Heard.

1) The petitioners have challenged the order dated 02.09.2023 whereby I.A. No. 1945/2023 and I.A. No. 1949/2023 have been disposed of holding that Section 13(9) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'SARFAESI Act, 2002) would not attract in the present case as respondent No. 2 has given written consent to the respondent No.1 to take action on his behalf.

2) The facts of the present case are the petitioner’s company, through its Directors, had availed various credit facilities from the respondent banks since the year 2008. Subsequently, the petitioner company, with the directors and guarantors availed a cash credit (hypothecation) limit of Rs. 74.50 Crores and a term loan of Rs. 22.00 Crores, total Rs. 96.50 Crores from respondent banks 1 and 2. This was done under a consortium called "the PNB Consortium" in March 2015. Additionally, petitioners No. 2, 4, and 5 acted as personal guarantors, while petitioners No. 6 and 7 acted as corporate guarantors, executing guarantee agreements in favor of the consortium members (respondent banks) on 24.03.2015. To further secure the repayment of the aforementioned credit facilities, amounting to Rs. 96.50 Crores, petitioner number 1 along with the directors created and extended an equitable mortgage on their immovable properties in favor of the lead bank of the consortium, i.e., respondent No.1/Punjab National Bank (PNB). The specific details regarding the properties are described in the notices issued under Sections 13(2) and 13(4) of the SARFAESI Act, 2002 dated 24.03.2015.

3) Afterwards, petitioner No.1/company with its Directors availed enhanced fund-based and non-fund-based credit facilities amounting to Rs. 129.93 crores. Out of this, the exposure of respondent No.1/PNB was Rs. 68.25 Crores, and respondent No.2/Union Bank of India (UBI) was Rs. 61.68 Crores. These credit facilities were obtained from the respondent banks under the consortium named "the PNB Consortium" in March 2018. In these loan transactions, petitioners No. 2, 4 and 5 acted as personal guarantors, while petitioners No. 6 and 7 acted as corporate guarantors, executing guarantee agreements in favor of the consortium members, i.e., the respondent banks. To further secure the repayment of the mentioned credit facilities totaling Rs. 129.93 Crores, petitioner number 1 Company, along with its directors, created and extended an equitable mortgage. Additionally, petitioners No. 2, 4, and 5 extended the equitable mortgage on their immovable properties in favor of the lead bank of the consortium, respondent No.1/ PNB bank, on 27.03.2018.

4) Following that, in June 2020, petitioner No.1/company, through its directors, also availed the Covid-19 Emergency Line of Credit (CELC) limit of Rs. 5.00 Crores from respondent No.2/UBI. In this loan transaction, petitioners No. 2, 4, and 5 acted as personal guarantors, while petitioners No. 6 and 7 acted as corporate guarantors, executing guarantee agreements in favor of respondent No.2/UBI. To further secure the repayment of this credit facility, petitioner No. 1/company, along with its Directors, and petitioners No. 2, 4, and 5, extended the equitable mortgage on their immovable properties in favor of the lead bank of the consortium, respondent No.1/PNB bank.

5) Subsequently, in December 2020, petitioner No. 1 Company, through its Directors, availed the Guaranteed Emergency Credit Line (GECL) Limit-I of Rs. 11.90 Crores to address liquidity crunch and cash flow mismatch resulting from the outbreak of the Covid-19 pandemic. This credit facility was obtained from respondent No.1. In this loan transaction, petitioners No. 2, 4, and 5 acted as personal guarantors, while petitioners No. 6 and 7 acted as corporate guarantors, executing guarantee agreements in favor of respondent No. 1. To further secure the repayment of this credit facility, petitioner No. 1 Company, along with its directors, and petitioners No. 2, 4, and 5, extended the equitable mortgage on their immovable properties in favor of the lead bank of the consortium, respondent No.1/PNB bank, on 24.12.2020.

