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The Legal Affair

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The Legal Affair

Let's talk Law

SC disapproves of writ petition in commercial dispute, upholds statutory remedies

SC disapproves of writ petition in commercial dispute, upholds statutory remedies

FACTS 

In the matter at hand The Punjab and Haryana High Court’s ruling, which had permitted postponed payment schedules for bank borrowers even as the bank had started SARFAESI proceedings, was being challenged in the South Indian Bank’s current argument, and the Bench had given notice on it in December 2022. A court’s interference in private contractual issues between lenders and borrowers, according to the appellant bank, gravely harmed the banks. It was emphasized that the decision in question was not an isolated incident but rather was one in a long line of instances where the High Court had exercised its writ authority and permitted lengthy payments.

Issue 

Whether the Punjab and Haryana High Court exercise beyond its Jurisdiction by admitting a Writ petition when an alternative remedy under the SARFAESI Act is available

Supreme court Analysis 

Judges Sanjiv Khanna and MM Sundresh of the Supreme Court ruled that litigants cannot be permitted to forgo approaching the tribunal in commercial disputes. The district court and high court have limited power to exercise their Jurisdiction in the commercial nature of the suit only in extraordinary circumstances.

The Bench stated that “This Court also disapproves of the borrower approaching the High Court for consideration of an offer…A financial transaction needs to be handled with more caution, especially if one of the parties is not covered by Article 12 of the Indian Constitution. A writ court may not promote an attempt to avoid a statute that specifies a particular mode’’.Therefore Punjab and Haryana high courts acted beyond their jurisdiction and held the guilty allowing petition.