AGARWAL TRACOM PVT. LTD.versusPUNJAB NATIONAL BANK & ORS.

                   . : - ~-




                              [2017] 11 S.C.R. 164



A                    AGARWAL TRACOM PVT. LTD.
                                       v.
                  PUNJAB NATIONAL BANK & ORS.
                       (Civil Appeal No. 19847 of2017)
B                             NOVEMBER 27, 2017
      [R. K. AGRAWAL AND ABHAY MANOHAR SAPRE, JJ.]
         Securitization and Reconstruction of Financial Assets and
  Enforcement of Security Interest Act, 2002 - ss.17 and 13 (4) -
C Auction purchaser challimging the action of the secured creditor in
  foifeiting the deposit -Appropriate remedy- Filing q( an application
  uls.17 before the DRT or writ petition u!Art.2261227 - Held: Reading
  of s.17(2) and r. 9(5) clear(v show that an action of secured creditor
  in forfeiting the deposit made by the auction purchaser is a part of
  the measures taken by the secured creditor u!s. 13(4) - Auction
D purchaser is one such person, who is aggrieved by the action of the
  secured credilor in forfeiting their money - Auction purchaser, thus,
  falls within the expression "any person" as specified u!s. 17(1) and
  thus, enritled 10 challenge the action of the secured creditor before
  the DRT by jl/ing an applicalion uls.17(1) - Security Interest
   (Enforcement} Rules, 2002 - rt: 8 and 9 - Constitution of India -
E
  Art. 2261227.
          Dismissing the appeal, the Court
           HELD: 1.1 Section 13(4) of the Securitization and
    Reconstruction of Financial Assets and Enforcement of Security
F   Interest Act, 2002 is invoked by the secured creditor against
    their borrower when the borrower fails to discharge his liability
    in full within the specified time. The secured creditor then can
    take possession of the assets of the borrower, transfer the assets
    by lease or by assignment or sell the assets to recover the
    outstanding dues under clanse (a). The secured creditor under
G   clause (b) can also take over the management of the business of
    the borrower or transfer by way of lease, assignment or sale.
    However such power can be invoked only when the creditor h11lds
    substantial part of the borrower's business as security and further
    it satisfies the condition set out in second proviso. The secured
H
                                    164
   . AGARWAL TRACOM PVT. LTD. v. PUNJAB NATIONAL                         165
                   BANK& ORS ..

creditor under·clause (c) can also appoint any manager to manage A
the borrower's business and lastly under clause (d), the secured
creditor can ask any .person to whom the money is due or become
due to pay to the secured creditor instead of paying to borrower·
which is sufficient to satisfy the debt. [Paras 20-22][174-B-EJ
       1.2 Section 17 provides a remedy to a person who is               B
 aggrieved by the measures taken by the secured creditor or his
 authorized officer under Section 13(4) in rellition to secured assets
 of the borrower. It says that "any person (including borrower)"
 may make an application to the DRT within 45 days from the date
 of nleasures taken under Section 13(4). Sub-section (2) of Section
 17 was added by way of amendment w.e.f. 11.11.2004. It provides
                                                                         c
 that the tribunal, on such application being made under Section
'17(1), shall consider whether the measures referred to and taken
 under Section 13(4) by the secured creditor are in accordance
 with the "provisions of this Act and the Rules made thereunder".
 Similarly, sub- sections (3), (4) and (7) of Section 17 which deal      D
 with the power of the DRT also use the expression "in accordance
 with provisions of the Act and the Rules made thereunder". )Para
23)[174-E-G]
       1.3 Sub-rule (S) of Ruic 9 is relevant. It provides that, if
 the auction purchaser commits any default in payment of sale            E
 consideration within the time specified, the deposit made hy
 auction purchaser shall be "forfeited" to the secured creditor
 and the auctioned property shall be resold and the defaulting
 purchaser shall "forfeit" air claims to the property or its part of
 the sum for which it may be sold subsequently. [Para 26][175-C]
                                                                     F
       1.4 Reading of the aforementioned Sections and the Rules
 and, in particular, Section 17(2) and Rule 9(5) would clearly go to
 show that an action of secured creditor in forfeiting the deposit
 made by the. auction purchaser is a part of the .measures taken by
 the secured creditor under Section 13(4). The reason Is that
 Section 17(2) empowers the Tribunal to examine all the issues G
 arising out of the measures taken under Section 13(4) including
 the measures taken by the secured creditor under Rules 8 and 9
 for disposal of the secured assets of the borrower. The expression
 "provisions of this Act and the Rules made thereunder" occurring
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166            SUPREME COURT REPORTS                     [2017] 1 l S.C.R.


