Article 227 was considered by the Apex Court, in BABUBHAI

MULJIBHAI PATEL Vs. NANDLAL KHODIDAS BAROT, (1974) 2

SCC 706 and it has been held as follows:

“10. Exercise of the jurisdiction is no doubt discretionary, but the

discretion must be exercised on sound judicial principles. When the

petition raises complex questions of fact, which may for their

determination require oral evidence to be taken, and on that account the

High Court is of the view that the dispute should not appropriately be tried

in a writ petition, the High Court may decline to try a petition (see

Gunwant Kaur v. Bhatinda Municipality (1969) 3 SCC 769).”

(emphasis supplied)

31. In MAFATLAL INDUSTRIES LTD. Vs. UNION OF

INDIA, (1997) 5 SCC 536, Apex Court, while considering

provisions of the Excise Act and the Customs Act, has held,

that the jurisdiction of the High Court under Article 226

and the Apex Court under Article 32, though cannot be

circumscribed by the provisions of the said enactments,

the courts will certainly have due regard to the legislative

intent evidenced by the provisions of the statutes and

would exercise their jurisdiction consistent with the

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statutory provisions. In part IV of the Judgment, the legal

position has been summarised and the relevant portion

reads as follows:

“108(i)...........While the jurisdiction of the High Courts under Article

226 - and of this Court under Article 32 - cannot be circumscribed by the

provisions of the said enactments, they will certainly have due regard to

the legislative intent evidenced by the provisions of the said Acts and

would exercise their jurisdiction consistent with the provisions of the Act.

The writ petition will be considered and disposed of in the light of and in

accordance with the provisions of Section 11-B. This is for the reason that

the power under Article 226 has to be exercised to effectuate the rule of

law and not for abrogating it.”

(emphasis supplied)

32. In KANAIYALAL LALCHAND SACHDEV Vs. STATE OF

MAHARASHTRA, (2011) 2 SCC 782, while considering the

question of maintainability of the writ petition, when

alternate remedy is available, while upholding the decision

of the High Court, dismissing the writ petition filed on the

ground of existence of an alternative remedy, under S.17

of the SARFAESI Act, Apex Court has held as follows:

"23. In our opinion, therefore, the High Court rightly dismissed the

petition on the ground that an efficacious remedy was available to the

28

appellants under Section 17 of the Act. It is well settled that ordinarily

relief under Articles 226/227 of the Constitution of India is not available if

an efficacious alternative remedy is available to any aggrieved person.

(See Sadhana Lodh v. National Insurance Co. Ltd., Surya Dev Rai v. Ram

Chander Rai and SBI v. Allied Chemical Laboratories.)

24. In City and Industrial Development Corpn. v. Dosu Aardeshir

Bhiwandiwala this Court had observed that:

"30. The Court while exercising its jurisdiction under Article 226

is duty- bound to consider whether:

(a) adjudication of the writ petition involves any complex and disputed

questions of facts and whether they can be satisfactorily resolved;

(b) the petition reveals all material facts;

(c) the petitioner has any alternative or effective remedy for the resolution

of the dispute;

(d) the person invoking the jurisdiction is guilty of unexplained delay and

laches;

(e) ex facie barred by any laws of limitation;

(f) grant of relief is against public policy or barred by any valid law; and

host of other factors."

(emphasis supplied)

33. In NIVEDITA SHARMA Vs. CELLULAR OPERATORS

ASSN. OF INDIA, (2011) 14 SCC 337, Apex Court has held,

that when a statutory forum is created by law for redressal of grievances,

a writ petition should not be entertained, ignoring the statutory

dispensation.

29

34. In SOUTHERN ELECTRICITY SUPPLY CO. OF

ORISSA LTD. Vs. SRI SEETARAM RICE MILL,(2012) 2 SCC 108,

Apex Court has held that it should only be for the

specialised tribunal or the appellate authority to examine

the merits of assessment or even the factual matrix of the

case. The relevant portion of the Judgment reads as

follows:

"80. It is a settled canon of law that the High Court would not normally

interfere in exercise of its jurisdiction under Article 226 of the Constitution of

India where statutory alternative remedy is available. It is equally settled that

this canon of law is not free of exceptions. The courts, including this Court,

have taken the view that the statutory remedy, if provided under a specific

law, would impliedly oust the jurisdiction of the civil courts. The High Court

in exercise of its extraordinary jurisdiction under Article 226 of the

Constitution of India can entertain writ or appropriate proceedings despite

availability of an alternative remedy. This jurisdiction, the High Court would

exercise with some circumspection in exceptional cases, particularly, where

the cases involve a pure question of law or vires of an Act are challenged.

