UNITED BANK OF INDIAversusSATYAWATI TONDON AND OTHERS

                      [201 O] 9 S.C.R. 1


                  UNITED BANK OF INDIA                             A
                               v.
            SATYAWATI TONDON AND OTHERS
              (Civil Appeal No. 5990 of 2010)
                        JULY 26, 2010
                                                                   B
   [G.S. SINGHVI AND ASOK KUMAR GANGULY, JJ.]

     Securitization and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 - ss.13(2), 13(4)
and 14 - Entitlement of bank to recover outstanding dues from C
the guarantor without proceeding against the borrower -
Appellant-bank issued notices to the guarantor u/s. 13(2) and
13(4) and filed application uls. 14 without first initiating action
against the borrower for recovery of the outstanding dues -
Held: The action taken by the appellant cannot be faulted on D
any legally permissible ground - The High Court completely
misdirected itself in assuming that the appellant could not
have initiated action against the guarantor without making
efforts for recovery of its dues from the borrower- Banks/
Banking.                                                            E
     Constitution of India, 1950:

     Article 136 - Interference with interim order passed by
High Court - Scope - Appellant-bank initiated action for
recovery of outstanding dues in terms of the provisions of the F
SARFAESI Act - Interim order by High Court restraining the
bank from proceeding under the Act - Challenge to - Held:
Normally the Supreme Court does not interfere with the
discretion exercised by High Court to pass an interim order
in a pending matter - However, on facts, an exception is G
required to be made out as the order under challenge had the .
effect of defeating the very object of the said legislation to
ensure that there were no unwarranted impediments in the
recovery of tlle debts, etc. due to banks, other financial
                               1                                   H
    2       SUPREME COURT REPORTS                 [2010] 9 S.C.R.


A institutions and secured creditors - Securitization and
    Reconstruction of Financial Assets and Enforcement of
    Security Interest Act, 2002.

       Article 226 - Cases relating to recovery of dues of banks,
8 financial institutions and secured creditors - Exercise of power
  under Article 226 - Rules of self-imposed restraint to be kept
  in mind by the High Courts - The High Courts should be
  extremely careful and circumspect in exercising its discretion
  to grant stay in such matters - The High Courts should not
  ignore the availability of statutory remedies under the ORT
C Act and 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.

D       Article 226 - Writ petition bypassing alternative statutory
  remedy - Maintainability of - Appellant-bank initiated action
  for recovery of outstanding dues in terms of the provisions of
  the SARFAESI Act - Writ petition filed challenging the action
  initiated by bank - Held:. The writ petition was liable to be
E dismissed because an effective alternative remedy was
  available to the writ petitioner uls. 17 of the SARFAESI Act,
  which contained a detailed mechanism for redressal of his
  grievance - Securitization and Reconstruction of Financial
  Assets and Enforcement of Security Interest Act, 2002 -
F Remedy - Alternative remedy.

        Words and Phrases- "any person" (used in s.17(1) of the
    Securitization and Reconstruction of Financial Assets and
    Enforcement of Security Interest Act, 2002) - Meaning of

G     Respondent no.2 obtained a term loan from
  appellant-bank for opening a colour lab. Respondent no.1
  gave guarantee for repayment of the loan; she mortgaged
  her property and executed an agreement of guarantee
  making herself liable for repayment of the loan amount
H with interest.
  UNITED BANK OF INDIA v. SATYAWATI TONDON              3
                 AND ORS.
    Respondent no.1, however, failed to repay the loan A
amount, whereupon thd appellant issued notice against
respondent nos.1 and 2 under s.13(2) of the Securitization
and Reconstruction of Financial Assets and Enforcement
of Security Interest Act, 2002 (SARFAESI Act) asking them
to pay the outstanding dues alongwith future interest and B
incidental expenses. Upon receipt of the notice,
respondent no.1 offered to settle the loan account, but the
appellant did not accept the offer and filed an application
under Section 14 of the SARFAESI Act, which was
allowed by the District Magistrate/Collector. Thereafter the c
appellant issued notice to respondent nos.1 and 2 under
Section 13(4) of the SARFAESI Act.

    Respondent no.1 filed writ petition and prayed that
the appellant be restrained from taking coercive action in
pursuance of the notices issued under Sections 13(2) D
and 13(4) and the order passed by the District Magistrate/
Collector. Respondent no.1 contended that the notices
issued by the appellant for recovery of the outstanding
due were ex facie illegal and liable to be quashed because
no action had been taken against the borrower i.e. E
respondent no.2 for recovery of the outstanding dues.

    The appellant, on the other hand, pleaded that the
action initiated against respondent no.1 was consistent
with the provisions of SARFAESI Act; that respondent        F
no.1 was bound to discharge her obligations to pay the
outstanding dues and that the writ petition was liable to
be dismissed because an alternative remedy was
available to respondent no.1 under Section 17 of the
SARFAESI Act.
                                                            G
     The High Court passed an interim order restraining
the appellant from taking action in furtherance of the
notice issued under Section 13(4) of the SARFAESI Act.

                                                            H
    4      SUPREME COURT REPORTS               [2010] 9 S.C.R.


A     In the instant appeal, the question which arose for
  consideration was whether the appellant could have
  issued notices to respondent no.1 under Section 13(2)
  and (4) of the SARFAESI Act and filed an application
  under Section 14 without first initiating action against the
B borrower i.e., respondent no.2, for recovery of the
  outstanding dues.

        Allowing the appeal, the Court

       HELD:1. Normally, this Court does not interfere with
C the discretion exercised by the High Court to pass an
  interim order in a pending matter but, having carefully
  examined the matter, this Court feels persuaded to make
  an exception in this case because the order under
  challenge has the effect of defeating the very object of
D the legislation enacted by Parliament for ensuring that
  there are no unwarranted impediments in the recovery of
  the debts, etc. due to banks, other financial institutions
  and secured creditors. [Para 13] [21-D-E]

E        2.1. In the present case, the High Court completely
    misdirected itself in assuming that the appellant could not
    have initiated action against respondent no.1 without
    making efforts for recovery of its dues from the borrower-
    respondent no.2. The High Court was not at all justified
    in injuncting the appellant from taking action in
F   furtherance of notice issued under Section 13(4) of the
    Act. [Paras 15, 28] [22-G-H; 32-C]

      2.2. Even after receipt of notices under Section 13(2)
  and (4) and order passed under Section 14 of the
G SARFAESI Act, respondent Nos.1 and 2 did not bother to
  pay the outstanding dues. Therefore, the action taken by
  the appellant for recovery of its dues by issuing notices
  under Section 13(2) and 13(4) and by filing an application
  under Section 14 cannot be faulted on any legally
H
  UNITED BANK OF INDIA v. SATYAWATI TONDON               5
                  AND ORS.

permissible ground and, the High Court committed A
serious error by entertaining the writ petition of
respondent No.1. [Para 16] [23-A-C]

     Bank of Bihar Ltd. v. Damodar Prasad (1969) 1 SCR 620;
State Bank of India v. Mis. lndexport Registered and others
                                                              8
(1992) 3 SCC 159 and Industrial Investment Bank of India
Limited v. Biswanath Jhunjhunwala (2009) 9 SCC 478 ~relied
on.