A     in sub-sections (2), (3), (4) and (7) of Section 17 clearly suggests
      that it includes the action taken under Section 13(4) as also
      includes therein the action taken under Rules 8 and 9 which deal
      with the completion of sale of the secured assets. In other words,
      the measures, taken under Section 13 (4) would not be completed
      unless the entire procedure laid down in Rules 8 and 9 for sale of
B
      secured assets is fully complied with by the secured creditor. It
      is for this reason, the tribunal has been empowered by Section
      17(2),(3) and (4) to examine all the steps taken by the secured
      creditor with a view to find out as to whether the sale of secured
      assets was made in conformity with the requirements contained
c     in Section l3(4) read with the Rules or not. [Paras 27-281[[175-
      D-G[
              1.5 Ruic 9(5) confers express power on the secured creditor
      to forfeit the deposit made by the auction purchaser in case the
      auction purchaser commits any default in paying installment of
D     sale money to the secured creditor. Such action taken by the
      secured creditor is, a part of the measures specified in Section
      13(4) and, therefore, it is regarded as a measure taken under
      Section 13(4) read with Ruic 9(5). The measures taken under
      Section 13(4) commence with any of the action taken in clauses
      (a) to (d) and end with measures specified in Ruic 9. [Para 29][175-
E     H; 176-A-BJ
             1.6 The auction purchaser (appellant herein) is one such
      person, who is aggrieved by the action of the secured creditor in
      forfeiting their money. The appellant, therefore, falls within the
      expression "any person" as specified under Section 17(1) and
F     hence is entitled to challenge the action of the secured creditor
      (PNB) before the DRT by filing an application under Section 17(1)
      of the SARFAESI Act. [Para 31)(176-01
            1. 7 The writ court as also the appellate court were justified
      in dismissing the appellant's writ petition on the ground of
G     availability ofalternativc statutory remedy of filing an application
      under Section 17(1) of SARFAESI Act before the concerned
      tribunal to challenge the action of the PNB in forfeiting the
      appellant's deposit under Ruic 9(5). There is no ground to
      interfere with the impugned judgment of the High Court. The
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   AGARWAL TRACOM PVT. LTD. v. PUNJAB NATIONAL                              167
                 BANK & ORS.

appellant is granted liberty to file an application before the              A
concerned Tribunal (DRT) under Section 17(1) of the SARFAESI
Act, which has jurisdiction .10 entertain such application within
45 days from the date of this order. [Paras 34-35](178-D-F]
      Umang Sugars Pvt. Ltd. v. State of Maharashtra & Anr.
      2014 (4) Mh.L.J. 113; United Bank of India v.                         B
      Satvawati Tandon & Ors. (2010) 8 SCC 110 : (2010] 9
      SCR 1 - referred to.
                        Case Law Reference
2014 (4) Mh.L.J. 113             Para 32                  referred to
                                                                            c
(201 O] 9 SCR l                  Para 33                  referred to
     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 19847
of2017.
      From the Judgment and Order dated 11.05.2016 of the High Court
of Delhi at New Delhi in LPANo. 699 of2015.                                 D
      Jaideep Gupta, Sr. Adv., Ajit Sharma, Surjadipta Seth, Advs. for
the Appellant.
                                                                   ·-   '