6) Lastly, in March 2021, petitioner No. 1/company, through its Directors, availed the Guaranteed Emergency Credit Line (GECL) Limit-II of Rs. 9.68 Crores from respondent No.1. In this loan transaction, petitioners No. 2, 4, and 5 acted as personal guarantors, while petitioners No. 6 and 7 acted as corporate guarantors, executing guarantee agreements in favor of respondent No. 1. To further secure the repayment of this credit facility, petitioner No. 1 Company, along with its directors, and petitioners No. 2, 4, and 5, extended the equitable mortgage on their immovable properties in favor of the lead bank of the consortium, respondent No.1 on 31.03.2021. Thus, a total amount of Rs. 158,39,98,105.76 was outstanding as of 30.06.2022.

7) Notice under Section 13(2) of the SARFAESI Act, 2002 was issued on 04.12.2021 to the borrowers as well as guarantors calling upon to discharge liabilities within a period of 60 days as stipulated in the notice. On 04.02.2022, representation was made by the petitioners before respondent No.1 and vide order dated 19.02.2022; the objections were decided by respondent No.1 alone. On 07.03.2022, a second demand notice was issued by respondent No.1 for itself and respondent No.2. On 08.05.2022, representation was made by the petitioners and again respondent No.1 alone decided the representation on 24.05.2022. Thereafter, possession was taken under Section 13(4) of the SARFAESI Act, 2002 by respondent No.1 for itself and respondent No.2 on 07.06.2022. The possession notice was published in the newspaper on 10.06.2022.

8) The proceedings initiated by the respondent banks under Section 14 of the SARFAESI Act, 2002 were completed on 20.02.2023 and 20.03.2023 by the District Magistrate Raipur and Durg, respectively. Those orders were challenged by the petitioners in S.A. No. 584 of 2022 before the Debts Recovery Tribunal, Jabalpur (for short 'DRT') on 23.06.2022. The petitioners raised various grounds in their written submission and in the application for grant of stay which were taken into consideration in W.P.(227) No. 490 of 2023. The crucial grounds raised in the application for grant of stay and written submission are reproduced as under:-

“2.2 Without making UBI as party DM could not have passed any order.

2.4 In the order passed by DM, which is at page 35, in para 2 at page 36 it can be seen that there is reference to sanctioned amount of PB alone Rs.87.18 Crores.

2.5 At page 37, third line from the top, there is reference to sanctioned amount of PNB only i.e. Rs. 87.18 Crores..

2.6 There is no reference to amount sanctioned/demanded of the UBI.

2.7 Order passed by the DM, Raipur is only for the PB and not for UBI.

2.8 That the amount referred in section 14 application/order is different than the amount claimed in 13(2) demand notice.”

9) Additionally, the petitioners filed two separate interim applications, registered as I.A. No. 1945/2023 and I.A. No. 1949/2023, seeking a stay on the effect and operation of the orders passed by the District Magistrate of Durg and Raipur, respectively, on the specified dates. The said interim applications were considered by the Learned Presiding Officer, and orders were passed on 08-06-2023. In this order, the Debts Recovery Tribunal granted conditional interim protection to the petitioners by allowing their application for stay and consequently stayed the execution of the orders passed by the District Magistrate, Durg and Raipur dated 20.03.2022 and 20.02.2023, respectively. However, the stay was subject to the onerous condition of depositing Rs. 15 Crores in 12 equal installments until 08.12.2023. The operative portion of the same has been reproduced herein below:-

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The petitioners have challenged this order in the present writ petition primarily on the ground that the conditions imposed by the Debts Recovery Tribunal while granting the stay are burdensome, unreasonable, and contrary to the provisions of the SARFAESI Act, 2002.

10) The petitioners challenged the order dated 08.06.2023 passed in W.P.(227) No. 490/2023 on various grounds including - (I) demand notice, (ii) there was no demand with regard to the amount borrowed from Union Bank of India, (iii) the proceedings initiated before the DRT are hit by Section 13(9) of the SARFAESI Act, 2002, (iv) the District Magistrates Raipur and Durg passed the orders with regard to the loan advanced to the petitioners by Punjab National Bank only and thus, the order passed by the DRT on 08.06.2023 was erroneous. This Court in W.P.(227) No. 490/2023 in para - 18, 19 & 20 held as under:-

“18) Bare reading of the Section 13(9) makes it clear that in case of financing a financial asset by multiple secured creditors or joint financing by secured creditors, it is stated that no individual secured creditor can exercise their rights conferred under or pursuant to sub-section (4) unless the exercise of such rights is agreed upon by secured creditors representing at least 60% in value of the outstanding amount as on a record date. This provision emphasizes that any action taken in accordance with the agreement of the majority secured creditors shall be binding on all the secured creditors involved in the financing arrangement.

