Allahabad Bank vs Mahamaya Export Pvt. Ltd

P.K. Bhasin, J

The appellant Bank had initiated SARFAESI measures in respect of some piece of land in order to recover its dues amounting to approx. thirty crores of rupees, which undoubtedly is public money, having lent the same to one M/s. ABW Infrastructure Ltd. The borrower is not a party in this appeal nor was it made a party by the respondent in its securitisation application. The amount disbursed to the borrower was to the tune of Rs. 38 crores odd and was disbursed way back in the year 2010. When time came for return of the money by the borrower to the appellant Bank, it vanished from the scene. The present respondent is stated to be a guarantor for the repayment of the said loan and in order to secure repayment of the loan amount it had placed at the disposal of the Bank a huge piece of land by way of equitable mortgage.

When the borrower as well as respondent guarantor/mortgagor were called upon to clear the Bank's dues which had become recoverable after declaration of the borrower's account as NPA within the statutory period of 60 days as provided under Section 13(2) of the SARFAESI Act, the present, respondent approached DRT-II, Delhi with an application under Section 13(2) of the SARFAESI Act, challenging the very recourse taken to the securitisation provisions by the Bank claiming that the mortgaged land was agricultural land and consequently not amenable to harsh and stringent measures provided under the SARFAESI Act for its sale. The learned Presiding Officer of DRT after hearing the matter regarding grant/rejection of interim relief to the respondent herein, passed the impugned order whereby it permitted the Bank to go ahead with the sale of the mortgaged land but restrained it from confirming the sale in case of any bidder coming forward to bid for a sum over and above the reserve price. The respondent was also aggrieved with the appellant's action for putting its land to sell on the ground that the value of that land was over Rs. 400 crores while in the sale proclamation the reserve price mentioned was only Rs. 46.41 crores.

Since the learned DRT permitted the appellant to go ahead with the sale of the mortgaged land, prima facie it can be said that the learned DRT was not satisfied with the claim of the respondent that mortgaged land was agricultural land.

The appellant had opposed the securitisation application, inter alia, on the ground that DRT-II, Delhi had no territorial jurisdiction to entertain the respondent's S.A. since the loan was sanctioned by New Friends Colony, New Delhi branch of the Bank where respondent's account was also being maintained. It also claimed lack of territorial jurisdiction with DRT-II, Delhi for the reason that notice under Section 13(2) and then under Section 13(4) of the SARFAESI Act were issued from New Friends Colony branch only. However, respondent claimed territorial jurisdiction with DRT-II, Delhi on the ground that in some of the documents written by the Bank it was mentioned that they were being issued by Zonal Office at Parliament Street, which area falls within the territorial jurisdiction of DRT-II, Delhi.

The appellant had also moved an application under Order 7 Rule 11, CPC before the DRT and when the appellant questioned about the territorial jurisdiction of the DRT, the learned Presiding Officer kept that question open with the observation that this controversy could not be resolved without evidence having been adduced in the matter. That observation was made in the order dated 6.8.2018 and against that order the appellant has filed a separate appeal, being Appeal No. 419/2018, which is also listed today.

The submissions made from both the sides by their respective learned Senior Counsel were primarily confined to the aspect as to whether DRT-II, Delhi has the territorial jurisdiction to decide the challenge to the securitization measures initiated by the appellant Bank or not. As far as the respondent's grievance raised before the DRT that the appellant Bank could not have at all initiated any action under the SARFAESI Act in respect the mortgaged land in question is concerned, respondent's learned Senior Counsel Mr. Sachin Dutta submitted that respondent had challenged non-consideration of that objection raised in the S.A. for the time being. He, however, submitted that as far as the present appeal is concerned, the same does not involve any question worth consideration by this Tribunal inasmuch as the learned DRT has, balancing the equities, permitted the Bank to go ahead with the sale but, at the same time, to protect the interest of the respondent, restrained the Bank from confirming the auction already stood conducted. The land in question has been sold at Rs. 46.41 crores which is the reserve price.

Since the property stands sold exactly at the figure of reserve price, a question will arise regarding the legality of the auction keeping but at this stage I am not going into that controversy and it will be for the DRT to examine that aspect and pass appropriate orders at the appropriate stage.