      M. T. George, Surendra Kumar, Advs. for the Respondents ...
      The Judgment of the Court was delivered by                            E
      AB.HAY MANO.HAR SAPRE, J. I. Leave granted.
      2. This appeal is directed against the final judgment and order
dated I 1.05.2016 passed by the High Court of Delhi al New Delhi in
LPA No.699 of 2015 whereby the Division Bench of the High Court
dismissed the appeal filed by the appellant herein for quashing the order   F
dated 01.09.2015 passed by the Single Judge, which dismissed the
appellanfs W.P.(c) No.8314 of2015. ·
       3. The controversy involved in'the appeal centers around the short
facts and is essentially a legal one. However, few relevant facts need
mention, in brief, to appreciate the controversy.                           G
     4. Respondents-Punjab National Bank(hereinafter referred to as
"PNB") is a Nationalised Bank. The PNB had given loan facility to a
Company called "Mis India Iron & Steel Corporation Limited" (in short,
"Borrower") for their business, which they were carrying at a place
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168             SUPREME COURT REPORTS                          [2017] 11 S.C.R.


A     called Noorpur Khirki, Village Farid Nagar. Tehsil Dhampur, District
      Bijnor (U.P.).
             5. To sccl)re the loan amount, the Borrower had secured their
      assets, which consisted of the land, factory building, plant and machinery
      situated at Dhanapur. The Borrower, however, failed to clear their loan
B     amount and became a defaulter in its repayment. The PNB, therefore,
      invoked their powers under Section 13(4) of the Securitization and
      Reconstruction ofFinancial Assets and Enforcement of Security Interest
      Act, 2002 (hereinafter referred to as "SARFAESI Act") and issued a
      public sale notice in leading English newspapers for sale of the mortgaged
      assets of the Borrower in the public auction fixed for 17.06.2014
c     (Annexure-P-1 ). The appellant herein was one of the bidders, whose
      bid was declared the highest.
             6. The appellant's bid was accordingly accepted by the PNB
      followed by execution of memorandum of understanding between the
      appellant and the PNB (Annexure P-4). The PNB also sent a letter to
D     the appellant stating that the entire plant, machinery. land and the building
      is auctioned in favour of the appellant. The letter also authorized the
      appellant to dismantle and sell the scrap plant and the machinery which
      was lying at the Borrower's factory's premises after depositing the
      necessary installment of sale amount, as agreed upon between the parties
E     in the memorandum of understanding.
             7. The appellant, however, failed to pay the regular installments
      towards sale money in terms of memorandum of understanding lo PNB
      and sought extension of time to pay and remove the scrap material from
      the site.
F           8. This gave rise to the disputes between the parties, namely,
      PNB, appellant (auction purchaser) and the Borrower before the Debt
      Recovery Tribunal (DRT), Lucknow being S.A. No 310 of 2014 wherein
      an order was passed on 03.07.2014 (Anncxure-P-11) directing the
      appellant not to remove any material from the factory premises. The
G     appellant then wrote a letter to PNB requesting them to refund their
      money with interest. This led to another dispute between the parties
      which was filed in the ORT and then before the appellate authority-
      DRAT and finally, in the High Court at Allahabad in Writ Pctition(c) No.
      22246/2015 by the Borrower. This writ petition was disposed of finally

H
    AGARWAL TRACOM PVT. LTD. v. PUNJAB NATIONAL                                 169
       BANK & ORS. [ABHAY MANOHAR SAPRE, J.]