     3.1. There is another reason why the impugned order
should be set aside. If respondent No.1 had any tangible C
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 expression 'any person' used in Section 17(1)
is of wide import. It takes within its fold, not only the D
borrower but also 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 are required to decide the matters E
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. The
High Court overlooked the settled law that ordinarily a
petition under Article 226 of the Constitution will not be F
entertained 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. [Para 17] [23-D-H]
                                                           G
     3.2. 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

                                                              H
    6      . SUPREME COURT REPORTS             [2010] 9 S.C.R.

A legislations enacted by Parliament and State Legislatures
  for recovery of such dues are 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
B 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. [Para 17) [23-H; 24-A-B]
c        3.3. The powers conferred upon the High Court
    under Article 226 of the Constitution to issue to any
    person or authority, including in appropriate cases, any
    Government, directions, orders or writs including the five
    prerogative writs for the enforcement of any of the rights
D   conferred by Part Ill or for any other purpose are very
    wide and there is no express limitation on exercise of that
    power but, at the same time, one cannot be oblivious of
    the rules of self-imposed restraint evolved by this Court,
    which every High Court is bound to keep in view while
E   exercising the powers under Article 226 of the
    Constitution. It is true that the rule of exhaustion of
    alternative remedy is a rule of discretion and not one of
    compulsion, but it is difficult to fathom any reason why
    the High Court should entertain a petition filed under
F   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 legislation contains a detailed
    mechanism for redressal of his grievance. The stay of an
G   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.
H
  UNITED BANK OF INDIA v. SATYAWATI TONDON                 7
                  AND ORS.
In cases relating to recovery of the dues of banks,             A
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           B
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 exception, then the High
Court may, after considering all the relevant parameters
and public interest, pass appropriate interim order. [Para      C
18] (24-C-H; 25-A-B]

     3.4. It is a matter of serious concern that despite
repeated pronouncements of this Court, the High Courts
continue to ignore the availability of statutory remedies
under the ORT Act and SARFAESI Act and exercise                 D
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. It is
hoped that in future the High Courts will exercise their
discretion in such matters with greater caution, care and       E
circumspection. [Para 27] (31-H; 32-A-8]

     Thansingh Nathma/ v. Superintendent of Taxes (1964)
6 SCR 654; Titaghur Paper Mills Co. Ltd. v. State of Orissa
(1983) 2 SCC 433; Assistant Collector of Central Excise,
                                                                F
Chandan Nagar, West Bengal v. Dunlop India Ltd. and others
(1985) 1 SCC 260; Punjab National Bank v. O.C. Krishnan
and others (2001) 6 sec 569; CCT, Orissa and others v.
Indian Explosives Ltd. (2008) 3 SCC 688; City and Industrial
Development Corporation v. Dosu Aardeshir Bhiwandiwala          G
and others (2009) 1 SCC 168; Raj Kumar Shivhare v.
Assistant Director, Directorate of Enforcement and another
(2010) 4 SCC 772 and Modem Industries v. Steel Authority
of India Limited (2010) 5 SCC 44 - relied on.

    Baburam Prakash Chandra Maheshwari v. Antarim Zila          H
    8       SUPREME COURT REPORTS                  [2J10] 9 S.C.R.


A Parishad AIR 1969 SC 556; Whirlpool Corporation v.
  Registrar of Trade Marks, Mumbai (1998) 8 SCC 1;
    Harbanslal Sahnia and another v. Indian Oil Corporation Ltd.
    and others (2003) 2 sec 107 - referred to.

                          Case Law Reference:
B
        (1969) 1 SCR 620           relied on             Para 14
        (1992) 3 sec 159           relied on             Para 14
        (2009) 9 sec 478           relied on             Para 14
c       AIR 1969 SC 556            referred to           Para 18
        (1998) 8 sec 1             referred to           Para 18
        (2003) 2 sec 101           referred to           Para 18
D       (1964) 6 SCR 654           relied on             Para 19
        (1983) 2 sec 433           relied on             Para 20
        (1985) 1 sec 260           relied on              Para 21

E       (2001) 6 sec 569           relied on              Para 22
        (2008) 3 sec 688           relied on              Para 23
        (2009) 1 sec 168           relied on              Para 24
        (201 O) 4 sec 112          relied on              Para 25
F
        (2010) s sec 44            relied on              Para 2

        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    5990 of 2010.
G       From the Judgment & Order dated 28.10.2009 of the High
    Court of Judicature at Allahabad in Civil Misc. Writ Petition No.
    55375 of 2009.

       Yashraj Singh Deora, Rajesh Gautam, Shiv Mitter (for
H Mitter & Mitter Co.) for the Appellant.
   UNITED BANK OF INDIA v. SATYAWATI TONDON                     9
                   AND ORS.

     The following Judgment of the Court was delivered               A

     1. Leave granted.

      2. With a view to give impetus to the industrial
development of the country, the Central and State Governments
encouraged the banks and other financial institutions to             B
formulate liberal policies for grant of loans and other financial
facilities to those who wanted to set up new industrial units or
expand the existing units. Many hundred thousand took
advantage of easy financing by the banks and other financial
institutions but a large number of them did not repay the amount     C
of loan, etc. Not only this, they instituted frivolous cases and
succeeded in persuading the Civil Courts to pass orders of
injunction against the steps taken by banks and financial
institutions to recover their dues. Due to lack of adequate
infrastructure and non-availability of manpower, the regular         D
Courts could not accomplish the task of expeditiously
adjudicating the cases instituted by banks and other financial
institutions for recovery of their dues. As a result, several
hundred crores of public money got blocked in unproductive
ventures. In order to redeem the situation, the Government of        E
India constituted a committee under the chairmanship of Shri
T. Tiwari to examine the legal and other difficulties faced by
banks and financial institutions in the recovery of their dues and
suggest remedial measures. The Tiwari Committee noted that
the existing procedure for recovery was very cumbersome and
                                                                     F
suggested that special tribunals be set up for recovery of the
dues of banks and financial institutions by following a summary
procedure. The Tiwari Committee also prepared a draft of the
proposed legislation which contained a provision for disposal
of cases in three months and conferment of power upon the            G
Recovery Officer for expeditious execution of orders made by
adjudicating bodies. The issue was further examined by the
Committee on the Financial System headed by Shri M.
Narasimham. In its First Report, the Narasimham Committee
also suggested setting up of special tribunals with special
                                                                     H
    10      SUPREME COURT REPORTS                   [2010] 9 S.C.R.