After giving my thoughtful consideration to the entire aspect of the matter, I am of the view that while passing the impugned order restraining the Bank from confirming the auction sale, the learned DRT has not kept in mind 'public interest' element. If confirmation of the auction is stayed, the Bank will not be able to get the auction money from the successful bidder and if that be so, it is clear that public money, for which the auction of the mortgaged land was permitted to be conducted by the DRT, remains in the pockets of a third party and the secured creditor, the appellant herein, Bank remains deprived of its dues about which there appears to be no controversy raised by the respondent.

The Hon'ble Supreme Court has in its various judgments which have already been not only noticed by this Tribunal in some orders earlier but have also been specifically brought to the notice of the learned Presiding Officers of all the DRTs under the jurisdiction of this DRAT where it was held that in matters where 'public money' is involved, grant of stay of recovery is to be an exception.

Reference can be made to one such order passed by this Tribunal on 26.10.2017 wherein the decisions of Hon'ble Supreme Court to be kept in mind while dealing the prayers for grant of interim injunctions against recovery of public/Banks' dues were noticed and which order was circulated amongst all the DRTs was in Misc. Appeal No. 286/2017, Fulleration India Credit Co. Ltd. v. Smt. Harpreet Kaur & Anr. Relevant paras from that order are being re-produced below:

"Hon'ble Supreme Court in the case of United Bank of India v. Satyawati Tandon, III (2010) BC 495 (SC) : VI (2010) SLT 52 : AIR 2010 SC 3413, had after noticing the avowed objects behind the enactment of RDDBFI Act and SARFAESI Act had gone on to observe that Courts had been staying the recovery processes initiated by the Banks under SARFAESI Act which had the effect of defeating the object of speedy recoveries of Banks' dues from the defaulting borrowers. Hon'ble Supreme Court had expressed its displeasure against grant of interim injunctions against the Banks restraining them from availing of their remedies under the SARFAESI Act as under:

"18 It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of Banks, Financial Institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters.....".

(Emphasis laid by me)

It is not that the Apex Court had expressed its concern over the stalling of recoveries of public money by judicial orders only in Satyawati Tandon's case (supra), but way back in the year 1984 also same views were expressed in a judgment reported in AIR 1985 SC 330: (1985) 2 SCR 190, Assistant Collector of Central Excise Chandan Nagar, West Bengal v. Dunlop India Ltd. and Ors., 1984 (SLT Soft) 384. The relevant observations are re-produced below:

"It is indeed a great pity-and, we wish we did not have to say it but we are afraid, we will be signally failing in our duty if we do not do so-some Courts, of late, appear to have developed an unwarranted tendency to grant interim orders-interim orders with a great potential for public mischief-for the mere asking. We feel greatly disturbed. We find it more distressing that such interim orders, often ex parte and non-speaking, are made even by the High Courts while entertaining writ petitions under Article 226 of the Constitution.........In several other cases.........this Court was forced to point out how wrong it was to make interim orders so soon as an application was but presented, when a second thought (or a second's thought) would expose the impairment of the public interest.........." We are constrained to make the observations which follows as we do feel dismayed at the tendency on the part of some of the High Courts to grant interlocutory orders for the mere asking. Normally, the High Court should not, as a rule, in proceedings under Article 226 of the Constitution grant any stay of recovery of tax save under very exceptional circumstances. The grant to stay in such matters, should be an exception and not a rule.

.............The Court has to show awareness of the fact that in a case like the present a municipality cannot function or meet its financial obligations if its source of revenue is blocked by an interim order restraining the municipality from recovering the taxes.............The grant of an interlocutory order of this nature would paralyze the administration and dislocate the entire working of the municipality.............We can also take judicial notice of the fact that the vast majority of the petitions under Article 226 of the Constitution are filed solely for the purpose of obtaining interim orders.............Where a plentitude of power is given under a statute, designed to meet a dire situation, it is no answer to say that the very nature of the power and the consequences which may ensue is itself a sufficient justification for the grant of a stay of that order, unless, of course, there are sufficient circumstances to justify a strong prima facie inference that the order was made in abuse of the power.............To grant interim relief straightaway and leave it to the respondents to move the Court to vacate the interim order may jeopardise the public interest..............We repeat and deprecate the practice of granting interim order which practically give the principal relief sought in the petition for no better reason than that a prima facie case has been made out, without being concerned about the balance of convenience, the public interest and a host of other relevant considerations.............

