#Article226 Archives - Prime Legal

Case title: PHR Invent Educational Society v. UCO Bank and Ors

Case no.: Civil Appeal No. ….. of 2024 (Arising out of SLP(C) No. 8867 of 2022)

Order on: 10^th April 2024

Quorum: Justice B.R. Gavai, Justice Rajesh Bindal and Justice Sandeep Mehta

FACTS OF THE CASE

The case revolves around a loan availed by the borrower (Dr. M.V. Ramana Rao) from UCO Bank, for which four properties were mortgaged as collateral security. Due to default in repayment, the bank initiated proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

The Bank issued an Auction Sale Notice for the scheduled properties. The borrower challenged this through a securitization application before the Debts Recovery Tribunal (DRT).

Meanwhile, the auction was conducted, and the appellant emerged as the highest bidder. Despite interim orders from the DRT, the borrower failed to comply with payment obligations. Eventually, the sale was confirmed in favor of the appellant.

CONTENTIONS OF THE APPELLANT

The appellant argued against the High Court entertaining the borrower’s writ petition, citing settled law on alternative remedies under the SARFAESI Act. They emphasized the borrower’s conduct, including non-compliance with payment obligations and the finality of the sale in favor of the appellant.

Shri Basant, learned Senior Counsel appearing for the appellant-auction purchaser relied on the judgments of this Court in the cases of,

United Bank of India v. Satyawati Tondon and Other:

The High Court overlooked the settled law that it will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions.

The Court further held that though the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, still it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution.

CONTENTIONS OF THE RESPONDENTS

UCO Bank and others argued for the dismissal of the borrower’s writ petition, emphasizing the availability of statutory remedies under the DRT Act and SARFAESI Act. They highlighted the borrower’s failure to comply with payment obligations and the finality of the confirmed sale.

ISSUE –

Whether the High Court erred in entertaining the borrower’s writ petition despite the availability of alternative remedies under the SARFAESI Act.
Whether the borrower’s conduct disentitles them to equitable relief.

COURT’S ANALYSIS AND JUDGEMENT

The court reiterated settled law that the High Court should not entertain petitions under Article 226 of the Constitution when effective alternative remedies are available. It emphasized the finality of the confirmed sale and the extinguishment of the borrower’s right of redemption. The court found no exceptional circumstances warranting the High Court’s interference. It held that the High Court erred in entertaining and allowing the borrower’s petition and dismissed the same.

The court, while recognizing the High Court’s wide powers under Article 226, stressed the importance of exhausting alternative remedies, especially in matters involving recovery of dues. The judgment upheld the finality of the confirmed sale and the borrower’s failure to avail statutory remedies, ultimately dismissing the borrower’s writ petition.

This case underscores the significance of adhering to statutory procedures and exhausting alternative remedies before seeking recourse through writ jurisdiction, particularly in matters concerning financial obligations and recovery actions.

“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.”

Judgement Reviewed by – Chiraag K A

Click Here to view Judgement

Case title: Dr Brajendra Singh Chauhan & Ors. Vs Central Administrative Tribunal & Ors

Case no.: Writ Application No. – 602 of 2024

Order on: March 22nd, 2024

Quoram: Justice Vivek Kumar Birla and Justice Donadi Ramesh

Facts of the case

The petitioners who were initially appointed as Short Term Medical Officers had approached the Central Administrative Tribunal (CAT), Allahabad Bench and sought to issue an order to the respondents for their appointment as regular Assistant Medical Officers. The CAT ruled in favour of the petitioners. However, the petitioners alleging non-compliance of the order by the respondents again approached the CAT by filing a contempt petition under the provisions of the Contempt of Courts Act, 1971. The Tribunal noting a substantially compliance of the order by the respondents disposed of the application. Aggrieved by the same, the petitioners appealed before the Allahabad High Court under Article 226 of the Constitution.

The Respondent’s Counsel submitted that the writ petition is not maintainable under Article 226 by citing Section 17 of the Administrative Tribunal Act, 1985 (AT Act) in conjunction with Section 19 of the Contempt of Courts Act, 1971 (CC Act).

Legal Provisions

Article 323A – It empowers the Parliament to enact the law providing for adjudication or trial by Administrative Tribunals and specifies the jurisdiction and powers of such Tribunals including their power to punish for contempt.

Section 14 & Section 15 of the AT Act – It specifies the jurisdiction, powers and authority for the Central Administrative Tribunal and State Administrative Tribunal respectively.

Section 17 of the AT Act – It empowers the Tribunal to punish for contempt of court and exercise its power similar to the High Court with regard to provisions of the Contempt of Courts Act, 1971.

Section 12 of the CC Act – It provides Punishment for Contempt of Court.

Section 19 of the CC Act – It provides that the appeals against the orders of Tribunal shall lie as a matter of right to the Bench of at least two Judges of High Court, where the contempt order is passed by the Single Judge and it shall lie to the Supreme Court where the order is passed by the Bench.

Court’s Analysis and Judgement

The Court addressing the question of maintainability of writ petition filed before the High Court against the orders passed under the Contempt of Courts Act delved into Article 323 A, Sections 14 & 17 of the AT Act and Sections 11, 12 & 19 of the CC Act. It drew a distinction between the orders passed by the Tribunal under Section 14(1) of the AT Act and the order passed under Section 17 of the AT Act. The Bench noted that the while there is no statutory remedy of appeal available under the former, the latter provides the same by virtue of Section 19 of the CC Act. Further, it noted that since the contempt proceeding under Section 17 of the AT Act is dealt with by a bench of not less than two members, the orders passed would be appealable only before the Supreme Court. Hence, it ruled that any order or decision of the Tribunal under the Contempt of Courts Act shall be appealable only to the Supreme Court within 60 days from the date of the order.

The Court heavily relied on the precedence laid down in the cases of T. Sudhakar Prasad Vs Government of A.P. and L. Chandra Kumar Vs. Union of India and held that the orders of the Tribunal under the Contempt of Courts Act shall be appealable only before the Supreme Court and no writ petition against the same shall be maintainable before the High Court under Article 226 / 277 of the Constitution of India. Accordingly, it dismissed the present petition citing the lack of maintainability. This judgement thus, throws light on the jurisdictional scope of appeals arising from contempt proceedings under Section 17 of the Administrative Tribunals Act and clears line on the exclusive appellate jurisdiction of the Supreme Court in matters regarding contempt orders issued by the Tribunal.

Judgement Reviewed by – Keerthi K

Click here to view the Judgement

Best Lawyers in Bangalore

The High Court should not entertain a petition under Article 226 of the Constitution particularly when an alternative statutory remedy is available : SC

Appeals against the Contempt orders of Central Administrative Tribunal (CAT) available only before the Supreme Court and not High Court: Allahabad High Court