A powers for adjudication of cases involving the dues of banks
  and financial institutions.

       After considering the reports of the two Committees and
  taking cognizance of the fact that as on 30-9-1990 more than
  15 lakh cases filed by public sector banks and 304 cases filed
8
  by financial institutions were pending in various Courts for
  recovery of debts, etc. amounting to Rs.6000 crores, the
  Parliament enacted the Recovery of Debts Due to Banks and
  Financial Institutions Act, 1993 (for short, 'the ORT Act'). The
  new legislation facilitated creation of specialised forums i.e., the
C Debts Recovery Tribunals and the Debts Recovery Appellate
  Tribunals for expeditious adjudication of disputes relating to
  recovery of the debts due to banks and financial institutions.
  Simultaneously, the jurisdiction of the Civil Courts was barred
  and all pending matters were transferred to the Tribunals from
D the date of their establishment.

        An analysis of the provisions of the ORT Act shows that
  primary object of that Act was to facilitate creation of special
  machinery for speedy recovery of the dues of banks and
E financial institutions. This is the reason why the ORT Act not only
  provides for establishment of the Tribunals and the Appellate
  Tribunals with the jurisdiction, powers and authority to make
  summary adjudication of applications made by banks or
  financial institutions and specifies the modes of recovery of the
F amount determined by the Tribunal or the Appellate Tribunal but
  also bars the jurisdiction of all courts except the Supreme Court
  and the High Courts in relation to the matters specified in
  Section 17. The Tribunals and the Appellate Tribunals have also
  been freed from the shackles of procedure contained in the
  Code of Civil Procedure. To put it differently, the ORT Act has
G not only brought into existence special procedural mechanism
  for speedy recovery of the dues of banks and financial
  institutions, but also made provision for ensuring that defaulting
  borrowers are not able to invoke the jurisdiction of Civil Courts

H
   UNITED BANK OF INDIA v. SATYAWATI TONDON                     11
                  AND ORS.

 for frustrating the proceedings initiated by the banks and other     A
 financial institutions.

       For few years, the new dispensation worked well and the
 officers appointed to man the Tribunals worked with great zeal
 for ensuring that cases involving recovery of the dues of banks
                                                                      B
 and financial institutions are decided expeditiously. However,
 with the passage of time, the proceedings before the Tribunals
 became synonymous with those of the regular Courts and the
 lawyers representing the borrowers and defaulters used every
 possible mechanism and dilatory tactics to impede the
 expeditious adjudication of such cases. The flawed                   C
 appointment procedure adopted by the Government greatly
 contributed to the malaise of delay in disposal of the cases
 instituted before the Tribunals.

        The survey conducted by the Ministry of Finance,              D
  Government of India revealed that as in 2001, a sum of more
  than Rs.1,20,000/- crores was due to the banks and financial
  institutions and this was adversely affecting the economy of the
  country. Therefore, the Government of India asked the
  Narasimham Committee to suggest measures for expediting             E
  the recovery of debts due to banks and financial institutions. In
  its Second Report, the Narasimham Committee noted that the
  non-performing assets of most of the public sector banks were
  abnormally high and the existing mechanism for recovery of the
 1same was wholly insufficient. In Chapter VIII of the Report, the    F
i Committee noted that the evaluation of legal framework has not
  kept pace with the changing commercial practice and financial
  sector reforms and as a result of that the economy could not
  reap full benefits of the reform process. The Committee made
  various suggestions for bringing about radical changes in the       G
  existing adjudicatory mechanism. By way of illustration, the
  Committee referred to the scheme of mortgage under the
  Transfer of Property Act and suggested that the existing laws
  should be changed not only for facilitating speedy recovery of
  the dues of banks, etc. but also for quick resolution of disputes
                                                                      H
    12      SUPREME COURT REPORTS                  [201 O] 9 S.C.R.


A arising out of the action taken for recovery of such dues. The
  Andhyarujina Committee constituted by the Central
  Government for examining banking sector reforms also
  considered the need for changes in the legal system. Both, the
  Narasimham and Andhyarujina Committees suggested
B enactment of new legislation for securitisation and empowering
  the banks and financial institutions to take possession of the
  securities and sell them without intervention of the court. The
  Government of India accepted the recommendations of the two
  committees and that led to enactment of the Securitization and
c Reconstruction of Financial Assets and Enforcement of Security
  Interest Act, 2002 (for short 'the SARFAESI Act'), which (:an
  be termed as one of the most radical legislative measures
  taken by the Parliament for ensuring that dues of secured
  creditors including banks, financial institutions are recovered
  from the defaulting borrowers without any obstruction. For the
0
  first time, the secured creditors have been empowered to take
  steps for recovery of their dues without intervention of the Courts
  or Tribunals.

       3. Section 13 of the SARFAESI Act contains detailed
E mechanism for enforcement of security interest. Sub-section (1)
  thereof lays down that notwithstanding anything contained in
  Sections 69 or 69-A of the Transfer of Property Act, any security
  interest created in favour of any secured creditor may be
  enforced, without the intervention of the court or tribunal, by such
F creditor in accordance with the provisions of this Act. Sub-
  section (2) of Section 13 enumerates first of many steps
  neede!d to be taken by the secured creditor for enforcement of
  security interest. This sub-section provides that if a borrower,
  who is under a liability to a secured creditor, makes any default
G in repayment of secured debt and his account in respect of such
  debt is classified as non-performing asset, then the secured
  creditor may require the borrower by notice in writing to
  discharge his liabilities within sixty days from the date of the
  notice with an indication that if he fails to do so, the secured
H creditor shdll be entitled to exercise all or any of its rights in
  UNITED BANK OF INDIA v. SATYAWATI TONDON                   13
                 AND ORS.