on 29.05.2015 observing therein that since the appellant had failed to          A
comply with the term of memorandum of understanding inasmuch as
the appellant having failed to deposit the requisite installment of sale
money, the PNB cannot proceed with the auction sale held on 17.06.2014
and nor can the appellant be permitted to remove the scrap material
lying in the factory premises.
                                                                                B
       9. This led the PNB to forfeit the appellant's deposit by their
letter dated 26.06.2015 (Annexure-P25). The appellant objected to the
action of PNB by letters and then filed the writ petition in the High Court
of Delhi challenging therein the action of PNB in forfeiting the appellant"s
deposit of money.
                                                                                c
       JO. The SingleJudgeoftheHigh Court, byorderdatedOl .09.2015,
dismissed the appellant's writ petition on the ground of availability of
alternative statutory remedy to the appellant of filing the application under
Section 17 of the SARFAESIAct before the DRT to challenge the action
of PNB in forfeiting the deposit money of the appellant. The Single
Judge, therefore, declined to go into the merits of the case.                   D
       11. The appellant, felt aggrieved of the order of the Single Judge,
filed intra Court appeal (LPA 699 of 2015) before the Division Bench.
By impugned judgment, the Division Bench dismissed the appeal and
confirmed the order of the Single Judge. The Division Bench was also
of the view that the writ petition filed by the appellant was rightly not       E
entertained by the Single Judge (writ Court) on the ground that the proper
remedy of the appellant was to file an application before the ORT under
Section 17 of the SARFAESI Act to question the action of forfeiture
made.by PNB and not in filing the writ petition under Article 226 of the
Constitution. Felt aggrieved. the auction purchaser has filed the present       F
appeal by way of special leave in this Court.
      12. Heard Mr. Jaideep Gupta, learned senior collnscl for the
appellant and Mr. M.T. George, learned counsel for the respondents.
       13. Mr. Jaideep Gupta, learned senior counsel appearing for the
appellant (auction purchaser) while questioning the legality and                G
correctness of the view taken by the two Courts below contended that
the reasoning and the conclusion arrived at by the writ Court and the
Appellate Court is not correct and hence deserves to be set aside. His
main submission was that the action impugned by the appellant.in their
                                                                                H
l 70             SUPREME COURT REPORTS                          [2017] Jl S.C.R.



 A      writ petition, namely, "forfeiture of the deposit of money by PNB" is not
        one of the measures specified under Section 13(4) of the SARFAESI
        Act and, therefore, provisions of Section 17 of SARFAESI Act are not
        attracted so far as the appellant's right to challenge such action under
        Section 17 before the DRT is concerned.

B              14. Jn other words, the submission was that in orderto attract the
        rigor of Section 17 of the SARFAESIAct, it 1s necessary that the action
        complained ofl?y the party concerned must satisfy the conditions set out
        in Section 13 ( 4 ). It was urged that the "forfeiture of deposit" impugned
        in the writ petition is not and nor it could be considered as one of the
        measures falling in Section 13 (4) so as to attract the rigor of Section 17
 c      of the SARFAESI Act. It was urged that the dispute in question was
        essentially between the PNB (secured creditor) and the auction purchaser
        (appellant) and arose after the measw·cs under Section 13(4) had been
        taken by the secured creditor (PNB) against the borrower and. therefore,
        the dispute in question fell outside the purview of Section I 3(4) and, in
D       consequence, fell out of purview of Section 17. In short, the dispute in
        question had nothing to do with any of the measures specified in Section
        13(4).
            15. It was fmiher urged that reading of Section 17 would go to
    show that the application under Section 17 can be made to ORT by
E "any person''' including borrower to challenge any of the measures
    referred to in Section 13(4) once taken by the secured creditor. However,
    since forfeiture of the amount made by the secured creditor against the
    auction purchaser is not one of the measures under Section 13(4) and
    hence, the action of forfeiture made by the secured creditor cannot be
    challenged by the auction purchascrunder Section 17 of the SARFAESI
F Act by filing an application. It was urged that w1der these circumstances
    the appellant had rightly filed the writ petition under Article 226/227 of
 .. t
    the Constitution to challenge the action of forfeiture of deposit money in
J.a the High Court, that being the only remedy available to them and,
    therefore, the writ petition should have been entertained for its hearing
G on merits by the writ court. It is these submissions, which were elaborated
    by the lea med counsel for the appellant by pointing out relevant provisions
    of the SARFAESI Act.
              I 6. In reply, learned counsel for the respondents (PNB) suppo11ed
        the impugned judgment and contended that the action impugned in the
H       writ petition docs ~ttra~.t Section 13(4) read with th.c Rules framed
   AGARWAL TRACOM PVT. LTD. v. PUNJAB NATIONAL                                 171
      BANK & ORS. [ABHAY MANOHAR SAPRE, J.)