19) In the present case, the outstanding amount for respondent No.1 is Rs. 88,53,94,944.02, and for respondent No.2, it is Rs. 61,83,80,951.31. It is crucial to note that a legal issue is involved, which was not considered by the Debts Recovery Tribunal (DRT) in its order, despite specific pleas raised in the application for stay and written submission filed by the petitioners. Therefore, considering the legal issue involved, the plea of alternative remedy raised by the respondents is rejected .

20) The petitioners, in response to the demand notice, filed an application for stay before the DRT on 09.05.2022 and reiterated their specific plea in the written submission. The DRT observed and acknowledged these pleas in paragraphs 11 to 17; subsequently passed an interim order thereby directing the petitioners to deposit Rs. 15 Crore in 12 equal installments within -12- six months. Upon reviewing the entire order dated 08.06.2023, it becomes evident that at paragraph 15, the DRT recorded its finding and conclusively determined that a demand notice for a sum of Rs. 1,98,39,98,105.76 was issued against the petitioners, requiring them to refund it and the possession order issued by the District Magistrate, Durg and Raipur on 20.03.2023 and 20.02.2023, respectively was stayed, subject to deposit of the aforementioned amount by the petitioners.”

and consequently this Court allowed the petition and set aside the order passed by the DRT, Jabalpur dated 08.06.2023 and directed the Tribunal to decide the matter afresh within a period of 15 days from the date of order.

11) The Tribunal vide order dated 02.09.2023 dealt with Sections 13(2) and 13(9) of the SARFAESI Act, 2002 and also considered the consent letter issued by Union Bank of India dated 07.03.2022, whereby the Punjab National Bank was authorized to initiate proceedings and to take steps on its behalf and held that the provisions of Section 13(9) of the SARFAESI Act, 2002 have already been complied with and thus, affirmed earlier order passed on 06.05.2023.

12) Learned counsel for the petitioners would submit that demand notice dated 07.03.2022 under Section 13(2) of the SARFAESI Act, 2002 was issued by Punjab National Bank and Union Bank of India jointly, but demand notice was issued for the amount borrowed from Punjab National Bank alone. He would further submit that the dues of the Punjab National Bank are less than 60%, therefore, respondent No.1-Bank, cannot represent respondent No. 2-Bank. He would also submit that vide demand notice dated 07.03.2022, no demand was made regarding the dues of Union Bank of India. He would further contend that no demand notice was issued under Section 13(2) of the SARFAESI Act, 2002 by the Union Bank of India; therefore, no action under Section 13(4) of the SARFAESI Act, 2002 can be initiated by the Union Bank of India. He would also contend that the permission letter dated 04.12.2021 issued by Union Bank of India in favour of the Punjab National Bank to act on behalf of Union Bank of India to take action under Section 14 of the SARFAESI Act, 2002 was not acted upon and on the basis of such permission letter or consent letter, no action can be taken against the petitioners in the absence of specific demand in the demand notice. He would further argue that the observation made by the learned Tribunal is erroneous whereby it is held that Section 13(9) of the SARFAESI Act, 2002 would not attract as a permission letter was issued by the Union Bank of India on 04.12.2021. He would also argue that since no demand notice has been issued by the Union Bank of India under Section 13(2) of the SARFAESI Act, 2002 no action can be taken by the Union Bank of India. Further, since no demand notice under Section 13(2) of the SARFAESI Act, 2002 has been issued by the Union Bank of India no application under Section 14 could be filed by the Union Bank of India. He has placed reliance on the judgments passed by the Hon'ble Supreme Court in the matters of Mardia Chemicals Ltd. and Others vs. Union of India and Others, (2004) 4 SCC 311 [LQ/SC/2004/496] and Transcore vs. Union of India and Another, (2008) 1 SCC 125 [LQ/SC/2006/1191] ; judgments passed by the High Court of Delhi in the matters of Assets Reconstruction Co. India P. Ltd. vs. Shamken Spinners Ltd. & Ors. in W.P.(C) No. 9557/2007; M/s. Alpine Industries Ltd. vs. Appellate Authority for Industrial & Financial Reconstruction & Ors. in W.P.(Civil) No. 1106 of 2011 and Chemstar Organics India Limited vs. Bank of Baroda & Ors. in W.P.(C) No. 1487/2011; judgment passed by the High Court at Calcutta in the matter of Tarun Mondal & Ors. vs. Axis Bank Limited & Ors. in W.P. No. 1246 of 2014; judgment passed by the Andhra Pradesh High Court in the matter of M/s. Sesha Saila Power and Engineering Pvt. Ltd. vs. State Bank of India, Raipur (C.G.) in W.P. No. 27220 of 2011; and the judgment passed by the Telangana High Court in the matter of Andhra Pradesh State Financial Corporation vs. Kotak Mahindra Bank in Writ Petition No. 43027 of 2019.