terms of Section 13(4). Sub-section (3) of Section 13 lays down A
that notice issued under Section 13(2) shall contain details of
the amount payable by the borrower as also the details of the
secured assets intended to be enforced by the bank or financial
institution. Sub-section (3-A) of Section 13 lays down that the
borrower may make a representation in response to the notice B
issued under Section 13(2) and challenge the classification of
his account as non-performing asset as also the quantum of
amount specified in the notice. If the bank or financial institution
comes to the conclusion that the representation/objection of the
borrower is not acceptable, then reasons for non-acceptance       c
are required to be communicated within one week. Sub-section
(4) of Section 13 specifies various modes which can be
adopted by the secured creditor for recovery of secured debt.
The secured creditor can take possession of the secured
assets of the borrower and transfer the same by way of lease, D
 assignment or sale for realising the secured assets. This is
 subject to the condition that the right to transfer by way of lease,
 etc. shall be exercised only where substantial part of the
 business of the borrower is held as secured debt. If the
 management of whole or part of the business is severable, then
 the secured creditor can take over management only of such E
 business of the borrower which is relatable to security. The
secured creditor can appoint any person to manage the
secured asset, the possession of which has been taken over.
 The secured creditor can also, by notice in writing, call upon a
 person who has acquired any of the secured assets from the F
 borrower to pay the money, which may be sufficient to discharge
 the liability of the borrower. Sub-section (7) of Section 13 lays
 down that where any action has been taken against a borrower
 under sub-section (4), all costs, charges and expenses properly
 incurred by the secured creditor or any expenses incidental G
 thereto can be recovered from the borrower. The money which
 is received by the secured creditor is required to be held by
 him in trust and applied, in the first instance, for such costs,
 charges and expenses and then in discharge of dues of the
 secured. creditor. Residue of the money is payable to the H
    14      SUPREME COURT REPORTS                   [2010] 9 S.C.R.


A   person entitled thereto according to his rights and interest. Sub-
    section (8) of Section 13 imposes a restriction on the sale or
    transfer of the secured asset if the amount due to the secured
    creditor together with costs, charges and expenses incurred by
    him are tendered at any time before the time fixed for such sale
B   or transfer. Sub-section (9) of Section 13 deals with the
    situation in which more than one secured creditor has stakes
    in the secured assets and lays down that in the case of
    financing a financial asset by more than one secured creditor
    or joint financing of a financial asset by secured creditors, no
C   individual secured creditor shall be entitled to exercise any or
    all of the rights under sub-section (4) unless all of them 2~ree
    for such a course. There are five unnumbered provisos to
    Section 13(9) which deal with pari passu charge of the workers
    of a company in liquidation. The first of these provisos lays
    down that in the case of a company in liquidation, the amount
D   realised from the sale of secured assets shall be distributed in
    accordance with the provisions of Section 529-A of the
    Companies Act, 1956. The second proviso deals with the case
    of a company being wound up on or after the commencement
    of this Act. If the secured creditor of such company opts to
E   realise its security instead of relinquishing the same and proving
    its debt under Section 529(1) of the Companies Act, then it can
     retain sale proceeds after depositing the workmen's dues with
    the liquidator in accordance with Section 529-A. The third
    proviso requires the liquidator to inform the secured creditor
F   about the dues payable to the workmen in terms of Section
    529-A. If the amount payable to the workmen is not certain, then
    the liquidator has to intimate the estimated amount to the
    secured creditor. The fourth proviso lays down that in case the
     secured creditor deposits the estimated amount of the
G   workmen's dues, then such creditor shall be liable to pay the
     balance of the workmen's dues or entitled to receive the
     excess amount, if any, deposited with the liquidator. In terms
     of the fifth proviso, the secured creditor is required to give an
     undertaking to the liquidator to pay the balance of the
H    workmen's dues, if any. Sub-section (10) of Section 13 lays
  UNITED BANK OF INDIA v. SATYAWATI TONDON                     15
                 AND ORS.
down that where dues of the secured creditor are not fully           A
satisfied by the sale proceeds of the secured assets, the
secured creditor may file an application before the Tribunal
under Section 17 for reco,1ery of balance amount from the
borrower. Sub-section (11) states that without prejudice to the
rights conferred on the secured creditor under or by this section,   B (
it shall be entitled to proceed against the guaranto;s or sell the
pledged assets without resorting to the measures specified in
clauses (a) to (d) of sub-section (4) in relation to the secured
assets. Sub-section (12) of Section 13 lays down that rights
available to the secured creditor under the Act may be               c
exercised by one or more of its officers authorised in this
behalf. Sub-section (13) lays down that after receipt of notice
under sub-section (2), the borrower shall not transfer by way of
sale, lease or otherwise (other than in the ordinary course of
his business) any of his secured assets referred to in the notice    D
without prior written consent of the secured creditor. In terms
of Section 14, the secured creditor can file an application
before the Chief Metropolitan Magistrate or the District
 Magistrate, within whose jurisdiction the secured asset or other
documents relating thereto are found for taking possession
thereof. If any such request is made, the Chief Metropolitan         E
Magistrate or the District Magistrate, as the case may be, is
obliged to take possession of such asset or document and
forward the same to the secured creditor.

      4. Section 17 speaks of the remedies available to any          F
person including borrower who may have grievance against the
action taken by the secured creditor under sub-section (4) of
Section 13. Such an aggrieved person can make an application
to the Tribunal within 45 days from the date on which action is
taken under that sub-section. By way of abundant caution, an         G
Explanation has been added to Section 17(1) and it has been
clarified that the communication of reasons to the borrower in
terms of Section 13(3-A) shall not constitute a ground for filing
application under Section 17(1 ). Sub-section (2) of Section 17
casts a duty on the Tribunal to consider whether the measures        H
    16      SUPREME COURT REPORTS                  [2010] 9 S.C.R.


A taken by the secured creditor for enforcement of security interest
  are in accordance with the provisions of the Act and the Rules
  made thereunder. If the Tribunal, after examining the facts and
  circumstances of the case and evidence produced by the
  parties, comes to the conclusion that the measures taken by
B the secured creditor are not in consonance with sub-section (4)
  of Section 13, then it can direct the secured creditor to restore
  management of the business or possession of the secured
  assets to the borrower. On the other hand, if the Tribunal finds
  that the recourse taken by the secured creditor under sub-
C section (4) of Section 13 is in accordance with the provisions
  of the Act and the Rules made thereunder, then, notwithstanding
  anything contained in any other law for the time being in force,
  the secured creditor can take recourse to one or more of the
  measures specified in Section 13(4) for recovery of its secured
  debt. Sub-section (5) of Section 17 prescribes the time-limit
0
  of sixty days within which an application made under Section
  17 is required to be disposed of. The proviso to this sub-section
  envisages extension of time, but the outer limit for adjudication
  of an application is four months. If the Tribunal fails to decide
E the application within a maximum period of four months, then
  either party can move the Appellate Tribunal for issue of a
  direction to the Tribunal to dispose of tha application
  expeditiously. Section 18 provides for an appeal to the
  Appellate Tribunal.

