M/S SOUTH INDIAN BANK LTD. & ORS.versusNAVEEN MATHEW PHILIP & ANR. ETC. ETC.

18                      [2023]
              SUPREME COURT    4 S.C.R. 18
                             REPORTS                        [2023] 4 S.C.R.


A                  M/S SOUTH INDIAN BANK LTD. & ORS.
                                       v.
             NAVEEN MATHEW PHILIP & ANR. ETC. ETC.
                      (Civil Appeal Nos. 2861-62 of 2023)
B                              APRIL 17, 2023
           [SANJIV KHANNA AND M. M. SUNDRESH, JJ.]
           Securitization and Reconstruction of Financial Assets and
     Enforcement of Security Interest Act, 2002:
C           Writ Jurisdiction of High Court under – Matter pertaining to
     default in payment of outstanding dues by the borrowers – Issuance
     of notices u/s. 13(4) – Writ petitions by the borrowers challenging
     the notices before the High Court – Debt Recovery tribunal was not
     functional at the time when said writ petitions were filed– However,
     became so from the month of March 2022 – Meanwhile, in an SLP,
D
     order passed by this Court to transfer the pending matters to the
     concerned tribunals when they start functioning with their respective
     Presiding Officers duly in-charge – Notwithstanding the said order,
     the High Court took upon itself to decide the said petitions and
     allowed the borrower to make deferred payment in 12 months –
E    Appeal before this Court – Appellant’s case that the relief granted
     by the High Court may not be disturbed while pressing for reiteration
     of law which might guide the High Court in not entertaining such
     writ petitions in the future – Held: In view of the fair stand of the
     appellant, the relief granted by the High Court not to be disturbed
     – Powers conferred under Article 226 are rather wide but are
F
     required to be exercised only in extraordinary circumstances – In
     matters where the legislature has provided for a specific mechanism
     for appropriate redressal, constitutional remedy not to be resorted
     to – Constitution of India – Art. 226.
           SARFAESI Act – Purpose and Object – Discussed.
G
           Writ:
            Writ of certiorari – Issuance of, when – Held: Is to be issued
     over a decision when the Court finds that the process does not
     conform to the law or statute – Writ is not to be issued to remedy all
H    violations – Writ court cannot substitute itself with the decision-
                                      18
     M/S SOUTH INDIAN BANK LTD. & ORS. v. NAVEEN                         19
           MATHEW PHILIP & ANR. ETC. ETC.

making authority while finding fault with the process – When a           A
tribunal is constituted,it is expected to determine issues of fact and
law, including a statutory violation – Constitution of India – Art.
226.
      Writ of mandamus – Issuance of – Writ petition before the
High Court in commercial matters against the private individual          B
seeking issuance of mandamus – Held: Writ of Mandamus is a
prerogative writ – In the absence of any legal right, the Court cannot
exercise the said power – More circumspection is required in a
financial transaction, particularly when one of the parties would
not come within the purview of Art. 12.                                  C
      Judicial deprecation: Interference of the High Courts in
matters pertaining to the SARFAESI Act – Held: Said practice is
deprecated – Request to the High Courts not to entertain such cases
– When a statute prescribes a particular mode, an attempt to
circumvent shall not be encouraged by a writ court – A litigant          D
cannot avoid the non-compliance of approaching the tribunal which
requires the prescription of fees and use the constitutional remedy
as an alternative – Constitution of India – Article 226.
       Judicial notice: Commercial matters, where an effective and
efficacious alternative forum has been constituted through a statute     E
– Interference by certain High Court invoking Art. 226 in such
matters leading to a regular supply of cases before this Court –
Judicial notice taken by this Court.
      Hari Vishnu Kamath v. Syed Ahmad Ishaque (1955) 1
      SCR 1104; Mardia Chemicals Ltd. v. Union of India,                 F
      (2004) 4 SCC 311 : [2004] 3 SCR 982– relied on.
      Radha Krishan Industries v. State of H.P. (2021) 6 SCC
      771; Phoenix Arc Private Limited vs. Vishwa Bharati
      Vidya Mandir & Ors. (2022) 5 SCC 345; Federal Bank
      Ltd. vs. Sagar Thomas & Ors. (2003) 10 SCC 733 :                   G
      [2003] 4 Suppl. SCR 121; State Bank of India vs.
      Arvindra Electronics (P) Ltd. 2022 SCC Online SC
      1522; United Bank of India vs. Satywati Tondon &
      Others (2010) 8 SCC 110 : [2010] 9 SCR 1; Authorized
      Officer, State Bank of Travancore & Another vs.
                                                                         H
20            SUPREME COURT REPORTS                          [2023] 4 S.C.R.


A          Mathew K.C. (2018) 3 SCC 85 : [2018] 1 SCR 233;
           Varimadugu OBI Reddy vs. B. Sreenivasulu & Others
           (2023) 2 SCC 168 – referred to.
                             Case Law Reference
     (2022) 5 SCC 345                    referred to             Para 11, 17
B
     [2003] 4 Suppl. SCR 121            referred to              Para 11, 17
     [2010] 9 SCR 1                     referred to              Para 11, 17
     [2018] 1 SCR 233                    referred to             Para 11, 17