thereunder and hence the remedy of the appellant lies in approaching           A
ORT by filing an application under Section 17 of the SARFAESI Act as
was rightly held by the two Courts below.
       17. Having heard the learned counsel for the parties and on perusal
of the record of the case, we find no merit in the appeal. In other words,
the view taken by the High Court appears to be just and reasonable and         B
hence docs not call for any interference.
       18. The short question that arise for consideration in this appeal is
whether the High Court was justified in holding that the remedy of the
appellant (auction purchaser) lies in challenging the action of the secured
creditor (PNB) in forfeiting the deposit by filing an application under        c
Section 17 of the SARFEASI Act before the ORT or the remedy of
auction purchaser is in filing the writ petition under Article 226/227 of
the Constitution of India to examine the legality of such action.
       19. Section 13(4) and Section 17 of the SARFAESI Act, Rules 8
and 9 of the Security lntercst(Enforcement) Rulcs,2002(hcrcinaftcr             D
referred to as "the Rules") to the extent they are relevant for deciding
the question involved in the appeal arc quoted below:
                                Section 13(4)
       13. Enforcement of security interest-
                                                                               E
       { I) to (3A) ...................................................... .
       (4) In case the borrower fails to discharge his liability in
       full within the period specified in sub-section (2), the
       secured creditor may take recourse to one or more of the
       following measures to recover his secured debt, namely:-
                                                                               F
           (a)    take possession of the secured assets of the
                  borrower including the right to transfer by way of
                  lease, assignment or sale for realizing the secured
                  asset;
           (b)    take over the management of the business of the              G
                  borrower including the right to transfer by way of
                  lease, assignment or sale for realizing the secured
                  asset:
                  Provided that the right to transfer by way of lease,
                                                                               H
172     SUPREME COURT REPORTS                     [2017] l l S.C.R.


A              assignment or sale shall be exercised only where
               the substantial part of the business of the borrower
               Is held as security for the debt:
               Provided further that where the management of
               whole, of the business or part of the business is
B              severable, the secured creditor shall take over the
               management of such business of the borrower
               which is relatable to the security or the debt;
         (c)   appoint any person (hereafter referred to as the
               manager), to manage the secured assets the
c              possession of which has been taken over by the
               secured creditor;
         (d)   require at any time by notice in writing, any person
               who has acquired any of the secured assets from
               the borrower and from whom any money is due or
D              may become due to the borrower, to pay the
               secured creditor, so much of the money as is
               sufficient to pay the secured debt."
                           Section 17
      "17. Annlication against measures to recover secured
E     debts-(1) Any person (including borrower), aggrieved by
      any of the measures referred to in sub-section (4) of section
      13 taken by the secured creditor or his authorized officer
      under this Chapter, may make an application along with such
      fee, as may be prescribed to the Debts Recovery Tribunal
      having jurisdiction in the matter within forty-five days from
F
      the date on which such measures had been taken:
      (2) The Debts Recovery Tribunal shall consider whether
      any of the measures referred to in sub-section (4) of section
      13 taken by the secured creditor for enforcement of security
      arc in accordance with the provisions of this Act and the
G
      rules made thereunder.
      (3) If, the Debts Recovery Tribunal, after examining the
      facts and circumstances of the case and evidence produced
      by the parties, comes to the conclusion that any of the
      measures referred to in sub-section (4) of section 13, taken
H
AGARWAL TRACOM PVT. LTD. v. PUNJAB NATIONAL                               173
   BANK & ORS. [ABHAY MANOHAR SAPRE, J.]