.............But since the law presumes that public authorities function properly and bona fide with due regard to the public interest, a Court must be circumspect in granting interim orders of far reaching dimensions or orders causing administrative, burdensome inconvenience or orders preventing collection of public revenue for no better reason than that the parties have come to the Court alleging prejudice, inconvenience or harm and that a prima facie case has been shown. There can be and there are no hard and fast rules. But prudence, discretion and circumspection are called for. There are several other vital considerations apart from the existence of a prima facie case. There is the question of balance of convenience. There is the question of irreparable injury: There is the question of the public interest. There are many such factors worthy of consideration.............

We desire to add and as was said in Cassel and Co. Ltd. v. Broome(I) we hope it will never be necessary for us to say so again that 'in the hierarchical system of Courts' which exists in our country, 'it is necessary for each lower tier', including the High Court, 'to accept loyally the decisions of the higher tiers'..............

.............We do not have the slightest doubt that the orders of the learned Single Judge as well as Division Bench are wholly unsustainable and should never have been made. Even assuming that the company had established a prima facie case, about which we do not express any opinion, we do not think that it was sufficient justification for granting the interim orders as was done by High Court. There was no question of any balance of convenience being in favour of the respondent-Company. The balance of convenience was certainly in favour of the Government of India.............We consider that where matters of public revenue are concerned, it is of utmost importance to realise that interim orders ought not to be granted merely because a prima facie case has been shown. More is required. The balance of convenience must be clearly in favour of the making of an interim order and there should not be the slightest indication of a likelihood of prejudice to the public interest. We are very sorry to remark that these considerations have not been borne in mind by the High Court and interim order of this magnitude had been granted for the mere asking............."

(Emphasis supplied)

In another judgment in the case of Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engineering Work, II (1997) CLT 468 (SC) : 1997 (SLT Soft) 1159 : (1997) 6 SCC 450, the Hon'ble Supreme Court had observed that:

"It is unfortunate that the High Court did not consider it necessary to refer to various judicial pronouncements of this Court in which the principles which have to be followed while examining an application for grant of interim relief have been clearly laid down. The observation of the High Court that reference to judicial decisions will not be of much importance was clear a method adopted by it in avoiding to follow and apply the law as laid down by this Court............

We are constrained to make these observation with regard to the manner in which the High Court had dealt with this case because this is not an isolated case where the Courts, while disobeying or not complying with the law laid down by this Court, have at time been liberal in granting injunction restraining encashment of Bank guarantees. It is unfortunate, that notwithstanding the authoritative the pronouncements of this Court, the High Courts and the Courts subordinate thereto, still seem intent on affording to this Court innumerable opportunities for dealing with this area of law, thought by this Court to be well settled.

When a position, in law, is well settled as a result of judicial pronouncement of this Court, it would amount to judicial impropriety to say the least, for the subordinate Courts including the High Courts to ignore the settled decisions and then to pass a judicial order which is clearly contrary to the settled legal position. Such judicial adventurism cannot be permitted and we strongly deprecate the tendency of the subordinate Courts in not applying the settled principles and in passing whimsical orders which necessarily has the effect of granting wrongful and unwarranted relief to one of the parties. It is time that this tendency stops."

(Emphasis laid)

In East India Commercial Co. Ltd. Calcutta and Another v. The Collector of Customs, Calcutta, 1962 (SLT Soft) 202 : 1963 SCR (3) 338, Hon'ble Supreme Court had observed that:

".............This raises the question whether an Administrative Tribunal can ignore the law declared by the highest Court in the State.............It would be anomalous to suggest that a Tribunal over which the High Court has superintendence can ignore the law declared by that Court and start proceedings in direct violation of it. If a Tribunal can do so, all the subordinate Courts can equally do so, for there is no specific provision, just like in the case of Supreme Court making the law declared by the High Court binding............."