This class of cases we are mentioning by way of illustration and should not be

understood to be an exhaustive exposition of law which, in our opinion, is

neither practical nor possible to state with precision. The availability of

alternative statutory or other remedy by itself may not operate as an absolute

bar for exercise of jurisdiction by the courts. It will normally depend upon the

facts and circumstances of a given case. The further question that would

inevitably come up for consideration before the Court even in such cases

would be as to what extent the jurisdiction has to be exercised.

81. Should the courts determine on merits of the case or should they

preferably answer the preliminary issue or jurisdictional issue arising in the

facts of the case and remit the matter for consideration on merits by the

competent authority? Again, it is somewhat difficult to state with absolute

clarity any principle governing such exercise of jurisdiction. It always will

depend upon the facts of a given case. We are of the considered view that

interest of administration of justice shall be better subserved if the cases of

the present kind are heard by the courts only where they involve primary

30

questions of jurisdiction or the matters which go to the very root of

jurisdiction and where the authorities have acted beyond the provisions of the

Act. However, it should only be for the specialised tribunal or the appellate

authorities to examine the merits of assessment or even the factual matrix of

the case."

(emphasis supplied)

35. In CICILY KALLARACKAL Vs. VEHICLE FACTORY,

(2012) 8 SCC 524, Apex Court has issued a direction of caution,

that it will not be a proper exercise of the jurisdiction by

the High Court to entertain a writ petition against such

orders against which statutory appeal lies. The relevant portion of

the Judgment reads as follows:

"4. Despite this, we cannot help but state in absolute terms that it is not

appropriate for the High Courts to entertain writ petitions under Article

226 of the Constitution of India against the orders passed by the

Commission, as a statutory appeal is provided and lies to this Court under

the provisions of the Consumer Protection Act, 1986. Once the legislature

has provided for a statutory appeal to a higher court, it cannot be proper

exercise of jurisdiction to permit the parties to bypass the statutory appeal

to such higher court and entertain petitions in exercise of its powers under

Article 226 of the Constitution of India.”

(emphasis supplied)

31

36. In CIT Vs. CHHABIL DASS AGRAWAL, (2014) 1

SCC 603, Apex Court has held, that when a statutory forum is

created by law for redressal of grievances, a writ petition should not be

entertained ignoring the statutory dispensation.

37. In UNION OF INDIA AND ANOTHER Vs. GUWAHATI

CARBON LIMITED, (2012) 11 SCC 651, the Customs, Excise

and Service Tax Appellate Tribunal, passed the order inter

alia holding that the Guwahati Carbon Limited is not entitled

to include freight and insurance charges in the assessable

value and therefore the duty levied under the Central

Excise Act, 1944 requires to be recalculated. Aggrieved by

the said order, the Guwahati Carbon Limited filed writ

petition. The writ petition though admitted on the first

date of hearing, was subsequently disposed of on the

ground that the petitioner can avail the alternate remedy

as provided by the Central Excise Act. The said order

having been questioned, in the appeal, the Division Bench

allowed the same on the ground that the writ court, in

exercise of the power under Article 226 of the Constitution

32

of India, has vast powers to decide any question that may

arise under the provisions of the Central Excise Act. The

said Judgment having been assailed before the Apex

Court, taking note of the principles laid down in the cases

of (i) MUNSHI RAM Vs. MUNICIPAL COMMITTEE, CHHEHARTA,(1979)

3 SCC 83; (ii) TITAGHUR PAPER MILLS CO. LTD. Vs. STATE OF

ORISSA, (1983) 2 SCC 433; (iii) RASHID AHMED Vs. MUNICIPAL

BOARD, KAIRANA, AIR 1950 SC 163; (iv) WHIRLPOOL CORPN. Vs.