 by the secured creditor arc not in accordance with the A
 provisions of this Act and the rules made thereunder, and
 require restoration of the management or restoration of
 possession, of the secured assets to the borrower or other
 aggrieved person, it may, by order,-
 (a) to (c) ....................... .                                     B
 ( 4) If, tbe Debts Recovery Tribunal declares the recourse
 taken by a secured creditor under sub-section (4) of section
 13, is in accordance with the provisions of this Act and the
 rules made thereunder, then, notwithstanding anything
 contained in any other law for the time being in force, the              c
 secured creditor shall be entitled to take recourse to one
 or more of the measures specified under sub-section (4) of
 section 13 to recover his secured debt.
 (4A) ............................................................ ..
 (5).................................................................     D
 (6) ................................................................ .
 (7) Save as otherwise provided in this Act, the Debts
 Recovery Tribunal shall, as far as may be, dispose of
 application in accordance with the provisions of the                     E
 Rceovcrv of Debts Due to Banks and Financial lnstitutio'ns
 Act. 1993(51 of 1993) and the rules made thereunder.
                                   Ruic 8
 8.    Sale of immovable secured assets-
  (1) to (8) ..........................................................   F

                               Ruic 9
  9. Time of sale, issue of sale certificate and delivery of
  possession. etc.-
  (1) to (4).........................................................     G
  (5) In default of payment within the period mentioned in
  sub-rule (4), the deposit shall be forfeited to the secured
  creditor and the property shall be resold and the defaulting
  purchaser shall forfeit all claim to the property or to any
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174            SUPREME COURT REPORTS                         [2017) ll S.C.R.


A           part of the sum for which it may be subsequently sold.
            (6) On confirmation of sale by the secured creditor and if
            the terms of payment have been complied with, the
            authorized officer exercising the power of sale shall issue a
            certificate of sale of the immovable property in favour of
B           the purchaser in the form given in Appendix V to these
            rules."
                                                   (Emphasis supplied)
             20. Section 13(4) is invoked by the secured creditor against their
      borrower when the borrower fails to discharge his liability in full within
c     the specified time. The secured creditor then can take possession of the
      assets of the borrower. transfer the assets by lease or by assignment or
      sell the assets to recover the outstanding dues under clause (a).
             21. The secured creditor under clause (b) can also take over the
      management of the business of the borrower or transfer by way of
D     lease, assignment or sale. However such power can be invoked only
      when the creditor holds substantial part of the borrower's business as
      security and further it satisfies the condition set out in second proviso.
            22. The secured creditor under clause (c) can also appoint any
      manager to manage the borrower's business and lastly under clause (ct),
E     the secured creditor can ask any person to whom the money is due or
      become due lb pay to the secured creditor instead of paying to borrower
      which is snfflcient to satisfy the debt.
             23. So far as Section 17 is concerned, it provides a remedy to a
      person who is aggrieved by the measures taken by the secured creditor
 F    or his authorized officer under Section 13(4) in relation to secured assets
      uf the borrower. It says that "any person (including borrower)" may
      make an application to the DRTwithin 45 days from the date of measures
      taken under Section 13(4). Sub-section (2) of Section 17 was added by
      way of amendment w.e.f. l l.11.2004. It provides that the Tribunal, on
      such application being made under Section 17( 1), shall consider whether
G     the measures referred to and taken under Section 13(4) by the secured
      creditor are in accordance with the "provisions of this Act and the
      Rules made thereunder". Similarly, sub- sections (3), (4) and (7) of
      Section 17 which deal with the power of the ORT also use the expression
      "in accordance with provisions of the Act and the Rules made
H
    AGARWAL TRACOM PVT. LTD. v. PUNJAB NATIONAL                                 175
       BANK & ORS. [ABHAY MANOHAR SAPRE, J.]