Thus, if these are the views of the highest Court of the land it is not understandable and can certainly be not accepted by this Tribunal that the DRTs under the jurisdiction of this Appellate Tribunal can turn a blind eye to the judgments of the Apex Court. As was observed by the Apex Court two decades back the practice of Courts ignoring its binding judgments must stop. That mandate, however, does not appear to have percolated down to the DRTs. Without going into this aspect any further, it is now at least hoped that not only the DRT whose order was impugned in this appeal but all other DRTs will not be ignoring the authoritative pronouncements of the highest Court of the land and will do well in obeying the same to avoid the charge of the 'judicial impropriety' being levelled by the stakeholders in the Institution of Debts Recovery Tribunals."

Recently also the Hon'ble Supreme Court in its judgment rendered on 30.1.2018, Authorized Officer, State Bank of India v. Mathew K.C., Civil Appeal No. 1281 of 2018, has observed regarding grant of stays against recovery of public monies. The relevant observations are re-produced as under:

"2 The present appeal assails an interim order dated 24.4.2015 passed in a writ petition under Article 226 of the Constitution, staying further proceedings at the stage of Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred as the 'SARFAESI Act'), on deposit of Rs. 3,50,000/- within two weeks. An appeal against the same has also been dismissed by the Division Bench observing that counter affidavit having been filed, it would be open for the appellant Bank to seek clarification/modification/variation of the interim order.

Mr. H.P. Raval, learned Senior Counsel appearing for the appellants, submits that the loan account of the respondent was declared a Non-Performing Asset (NPA) on 28.12.2014. The outstanding dues of the respondent on the date of the institution of the writ petition was Rs. 41,82,560/-. Despite repeated notices, the respondent failed and neglected to pay the dues. Statutory notice under Section 13(2) of the SARFAESI Act was issued to the respondent on 21.1.2015. The objections under Section 13(3A) were considered, and rejection was communicated by the appellant on 31.3.2015. Possession notice was then issued under Section 13(4) of the Act read with Rule 8 of The Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as 'the Rules') on 21.4.2015.

The SARFAESI Act 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 Debts Recovery Tribunal, followed by a right to appeal before the Appellate Tribunal under Section 18. The High Court ought not to have entertained the writ petition in view of the adequate alternate statutory remedies available to the respondent. The interim order was passed on the very first date, without an opportunity to the appellant to file a reply. Reliance was placed on United Bank of India v. Satyawati Tandon and Others, III (2010) BC 495 (SC) : VI (2010) SLT 52 : 2010(8) SCC 110, and General Manager, Sri Siddeshwara Cooperative Bank Limited and Another v. Ikbal and Others, VIII (2013) SLT 290 : 2013 (10) SCC 83. The writ petition ought to have been dismissed at the threshold on the ground of maintainability. The Division Bench erred in declining to interfere with the same.

Mr. Roy Abraham, learned Counsel for the respondent, submitted that it was desirous to repay the loan, and merely sought regularisation of the loan account. The inability to service the loan was genuine, occasioned due to market fluctuations causing huge loss in business, beyond the control of the respondent. The failure of the Bank to consider the request for regularisation of the loan account, the absence of a right to appeal under Section 17 against the order passed under Section 13(3A), the respondent was left with no option but to prefer the writ application as the respondent genuinely desired to discharge the loans. The collateral security offered included agricultural lands also, which had to be excluded under Section 31 of the SARFAESI Act. There had been violation of the principles of natural justice. A large number of similar writ applications are pending before the High Court preferred by the concerned borrowers, but the Bank has singled out the present respondent alone for a challenge.

We have considered the submissions on behalf of the parties. 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. In the present case, the facts are not in dispute. 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 of the Constitution ought not to be entertained if alternate statutory remedies are available, except in cases falling within the well defined exceptions as observed in Commissioner of Income Tax and Others v. Chhabil Dass Agarwal, VII (2013) SLT 376 : 2014(1)SCC 603, as follows:

"15. Thus, while it can be said that this Court has recognised some exceptions to the rule of alternative remedy i.e. where the statutory authority 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 the principles of natural justice, the proposition laid down in Thansingh Nathmal case, Titaghur Paper Mills case and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation."

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 in March 2015 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, by Amendment Act 30 of 2004, as follows:

"Explanation-For the removal of doubts, it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including the borrower) to make an application to the Debts Recovery Tribunal under this sub-section."