C    (2023) 2 SCC 168                    referred to             Para 11, 17
     [1955] 1 SCR 1104                   relied on               Para 14
     [2004] 3 SCR 982                    relied on               Para 15
     (2021) 6 SCC 771                    referred to             Para 16
D          CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2861-
     2862 of 2023.
           From the Judgment and Order dated 19.10.2022 of the High Court
     of Kerala at Ernakulam in WA Nos. 1492 and 1497 of 2022.
           K. V. Vishwanathan, Sr. Adv., A. Karthik, Arsh Khan, Ms. Smrithi
E    Suresh, Ms. Sreepriya K, Advs. for the Appellants.
          Shyam Divan, Sr. Adv., Nishe Rajen Shonker, Mrs. Anu K Joy,
     Abraham C. Mathew, Alim Anvar, Advs. for the Respondents.
           The Judgment of the Court was delivered by
F          M. M. SUNDRESH, J.
           1. Leave granted.
            2. Seeking enforcement of a unilateral offer concerning private
     financial transactions, while questioning the steps taken to recover the
     dues on the failure to comply with the one-time settlements, extraordinary
G
     jurisdiction of the High Court was sought to be invoked. Acceding to the
     request made by duly interfering with the action taken by the Appellants,
     orders were passed, in exercise of the powers conferred under Article
     226 of the Constitution of India by the High Court of Kerala, which are
     impugned in the present appeals.
H
   M/S SOUTH INDIAN BANK LTD. & ORS. v. NAVEEN                                 21
 MATHEW PHILIP & ANR. ETC. ETC. [M. M. SUNDRESH, J.]

     3. Heard Mr. K.V. Vishwanathan, learned Senior Counsel for the            A
Appellants and Mr. Shyam Divan, learned Senior Counsel for the
Respondents.
       4. Two loans were obtained by the Respondents, being a housing
/ KCC overdraft loan and a business loan. The accounts of the
Respondents were declared as non-performing assets (“NPA”) on                  B
27.05.2021. Notices under Section 13(2) of the Securitization and
Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002 (hereinafter referred to as “SARFAESI Act”) were issued on
07.08.2021 and 12.08.2021, respectively, which were duly replied to by
the Respondents on 28.10.2021, seeking twelve months’ time to repay
the loan.                                                                      C

       5. Strangely enough, within 3 days of the reply dated 28.10.2021,
prior to the expiry of the statutory period prescribed, a challenge was
laid to the demand notice issued under Section 13(2) of the SARFAESI
Act, by filing Writ Petition No. 23940 of 2021. Entertaining the said lis,
a direction was issued to the Appellants to consider the proposal placed.      D
In due compliance of the aforesaid order, the Respondents were allowed
to remit the dues accrued in five installments instead of twelve. The
extended benefit conferred was not utilized by the Respondents, and
therefore, a reminder was also sent. Receiving no response, two notices
under Section 13(4) of the SARFAESI Act, were issued on 02.12.2021             E
and 20.12.2021.
       6. Impugning the aforesaid notices, two writ petitions were filed
by the Respondents, being Writ Petition No. 30238 of 2021 and 30450 of
2021 questioning the action taken, through a writ of certiorari while
praying for a positive direction to accept the unilateral offers made. It is   F
to be noted that the Debt Recovery Tribunal, though was not functional
at the time of filing the aforesaid Writ Petitions, became so from the
month of March, 2022.
      7. Taking note of the then prevailing situation resulting in the post
of Presiding Officer lying vacant for proper adjudication in various           G
Tribunals, an order was passed by this Court in Special Leave Petition
No. 10911 dated 16.12.2021,
         “Learned Senior Counsel appearing for the petitioner has
      brought to our notice the difficulty being faced by parties on
      account of non-appointment of members in DRTs and DRATs.
                                                                               H
22            SUPREME COURT REPORTS                           [2023] 4 S.C.R.


A             He requested that the matters before DRT and DRAT can be
           directed to be considered by other Tribunals like Central
           Administrative Tribunal, Armed Forces Tribunal and Industrial
           Tribunal within the State.
              With a view to resolve the problem being faced by the parties,
B          for the time being and purely as a stop-gap arrangement, we
           request the concerned High Court(s) to entertain the matters falling
           within the jurisdiction of DRTs and DRATs under Article 226 of
           the Constitution of India, till further orders.
              We make it clear that once the Tribunal(s) is/are constituted,
C          the matters can be relegated to the Tribunals by the High Court(s).
               List the matter on 21-1-2022.”
             8. As could be seen, the order is self-explanatory, making it clear
     that it is only an interim arrangement, and therefore, the pending matters
     ought to be transferred to the concerned Tribunals when they start
D    functioning with their respective Presiding Officers duly in-charge. The
     aforesaid matter was disposed of by the order dated 12.09.2022,
           “1. Counsel appearing on behalf of the petitioner states that since
           the post in the Debt Recovery Tribunal has been filled up, the
           cause does not survive.
E
           2. The Special Leave Petition is accordingly disposed of without
           this Court expressing any opinion on the question of law raised.
           3. Pending applications, if any, stands disposed of.”
            9. Notwithstanding the orders passed above by this Court, the
F    High Court took upon itself to decide the issues raised, on merit, by
     allowing the Respondents to make deferred payment in 20 installments,
     a relief which was more than the one prayed for. The installments were
     modified by the learned Division Bench in Writ Appeal No. 1492 of 2022
     and 1497 of 2022, to 12 months as originally prayed for by the Respondents
G    while declining to interfere with the decision of the learned Single Judge
     on merit. Impugning the aforesaid orders, the lender bank has filed the
     present appeals.
           10. The learned Senior Counsel appearing for the Appellants fairly
     submitted that the relief granted by the High Court may not be disturbed
     while pressing for the reiteration of law which might guide the High
H
   M/S SOUTH INDIAN BANK LTD. & ORS. v. NAVEEN                                    23
 MATHEW PHILIP & ANR. ETC. ETC. [M. M. SUNDRESH, J.]