thereunder".                                                                    A
      24. Rule 8, which has 8 sub-rules, deals with the manner of sale
of immovable secured assets and provides detail procedure as to how
and in what manner the sale of secw·ed assets. is to be held. Rule 9
deals with time of sale, issue of sale certificate and delivery of possession
       25. Rule 9(6) empowers the authorized officer to issue sale              B
certificate in favour of the purchaser. Ruic 9(9) then empowers the
authorized officer to deliver the properties to the purchaser whereas
Ruic 9( I 0) empowers the authorized officer to mention in sale certificate
that the property is free from encumbrances.
       26. So far as this case is concerned. sub-mle (5) of Rule 9 is           c
relevant. It provides that, if the auction purchaser commits any default
in payment of sale consideration within the time specified, the deposit
made by auction purchaser shall be "forfeited" to the secured creditor
and the auctioned property shall be resold and the defaulting purchaser
shall "forfeit" all claims to the property or its part of the sum for which     D
it may be sold subsequently.
       27. Reading of the aforementioned Sections and lhe Rules and, in
patticular, Section 17(2) and Ruic 9(5) would clearly go to show that an
action of secured creditor in forfeiting the deposit made by the auction
purchaser is a part of the measures taken by the secured creditor under         E
Section 13(4 ).
       28. The reason is that Section 17(2) empowers the Tribunal to
examine all the issues arising out of the measures taken under Section
13(4) including the measw·es taken by the secured creditor under Rules
8 and 9 for disposal of the secured assets of the borrower. The expression
                                                                             F
"provisions of this Act and the Rules made thereunder" occurring
in sub-sections (2), (3), (4) and (7) of Section 17 clearly suggests that it
includes the action taken under Section 13(4) as also includes therein
the action taken under Rules 8 and 9 which deal with the completion of
sale of the secured assets. In other words, the measures taken under
Section 13 (4) would not be completed unless the entire procedure laid G
down in Rules 8 and 9 for sale of secured assets is fully complied with
by the secured creditor. It _is for this reason, the Tribunal has been
empowered by Section 17(2),(3) and (4) to examine all the steps taken
by the secured creditor with a view to find out as to whether the sale of
secured assets was made in conformity with the requirements contained H
176             SUPREME COURT REPORTS                          (2017) l l S.C.R.


A     in Section 13(4) read with the Rules or not?
             29. We also notice that Rule 9(5) confers express power on the
      secured creditor to forfeit the deposit made by the auction pLU'chascr in
      case the auction purchaser commits any default in paying installment of
      sale money to the secured creditor. Such action taken by the secured
B     creditor is, in our opinion, a part of the measures specified in Section
      13(4) and, therefore, it is regarded as a measure taken under Section
      13(4) read with Ruic 9(5). Jn our view, the measures taken under Section
      13(4) commence with any of the action taken in clauses (a) to (d) and
      end with measures specified in Rule 9.

c            30. In our view, therefore, the expression "any of the measures
      referred to in Section 13(4) taken by secw·ed creditor or his authorized
      officer" in Section 17( I) would include all actions taken by the secured
      creditor under the Rules which relate to the measures specified in
      Section! 3( 4).

D           31. The auction purchaser (appellant herein) is one such person,
      who is aggrieved by the action of the secured creditor in forfeiting their
      money. The appellant, therefore, falls within the expression "any person"
      as specified under Section 17( I) and hence is entitled to challenge the
      action of the secured creditor (PNB) before the DRT by filing an
      application under Section 17(1) of the SARFAESIAct.
E
            32. Learned counsel for the appellant placed reliance on the
      decision of the Division Bench of High Court of Bombay in Umang
      Sugars Pvt. Ltd. vs. State of Maharashtra & Anr., 2014(4) Mh.L.J.
      113 which, according to him, supports his submission. We have gone
      through the decision and unable lo agree with the view taken therein.
F     Their Lordships, while holding that Section 17( I) does not apply to auction
      purchaser and, therefore. writ petition filed by him can be entertained in
      such cases, did not notice the Rules, which deal with the measures taken
      under Section 13(4) and nor considered its effect on the measures.
             33. In United Bank of India vs. Satyawati Tondon & Ors.,
G     (2010) 8 SCC 110, this Court had the occasion to examine in detail the
      provisions of the SARFAESI Act and the question regarding invocation
      of the extraordinary power under Article 226/227 in challenging the
      actions taken under the SARFAESI Act. Their Lordships gave a note
      of caution while dealing with the writ filed to challenge the actions taken
      under the SARFAESI Act and made following pertinent observations
H
   AGARWAL TRACOM PVT. LTD. v. PUNJAB NATIONAL                           177
      BANK & ORS. [ABHAY MANOHAR SAPRE, J.]