The Section 13(4) notice along with possession notice under Rule 8 was issued on 21.4.2015. The remedy under Section 17 of the SARFAESI Act was now available to the respondent if aggrieved. These developments were not brought on record or placed before the Court when the impugned interim order came to be passed on 24.4.2015. The writ petition was clearly not instituted bona fide, but patently to stall further action for recovery. There is no pleading why the remedy available under Section 17 of the Act before the Debts Recovery Tribunal was not efficacious and the compelling reasons for by-passing the same. Unfortunately, the High Court also did not dwell upon the same or record any special reasons for grant of interim relief by direction to deposit.

The statement of objects and reasons of the SARFAESI Act states that the banking and financial sector in the country was felt not to have a level playing field in comparison to other participants in the financial markets in the world. The financial institutions in India did not have the power to take possession of securities and sell them. The existing legal framework relating to commercial transactions had not kept pace with changing commercial practices and financial sector reforms resulting in tardy recovery of defaulting loans and mounting non-performing assets of Banks and financial institutions. The Narasimhan Committee I and II as also the Andhyarujina Committee constituted by the Central Government Act had suggested enactment of new legislation for securitisation and empowering Banks and Financial Institutions to take possession of securities and sell them without Court intervention which would enable them to realise long term assets, manage problems of liquidity, asset liability mismatches and improve recovery. The proceedings under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, (hereinafter referred to as 'the DRT Act') with passage of time, had become synonymous with those before regular Courts affecting expeditious adjudication. All these aspects have not been kept in mind and considered before passing the impugned order.

Even prior to the SARFAESI Act, considering the alternate remedy available under the DRT Act it was held in Punjab National Bank v. O.C. Krishnan and Others, II (2001) BC 642 (SC) : V (2001) SLT 778 : (2001) 6 SCC 569, that:

"6. The Act has been enacted with a view to provide a special procedure for Recovery of Debts Due to the Banks and the Financial Institutions. There is a hierarchy of appeal provided in the Act, namely, filing of an appeal under Section 20 and this fast-track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision under an Act cannot expressly oust the jurisdiction of the Court under Articles 226 and 227 of the Constitution, nevertheless, when there is an alternative remedy available, judicial prudence demands that the Court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have directed the respondent to take recourse to the appeal mechanism provided by the Act."

In Satyawati Tandon (supra), the High Court had restrained further proceedings under Section 13(4) of the Act. Upon a detailed consideration of the statutory scheme under the SARFAESI Act, the availability of remedy to the aggrieved under Section 17 before the Tribunal and the appellate remedy under Section 18 before the Appellate Tribunal, the object and purpose of the legislation, it was observed that a writ petition ought not to be entertained in view of the alternate statutory remedy available holding:

"43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of Banks and other Financial Institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc. the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, the High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute.

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 the 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."

In Union Bank of India and Another v. Panchanan Subudhi, 2010 (15) SCC 552, further proceedings under Section 13(4) were stayed in the writ jurisdiction subject to deposit of Rs. 10,00,000/- leading this Court to observe as follows:

"7. In our view, the approach adopted by the High Court was clearly erroneous. When the respondent failed to abide by the terms of onetime settlement, 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."

The same view was reiterated in Kanaiyalal Lalchand Sachdev and Others v. State of Maharashtra and Others, II (2011) SLT 188 : I (2011) BC 698 (SC) : 2011 (2) SCC 782 observing:

"23. In our opinion, therefore, the High Court rightly dismissed the petition on the ground that an efficacious remedy was available to the 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.)"

In Ikbal (supra), it was observed that the action of the Bank under Section 13(4) of the 'SARFAESI Act' available to challenge by the aggrieved under Section 17 was an efficacious remedy and the institution directly under Article 226 was not sustainable, relying upon Satyawati Tandon (supra), observing:

"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.

.......In our view, there was no justification whatsoever for the learned Single Judge to allow the borrower to bypass the efficacious remedy provided to him under Section 17 and invoke the extraordinary jurisdiction in his favour when he had disentitled himself for such relief by his conduct. The Single Judge was clearly in error in invoking his extraordinary jurisdiction under Article 226 in light of the peculiar facts indicated above. The Division Bench also erred in affirming the erroneous order of the Single Judge."

A similar view was taken in Punjab National Bank and Another v. Imperial Gift House and Others, (2013) 14 SCC 622, observing:

"3. Upon receipt of notice, the respondents filed representation under Section 13(3-A) of the Act, which was rejected. Thereafter, before any further action could be taken under Section 13(4) of the Act by the Bank, the writ petition was filed before the High Court.