13) On the other hand, learned counsel for the respondents would submit that the present writ petition is not maintainable as there is an efficacious alternative remedy to prefer an appeal. It is also stated that the DRT has ample power to pass interim orders according to the provisions of Section 17(7) of the SARFAESI Act, 2002 read with Section 19(25) of the Recovery of Debts and Bankruptcy Act, 1993. They would further submit that the provisions of Section 13(9) of the SARFAESI Act, 2002 will not be applicable in the case of the petitioners and being the borrowers, the writ petition would not be maintainable. They would furtherz submit that the meeting of consortium lenders/members was convened on 03.12.2021 where it was decided that the Lead Bank on behalf of the consortium lenders would issue notice under Section 13(2) of the SARFAESI Act, 2002 and in pursuance of the agreement dated 24.05.2022 the Lead Bank i.e. Punjab National Bank was authorized by respondent No.2 and accordingly, consent letter dated 04.12.2021 was given by respondent No. 2-Bank. It is also submitted that the demand notice issued under Section 13(2) of the SARFAESI Act, 2002 was not defective and it was issued to the Lead Bank i.e. Punjab National Bank for recovery of the amount borrowed from Punjab National Bank as well as Union Bank of India by the petitioners. They would further contend that the amount of Rs.158,39,98,105.76/- is outstanding as on 30.06.2022 in the aforesaid loan accounts of the petitioner company. They would also contend that the demand notice dated 07.09.2022 was rightly issued by the Authorized Officer of respondent No.1/Bank on behalf of both the consortium lenders. Learned counsel for the respondents have placed reliance on the judgments passed by the Hon'ble Supreme Court in the matters of M/s South Indian Bank Ltd. and others vs. Naveen Mathew Philip and another reported in 2023 LiveLaw (SC) 320; Phoenix Arc Private Limited vs. Vishwa Bharati Vidya Mandir and Others, (2022) 5 SCC 345 [LQ/SC/2022/45 ;] ; Varimadugu Obi Reddy vs. B Shreenivasulu and others reported in (2023) 2 SCC 168 [LQ/SC/2022/1455 ;] ; Punjab National Bank vs. O.C. Krishnan and Others, (2001) 6 SCC 569 [LQ/SC/2001/1735] and L&T Housing Finance Limited vs. Trishul Developers and Ors. passed in Civil Appeal No. 3413 of 2020 arising out of SLP (C) No. 18360 of 2019 dated 27.10.2020; the orders passed by the High Court of Chhattisgarh in the matters of Ruchi Agrotech and Ors. vs. Allahabad Bank, in WP(227) No. 563 of 2023 and Ms Techno Drillers Through its Partner & Ors. vs. Aditya Birla Finance Limited Through its Authorised Officer, in WP227 No. 547 of 2023; the judgments of the High Court of Madhya Pradesh in the matter of Devendra Kumar Rai vs. State Bank of India, Jabalpur, reported in 2022 SCC Online MP 1295 and Pramila Doshi & Another vs. I.D.F.C. First Bank passed in W.P. No. 19444/2022 dated 08.09.2022.