which. in our view, squarely apply to the case on hand:                  A
       "42. There is another reason why the impugned order
       should be set aside. If Respondent 1 had any tangible
       grievance against the notice issued under Section 13(4) or
       action taken under Section 14, then she could have availed
       remedy by filing an application under Section 17(1). The          B
       expression "any person" used in Section 17(1) is of wide
       import. It takes within its fold, not only the borrower but
       also the guarantor or any other person who may be affected
       by the action taken under Section 13(4) or Section 14. Both,
       the Tribunal and the Appellate Tribunal are empowered to
       pass interim orders under Sections 17 and 18 and arc              c
       required to decide the matters within a fixed time schedule.
       It is thus evident that the remedies available to an
       aggrieved person under the SARFAESI Act are both
     · expeditious and effective.
      43. Unfortunately, the High Court overlooked the settled           D
      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, ccss, fees, other types of public money and the          E
      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
      arc a code unto themselves inasmuch as they not only               F
      contain comprehensive procedure for recovery of the dues
      but also envisage constitution of quasi-judicial bodies for
      rcdrcssal of the grievance of any aggrieved person.
      Therefore, fo all such cases, the High Court must insist
      that before availing remedy under Article 226 of the               G
      Constitution, a person must exhaust the remedies available
      under the relevant statute.
      44. While expressing the aforesaid view, we arc conscious
      that the powers conferred upon the High Court under
      Article 226 of the Constitution to issue to any person or          H
178                SUPREME COURT REPORTS                         (2017] 11 S.C.R.



A            authority, including in appropriate cases. any Government,
             directions, orders or writs including the five prerogative
             writs for the enforcement of any of the rights conferred hy
             Part III or for any other purpose are very wide and there is
             no express limitation on exercise of that power but, at the
             same time, we cannot be oblivious of the rules of self-
B
             imposc(I restraint evolved by this Court, which every High
             Court is bound to keep in view while exercising power
             under Article 226 of the Constitution.
             45. It is true thatthe rule of exhaustion of alternative remedy
             is a rule of discretion and not one of compulsion, but it is
c            difficult to fathom any reason why the High Court should
             entertain a petition filed under Article 226 of the
             Constitution and pass interim order ignoring the fact that
             the petitioner can avail effective alternative remedy by filing
             application, appeal, revision, etc. and the particular
D            legislation contains a detailed mechanism for redrcssal of
             his grievance."
             34. In the light of foregoing discussion, we arc of the considered
      opinion that the Writ Court as also the Appellate Court were justified in
      dismissing the appellant's writ petition on the ground of availability of
E     alternative statutory remedy of filing an application under Section 17(1)
      ofSARFAESIAct before the concerned Tribunal to challenge the action
      of the PNB in forfeiting the appellant's deposit under Ruic 9(5). We
      find no ground to interfere with the impugned judgment of the High
      Comt.

F            35. The appellant is, accordingly, granted libe1tyto file an application
      before the concerned Tribunal (DRT) under Section 17( I) of the
      SARFAES! Act, which has jurisdiction to entc1tain such application within
      45 days from the date of this order. In case, if the appellant files any
      such application, the Tribunal shall decide the same on its merits in
      accordance with law unint1ucnccd by any of the observations made by
G     this Court and the High Court in the impugned judgment.
            36. With these observations and liberty granted to the appellant,
      the appeal fails and is accordingly dismissed.


      Nidhi Jain                                                     Appeal dis1nisscd.