In our view, the High Court was not justified in entertaining the writ petition against the notice issued under Section 13(2) of the Act and quashing the proceedings initiated by the Bank."

It is the solemn duty of the Court to apply the correct law without waiting for an objection to be raised by a party, especially when the law stands well settled. Any departure, if permissible, has to be for reasons discussed, of the case falling under a defined exception, duly discussed after noticing the relevant law. 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. Loans by Financial Institutions are granted from public money generated at the tax payers expense. Such loan does not become the property of the person taking the loan, but retains its character of public money given in a fiduciary capacity as entrustment by the public. Timely repayment also ensures liquidity to facilitate loan to another in need, by circulation of the money and cannot be permitted to be blocked by frivolous litigation by those who can afford the luxury of the same. The caution required, as expressed in Satyawati Tandon (supra), has also not been kept in mind before passing the impugned interim order:

"46. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of Banks, Financial Institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which (sic will) ultimately prove detrimental to the economy of the nation.

Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, Whirlpool Corpn. v. Registrar of Trade Marks and Harbanslal Sahnia v. Indian Oil Corpn. Ltd. and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass an appropriate interim order."

The writ petition ought not to have been entertained and the interim order granted for the mere asking without assigning special reasons, and that too without even granting opportunity to the appellant to contest the maintainability of the writ petition and failure to notice the subsequent developments in the interregnum. The 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 have declined interference.

We cannot help but disapprove the approach of the High Court for reasons already noticed in Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engineering Works (P) Ltd. and Another, II (1997) CLT 468 (SC) : 1997 (SLT Soft) 1159 : 1997(6) SCC 450, observing:

"32. When a position, in law, is well settled as a result of judicial pronouncement of this Court, it would amount to judicial impropriety to say the least, for the subordinate Courts including the High Courts to ignore the settled decisions and then to pass a judicial order which is clearly contrary to the settled legal position. Such judicial adventurism cannot be permitted and we strongly deprecate the tendency of the subordinate Courts in not applying the settled principles and in passing whimsical orders which necessarily has the effect of granting wrongful and unwarranted relief to one of the parties. It is time that this tendency stops."

The impugned orders are therefore contrary to the law laid down by this Court under Article 141 of the Constitution and unsustainable. They are therefore set aside and the appeal is allowed.

All questions of law and fact remain open for consideration in any application by the aggrieved before the statutory forum under the SARFAESI Act.

Same views have been reiterated by the Apex Court in a judgment pronounced only a few dates back on 5.10.2018 in ICICI Bank Ltd. v. Umakanta Mohapatra, Civil Appeal Nos. 10243-10250 of 2018. The judgment is re-produced below:

"Despite several judgments of this Court, including a judgment by Hon'ble Mr. Justice Navin Sinha, as recently as on 30.1.2018, in Authorized Officer, State Bank of Travancore and Anr. v. Mathew K.C. (2018) 3 SCC 85, the High Courts continue to entertain matters which arise under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI), and keep granting interim orders in favour of person who are Non-Performing Assets (NPAs).

The writ petition itself was not maintainable, as a result of which, in view of our recent judgment, which has followed earlier judgments of this Court, held as follows:

"18. We cannot help but disapprove the approach of the High Court for reasons already noticed in Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engineering Works (P) Ltd. and Another, (1997) 6 SCC 450, observing:

"32. When a position, in law, is well settled as a result of judicial pronouncement of this Court, it would amount to judicial impropriety to say the least, for the subordinate Courts including the High Courts to ignore the settled decisions and then to pass a judicial order which is clearly contrary to the settled legal position. Such judicial adventurism cannot be permitted and we strongly deprecate the tendency of the subordinate Courts in not applying the settled principles and in passing whimsical orders which necessarily has the effect of granting wrongful and unwarranted relief to one of the parties. It is time that this tendency stops."

The writ petition, in this case, being not maintainable, obviously, all orders passed must perish, including the impugned order, which is set aside.

The appeals are allowed in the aforesaid terms.

Pending applications, if any, shall stand disposed of."