Court in not entertaining such writ petitions in the future. It is further        A
submitted that the High Court has exercised writ jurisdiction under Article
226 of the Constitution of India, even after the Debt Recovery Tribunal
became functional, in about 185 cases pertaining to the Appellants alone.
After the filing of the Special Leave Petitions, 35 Writ Petitions have
been filed. Resultantly, the Appellants are not in a position to proceed
                                                                                  B
further to recover the amounts due from the defaulting borrowers/
guarantors, defeating the object of the SARFAESI Act itself.
        11. Learned Senior Counsel brought to the notice of this Court
that a writ petition involving private individuals over a financial transaction
is not maintainable. Despite the position being settled, the interference
                                                                                  C
by various High Courts continues. The very objective of the Act 54 of
2002 is being frustrated by such interference. The alternative remedy
being effective and efficacious, the extraordinary jurisdiction of the High
Court under Article 226 of the Constitution of India, either be a writ of
certiorari or mandamus, ought not to have been invoked. One has to
see the impact on the Appellants of the repeated interference by the              D
High Court. The learned Senior Counsel took us through the following
decisions:
       •      Phoenix Arc Private Limited vs.Vishwa Bharati Vidya
              Mandir & Ors., (2022) 5 SCC 345.
       •      Federal Bank Ltd. vs. Sagar Thomas & Ors., (2003) 10                E
              SCC 733.
       •      State Bank of India vs. Arvindra Electronics (P) Ltd., 2022
              SCC Online SC 1522.
       •      United Bank of India vs. Satywati Tondon & Others, (2010)           F
              8 SCC 110
       •      Authorized Officer, State Bank of Travancore & Another
              vs. Mathew K.C., (2018) 3 SCC 85
       •      Varimadugu OBI Reddy vs. B. Sreenivasulu & Others,
              (2023) 2 SCC 168.                                                   G
       12. The learned Senior Counsel appearing for the Respondents
submitted that at the time of filing the Writ Petitions, the Tribunal was
not functioning. The power available under Article 226 of the Constitution
of India cannot be taken away, notwithstanding the existence of the
                                                                                  H
24             SUPREME COURT REPORTS                            [2023] 4 S.C.R.


A    Tribunal. While appreciating the stand taken by the Appellants, it is
     submitted that when extreme steps are taken, a litigant may not have
     any other option except to approach the writ court.
            13. In view of the fair stand taken by the learned Senior Counsel
     appearing for the Appellants, we do not wish to interfere with the
B    impugned orders passed. We may, however, reiterate the settled position
     of law on the interference of the High Court invoking Article 226 of the
     Constitution of India in commercial matters, where an effective and
     efficacious alternative forum has been constituted through a statute. We
     are also constrained to take judicial notice of the fact that certain High
     Courts continue to interfere in such matters, leading to a regular supply
C    of cases before this Court. One such High Court is that of Punjab &
     Haryana.
             14. A writ of certiorari is to be issued over a decision when the
     Court finds that the process does not conform to the law or statute. In
     other words, courts are not expected to substitute themselves with the
D    decision-making authority while finding fault with the process along with
     the reasons assigned. Such a writ is not expected to be issued to remedy
     all violations. When a Tribunal is constituted, it is expected to go into the
     issues of fact and law, including a statutory violation. A question as to
     whether such a violation would be over a mandatory prescription as
E    against a discretionary one is primarily within the domain of the Tribunal.
     So also, the issue governing waiver, acquiescence, and estoppel. We
     wish to place reliance on the decision of this Court in Hari Vishnu
     Kamath v. Syed Ahmad Ishaque, (1955) 1 SCR 1104,
              “Then the question is whether there are proper grounds for
F          the issue of certiorari in the present case. There was considerable
           argument before us as to the character and scope of the writ of
           certiorari and the conditions under which it could be issued. The
           question has been considered by this Court in Parry & Co. v.
           Commercial Employees’ Association, Madras [(1952) SCR
           519], Veerappa Pillai v. Raman and Raman Ltd. & Others
G          [(1952) SCR 583], Ibrahim Aboobaker v. Custodian General
           [(1952) SCR 696] and quite recently in T.C. Basappa v. T.
           Nagappa [(1955) SCR 250]. On these authorities, the following
           propositions may be taken as established: (1) Certiorari will be
           issued for correcting errors of jurisdiction, as when an inferior
H          Court or Tribunal acts without jurisdiction or in excess of it, or
  M/S SOUTH INDIAN BANK LTD. & ORS. v. NAVEEN                                25
MATHEW PHILIP & ANR. ETC. ETC. [M. M. SUNDRESH, J.]