REGISTRAR OF TRADE MARKS, (1998) 8 SCC 1 and S.35-G of the

Central Act, 1944 providing for appeal to the High Court

from the order passed in an appeal by the Appellate

Tribunal, while allowing the appeal, it has been held as

follows:

“15. In our opinion, the assessee ought not to have filed a writ

petition before the High Court questioning the correctness or otherwise of

the orders passed by the Tribunal. The Excise Law is a complete code in

order to seek redress in excise matters and hence may not be appropriate

for the writ court to entertain a petition under Article 226 of the

Constitution. Therefore, the learned Single Judge was justified in

observing that since the assessee has a remedy in the form of a right of

appeal under the statute, that remedy must be exhausted first. The order

passed by the learned Single Judge, in our opinion, ought not to have been

33

interfered with by the Division Bench of the High Court in the appeal filed

by the respondent assessee.”

(emphasis supplied)

38. Sri R.L.Patil, contended that the view

expressed in Hotel Vandana Palace case with regard to the

maintainability of writ petition i.e., without filing the appeal

before the DRAT, under S.18 of the Act being the correct

position of law, the decision in the case of Smt.Lily Joseph,

expressing a contrary view is unsound and is liable to be

declared as per incuriam.

39. Sri R. Ashok Kumar, on the other hand

supported the conclusion arrived at in Smt.Lily Joseph case

and contended that the finding recorded on point (ii), in

the case of Hotel Vandana Place case, being in ignorance of

well settled principles of law and also the binding decision

in the case of SATYAWATI TONDON, is liable to be declared

as per incuriam. Learned advocate submitted that the Hotel

Vandana Palace case having been decided in the peculiar

facts, which can be seen from the opening sentence of

34

para 23, does not constitute a binding precedent especially

on account of not noticing and following the decision of the

Apex Court in SATYAWATI TONDON, wherein, the material

aspects and the significance of S.18 of SARFAESI Act has

been adverted to in detail. He submitted that the decision

in the case of KANAIYALAL LALCHAND SACHDEV has been

misread and misinterpreted without any attempt being

made to understand the legislative intent behind the

SARFAESI Act and true purport of the ratio of law laid

down in the said decision by the Division Bench which has

decided Hotel Vandana Place case. He further submitted that

the judgment in Smt.Lily Joseph case has been correctly

rendered, based on the law laid down in KANAIYALAL

LALCHAND SACHDEV and hence is a binding precedent.

40. In view of the rival contentions and the

reference made by the learned Single Judge, extracted

supra, the question for determination is “Whether the view

expressed by the Division Bench of this Court in Hotel Vandana Palace

case, with regard to the maintainability of writ petition, despite the

35

availability of an alternative remedy of appeal, lays down the correct law

or the contrary view in Smt.Lily Joseph case is the correct law?”

41. The Division Bench, while answering point

No.(ii) formulated for consideration, at para 11, in the case

of Hotel Vandana Palace, has stated (at paras 24, 25 and 26)

as follows:

(i) The writ petition was not been dismissed on the ground of

maintainability of non exercising the power (must be read as non availing

the remedy) granted under S.18 of the Act, but was rejected on the ground

that the earlier writ petition challenging the sale notice had been

dismissed.

(ii) Without deposit of either 50% or 25%, as required under

S.18 of the SARFAESI Act, an appeal cannot be filed.

(iii) Decision of Apex Court rendered in KANAIYALAL LALCHAND

SACHDEV has no application, on account of the fact that there is no

disputed questions of fact and the question arising for decision is only

“whether the Bank has followed the Rules before selling the property”.

(iv) In the special circumstances of the case i.e., the property

worth several crores was sold in public auction, without following the

procedure, and in such a case, the person who has lost the property in a

sale conducted by the Bank for non payment of more than 5 crores of

rupees, it is difficult for a person like appellant to approach the Tribunal to

file an appeal by depositing 50% or 25% of the amount due.

36

In the peculiar facts and circumstances of the case, with the

aforesaid reasoning, the writ petition was held as

maintainable.

42. In Smt.Lily Joseph case, the challenge in the writ

petition was to an order passed by the Tribunal under S.17

of the SARFAESI Act. The writ petition was dismissed by

the learned Single Judge on the ground of availability of

alternative remedy of appeal to the DRAT. By referring to

the decision of the Apex Court in KANAIYALAL LALCHAND

SACHDEV, the Division Bench has dismissed the writ

appeal, by stating that the law is well settled on the issue.

It is to be pointed out that without raising a point for

consideration and assigning reasons, the conclusion has

been arrived at. There is no express declaration of law or

authority of a general nature, to reckon the decision as

binding, as is contemplated by Article 141 of the

Constitution.