14) Before adverting to the facts of the present case, it would be advantageous to discuss the judgments passed by the Hon'ble Supreme Court and various High Courts relied on by both the parties.

15) Firstly, I would like to go through the judgments relied on by learned counsel for the petitioners.

16) In Mardia Chemicals Ltd. (supra), the Hon'ble Supreme Court has held in para- 71 as under:-

“71. Arguments have been advanced as to how far principles of lender's liability are applicable. Whatever be the position, however, it cannot be denied that the financial institutions, namely, the lenders owe a duty to act fairly and in good faith. There has to be a fair dealing between the parties and the financing companies/institutions are not free to ignore performance of their part of the obligation as a party to the contract. They cannot be free from it. Irrespective of the fact as to whatever may have been held in decisions of some American courts, in view of the facts and circumstances and the terms of the contract and other details relating to those matters, that may or may not strictly apply, nonetheless, even in absence of any such decisions or legislation, it is incumbent upon such financial institutions to act fairly and in good faith complying with their part of obligations under the contract. This is also the basic principle of the concept of lender's liability. It cannot be a one-sided affair shutting out all possible and reasonable remedies of the other party, namely, borrowers and assume all drastic powers for speedier recovery of NPAs. Possessing more drastic powers calls for exercise of higher degree of good faith and fair play. The borrowers cannot be left remedies in case they have been wronged against or subjected to unfair treatment violating the terms and conditions of the contract. They can always plead in defence deficiencies on the part of the banks and financial institutions.”

17) In Transcore (supra), the Hon'ble Supreme Court has held in para - 29 and 30 as under:-

“29. Section 13 (9) inter alia states that where a financial asset is funded by more than one bank/FI or in case of joint financing by a consortium, no single secured creditor from that consortium shall be entitled to exercise right under Section 13 (4) unless exercise of such right is agreed upon by all the secured creditors. Section 13 (9) provides for one more instance when permission of DRT may be required under the first proviso to Section 19 (1) of the DRT Act. The agreement between the secured creditors in such cases is required to be placed before DRT not as a fetter on the rights of the secured creditors but out of abundant caution. Generally, such agreements are complex in measure, particularly because rights of each of the secured creditors in the consortium may be required to be looked into. However, if before DRT, all the secured creditors in such consortium enter into an agreement under Section 13 (9) then no such further inquiry is required to be made by DRT. In such cases, DRT has only to see that all the secured creditors in the consortium are represented under the agreement.

30. The point to be noted is that the scheme of the NPA Act does not deal with disputes between the secured creditors and the borrower. On the contrary, the NPA Act deals with the rights of the secured creditors inter se. The reason is that the NPA Act proceeds on the basis that the liability of the borrower has crystallized and that his account is classified as non-performing asset in the hands of the bank/FI.”

18) In M/s Alpine Industries Ltd. (supra), Delhi High Court has held in para- 14 as under:-

“14. The requirement of 3/4th of the secured creditors taking measures for the abatement of reference under proviso to section 15 of SICA is not independent of measures taken by 3/4th of the secured creditors under section 13 (9) of the SARFESI Act, 2002. Once the measures have been taken, which is not disputed in the present case as one of the unit had been taken over, whether the action was by 3/4th of the secured creditors or less in violation of section 13 (9) of SARFESI Act, 2002 is not to be re-determined independently by BIFR. The action of 3/4th secured creditors being not representing 3/4th secured creditors can be challenged in an appeal under Section 17 of SARFESI Act, 2002. The plea of the learned counsel for the petitioner that the petitioner company is not challenging the action taken by secured creditors under SARFESI Act, 2002 will not ensure any benefit to the petitioner company. If the action of 3/4th of the secured creditors is not challenged under SARFESI Act, 2002 on the ground that it is not by 3/4th of the secured creditors, this issue cannot be raised by the petitioner company before BIFR/AAIFR not the Board and Appellate Authority would be competent to go into the issue whether the measure taken was by 3/4th of the secured creditors or less. In the circumstances the plea of the petitioner that the BIFR should have independently adjudicated the issue cannot be sustained and the orders of BIFR/AAIFR cannot be faulted on this ground. In these circumstances abatement under proviso to section 15 of SICA on the ground that measures have been taken by 3/4th of the secured creditors under SARFESI Act, 2002 will not be on the basis of independent judicial enquiry by BIFR/AAIFR as has been contended on behalf of the petitioner.”