   fails to exercise it. (2) Certiorari will also be issued when the         A
   Court or Tribunal acts illegally in the exercise of its undoubted
   jurisdiction, as when it decides without giving an opportunity to
   the parties to be heard, or violates the principles of natural justice.
   (3) The Court issuing a writ of certiorari acts in exercise of a
   supervisory and not appellate jurisdiction. One consequence of            B
   this is that the Court will not review findings of fact reached by
   the inferior Court or Tribunal, even if they be erroneous. This is
   on the principle that a Court which has jurisdiction over a subject-
   matter has jurisdiction to decide wrong as well as right, and when
   the Legislature does not choose to confer a right of appeal against
   that decision, it would be defeating its purpose and policy, if a         C
   superior Court were to re-hear the case on the evidence, and
   substitute its own findings in certiorari. These propositions are
   well-settled and are not in dispute.
      (4) The further question on which there has been some controversy
   is whether a writ can be issued, when the decision of the inferior        D
   Court or Tribunal is erroneous in law. This question came up for
   consideration in Rex v. Northumberland Compensation Appeal
   Tribunal; Ex parte Shaw [(1951) 1 K.B. 711], and it was held
   that when a Tribunal made a “speaking order” and the reasons
   given in that order in support of the decision were bad in law,           E
   certiorari could be granted. It was pointed out by Lord Goddard,
   C.J. that that had always been understood to be the true scope of
   the power. Walsall Overseers v. London and North Western Ry.
   Co. [(1879) 4 A.C. 30] and Rex v. Nat Bell Liquors Ld. [(1922)
   2 A.C. 28] were quoted in support of this view. In Walsall
   Overseers v. London and North Western Ry. Co. [(1879) 4 A.C.              F
   30] Lord Cairns, L.C. observed as follows:
          “If there was upon the face of the order of the court of
      quarter sessions anything which showed that order was
      erroneous, the Court of Queen’s Bench might be asked to have
      the order brought into it, and to look at the order, and view it       G
      upon the face of it, and if the court found error upon the face
      of it, to put an end to its existence by quashing it.”
     In Rex v. Nat Bell Liquors Ld. [(1922) 2 A.C. 128] Lord
   Sumner said:
                                                                             H
26      SUPREME COURT REPORTS                            [2023] 4 S.C.R.


A           “That supervision goes to two points; one is the area of the
        inferior jurisdiction and the qualifications and conditions of its
        exercise; the other is the observance of the law in the course
        of its exercise.”
        The decision in Rex v. Northumberland Compensation
B    Appeal Tribunal; Ex parte Shaw [(1951) 1 K.B. 711] was taken
     in appeal, and was affirmed by the Court of Appeal in Rex v.
     Northumberland Compensation Appeal Tribunal; Ex parte
     Shaw [(1952) 1 K.B. 338]. In laying down that an error of law
     was a ground for granting certiorari, the learned Judges
C    emphasised that it must be apparent on the face of the record.
     Denning, L.J. who stated the power in broad and general terms
     observed:
            “It will have been seen that throughout all the cases there
        is one governing rule: certiorari is only available to quash a
        decision for error of law if the error appears on the face of
D
        the record.”
        The position was thus summed up by Morris, L.J.
            “It is plain that certiorari will not issue as the cloak of an
        appeal in disguise. It does not lie in order to bring an order or
E       decision for rehearing of the issue raised in the proceedings. It
        exists to correct error of law where revealed on the face of
        an order or decision, or irregularity, or absence of, or excess
        of, jurisdiction where shown”.
         In Veerappa Pillai v. Raman & Raman Ltd. [(1952) SCR 583],
F    it was observed by this Court that under article 226 the writ should
     be issued “in grave cases where the subordinate tribunals or bodies
     or officers act wholly without jurisdiction, or in excess of it, or in
     violation of the principles of natural justice, or refuse to exercise a
     jurisdiction vested in them, or there is an error apparent on the
     face of the record”. In T.C. Basappa v. T. Nagappa [(1955)
G
     SCR 250] the law was thus stated:
            “An error in the decision or determination itself may also
        be amenable to a writ of ‘certiorari’ but it must be a manifest
        error apparent on the face of the proceedings, e.g., when it
        is based on clear ignorance or disregard of the provisions of
H
   M/S SOUTH INDIAN BANK LTD. & ORS. v. NAVEEN                                   27
 MATHEW PHILIP & ANR. ETC. ETC. [M. M. SUNDRESH, J.]

          law. In other words, it is a patent error which can be corrected       A
          by ‘certiorari’ but not a mere wrong decision.”
       15. The object and reasons behind the Act 54 of 2002 are very
clear as observed by this Court in Mardia Chemicals Ltd. v. Union of
India, (2004) 4 SCC 311. While it facilitates a faster and smoother
mode of recovery sans any interference from the Court, it does provide           B
a fair mechanism in the form of the Tribunal being manned by a legally
trained mind. The Tribunal is clothed with a wide range of powers to set
aside an illegal order, and thereafter, grant consequential reliefs, including
re-possession and payment of compensation and costs. Section 17(1) of
the SARFAESI Act gives an expansive meaning to the expression “any
                                                                                 C
person”, who could approach the Tribunal.
       16. Approaching the High Court for the consideration of an offer
by the borrower is also frowned upon by this Court. A writ of mandamus
is a prerogative writ. In the absence of any legal right, the Court cannot
exercise the said power. More circumspection is required in a financial
                                                                                 D
transaction, particularly when one of the parties would not come within
the purview of Article 12 of the Constitution of India. When a statute
prescribes a particular mode, an attempt to circumvent shall not be
encouraged by a writ court. A litigant cannot avoid the non-compliance
of approaching the Tribunal which requires the prescription of fees and
use the constitutional remedy as an alternative. We wish to quote with           E
profit a recent decision of this Court in Radha Krishan Industries v.
State of H.P., (2021) 6 SCC 771,
       “25. In this background, it becomes necessary for this Court, to
       dwell on the “rule of alternate remedy” and its judicial exposition.
       In Whirlpool Corpn. v. Registrar of Trade Marks (1998) 8 SCC              F
       1, a two-Judge Bench of this Court after reviewing the case law
       on this point, noted: (SCC pp. 9-10, paras 14-15)
          “14. The power to issue prerogative writs under Article 226
          of the Constitution is plenary in nature and is not limited by any
          other provision of the Constitution. This power can be exercised       G
          by the High Court not only for issuing writs in the nature of
          habeas corpus, mandamus, prohibition, quo warranto and
          certiorari for the enforcement of any of the Fundamental Rights
          contained in Part III of the Constitution but also for “any other
          purpose”.
                                                                                 H
28     SUPREME COURT REPORTS                              [2023] 4 S.C.R.