F       5. Section 34 lays down that no Civil Court shall have
  jurisdiction to entertain any suit or proceeding in respect of any
  matter which a Tribunal or Appellate Tribunal is empowered to
  determine. It further lays down that no injunction shall be granted
  by any Court or other authority in respect of any action taken
G or to be taken under the SARFAESI Act or the ORT Act. Section
  35 of the SARFAESI Act is substantially similar to Section 34(1)
  of the ORT Act. It declares that the provisions of this Act shall
  have effect, notwithstanding anything inconsistent therewith
  contained in any other law for the time being in force or any
H instrument having effect by virtue of any such law.
  UNITED BANK OF INDIA v. SATYAWATI TONDON                      17
                  AND ORS.
     6. However, effective implementation of the SARFAESI             A
Act was delayed by more than two years because several writ
petitions were filed in the High Courts and this Court
questioning its vires. The matter was finally decided by this
Court in Mardia Chemicals v. Union of India (2004) 4 SCC
311 and the validity of the SARFAESI Act was upheld except            B
the condition of deposit of 75% amount enshrined in Section
17(2). The Court referred to the recommendations of the
Narasimham and Andhyarujina Committees on the issue of
constitution of special tribunals to deal with cases relating to
recovery of the dues of banks etc. and observed:                      c
    "One of the measures recommended in the circumstances
    was to vest the financial institutions through,special
    statutes, the power of sale of the assets without
    intervention of the court and for reconstruction of assets. It    D
    is thus to be seen that the question of non-recoverable or
    delayed recovery of debts advanced by the banks or
    financial institutions has been attracting attention and the
    matter was considered in depth by the Committees
    ::.pecially constituted consisting of the experts in the field.
     In the prevalent situation where the amounts of dues are         E
    huge and hope of early recovery is less, it cannot be said
    that a more effective legislation for the purpose was
    uncalled for or that it could not be resorted to. It is again
    to be noted that after the Report of the Narasimham
    Committee, yet another Committee was constituted                  F
    headed by Mr. Andhyarujina for bringing about the needed
    steps within the legal framework. We are, therefore, unable
    to find much substance in the submission made on behalf
    of the petitioners that while the Recovery of Debts Due to
    Banks and Financial Institutions Act was in operation it was      G
    uncalled for to have yet another legislation for the recovery
    of the mounting dues. Considering the totality of
    circumstances and the financial climate world over, if it
    was thought as a matter of policy to have yet speedier
    legal method to recover the dues, such a policy decision          H
    18       SUPREME COURT REPORTS                   [2010] 9 S.C.R.


A        cannot be faulted with nor is it a matter to be gone into
         by the courts to test the legitimacy of such a measure
         relating to financial policy."

                                                (emphasis supplied)
8
       This Court then held that the borrower can challenge the
  action taken under Section 13(4) by filing an application under
  Section 17 of the SARFAESI Act and a civil suit can be filed
  within the narrow scope and on the limited grounds on which
  they are permissible in the matters relating to an English
C mortgage enforceable without intervention of the Court. In
  paragraph 31 of the judgment, the Court observed as under:

         "In view of the discussion held in the judgment and the
         findings and directions contained in the preceding
D        paragraphs, we hold that the borrowers would get a
         reasonably fair deal and opportunity to get the matter
         adjudicated upon before the Debts Recovery Tribunal. The
         effect of some of the provisions may be a bit harsh for
         some of the borrowers but on that ground the impugned
E        provisions of the Act cannot be said to be unconstitutional
         in view of the fact that the object of the Act is to achieve
         speedier recovery of the dues declared as NPAs and
         better availability of capital liquidity and resources to help
         in growth of the economy of the country and welfare of
         the people in general which would subserve the public
F
         interest."

                                                (emphasis supplied)

       7. In the light of the above, we shall now consider whether
G the Division Bench of the High Court was justified in restraining
  the appellant from proceeding under Section 13(4) of the
  SARFAESI Act against the property of respondent No.1.

        8. A perusal of the record shows that the appellant
    sanctioned a term loan of Rs.22,50,000/- in favour cf Mis.
H
  UNITED BANK OF INDIA v. SATYAWATI TONDON                    19
                  AND ORS.
Pawan Color Lab [through its proprietor Pawan Singh                 A
(respondent No.2)] some time in November, 2004. Respondent
No.1 gave guarantee for repayment of the loan and mortgaged
her property bearing House No. 752/062, Bakshi Khurd,
Daraganj, Pargana and Tehsil Sadar, District Allahabad by
deposit of title deeds. She also submitted an affidavit dated       B
28.12.2004 and executed agreement of guarantee dated
29.12.2004 making herself liable for repayment of the loan
amount with interest.

      9. After one year and six months, the appellant sent letter
dated 6.5.2006 to respondent Nos.1 and 2 pointing out that          C
repayment of loan was highly irregular. After another one year,
the account of respondent No.2 was classified as Non-
Performing Asset. On 19.7.2007, the appellant sent separate
letters to respondent Nos. 1 and 2 requiring them to deposit
the outstanding dues amounting to Rs.23,78,478/-. Thereupon,        D
respondent No.1 deposited a sum of Rs.50,000/- and gave
written undertaking to pay the balance amount in instalments.
However, she did not fulfil her promise to repay the remaining
amount. This compelled the appellant to issue notice to
respondent Nos.1 and 2 under Section 13(2) requiring them to        E
pay Rs.23,22,972/- along with future interest and incidental
expenses within 60 days. Upon receipt of the notice,
respondent No.1 offered to pay a sum of Rs.18 lakhs for
settlement of the loan account, but the appellant did not accept
the offer and filed an application under Section 14 of the          F
SARFAESI Act, which was allowed by District Magistrate/
Collector, Allahabad vide his order dated 25.8.2008.
Thereafter, the appellant issued notice dated 21.1.2009 to
respondent Nos.1 and 2 under Section 13(4) of the SARFAESI
M.                                                                  G
     10. Faced with the imminent threat of losing the mortgaged
property, respondent No.1 filed C.M.W.P. No.55375 of 2009
and prayed that the appellant herein may be restrained from
taking coercive action in pursuance of the notices issued under     H
    20      SUPREME COURT REPORTS                   [2010] 9 S.C.R.