19) In Chemstar Organics India Limited (supra), Delhi High Court has held in paras- 17 to 24 as under:-

“17. The most important aspect to be kept in mind is that there are two different sets of assets. The first is the residential property owned by the promoters of the petitioner-company qua which equitable mortgage has been created only in favour of BOB. The second set of assets are the factory premises over which GIIC and BOB had pari passu charge. Thus, the initialization of the proceedings under the SARFAESI Act was separate. BOB issued notice under the SARFAESI Act qua the residential property on 15.06.2006 and took over symbolic possession on 12.01.2007. The qua the factory premises by BOB was dated 05.04.2008. It is qua the second notice really that the question arose as to whether the requirement under the statute of consent of at least 3/4th of the secured creditors was not satisfied as a consequence of absence of consent of GIIC. BOB sought to take a stand that the consent of GIIC was available, while the stand of GIIC was that till date they had not given the consent to BOB. However, GIIC also simultaneously took a stand that an agreement had been recorded that the land, building, plant and machinery be sold at public auction and the proceeds realized therefrom after squaring the amount of provident fund, be distributed between GIIC and BOB having pari passu charge over the assets. This aspect was, however, clarified thereafter by BOB stating that it was under an impression that the consent and approval of GIIC was available, but as it transpired, the issue of consent had been placed before the higher authority of GIIC and instructions were awaited.

18. The rationale for dismissal of the reference as non maintainable by the order dated 12.11.2008 of BIFR was, however, that the petitioner-company had not been able to dispute that its factory was lying closed since 2001 and both the units had been taken over by GIIC in 2001 and 2004 which had resulted in the loss of industrial character of the petitioner-company in view of Section 3(2)(b) of SICA r/w Section 3 (d) of the Industries (Development and Regulation) Act, 1951. It is this order which was assailed by the petitioner in Appeal No. 246 of 2008 before the AAIFR. The appeal was, however, dismissed on 14.01.2011 which order is now sought to be assailed in the present writ petition filed under Article 226 of the Constitution of India.

19. The order of the AAIFR dated 14.01.2011 records the plea of the petitioner-company that qua the mortgaged property owned by the petitioner-company, the notice dated 15.06.2006 issued by BOB was bad in law as the consent of GIIC having pari passu charge had not been obtained. Thus, the consent of 75% of the charge holders of the assets of the petitioner-company was not available. The AAIFR took note of the GIIC having taking over possession of the units of the petitioner -company under Section 29 of State Financial Corporation Act, 1951 – Nandesari unit of 01.10.2002 and the Umraya Unit on 23.06.2004. The order of the DRT, Mumbai dated 06.10.2009 dismissing the application of the petitionercompany was also taken note of where it had been observed that in view of the third proviso to Section 15(1) of SICA, the reference pending before BIFR would stand abated, the said provision equally applying to proceedings before the AAIFR. Another aspect taken note of by the AAIFR is the consent recorded for sale of assets of the petitioner-company before the Gujarat High Court coupled with endeavour of the petitioner-company to seek recall of that order dated 10.08.2007 clarifying that the order would not come in the way of the petitioner-company in the proceedings before the BIFR or AAIFR i.e. it should be treated as an order granting permission to sell the property of the company.