A       15. Under Article 226 of the Constitution, the High Court, having
        regard to the facts of the case, has a discretion to entertain or
        not to entertain a writ petition. But the High Court has imposed
        upon itself certain restrictions one of which is that if an effective
        and efficacious remedy is available, the High Court would not
        normally exercise its jurisdiction. But the alternative remedy
B
        has been consistently held by this Court not to operate as
        a bar in at least three contingencies, namely, where the
        writ petition has been filed for the enforcement of any of
        the Fundamental Rights or where there has been a violation
        of the principle of natural justice or where the order or
C       proceedings are wholly without jurisdiction or the vires of
        an Act is challenged. There is a plethora of case-law on this
        point but to cut down this circle of forensic whirlpool, we would
        rely on some old decisions of the evolutionary era of the
        constitutional law as they still hold the field”.
D                                                     (emphasis supplied)
     26. Following the dictum of this Court in Whirlpool Corpn. v.
     Registrar of Trade Marks [(1998) 8 SCC 1], in Harbanslal
     Sahnia v. Indian Oil Corpn. Ltd. [(2003) 2 SCC 107], this Court
     noted that: (Harbanslal Sahniacase, SCC p. 110, para 7)
E       “7. So far as the view taken by the High Court that the remedy
        by way of recourse to arbitration clause was available to the
        appellants and therefore the writ petition filed by the appellants
        was liable to be dismissed is concerned, suffice it to observe
        that the rule of exclusion of writ jurisdiction by availability of
F       an alternative remedy is a rule of discretion and not one of
        compulsion. In an appropriate case, in spite of availability
        of the alternative remedy, the High Court may still exercise
        its writ jurisdiction in at least three contingencies: (i) where
        the writ petition seeks enforcement of any of the
        fundamental rights; (ii) where there is failure of principles
G       of natural justice; or (iii) where the orders or proceedings
        are wholly without jurisdiction or the vires of an Act is
        challenged. (See Whirlpool Corpn.v. Registrar of Trade
        Marks[(1998) 8 SCC 1].) The present case attracts applicability
        of the first two contingencies. Moreover, as noted, the
H       appellants’ dealership, which is their bread and butter, came to
  M/S SOUTH INDIAN BANK LTD. & ORS. v. NAVEEN                             29
MATHEW PHILIP & ANR. ETC. ETC. [M. M. SUNDRESH, J.]

      be terminated for an irrelevant and non-existent cause. In such     A
      circumstances, we feel that the appellants should have been
      allowed relief by the High Court itself instead of driving them
      to the need of initiating arbitration proceedings.”
                                                  (emphasis supplied)
                                                                          B
      27. The principles of law which emerge are that:
      27.1. The power under Article 226 of the Constitution to issue
   writs can be exercised not only for the enforcement of fundamental
   rights, but for any other purpose as well.
      27.2. The High Court has the discretion not to entertain a writ     C
   petition. One of the restrictions placed on the power of the High
   Court is where an effective alternate remedy is available to the
   aggrieved person.
      27.3. Exceptions to the rule of alternate remedy arise where:
   (a) the writ petition has been filed for the enforcement of a          D
   fundamental right protected by Part III of the Constitution; (b)
   there has been a violation of the principles of natural justice; (c)
   the order or proceedings are wholly without jurisdiction; or (d)
   the vires of a legislation is challenged.
      27.4. An alternate remedy by itself does not divest the High        E
   Court of its powers under Article 226 of the Constitution in an
   appropriate case though ordinarily, a writ petition should not be
   entertained when an efficacious alternate remedy is provided by
   law.
       27.5. When a right is created by a statute, which itself           F
   prescribes the remedy or procedure for enforcing the right or
   liability, resort must be had to that particular statutory remedy
   before invoking the discretionary remedy under Article 226 of the
   Constitution. This rule of exhaustion of statutory remedies is a
   rule of policy, convenience and discretion.
                                                                          G
       27.6. In cases where there are disputed questions of fact, the
   High Court may decide to decline jurisdiction in a writ petition.
   However, if the High Court is objectively of the view that the
   nature of the controversy requires the exercise of its writ
   jurisdiction, such a view would not readily be interfered with.”
                                                                          H
30             SUPREME COURT REPORTS                           [2023] 4 S.C.R.


A           17. We shall reiterate the position of law regarding the interference
     of the High Courts in matters pertaining to the SARFAESI Act by quoting
     a few of the earlier decisions of this Court wherein the said practice has
     been deprecated while requesting the High Courts not to entertain such
     cases.
B          •      Federal Bank Ltd. v. Sagar Thomas, (2003) 10 SCC733,
                      “18. From the decisions referred to above, the position
                  that emerges is that a writ petition under Article 226 of the
                  Constitution of India may be maintainable against (i) the
                  State (Government); (ii) an authority; (iii) a statutory body;
C                 (iv) an instrumentality or agency of the State; (v) a company
                  which is financed and owned by the State; (vi) a private
                  body run substantially on State funding; (vii) a private body
                  discharging public duty or positive obligation of public nature;
                  and (viii) a person or a body under liability to discharge any
                  function under any statute, to compel it to perform such a
D
                  statutory function.
                               xxx     xxx      xxx
                      26.A company registered under the Companies Act for
                  the purposes of carrying on any trade or business is a private
E                 enterprise to earn livelihood and to make profits out of such
                  activities. Banking is also a kind of profession and a
                  commercial activity, the primary motive behind it can well
                  be said to earn returns and profits. Since time immemorial,
                  such activities have been carried on by individuals generally.
                  It is a private affair of the company though the case of
F
                  nationalized banks stands on a different footing. There may
                  well be companies, in which majority of the share capital
                  may be contributed out of the State funds and in that view
                  of the matter there may be more participation or dominant
                  participation of the State in managing the affairs of the
G                 company. But in the present case we are concerned with a
                  banking company which has its own resources to raise its
                  funds without any contribution or shareholding by the State.
                  It has its own Board of Directors elected by its shareholders.
                  It works like any other private company in the banking
H                 business having no monopoly status at all. Any company
  M/S SOUTH INDIAN BANK LTD. & ORS. v. NAVEEN                              31
MATHEW PHILIP & ANR. ETC. ETC. [M. M. SUNDRESH, J.]

