Introduction:
The Jaipur Bench of the Rajasthan High Court, presided over by Justice Avneesh Jhingan, dismissed a writ petition challenging actions under the SARFAESI Act, 2002, on grounds that the petitioner, Naseem Ahmad Khan, had already availed the statutory remedy under the Debt Recovery Tribunal (DRT). The court underscored the principle of judicial restraint, holding that writ petitions cannot circumvent statutory remedies unless exceptional circumstances exist. This decision followed a review of statutory provisions, Supreme Court precedents, and the petitioner’s own contradictory submissions.
Arguments of Both Sides:
The petitioner, Naseem Ahmad Khan, argued that he was a bona fide purchaser of the property in question, which he had bought from his brother. He contended that he was not a borrower under the SARFAESI Act and thus could not avail the appellate remedy. He also challenged the statutory requirement for a pre-deposit of 50% of the due amount, asserting that it placed an unreasonable burden on non-borrowers. Additionally, the petitioner claimed that the property’s possession by ICICI Home Finance was unlawful and sought relief under Article 226 of the Constitution. His counsel argued that the statutory requirement of a pre-deposit before appeal was arbitrary and deprived him of an effective remedy.
On the contrary, the respondent, ICICI Home Finance, asserted that the petitioner was not a bona fide purchaser but had acquired the property from his brother, the borrower, with the intent to evade loan recovery. They argued that the petitioner had already initiated proceedings before the DRT, including an application for a stay, which was rejected. They emphasized that the SARFAESI Act provides comprehensive remedies and that writ jurisdiction cannot be invoked to bypass the statutory framework. Citing Supreme Court precedents, the respondent contended that the availability of an alternative remedy precluded the High Court from entertaining the writ petition.
Court’s Judgment:
The court dismissed the writ petition, emphasizing the principles established in Union of India v. Satyawati Tondon and subsequent judgments. It noted that the SARFAESI Act is a complete code in itself, providing robust remedies for aggrieved parties, including borrowers and other affected persons. The court highlighted that Section 18 of the Act permits any person aggrieved by a DRT order to file an appeal, subject to the pre-deposit requirement.
Justice Jhingan observed that the petitioner’s arguments were self-contradictory. On one hand, he claimed he was not a borrower and thus exempt from the Act’s provisions. On the other hand, he relied on the same provisions to challenge the pre-deposit requirement. The court ruled that the applicability of the pre-deposit condition falls within the appellate authority’s jurisdiction and cannot be a ground for bypassing the statutory remedy.
Referring to the Supreme Court’s decision in Satyawati Tondon, the court reiterated that High Courts should exercise extreme caution when entertaining writ petitions involving the financial sector, as delays could adversely affect the economy. The court noted that exceptions to the rule of alternative remedies—such as violations of natural justice, ultra vires actions, or fundamental procedural lapses—were absent in this case.
Furthermore, the court observed that the petitioner was attempting to pursue parallel remedies by raising issues on merits before both the DRT and the High Court. It held that such conduct amounted to sailing on two boats, which is impermissible in law.
The court also referred to the Supreme Court’s guidance in PHR Invent Education Society v. UCO Bank, where certain exceptions to the rule of alternative remedies were carved out. However, the petitioner failed to demonstrate how his case fit within any of these exceptions.
In conclusion, the High Court dismissed the petition, affirming that the petitioner must pursue his pending appeal before the DRT and comply with the statutory requirements, including the pre-deposit condition. The judgment reinforced the principle that writ jurisdiction should not be misused to circumvent statutory remedies unless compelling circumstances exist.