20. The facts germane, taken note of by the AAIFR qua the closure of the factory of the petitioner-company, were the taking over of possession of the units by GIIC under Section 29 of the State Financial Corporation Act, 1951 and the impossibility of the petitioner employing more than 50 workers on account of the factory lying closed for more than 3 years. Even the electricity meter be lying locked and the factory could not be said to be running. Insofar as the abatement of proceedings before the BIFR is concerned, it was noticed that the notice issued by BOB under Section 13 (4) of SARFAESI act qua the assets of the company was material and stay had been declined by the DRT on 06.10.2009 in SA No.4/2007. The DRAT while dealing with the appeal in its order dated 20.04.2010 considered the prayer for the petitioner-company that the observations/findings of the DRT should not be taken as final between the parties so as to preclude the petitionercompany from raising the point before the DRT at the stage of final disposal of SA No.4/2007. The DRAT, thus, only ensured the legal principle that the decision on an interim application should not prejudice the ultimate decision on the appeal.

21. The AAIFR was of the opinion that the aforesaid proceedings imply that the DRT would ultimately be called upon in SA No. 4/2007 to decide whether the action taken under Section 13 (4) of SARFAESI Act was legal or not, which in turn was dependent upon the consent of the 3/4th value of the secured creditors and thus the AAIFR refused to assume concurrent jurisdiction as that was an aspect to be decided under SARFAESI Act and not under SICA.

22. The AAIFR has, thus, concluded that once interim findings have been arrived at against the petitionercompany in the proceedings before the DRT/DRAT under SARFAESI Act, with possession being taken over, the reference would abate in view of the third proviso to Section 15 (1) of SICA. This was, however, with a clarification that if the action taken under Section 13 (4) of the SARFAESI Act is ultimately set aside, the petitionercompany would be at liberty to seek revival of the appeal before the AAIFR and the question of dismissal of reference being erroneous would be examined.

23. We may also note that a further material development which has taken place during the pendency of the present writ petition is that SA No.4/2007 has been dismissed by the DRT, Mumbai vide order dated 07.02.2012. Thus, the final order has also been passed by the DRT, Mumbai. Various pleas of petitioner-company about absence of equitable mortgage qua residential property, inability to create equitable mortgage on account of negative lien in favour of GIIC (negative lien not having been found), all stand rejected. In fact, the DRT has observed that the securitization proceedings being initiated only against guarantors qua the residential property owned by them and mortgaged with BOB, did not require consent of GIIC.

24. We have set out the salient facts in view of the multiplicity of proceedings which had been initiated. To our mind, the crucial question is the very object of introduction of the SARFAESI Act and as to how Section 13(9) of the said Act has to be read in that context. The purpose of enactment of SARFAESI Act was to enable the banks and financial institutions to realize long term assets, manage problems of liquidity, asset liability mis-match and improve recovery by exercising powers to take possession of the securities and realize proceeds through sale. This was to assist in reduction of non-performing assets by adopting measures for recovery of reconstruction. Chapter III deals with enforcement of security interest and Section 13 forms a part of this Chapter. Any security interest in favour of secured creditors has, thus, been made enforceable without intervention of SARFAESI Act. If Section 13(9) is read in that context, it is obvious that this is a beneficial provision for the secured creditors and not the debtor. The reason for the same is that there may be more than one secured creditors or joint financiers and one secured creditor should not be able to appropriate the proceeds of the secured assets or take a decision in that behalf without concurrence of the other secured creditors. The benchmark provided herein is of three-fourth value of the secured creditors. Thus, if this benchmark is met, a secured creditor exercises all rights conferred on him in pursuance to Section 13 (4) of the said Act. This protects the interests of the other secured creditor as also gives weightage to their opinion. The only infirmity qua the action of BOB relied upon by the petitioner-company in the present case is the absence of consent beforehand from other secured creditor viz GIIC so as to meet the benchmark of three-fourth in value of the secured creditors. It is, however, not in dispute that consent was accorded by GIIC. The provisions of Section 13 (9) of the SARFAESI Act are not meant to be an instrument of defence by a borrower to avoid payment where ultimately three-fourth of the value of the secured creditors are at idem on the action proposed or taken. We have to also keep in mind that with regard to the initial notice of BOB qua the residential property of the promoters of the petitioner-company, GIIC had no interest. Qua the other assets, there was a pari passu charge of GIIC and BOB as is admitted by GIIC. It is obvious that the petitionercompany is using the absence of earlier consent of GIIC as a ruse to deny payment of liability to both the creditors.”