43. Presently, we shall deal with the concept of per

incuriam.

37

44. A decision rendered in ignorance of a binding

precedent and/or in ignorance of the statutory provision,

would be held to have been rendered per incuriam (See para

98 of the decision in SUBHASH CHANDRA AND ANOTHER Vs.

DELHI SUBORDINATE SERVICES SELECTION BOARD AND

OTHERS, (2009) 15 SCC 458).

45. In GOVT. OF A.P. AND ANOTHER Vs. B.

SATYANARAYANA RAO (DEAD) BY LRS. AND OTHERS, (2004) 4

SCC 262, while dealing with the concept of per incuriam,

Apex Court has held as follows:

“8………The rule of per incuriam can be applied where a court

omits to consider a binding precedent of the same court or the superior

court rendered on the same issue or where a court omits to consider any

statute while deciding that issue…….”

46. In GENERAL MANAGER, SRI SIDDESHWARA

COOPERATIVE BANK LIMITED AND ANOTHER, Vs. IKBAL AND

OTHERS, (2013) 10 SCC 83, the material facts were that the

respondent availed housing loan from the appellant by

mortgaging certain immovable property. As the respondent

committed default in repayment of the loan, the Bank

38

issued notice to him under S.13(2) of the SARFAESI Act.

Later, the Bank published auction notice and the highest

bid received was accepted. The auction-purchaser

deposited 25% of the sale consideration and did not make

payment of the balance amount within 15 days of the

confirmation of sale. The auction-purchaser made delayed

final payment and the Bank issued in his favour a sale

certificate. The proceeds realised by auction sale having

fallen short of the total outstanding amount against the

borrower, the Bank filed a dispute before the Registrar of

Co-Operative Societies for recovery of outstanding amount

and an exparte award was passed. At that stage, by filing

a writ petition, the borrower challenged the sale certificate

issued in favour of the auction-purchaser. The learned

Single Judge held that the mandatory requirement of Rule

9 was not followed and that therefore despite the remedy

of appeal to the borrower, provided under S.17 of the

SARFAESI Act, a case was made out under S.226 of the

Constitution and the same was affirmed by the Division

Bench. Feeling aggrieved, the Bank and the auction-

39

purchaser approached the Apex Court. While allowing the

appeal and setting aside the impugned orders and by

taking note of the law laid down in SATYAWATI TONDON’S

case, it was held as follows:

“23. There is one more aspect in the matter which has troubled us.

Against the action of the Bank under Section 13(4) of the SARFAESI Act,

the borrower had a remedy of appeal to the Debts Recovery Tribunal

(DRT) under Section 17. The remedy provided under Section 17 is an

efficacious remedy. The borrower did not avail of that remedy and further

remedies from that order and instead directly approached the High Court

in extraordinary jurisdiction under Article 226 of the Constitution of India.

*** *** ***

27. No doubt an alternative remedy is not an absolute bar to the

exercise of extraordinary jurisdiction under Article 226 but by now it is

well settled that where a statute provides efficacious and adequate remedy,

the High Court will do well in not entertaining a petition under Article

226. On misplaced considerations, statutory procedures cannot be allowed

to be circumvented.”

(emphasis supplied)

47. In NARAYAN CHANDRA GHOSH Vs. UCO BANK AND

OTHERS, (2011) 4 SCC 548, the material facts were, that the

appellant/borrower, filed an appeal before the DRAT and in

that appeal, an application was filed under S.18(1) of the

40

SARFAESI Act. The DRAT exempted the appellant from

making any deposit in terms of the second proviso to S.18

of the Act, before entertaining the appeal against the order

passed by the DRT. The said order, when questioned by

the Bank having been set aside by the High Court and the

borrower having approached the Apex Court, the question

raised for consideration was “whether the Appellate Tribunal

has the jurisdiction to exempt the person, preferring an appeal under

Section 18 of the Act from making any pre-deposit in terms of the

said provision?”. While deciding the case, Apex Court has

held as follows:

“7. Section 18(1) of the Act confers a statutory right on a person

aggrieved by any order made by the Debts Recovery Tribunal under

Section 17 of the Act to prefer an appeal to the Appellate Tribunal.