A Section 13(2) and (4) and order dated 25.8.2008 passed by
  District Magistrate/Collector, Allahabad. She pleaded that the
  notices issued by the appellant for recovery of the outstanding
  dues are ex facie illegal and liable to be quashed because no
  action had been taken against the borrower i.e., respondent
B No.2 for recovery of the outstanding dues.

        11. In the counter affidavit filed on behalf of the appellant,
  it was pleaded that action initiated against respondent No.1
  was consistent with the provisions of SARFAESI Act and writ
C petitioner (respondent No.1 herein) was bound to discharge her
  obligations to pay the outstanding dues and there was no merit
  in her challenge to the notices issued under Section 13(2) and
  13(4) or the order passed under Section 14. It was further
  pleaded that the writ petition is liable to be dismissed because
  an alternative remedy is available to the petitioner under
D Section 17 of the SARFAESI Act.

      12. The Division Bench of the High Court did not even
  advert to the appellant's plea that the writ petition should not
  be entertained because an effective alternative remedy was
E available to the writ petitioner under Section 17 of the
  SARFAESI Act and passed the impugned order restraining the
  appellant from taking action in furtherance of notice issued
  under Section 13(4) of the SARFAESI Act. The reason which
  prompted the High Court to pass the impugned interim order
F and operative portion thereof are extracted below:

         "Learned counsel for the petitioner has urged that the loan
         was taken by respondent No.4 for opening a colour lab at
         50/43, Raj Complex, K.P. Kakkar Road, Allahabad, but the
         loan has not been repaid by respondent No.4 and the bank
G        is proceeding against the petitioner who is the guarantor
         of the loan. It is not clear from the documents produced
         by learned counsel for the bank as to what steps have
         been taken by the bank against the borrower of the loan
         and merely issuance of notice under section 13(2) of the
H
   UNITED BANK OF INDIA v. SATYAWATI TONDON                    21
                  AND ORS.
     Securitization and Reconstruction of Financial Assets and        A
     Enforcement of Security Interest Act, 2002 against the
     borrower is not sufficient. The bank should have proceeded
     against the borrower and exhausted all the remedies
     against him and thereafter the bank could have proceeded
     against the guarantor.                                           B

     Until further orders of this court, the respondents are
     restrained from proceeding under section 13(4) of the Act
     2002 with regard to petitioner's property who was the
     guarantor of the loan. However, if any possession has been
     taken by the bank then the property shall not be sold to any     C
     one else and the petitioner shall be continued in
     possession of the property."

       13. We have heard learned counsel for the appellant and
  perused the record. Normally, this Court does not interfere with    D
  the discretion exercised by the High Court to pass an interim
  order in a pending matter but, having carefully examined the
· matter, we have felt persuaded to make an exception in this
  case because the order under challenge has the effect of
  defeating the very object of the legislation enacted by the         E
  Parliament for ensuring that there are no unwarranted
  impediments in the recovery of the debts, etc. due to banks,
  other financial institutions and secured creditors.

       14. The question whether the appellant could have issued
 notices to respondent No.1 under Section 13(2) and (4) and           F
 filed an application under Section 14 of the SARFAESI Act
 without first initiating action against the borrower i.e.,
 respondent No.2 for recovery of the outstanding dues is no
 longer res integra. In Bank of Bihar Ltd. v. Oamodar Prasad
 (1969) 1 SCR 620, this Court considered and answered in              G
 affirmative the question whether the bank is entitled to recover
 its dues from the surety and observed:

       "It is the duty of the surety to pay the decretal amount. On
      such payment he will be subrogated to the rights of the         H
    22       SUPREME COURT REPORTS                   [2010] 9 S.C.R.


A        creditor under Section 140 of the Indian Contract Act, and
         he may then recover the amount from the principal. The very
         object of the guarantee is defeated if the creditor is asked
         to postpone his remedies against the surety. In the present
         case the creditor is banking company. A guarantee is a
B        collateral security usually taken by a banker. The security
         will become useless if his rights against the surety can be
         so easily cut down."

       In State Bank of India v. Mis. lndexport Registered and
  others (1992) 3 SCC 159, this Court held that the decree-holder
C bank can execute the decree against the guarantor without
  proceeding against the principal borrower and then proceeded
  to observe:

         "The execution of the money decree is not made
D        dependent on first applying for execution of the mortgage
         decree. The choice is left entirely with the decree-holder.
         The question arises whether a decree which is framed as
         a composite decree, as a matter of law, must be executed
         against the mortgage property first or can a money decree,
E        which covers whole or part of decretal amount covering
         mortgage decree can be executed earlier. There is nothing
         in law which provides such a composite decree to be first
         executed only against the [principal debtor]."

    In Industrial Investment Bank of India Limited v. Biswanath
F   Jhunjhunwala (2009) 9 SCC 478, this Court again held that the
    liability of the guarantor and principal debtor is co-extensive and
    not in alternative and the creditor/decree-holder has the right
    to proceed against either for reC(overy of dues or realization of
    the decretal amount.
G
        15. In view of the law laid down in the aforementioned
  cases, it must be held that the High Court completely
  misdirected itself in assuming that the appellant could not have
  initiated action against respondent No.1 without making efforts
H for recovery of its dues from the borrower - respondent No.2.
  UNITED BANK OF INDIA v. SATYAWATI TONDON                        23
                 AND ORS.
      16. The facts of the present case show ~; 1dt even after          A
receipt of notices under Section 13(2) and (4) and order
passed under Section 14 of the SARFAESI Act, respondent
Nos.1 and 2 did not bother to pay the outstanding dues. Only
a paltry amount of Rs.50,000/- was paid by respondent No.1
on 29.10.2007. She did give an undertaking to pay the balance           B
amount in installments but did not honour her commitment.
Therefore, the action taken by the appellant for recovery of its
dues by issuing notices under Section 13(2) and 13(4) and by
filing an application under Section 14 cannot be faulted on any
legally permissible ground and, in our view, the Division Bench         c
of the High Court committed serious error by entertaining the
writ petition of respondent No.1.

      17. There is another reason why the impugned order
should be set aside. If respondent No.1 had any tangible
grievance against the notice issued under Section 13(4) or              D
action taken under Section 14, then she could have availed
remedy by filing an application under Section 17(1 ). The
expression 'any person' used in Section 17(1) is of wide
import. It takes within its fold, not only the borrower but also
guarantor or any other person who may be affected by the                E
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 are required to
decide the matters within a fixed time schedule. It is thus evident
that the remedies available to an aggrieved person under the            F
SARFAESI Act are both expeditious and effective.
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         G
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            H
    24      SUPREME COURT REPORTS                    [2010] 9 S.C.R.