        carrying on banking business with a capital of five lakhs          A
        will become a scheduled bank. All the same, banking activity
        as a whole carried on by various banks undoubtedly has an
        impact and effect on the economy of the country in general.
        Money of the shareholders and the depositors is with such
        companies, carrying on banking activity. The banks finance
                                                                           B
        the borrowers on any given rate of interest at a particular
        time. They advance loans as against securities. Therefore,
        it is obviously necessary to have regulatory check over such
        activities in the interest of the company itself, the
        shareholders, the depositors as well as to maintain the proper
        financial equilibrium of the national economy. The banking         C
        companies have not been set up for the purposes of building
        the economy of the State; on the other hand such private
        companies have been voluntarily established for their own
        purposes and interest but their activities are kept under
        check so that their activities may not go wayward and harm
                                                                           D
        the economy in general. A private banking company with
        all freedom that it has, has to act in a manner that it may
        not be in conflict with or against the fiscal policies of the
        State and for such purposes, guidelines are provided by
        Reserve Bank so that a proper fiscal discipline, to conduct
        its affairs in carrying on its business, is maintained. So as to   E
        ensure adherence to such fiscal discipline, if need be, at
        times even the management of the company can be taken
        over. Nonetheless, as observed earlier, these are all
        regulatory measures to keep a check and provide guidelines
        and not a participatory dominance or control over the affairs
                                                                           F
        of the company. For other companies in general carrying
        on other business activities, maybe manufacturing, other
        industries or any business, such checks are provided under
        the provisions of the Companies Act, as indicated earlier.
        There also, the main consideration is that the company itself
        may not sink because of its own mismanagement or the               G
        interest of the shareholders or people generally may not be
        jeopardized for that reason. Besides taking care of such
        interest as indicated above, there is no other interest of the
        State, to control the affairs and management of the private
        companies. Care is taken in regard to the industries covered
                                                                           H
32       SUPREME COURT REPORTS                          [2023] 4 S.C.R.


A          under the Industries (Development and Regulation) Act,
           1951 that their production, which is important for the
           economy, may not go down, yet the business activity is
           carried on by such companies or corporations which only
           remains a private activity of the entrepreneurs/companies.
B              27. Such private companies would normally not be
           amenable to the writ jurisdiction under Article 226 of the
           Constitution. But in certain circumstances a writ may issue
           to such private bodies or persons as there may be statutes
           which need to be complied with by all concerned including
           the private companies. For example, there are certain
C          legislations like the Industrial Disputes Act, the Minimum
           Wages Act, the Factories Act or for maintaining proper
           environment, say the Air (Prevention and Control of
           Pollution) Act, 1981 or the Water (Prevention and Control
           of Pollution) Act, 1974 etc. or statutes of the like nature
D          which fasten certain duties and responsibilities statutorily
           upon such private bodies which they are bound to comply
           with. If they violate such a statutory provision a writ would
           certainly be issued for compliance with those provisions.
           For instance, if a private employer dispenses with the service
           of its employee in violation of the provisions contained under
E          the Industrial Disputes Act, in innumerable cases the High
           Court interfered and has issued the writ to the private bodies
           and the companies in that regard. But the difficulty in issuing
           a writ may arise where there may not be any non-
           compliance with or violation of any statutory provision by
F          the private body. In that event a writ may not be issued at
           all. Other remedies, as may be available, may have to be
           resorted to.”
     •     United Bank of India v. Satyawati Tondon, (2010) 8
           SCC 110,
G             “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
H          expression “any person” used in Section 17(1) is of wide
  M/S SOUTH INDIAN BANK LTD. & ORS. v. NAVEEN                              33
MATHEW PHILIP & ANR. ETC. ETC. [M. M. SUNDRESH, J.]

        import. It takes within its fold, not only the borrower but        A
        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 are
        required to decide the matters within a fixed time schedule.
                                                                           B
        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
        law that the High Court will ordinarily not entertain a petition
        under Article 226 of the Constitution if an effective remedy       C
        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. In our view, while
        dealing with the petitions involving challenge to the action       D
        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
        are a 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        E
        redressal of the 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.                                                  F
            44. While expressing the aforesaid view, we are
        conscious that 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   G
        for the enforcement of any of the rights conferred by 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-imposed
        restraint evolved by this Court, which every High Court is
                                                                           H
34       SUPREME COURT REPORTS                            [2023] 4 S.C.R.


A          bound to keep in view while exercising power under Article
           226 of the Constitution.
               45. 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
B          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
           contains a detailed mechanism for redressal of his grievance.
C                       xxx      xxx      xxx
               55. It is a matter of serious concern that despite repeated
           pronouncement of this Court, the High Courts continue to
           ignore the availability of statutory remedies under the DRT
           Act and the SARFAESI Act and exercise jurisdiction under
D          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 their discretion in such matters
           with greater caution, care and circumspection.”

