AUTHORIZED OFFICER, STATE BANK OF TRAVANCORE AND ANOTHER versus MATHEW K. C.

Citation: [2018] 1 S.C.R. 233 · Decided: 30-01-2018 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Appeal(s) allowed

Cited by 5 judgment(s) · cites 3 · see the full citation network in Lexace

Judgment (excerpt)

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AUTHORIZED OFFICER, STATE BANK OF TRAVANCORE
AND ANOTHER
v.
MATHEW K. C.
(Civil Appeal No. 1281 of  2018)
JANUARY 30, 2018
[R. F. NARIMAN AND NAVIN SINHA, JJ.]
Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 – ss.13(4), 17, 18 – Grant
of loans by financial institution – Failure of the borrower to pay
the dues – Case of borrower that he was desirous to pay loan amount,
as such sought regularization of the loan amount but bank failed to
consider the same – Writ petition u/Art.226 by borrower – Interim
order passed, staying further proceedings at the stage of s.13(4),
on deposit of Rs.3,50,000/- – Appeal thereagainst dismissed by the
Division Bench – On appeal, held: In financial matters grant of ex-
parte interim orders can have a deleterious effect and it is not
sufficient to say that the aggrieved has the remedy to move for
vacating the interim order – Such loan are granted from public
money generated at tax payers’ expense – Timely repayment cannot
be permitted to be blocked by frivolous litigation – It is the solemn
duty of the court to apply the correct law without waiting for an
objection – Any departure, if permissible, has to be for reasons
discussed, of the case falling under a defined exception – High
Court ought not to have entertained the writ petition in view of the
adequate alternate statutory remedies available to the borrower and
without granting opportunity to the bank to contest the
maintainability of the writ petition – Opinion of the Division Bench
that the counter affidavit having subsequently been filed, stay/
modification could be sought of the interim order cannot be
considered sufficient justification to decline interference – Thus,
the impugned orders are unsustainable, and set aside – Constitution
of India – Art.226 – Alternative Remedy.
Allowing the appeal, the Court
HELD: 1.1 The Securitisation and Reconstruction of
[2018] 1 S.C.R. 233
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SUPREME COURT REPORTS
[2018] 1 S.C.R.
Financial Assets and Enforcement of Security Interest Act, 2002
is a complete code by itself, providing for expeditious recovery
of dues arising out of loans granted by financial institutions, the
remedy of appeal by the aggrieved under Section 17 before the
Debt Recovery Tribunal, followed by a right to appeal before the
Appellate Tribunal u/s. 18. The High Court ought not to have
entertained the writ petition in view of the adequate alternate
statutory remedies available to the Respondent. [Para 4][237-E]
1.2 Normally this Court in exercise of jurisdiction under
Article 136 of the Constitution is loathe to interfere with an
interim order passed in a pending proceeding before the High
Court, except in special circumstances, to prevent manifest
injustice or abuse of the process of the court. The discretionary
jurisdiction under Article 226 is not absolute but has to be
exercised judiciously in the given facts of a case and in accordance
with law. The normal rule is that a writ petition under Article 226
ought not to be entertained if alternate statutory remedies are
available, except in cases falling within the well defined
exceptions. [Para 6][238-C-D]
1.3 The pleadings in the writ petition are very bald and
contain no statement that the grievances fell within any of the
well defined exceptions. The allegation for violation of principles
of natural justice is rhetorical, without any details and the prejudice
caused thereby. It harps only on a desire for regularisation of the
loan account, even while the Respondent acknowledges its own
inability to service the loan account for reasons attributable to it
alone. The writ petition was filed in undue haste immediately after
disposal of objections under Section 13(3A). The legislative
scheme, in order to expedite the recovery proceedings, does
not envisage grievance redressal procedure at this stage, by
virtue of the explanation added to Section 17 of the Act. [Para
7][239-B-C]
1.4 The Section 13(4) notice along with possession notice
u/r.8 was issued. The remedy u/s.17 was now available to the
respondent if aggrieved. These developments were not brought
on record or placed before the Court when the interim order
came to be passed. The writ petition was clearly not instituted
bonafide, but patently to stall further action for recovery. There
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is no pleading why the remedy available u/s. 17 before the Tribunal
was not efficacious and the compelling reasons for by-

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