Can The High Court Entertain A Writ Petition Under Article 226 Of The Constitution If An Alternative Statutory Remedy Is Available?

The Hon'ble Supreme Court in the case of "Authorized Officer, State Bank of Travancore and Ors. Vs. Mathew K.C.", MANU/SC/0054/2018, whereby, the Appellant / Bank assailed an interim order dated 24.04.2015 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'), held that the Hon'ble high Court ought not to entertain a writ petition Under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person.

Brief facts :

The loan account of the Respondent / borrower was declared a Non-Performing Asset (NPA) on 28.12.2014. 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 21.01.2015. 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 21.04.2015. Aggrieved against the order passed Under Section 13(3A) of the SARFAESI Act, the Respondent / borrower filed a writ petition Under Article 226 of the Constitution, staying further proceedings at the stage of Section 13(4) of the SARFAESI Act. The outstanding dues of the Respondent on the date of the institution of the writ petition was Rs. 41,82,560/-.

Legal Issue:

Whether a High Court can entertain a writ petition under article 226 of the constitution if an alternative statutory remedy is available?

Submission by the Appellant :

The Appellant / Bank submitted that 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 Debt 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 Ors...