E    •     State Bank of Travancore v. Mathew K.C., (2018) 3
           SCC 85,
              “5. We have considered the submissions on behalf of
           the parties. Normally this Court in exercise of jurisdiction
           under Article 136 of the Constitution is loath to interfere
F          with an interim order passed in a pending proceeding before
           the High Court, except in special circumstances, to prevent
           manifest injustice or abuse of the process of the court. In
           the present case, the facts are not in dispute. The
           discretionary jurisdiction under Article 226 is not absolute
           but has to be exercised judiciously in the given facts of a
G          case and in accordance with law. The normal rule is that a
           writ petition under Article 226 of the Constitution ought not
           to be entertained if alternate statutory remedies are
           available, except in cases falling within the well-defined
           exceptions as observed in CIT v. Chhabil Dass Agarwal
           [(2014) 1 SCC 603], as follows: (SCC p. 611, para 15)
H
  M/S SOUTH INDIAN BANK LTD. & ORS. v. NAVEEN                             35
MATHEW PHILIP & ANR. ETC. ETC. [M. M. SUNDRESH, J.]

               “15. Thus, while it can be said that this Court has        A
           recognised some exceptions to the rule of alternative
           remedy i.e. where the statutory authority has not acted
           in accordance with the provisions of the enactment in
           question, or in defiance of the fundamental principles of
           judicial procedure, or has resorted to invoke the provisions
                                                                          B
           which are repealed, or when an order has been passed
           in total violation of the principles of natural justice, the
           proposition laid down in Thansingh Nathmal v. Supt.
           of Taxes [AIR 1964 SC 1419], Titaghur Paper Mills
           Co. Ltd. v. State of Orissa [(1983) 2 SCC 433: 1983
           SCC (Tax) 131] and other similar judgments that the            C
           High Court will not entertain a petition under Article 226
           of the Constitution if an effective alternative remedy is
           available to the aggrieved person or the statute under
           which the action complained of has been taken itself
           contains a mechanism for redressal of grievance still          D
           holds the field. Therefore, when a statutory forum is
           created by law for redressal of grievances, a writ petition
           should not be entertained ignoring the statutory
           dispensation.”
                    xxx     xxx       xxx
                                                                          E
            8. The Statement of Objects and Reasons of
        the SARFAESI Act states that the banking and financial
        sector in the country was felt not to have a level playing
        field in comparison to other participants in the financial
        markets in the world. The financial institutions in India did
                                                                          F
        not have the power to take possession of securities and sell
        them. The existing legal framework relating to commercial
        transactions had not kept pace with changing commercial
        practices and financial sector reforms resulting in tardy
        recovery of defaulting loans and mounting non-performing
        assets of banks and financial institutions. Narasimhan            G
        Committee I and II as also the Andhyarujina Committee
        constituted by the Central Government Act had suggested
        enactment of new legislation for securitisation and
        empowering banks and financial institutions to take
        possession of securities and sell them without court
                                                                          H
36   SUPREME COURT REPORTS                          [2023] 4 S.C.R.


A      intervention which would enable them to realise long-term
       assets, manage problems of liquidity, asset liability
       mismatches and improve recovery. The proceedings under
       the Recovery of Debts Due to Banks and Financial
       Institutions Act, 1993 (hereinafter referred to as “the DRT
B      Act”) with passage of time, had become synonymous with
       those before regular courts affecting expeditious
       adjudication. All these aspects have not been kept in mind
       and considered before passing the impugned order.
           9. Even prior to the SARFAESI Act, considering the
C      alternate remedy available under the DRT Act it was held
       in Punjab National Bank v. O.C. Krishnan [(2001) 6 SCC
       569] that: (SCC p. 570, para 6)
              “6. The Act has been enacted with a view to provide
          a special procedure for recovery of debts due to the
          banks and the financial institutions. There is a hierarchy
D
          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
          Constitution or by filing a civil suit, which is expressly
E         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
F         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
          Act.”
G
                   xxx      xxx      xxx
           15. It is the solemn duty of the court to apply the correct
       law without waiting for an objection to be raised by a party,
       especially when the law stands well settled. Any departure,
H      if permissible, has to be for reasons discussed, of the case
  M/S SOUTH INDIAN BANK LTD. & ORS. v. NAVEEN                             37
MATHEW PHILIP & ANR. ETC. ETC. [M. M. SUNDRESH, J.]

        falling under a defined exception, duly discussed after           A
        noticing the relevant law. In financial matters grant of ex
        parte interim orders can have a deleterious effect and it is
        not sufficient to say that the aggrieved has the remedy to
        move for vacating the interim order. Loans by financial
        institutions are granted from public money generated at the       B
        taxpayer’s expense. Such loan does not become the property
        of the person taking the loan, but retains its character of
        public money given in a fiduciary capacity as entrustment
        by the public. Timely repayment also ensures liquidity to
        facilitate loan to another in need, by circulation of the money
        and cannot be permitted to be blocked by frivolous litigation     C
        by those who can afford the luxury of the same. The caution
        required, as expressed in United Bank of India v.
        Satyawati Tondon [(2010) 8 SCC 110: (2010) 3 SCC (Civ)
        260], has also not been kept in mind before passing the
        impugned interim order: (SCC pp. 123-24, para 46)                 D
               “46. 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 constitutional and legal           E
           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 impact on the financial health of
           such bodies/institutions, which (sic will) ultimately prove
           detrimental to the economy of the nation. Therefore,           F
           the High Court should be extremely careful 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 of the exceptions carved
           out in Baburam Prakash Chandra Maheshwari v.                   G
           Antarim Zila Parishad [AIR 1969 SC 556], Whirlpool
           Corpn. v. Registrar of Trade Marks [(1998) 8 SCC
           1] and Harbanslal Sahnia v. Indian Oil Corpn.
           Ltd. [(2003) 2 SCC 107] and some other judgments, then
           the High Court may, after considering all the relevant
                                                                          H
38   SUPREME COURT REPORTS                           [2023] 4 S.C.R.