However, the right conferred under Section 18(1) is subject to the

condition laid down in the second proviso thereto. The second proviso

postulates that no appeal shall be entertained unless the borrower has

deposited with the Appellate Tribunal fifty per cent of the amount of debt

due from him, as claimed by the secured creditors or determined by the

Debts Recovery Tribunal, whichever is less. However, under the third

proviso to the sub-section, the Appellate Tribunal has the power to reduce

the amount, for the reasons to be recorded in writing, to not less than

twenty-five per cent of the debt, referred to in the second proviso. Thus,

there is an absolute bar to entertainment of an appeal under Section 18 of

the Act unless the condition precedent, as stipulated, is fulfilled. Unless

the borrower makes, with the Appellate Tribunal, a pre-deposit of fifty per

cent of the debt due from him or determined, an appeal under the said

41

provision cannot be entertained by the Appellate Tribunal. The language

of the said proviso is clear and admits of no ambiguity.

8. It is well-settled that when a Statute confers a right of appeal,

while granting the right, the Legislature can impose conditions for the

exercise of such right, so long as the conditions are not so onerous as to

amount to unreasonable restrictions, rendering the right almost illusory.

Bearing in mind the object of the Act, the conditions hedged in the said

proviso cannot be said to be onerous. Thus, we hold that the requirement

of pre-deposit under sub-section (1) of Section 18 of the Act is mandatory

and there is no reason whatsoever for not giving full effect to the

provisions contained in Section 18 of the Act. In that view of the matter,

no court, much less the Appellate Tribunal, a creature of the Act itself, can

refuse to give full effect to the provisions of the Statute. We have no

hesitation in holding that deposit under the second proviso to Section

18(1) of the Act being a condition precedent for preferring an appeal under

the said section, the Appellate Tribunal had erred in law in entertaining the

appeal without directing the appellant to comply with the said mandatory

requirement.”

(emphasis supplied)

48. In the case of PARSN MEDICINAL PLANTS

PRIVATE LIMITED AND ANOTHER Vs. INDIAN BANK AND

OTHERS, (2011) 15 SCC 253, the material facts were, the

finding of the Debts Recovery Appellate Tribunal that the

appellants / guarantors need not make any deposit to

maintain the appeal was assailed by the Bank and also by

the auction-purchaser by filing writ petitions and by

contending that the amount paid / deposited by the

auction-purchaser cannot be adjusted towards the deposit

42

to be made by the borrowers / guarantors, while preferring

appeal under S.18 of the SARFAESI Act and also that there

cannot be complete waiver of the deposit, as was prayed

on the part of the guarantors, before the Appellate

Tribunal and was accepted by the Appellate Tribunal.

Repelling the contention urged on behalf of the guarantors

that the issue of waiver is a matter completely between

the appellant / guarantors and the Appellate Tribunal and

no prejudice, whatsoever, has been caused to the Bank so

as to knock the doors of the writ court and that the

Appellate Tribunal is completely within its bounds in

passing the order, by finding that the entire controversy is

with regard to waiver of deposit amount, Apex Court, after

extracting S.18 of the SARFAESI Act, has held as follows:

“17………..The language used in this section is very plain and clear,

making it unambiguously clear that any person aggrieved by the order of the

Debts Recovery Tribunal passed under Section 17 may prefer appeal to the Debts

Recovery Appellate Tribunal by paying necessary fee and the second proviso to

sub-section (1) makes it clear that no appeal shall be entertained unless the

borrower has deposited with the Appellate Tribunal fifty per cent of the amount

of debt due from him. However, under the third proviso to sub-section (1),

power has been given to the Appellate Tribunal to reduce the deposit amount, for

the reasons to be recorded in writing, to not less than twenty-five per cent of debt

43

referred to in the second proviso. Thus, though a discretionary power has been

conferred on the Debts Recovery Appellate Tribunal under the third proviso to

sub-section (1), the discretion is not an absolute one, but a limited one. While

exercising the discretion conferred on it, provided for under the third proviso to

sub-section (1), the Appellate Tribunal has been mandated not to reduce the

deposit amount to not less than twenty-five per cent of the debt referred to in the

second proviso.

18. While such is the legal mandate, in the impugned order, the first

respondent Appellate Tribunal has granted complete waiver of the deposit

amount to the appellants/guarantors, which has not been contemplated under law.