A enacted by Parliament and State Legislatures for recovery of
  such dues are 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
B cases, 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.

          18. While expressing the aforesaid view, we are conscious
    that the powers conferred upon the High Court under Article 226
C   of the Constitution to issue to any person or 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 by Part Ill or for any other purpose
    are very wide and there is no express limitation on exercise of
D   that power but, at the same time, we cannot be oblivious of the
    rules of self-imposed restraint evolved by this Court, which
    every High Court is bound to keep in view while exercising
    power under Article 226 of the Constitution. It is true that the
    rule of exhaustion of alternative remedy is a rule of discretion
E   and not one of compulsion, but it is 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 legislation
F   contains a detailed mechanism for redressal of his grievance.
    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
G   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 impaqt on the financial health of such
    bodies/institutions, which ultimately prove detrimental to the
H   economy of the nation. Therefore, the High Court should be
  UNITED BANK OF INDIA v. SATYAWATI TONDON                       25
                  AND ORS.
extremely careful and circumspect in exercising its discretion A
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 AIR 1969 SC 556, Whirlpool Corporation v. Registrar
of Trade Marks, Mumbai (1998) 8 SCC 1 and Harbanslal B
Sahnia and another v. Indian Oil Corporation Ltd. and others
(2003) 2 sec 107 and some other judgments, then the High
Court may, after considering all the relevant parameters and
public interest, pass appropriate interim order.

     19. In Thansingh Nathmal v. Superintendent of Taxes C
(1964) 6 SCR 654, the Constitution Bench considered the
question whether the High Court of Assam should have
entertained the writ petition filed by the appellant under Article
226 of the Constitution questioning the order passed by the
Commissioner of Taxes under the Assam Sales Tax Act, 1947. D
While dismissing the appeal, the Court observed as under:

    "The jurisdiction of the High Court under Article 226 of the
    Constitution is couched in wide terms and the exercise
    thereof is not subject to any restrictions except the territorial   E
    restrictions which are expressly provided in the Articles. But
    the exercise of the jurisdiction is discretionary: it is not
    exercised merely because it is lawful to do so. The very
    amplitude of the jurisdiction demands that it will ordinarily
    be exercised subject to certain self-imposed limitations.           F
    Resort that jurisdiction is not intended as an alternative
    remedy for relief which may be obtained in a suit or other
    mode prescribed by statute. Ordinarily the Court will not
    entertain a petition for a writ under Article 226, where the
    petitioner has an alternative remedy, which without being           G
    unduly onerous, provides an equally efficacious remedy.
    Again the High Court does not generally enter upon a
    determination of questions which demand an elaborate
    examination of evidence to establish the right to enforce
    which the writ is claimed. The High Court does not                  H
    26       SUPREME COURT REPORTS                   [2010] 9 S.C.R.


A        therefore act as a court of appeal against the decision of
         a court or tribunal, to correct errors of fact, and does not
         by assuming jurisdiction under Article 226 trench upon an
         alternative remedy provided by statute for obtaining relief.
         Where it is open to the aggrieved petitioner to move
s        another tribunal, or even itself in another jurisdiction for
         obtaining redress in the manner provided by a statute, the
         High Court normally will not permit by entertaining a petition
         under Article 226 of the Constitution the machinery created
         under the statute to be bypassed, and will leave the party
c        applying to it to seek resort to the machinery so set up."

         20. In Titaghur Paper Mills Co. Ltd. v. State of Orissa
    (1983) 2 SCC 433, a three-Judge Bench considered the
    question whether a petition under Article 226 of the Constitution
    should be entertained in a matter involving challenge to the order
D   of the assessment passed by the competent authority under the
    Central Sales Tax Act, 1956 and corresponding law enacted by
    the State legislature and answered the same in negative by
    making the following observations:

E        "Under the scheme of the Act, there is a hi~rarchy ~f
         authorities before which the petitioners can get adequate
         redress against the wrongful acts complained of. The
         petitioners have the right to prefer an appeal before the
         Prescribed Authority under sub-section (1) of Section 23
F        of the Act. If the petitioners are dissatisfied with the
         decision in the appeal, they can prefer a further appeal to
         the Tribunal under sub-section (3) of Section 23 of the Act,
         and then ask for a case to be stated upon a question of
         law for the opinion of the High Court under Section 24 of
         the Act. The Act provides for a complete machinery to
G
         challenge an order of assessment, and the impugned
         orders of assessment can only be challenged by the mode
         prescribed by the Act and not by a petition under Article
         226 of the Constitution. It is now well recognised that where
         a right or liability is created by a statute which gives a
H
 UNITED BANK OF INDIA v. SATYAWATI TONDON                     27
                 AND ORS.
    special remedy for enforcing it, the remedy provided by that A
    statute only must be availed of. This rule was stated with
    great clarity by Willes, J. in Wolverhampton New
    Waterworks Co. v. Hawkesford in the following passage:

           ''There are three classes of cases in which a liability B
           may be established founded upon statute .... But
           there is a third class, viz. where a liability not existing
           at common law is created by a statute which at the
           same time gives a special and particular remedy
           for enforcing it. .. the remedy provided by the statute C
            must be followed, and it is not competent to the
            party to pursue the course applicable to cases of
            the second class. The form given by the statute
            must be adopted and adhered to."

    The rule laid down in this passage was approved by the D
    House of Lords in Neville v. London Express Newspapers
    Ltd. and has been reaffirmed by the Privy Council in
    Attorney-General of Trinidad and Tobago v. Gordon Grant
    & Co. Ltd. and Secretary of State v. Mask & Co. It has also
    been held to be equally applicable to enforcement of rights, E
    and has been followed by this Court throughout. The High
    Court was therefore justified in dismissing the writ petitions
    in limine."

     21. The views expressed in Titaghur Paper Mills Co. Ltd.
v. State of Orissa (supra) were echoed in Assistant Collector        F
of Central Excise, Chandan Nagar, West Bengal v. Dunlop
India Ltd. and others (1985) 1 sec 260 in the following words:

    "Article 226 is not meant to short-circuit or circumvent
    statutory procedures. It is only where statutory remedies G
    are entirely ill-suited to meet the demands of extraordinary
    situations, as for instance where the very vires of the statute
    is in question or where private or public wrongs are so
    inextricably mixed up and the prevention of public injury and
                                                                     H
    28       SUPREME COURT REPORTS                    [2010] 9 S.C.R.