A           parameters and public interest, pass an appropriate interim
            order.”
     •      Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya
            Mandir, (2022) 5 SCC 345,
             “18. Even otherwise, it is required to be noted that a
B        writ petition against the private financial institution — ARC
         — the appellant herein under Article 226 of the Constitution
         of India against the proposed action/actions under Section
         13(4) of the SARFAESI Act can be said to be not
         maintainable. In the present case, the ARC proposed to
C        take action/actions under the SARFAESI Act to recover
         the borrowed amount as a secured creditor. The ARC as
         such cannot be said to be performing public functions which
         are normally expected to be performed by the State
         authorities. During the course of a commercial transaction
         and under the contract, the bank/ARC lent the money to
D
         the borrowers herein and therefore the said activity of the
         bank/ARC cannot be said to be as performing a public
         function which is normally expected to be performed by
         the State authorities. If proceedings are initiated under
         the SARFAESI Act and/or any proposed action is to be
E        taken and the borrower is aggrieved by any of the actions
         of the private bank/bank/ARC, borrower has to avail the
         remedy under the SARFAESI Act and no writ petition
         would lie and/or is maintainable and/or entertainable.
         Therefore, decisions of this Court in Praga Tools
         Corpn. v. C.A. Imanual, [(1969) 1 SCC 585] and Ramesh
F
         Ahluwalia v. State of Punjab, [(2012) 12 SCC 331: (2013)
         3 SCC (L&S) 45: 4 SCEC 715] relied upon by the learned
         counsel appearing on behalf of the borrowers are not of
         any assistance to the borrowers.
                     xxx     xxx      xxx
G
            21. Applying the law laid down by this Court in State
         Bank of Travancore v. Mathew K.C., [(2018) 3 SCC 85:
         (2018) 2 SCC (Civ) 41] to the facts on hand, we are of the
         opinion that filing of the writ petitions by the borrowers
         before the High Court under Article 226 of the Constitution
H
  M/S SOUTH INDIAN BANK LTD. & ORS. v. NAVEEN                              39
MATHEW PHILIP & ANR. ETC. ETC. [M. M. SUNDRESH, J.]

        of India is an abuse of process of the court. The writ petitions   A
        have been filed against the proposed action to be taken
        under Section 13(4). As observed hereinabove, even
        assuming that the communication dated 13-8-2015 was a
        notice under Section 13(4), in that case also, in view of the
        statutory, efficacious remedy available by way of appeal
                                                                           B
        under Section 17 of the SARFAESI Act, the High Court
        ought not to have entertained the writ petitions. Even the
        impugned orders passed by the High Court directing to
        maintain the status quo with respect to the possession of
        the secured properties on payment of Rs 1 crore only (in all
        Rs 3 crores) is absolutely unjustifiable. The dues are to the      C
        extent of approximately Rs 117 crores. The ad interim relief
        has been continued since 2015 and the secured creditor is
        deprived of proceeding further with the action under
        the SARFAESI Act. Filing of the writ petition by the
        borrowers before the High Court is nothing but an abuse of         D
        process of court. It appears that the High Court has initially
        granted an ex parte ad interim order mechanically and
        without assigning any reasons. The High Court ought to
        have appreciated that by passing such an interim order, the
        rights of the secured creditor to recover the amount due
        and payable have been seriously prejudiced. The secured            E
        creditor and/or its assignor have a right to recover the amount
        due and payable to it from the borrowers. The stay granted
        by the High Court would have serious adverse impact on
        the financial health of the secured creditor/assignor.
        Therefore, the High Court should have been extremely               F
        careful and circumspect in exercising its discretion while
        granting stay in such matters. In these circumstances, the
        proceedings before the High Court deserve to be
        dismissed.”
           •       Varimadugu Obi Reddy v. B. Sreenivasulu,                G
        (2023) 2 SCC 168,
           “36. In the instant case, although the respondent
        borrowers initially approached the Debts Recovery Tribunal
        by filing an application under Section 17 of
        the SARFAESI Act, 2002, but the order of the Tribunal
                                                                           H
40              SUPREME COURT REPORTS                         [2023] 4 S.C.R.


A                   indeed was appealable under Section 18 of the Act subject
                    to the compliance of condition of pre-deposit and without
                    exhausting the statutory remedy of appeal, the respondent
                    borrowers approached the High Court by filing the writ
                    application under Article 226 of the Constitution. We
                    deprecate such practice of entertaining the writ application
B
                    by the High Court in exercise of jurisdiction under Article
                    226 of the Constitution without exhausting the alternative
                    statutory remedy available under the law. This circuitous
                    route appears to have been adopted to avoid the condition
                    of pre-deposit contemplated under 2nd proviso to Section
C                   18 of the 2002 Act.”
            18. While doing so, we are conscious of the fact that the powers
     conferred under Article 226 of the Constitution of India are rather wide
     but are required to be exercised only in extraordinary circumstances in
     matters pertaining to proceedings and adjudicatory scheme qua a statute,
D    more so in commercial matters involving a lender and a borrower, when
     the legislature has provided for a specific mechanism for appropriate
     redressal.
            19. Reiterating the concern expressed, the present appeals are
     disposed of. The Registry is directed to mark a copy of this order to the
E    High Court of Kerala and the High Court of Punjab & Haryana. No
     costs.

     Nidhi Jain                                                Appeals disposed of.
     (Assisted by : Rakhi, LCRA)

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