In the interpretation of statutes, the courts always presume that the legislature

inserted every part thereof for a purpose and the legislative intention is that every

part of the statute should have effect. The legislature is deemed not to waste its

words or to say anything in vain. By an interpretative process, the Court cannot

reach a conclusion which makes it impossible for remedies provided for under

the law to be worked out. The purposive interpretation requires that any

interpretation which is unjust or absurd must be eschewed and the Court must

adopt principles of reasonable and harmonious construction in consonance with

the avowed statutory purpose. Hence, impugned order passed by the first

respondent Appellate Tribunal is absolutely bereft of any power granted to it and

therefore, the same needs to be set aside.”

(emphasis supplied)

49. In T.P.VISHNU KUMAR Vs. CANARA BANK, P.N.

ROAD, TIRUPPUR AND OTHERS, (2013) 10 SCC 652, the

material facts were that the Bank filed O.A. before the DRT

to pass a decree directing the defendants, to pay the

44

quantified sum along with interest. I.As. were filed to

produce the extract of the accounts and the documents

relating to the loan transactions. The applications having

been contested were rejected by the Tribunal, against

which, the writ petitions were filed and the same was

opposed on the ground of availability of alternative remedy

under the Act. Writ petitions having been allowed, the

Bank took up the matter in appeal and the Division Bench

having allowed the writ appeals by holding that the

borrower had not availed the alternative remedy available

under S.20 of the RDDB Act, Apex Court was approached

for relief. Considering the purpose for which the Tribunal

has been established and the Act providing for a

mechanism by way of appeal as per S.20 to the Appellate

Tribunal, it was held as follows:

“10……When the Act itself provides for a mechanism, by an

appeal under Section 20 of the Act, in our view, the High Court is not

justified in invoking jurisdiction under Article 226 of the Constitution of

India to examine that the rejection of the applications by the Tribunal was

correct or not…….”

45

50. The Division Bench which decided the Hotel

Vandana Palace case, while recording finding on point No.(ii)

unfortunately, has not noticed the binding decision in

SATYAWATI TONDON’S case, wherein, the Apex Court while

being conscious that the powers conferred upon the High

Court under Article 226 of the Constitution to issue

prerogative writs being very wide and that there can be no

express limitation on exercise of that power, by expressing

serious concern, has held as follows:

“ 44…..we cannot be oblivious of the rules of self-imposed

restraint evolved by this Court, which every High Court is bound to keep

in view while exercising the power under Article 226 of the Constitution.

*** *** ***

“55. 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. We hope and trust that in future the High

Courts will exercise their discretion in such matters with greater caution,

care and circumspection.”

(emphasis supplied)

46

51. Article 141 of the Constitution of India reads as

follows:

“141. Law declared by Supreme Court to be binding on all

courts.- The law declared by Supreme Court shall be binding on

all courts within the territory of India.”

Article 141 of the Constitution provides that the law

declared by the Apex Court shall be binding on all Courts

within the territory of India. Therefore, the ratio decidendi

declared in SATYAWATI TONDON’S case was binding and

ought to have been applied, when Hotel Vandana Palace case

was decided.

52. The finding recorded on point No.(ii) in the

case of Hotel Vandana Palace having been rendered, as is

evident from para 23 of the judgment itself, on the special

facts and circumstances of the said case, cannot be a binding

precedent. In the case of Smt.Lily Joseph, the Division Bench

has not assigned reasons, while holding the writ petition as

not maintainable, except making reference to the decision

in the case of KANAIYALAL LALCHAND SACHDEV.

47

52.1. Sri R.L. Patil, submitted that the Judgment

rendered in Hotel Vandana Palace case was questioned before

the Apex Court and the appeal was dismissed, in the case

of VASU P. SHETTY Vs. HOTEL VANDANA PALACE, (2014) 5 SCC

660 and hence the doctrine of merger applies. He further

submitted that the decision in Hotel Vandana Palace case, thus,

having attained finality is a binding precedent.

52.2. Sri R. Ashok Kumar, on the other hand,

submitted that, the mere fact that appeal preferred against

the decision in VASU P. SHETTY case was dismissed by the

Apex Court does not mean that the issue under

consideration viz., point No.(ii) raised in Hotel Vandana Palace

case as having been determined by the Apex Court. He

submitted that the Division Bench while deciding Hotel

Vandana Palace case, having overlooked the decision in

SATYAWATI TONDON’S case and also misinterpreted the

ratio of law laid down in KANAIYALAL LALCHAND SACHDEV

case, it is open to this Bench to go into the issue and differ

from the conclusion reached on point No.(ii) in Hotel Vandana

Palace case by the Division Bench.