Thus, it has been held by the Apex Court from time that in such like matters even if a prima facie case is shown to be existing in favour of the litigant claiming injunction against recovery of public money, that circumstance itself is not sufficient to restrain recovery of public money like Bank's dues. It has also been held that as far as balance of convenience is concerned, there is no question the same being in favour of a defaulter and similarly a defaulter in repayment of public dues cannot claim that it will suffer irreparable loss in case money is recovered from it. Unfortunately, in the present case, the learned Presiding Officer has neither said in the impugned order that respondent had a prima facie case or that balance of convenience was in its favour and further that respondent would suffer irreparable loss in case money which was lent by the appellant to its borrower is recovered from the property of respondent or otherwise. As far as irreparable loss is concerned, I am of the view that the borrower and the mortgagor/guarantor cannot claim that any irreparable loss will be caused to them in case the lender of the succeeds in recovering its dues and more so when the guarantor can always recover back its money from the borrower for whom it had given the guarantee in case the guaranteed money is either paid by it on its own or gets recovered through SARFAESI measures initiated by the secured creditor. It is 'public money' which is being demanded back by the lender Bank and instead of paying the same a legal battle has been started to delay recovery of that money by the respondent.

Considering all the facts and circumstances, this Tribunal is of the view that the respondent has neither a prima facie case in its favour nor balance of convenience exists in its favour for grant of any ad interim relief and there is no question of its suffering irreparable loss in case money is recovered from it or from the property in question which was mortgaged by it voluntarily in favour of the Bank.

It was also submitted by the learned Senior Counsel for the respondent that sometime may be given to the respondent to bring a buyer for the land in dispute who would be willing to buy the same at a price which would be much higher than the price at which it has been sold by the Bank.

I am afraid the present proceedings cannot be got derailed by the respondent in such a way and this submission appears to have been made simply to delay the disposal of this appeal and as was the submission made even by Mr. Rajeeve Mehra, the learned Senior Counsel for the appellant Bank. I also do not agree with the submission of Mr. Sachin Dutta, learned Senior Counsel for the respondent that the interest of both the parties has been appropriately protected by the learned Presiding Officer of the Tribunal below by permitting the Bank to go ahead with the auction which it has already conducted. In my view the Tribunal has virtually granted unconditional interim relief to the respondent totally ignoring the 'public interest' Learned Senior Counsel for the Bank had also submitted that it would have been understandable if the learned Presiding Officer of the DRT had ordered that the auction and confirmation of the sale in favour of the successful bidder shall be subject to the final decision in the S.A. However, I do not agree with that submission considering the fact the respondent had no prima facie case in its favour for any interim relief and particularly when the DRT itself did not consider the plea of the respondent that the mortgaged land was agricultural land to be worth acceptance even at the interim stage of the proceedings.

In view of the forgoing, I allow this appeal and set aside the impugned order of the DRT. Consequently, the appellant will now become entitled to proceed with the confirmation of auction sale already conducted by it. It is, however, needless to state that since the S.A. is still pending and in case respondent succeeds in its case finally on merits, the sale which already stands conducted has to be subject to the success or failure of the security applicant, respondent herein, in its S.A. However, in the confirmation letter which now appellant will be entitled to issue to the successful auction purchaser it will be mentioned that confirmation of sale is subject to the final decision which might be taken in the respondent's pending S.A.

At this stage, a prayer is made by the learned Senior Counsel for the respondent that the appellant be at least restrained from delivering the physical possession of the land in question. However, this prayer cannot be accepted in view of the fact that this Tribunal has permitted confirmation of sale and in case possession is not delivered to the successful purchaser the aforesaid order passed in favour of the appellant Bank will become meaningless and the respondent will again indirectly get the relief which it is not entitled to get. In case the respondent feels that the auction purchaser needs to be stopped from creating any further third party rights, it would be open for the respondent to have recourse to its legal remedies before any competent forum for the said relief against the auction purchaser.

It is clarified that whatever has been observed hereinabove is only a prima facie view on all the aspects and not an expression of any final opinion of this Tribunal which final view has to by the DRT which is still seized of the matter including the objection of the appellant Bank regarding the lack of territorial jurisdiction of the DRT-II, Delhi which had been kept open by it while dealing with the appellant's application under Order 7 Rule 11, C.P.C.

DRT records be sent back forthwith along with a copy of this order.