A        the vindication of public justice require it that recourse may
         be had to Article 226 of the Constitution. But then the Court
         must have good and sufficient reason to bypass the
         alternative remedy provided by statute. Surely matters
         involving the revenue where statutory remedies are
B        available are not such matters. 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 and thereafter prolong
         the proceedings by one device or the other. The practice
c        certainly needs to be strongly discouraged."

         22. In Punjab National Bank v. O.C. Krishnan and 01','wrs
    (2001) 6 SCC 569, this Court considered the question whether
    a petition under Article 227 of the Constitution was maintainable
    against an order passed by the Tribunal under Section 19 of
D   the ORT Act and observed:

         "5. In our opinion, the order which was passed by the
         Tribunal directing sale of mortgaged property was
         appealable under Section 20 of the Recovery of Debts
E        Due to Banks and Financial Institutions Act, 1993 (for short
         "the Act'.'). The High Court ought not to have exercised its
         jurisdiction under Article 227 in view of the provision for
         alternative remedy contained in the Act. We do not
         propose to go into the correctness of the decision of the
F        High Ccurt and whether the order passed by the Tribunal
         was correct or not has to be decided before an appropriate
         forum.

         6. The Act has been enacted with a view to provide a
         special procedure for recovery of debts due to the banks
G        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
H
  UNITED BANK OF INDIA v. SATYAWATI TONDON                  29
                  AND ORS.
    Constitution or by filing a civil suit, which is expressly    A
    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           B
    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         c
    Act."

      23. In CCT, Orissa and others v. Indian Explosives Ltd.
(2008) 3 sec 688, the Court reversed an order passed by the
Division Bench of Orissa High Court quashing the show cause
notice issued to the respondent under the Orissa Sales Tax Act    D
by observing that the High Court had completely ignored the
parameters laid down by this Court in a large number of cases
relating to exhaustion of alternative remedy.

    24. In City and Industrial Development Corporation v.         E
Dosu Aardeshir Bhiwandiwala and others (2009) 1 SCC 168,
the Court highlighted the parameters which are required to be
kept in view by the High Court while exercising jurisdiction
under Article 226 of the Constitution. Paragraphs 29 and 30
of that judgment which contain the views of this Court read as    F
under:-

    "29. In our opinion, the High Court while exercising its
    extraordinary jurisdiction under Article 226 of the
    Constitution is duty-bound to take all the relevant facts and
    circumstances into consideration and decide for itself even G
    in the absence of proper affidavits from the State and its
    instrumentalities as to whether any case at all is made out
    requiring its interference on the basis of the material made
    available on record. There is nothing like issuing an
    ex parte writ of mandamus, order or direction in a public H
    30          SUPREME COURT REPORTS                  [2010] 9 S.C.R.


A        law remedy. Further, while considering the validity of
         impugned action or inaction the Court will not consider
         itself restricted to the pleadings of the State but would be
         free to satisfy itself whether any case as such is made out
         by a person invoking its extraordinary jurisdiction under
B        Article 226 of the Constitution.

         30. The Court while exercising its jurisdiction under
         Article 226 is duty-bound to consider whether:

          (a)     adjudication of writ petition involves any complex
c                 and disputed questions of facts and whether they
                  can be satisfactorily resolved;

          (b)     the petition reveals all material facts;

          (c)     the petitioner has any alternative or effective
D                 remedy for the resolution of the dispute;

          (d)     person invoking the jurisdiction is guilty of
                  unexplained delay and !aches;

E         (e)     ex facie barred by any laws of limitation;

          (f)     grant of relief is against public policy or barred by
                  any valid law; and host of other factors.

         The Court in appropriate cases in its discretion may direct
F        the State or its instrumentalities as the case may be to file
         proper affidavits placing all the relevant facts truly and
         accurately for the consideration of the Court and
         particularly in cases where public revenue and public
         interest are involved. Such directions are always required
G        to be complied with by the State. No relief could be
         granted in a public law remedy as a matter of course only
         on the ground that the State did r.ot file its counter-affidavit
         opposing the writ petition. Further, empty and self-
         defeating affidavits or statements of Government
H        spokesmen by themselves do not form basis to grant any
  UNITED BANK OF INDIA v. SATYAWATI TONDON                    31
                 AND ORS.
    relief to a person in a public law remedy to which he is not     A
    otherwise entitled to in law."

    25. In Raj Kumar Shivhare v. Assistant Director,
Directorate of Enforcement and another (2010) 4 sec 772,
the Court was dealing with the issue whether the alternative
                                                                     8
statutory remedy available under the Foreign Exchange
Management Act, 1999 can be bypassed and jurisdiction under
Article 226 of the Constitution could be invoked. After
examining the scheme of the Act, the Court observed:

    "31. When a statutory forum is created by law for redressal      C
    of grievance and that too in a fiscal statute, a writ petition
    should not be entertained ignoring the statutory
    dispensation. In this case the High Court is a statutory
    forum of appeal on a question of law. That should not be
    abdicated and given a go-by by a litigant for invoking the       D
    forum of judicial review of the High Court under writ
    jurisdiction. The High Court, with great respect, fell into a
    manifest error by not appreciating this aspect of the matter.
     I~ has however dismissed the writ petition on the ground
    of lack of territorial jurisdiction.                             E

    32. No reason could be assigned by the appellant's
    counsel to demonstrate why the appellate jurisdiction of the
    High Court under Section 35 of FEMA does not provide
    an efficacious remedy. In fact there could hardly be any
    reason since the High Court itself is the appellate forum."      F

    26. In Modern Industries v. Steel Authority of India
Limited (2010) 5 SCC 44, the Court held that where the
remedy was available under the Interest on Delayed Payments
to Small Scale and Ancillary Industrial Undertakings Act, 1993, G
the High Court was not justified in entertaining a petition under
Article 226 of the Constitution.

    27. It is a matter of serious concern that despite repeated
pronouncement of this Court, the High Courts continue to ignore      H
    32       SUPREME COURT REPORTS                [2010] 9 S.C.R.


A   the availability of statutory remedies under the ORT Act and
    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
B   their discretion in such matters with greater caution, care and
    circumspection.

         28. Insofar as this case is concerned, we are convinced
    that the High Court was not at all justified in injuncting the
C   appellant from taking action in furtherance of notice issued
    under Section 13(4) of the Act.

        29. In the result, the appeal is allowed and the impugned
    order is set aside. Since the respondent has not appeared to
    contest the appeal, the costs are made easy.

    B.B.B.                                        Appeal allowed.