48

52.3. In view of the rival contentions, the question

that arises is ‘whether, the decision in VASU P. SHETTY case has

approved the view of the Division Bench on point No.(ii) raised in Hotel

Vandana Palace case’?

52.4. In KUNHAYAMMED Vs. STATE OF KERALA, (2000)

6 SCC 359, Apex Court has reiterated that the doctrine of

merger is not of universal application or unlimited

application; the nature of jurisdiction exercised by the

superior Forum and the content or subject matter of

challenge laid or which could have been laid, shall have to

be kept in view.

52.5. The decision in VASU P. SHETTY’s case clearly

reveals that neither there is any consideration with regard

to the writ being not entertainable on account of

availability of alternative remedy under S.18 of the

SARFAESI Act nor the validity of finding on point No.(ii)

recorded by the Division Bench has been gone into.

49

52.6. In VASU P. SHETTY’s case, the opinion of the

Division Bench in Hotel Vandana Palace case on the

interpretation of sub-rules (5) and (6) of Rule 8 of the

Rules was held as flawless and the only question

considered as can be seen from para 19 of the decision is,

as to whether it can be held that the borrower in the case had waived the

mandatory provisions of Rules 8 and 9 of the Rules. Hence, it

cannot be said that the remaining part of the decision in

the case of Hotel Vandana Palace as having merged in the

order passed by the Apex Court in the case of Vasu P. Shetty.

Thus, the view expressed by the Division Bench of this

Court in Hotel Vandana Palace, on point No.(ii), is open to

reconsideration by a coram of more than two Judges.

53. When extraordinary writ remedy is invoked,

despite the availability of an alternative remedy, the Court

should at the threshold, examine, whether the petition can

be entertained having regard to the pleading in the

petition, more particularly, the reason(s) stated for bypassing

of the alternative remedy. In a catena of decisions, it has

50

been held by the Apex Court, that writ petition under

Article 226 of the Constitution should not be entertained

when the alternate remedy is available under the Act,

unless exceptional circumstances are made out. The writ

remedy cannot be permitted to be availed as a routine /

matter of course, but only in exceptional circumstances.

The Apex Court has recognized some exceptions to the

rule of alternative remedy i.e., where the statutory body

has not acted in accordance with the provisions of the

enactment in question or in defiance of the fundamental

principles of judicial procedure, or has resorted to invoke

the provisions which are repealed, or when an order has

been passed in total violation of principles of natural

justice, or when the vires of the statute is under challenge.

54. Unless the Court is convinced that the case

falls under the exceptional categories, the writ petition

filed against the order of the Tribunal, passed in exercise

of the jurisdiction under S.17 of the SARFAESI Act, on

account of the legislative intent behind the enactment of

51

the SARFAESI Act and RDDB Act and the ratio of law laid

down by the Apex Court in the cases of (1) Kanaiyalal Lalchand

Sachdev (2) Satyawati Tondon and (3) Sri Siddeshwara Co.Op. Bank

Ltd., cannot be entertained, as the approach of the High

Court should be consistent with the provisions of the

statutes and also the law laid down by the Apex Court,

mandated by Article 141 of the Constitution.

In view of the aforesaid discussion, we are of the

opinion that Hotel Vandana Palace case does not lay down the

correct position of law i.e., in so far as point No.(ii) answered

therein. Hence, the finding recorded on point No.(ii), in

Hotel Vandana Palace case, is declared as per incuriam. Needless

to say that any decision(s) of this Court which take(s) the

view contrary to the law laid down by the Apex Court, in

(1) Kanaiyalal Lalchand Sachdev (2) Satyawati Tondon and (3) Sri

Siddeshwara Co.Op. Bank Ltd., does not lay down the correct

law on the question involved in this Reference. The

Reference is answered accordingly.

52

The petition be now listed before the learned Single

Judge, to decide in the first instance, the entertainability or

otherwise of the writ petition by keeping in view the

position of law, as above.

Sd/-

JUDGE

Sd/-

JUDGE

Sd/-

JUDGE

sac*