20) In Andhra Pradesh State Financial Corporation (supra), Telangana High Court has held as under:-

“It is true that under Section 13 (9) of the SARFAESI Act, a secured creditor is entitled to proceed with the enforcement of security, if secured creditors representing not less that three-forth in value of the amount outstanding give consent. But, a creditor who had not obtained a VRS,JI&PKR, J W.P. No. 43027 of 2018 first pari-passu charge and who holds only a second charge, cannot invoke the Section 13 (9). Therefore, we are of the considered view that the 1st respondent cannot claim to be the holder of a first pari-passu charge along with the petitioner Corporation, in the absence of a special contract to the contrary in terms of Section 48 of the Transfer of Property Act, 1882. Hence, the impugned action of the 1st respondent is liable to be set aside.

57. Therefore, in view of the above, the Writ petition is allowed to the following effect:

(i) The 1st respondent (Kotak Mahindra Bank) shall not proceed further with the measures initiated under the SARFAESI Act, 2002, without obtaining the consent of the petitioner Corporation. VRS,J&PKR,J W.P. No. 43027 of 2018

(ii) Alternatively, the 1st respondent shall deposit with the petitioner Corporation, the amounts due by the 3rd respondent borrower to the petitioner Corporation, as on date, as undertaken by the 1st respondent, in the meeting of the Joint Lenders, dated 26.05.2015 and in their letter dated 02.06.2017.

(iii) Upon such deposit being made, the first charge that the petitioner Corporation has, over the immovable properties of the 3rd respondent borrower shall stand automatically released and the 1st respondent will be free to proceed further with the measures initiated under the SARFAESI Act. In case, the 1st respondent has any dispute about the amounts due from the 3rd respondent borrower to the petitioner Corporation as claimed by them, it may be open to the 1st respondent to approach the Debts Recovery Tribunal, in spite of making payment and getting the properties released from security from the petitioner Corporation. However, in the circumstances of the case, there shall be no order as to costs.”

21) In Asset Reconstruction Co. India P. Ltd. (supra), Delhi High Court has held in para - 6, 8, 11 & 12 as under:-

“6. In view of the Oman Industrial Bank, since a minority secured creditor cannot frustrate the revival of a sick company, it would in our opinion be necessary that the requirement must similarly exist for an asset reconstruction company or a securitization company for taking the benefit of the 2nd proviso to Section 15 (1) to purchase at least 75% or more of the secured assets of a sick company. If a minority secured creditor having secured assets even just less than 75% of financial assets cannot frustrate revival of a sick company (even if he holds upto 74% of the secured assets) then how can any and every secured/unsecured creditor having much much less than 74% of the secured assets frustrate the revival of a sick company by preventing a reference being filed. Any other interpretation will lead to a gross absurdity. For example, a securitization company or an asset reconstruction company may purchase a debt of Re.1 or Rs.100 or Rs.1,000 or 0.1% or 0.01% or 0.001% of the debt, whether secured or unsecured, of a company and then claim that there cannot be reference made by a sick company under SICA. Be it noted that a debt which is purchased by a securitization company or an asset reconstruction company of an amount of Re.1 etc., in fact need not even be a secured debt but it can be an unsecured debt if a literal construction is adapted of the 2nd proviso to Section 15(1) i.e. asset reconstruction company or a securitization company if it purchases an unsecured debt of even Re.1 of a sick company, then, it can on a literal interpretation of the 2nd proviso seek to claim the benefit of the said proviso to Section 15 (1) and prevent revival and rehabilitation of a sick industrial company. Surely, that cannot be the intention of the Legislature. In fact, the intention of the Legislature is just opposite because in the Companies Act which is proposed to be amended to bring about an amalgam between the functions of BIFR, Company Law Board and the Civil Court dealing with winding up proceedings under the Companies Act, it has been specifically provided that there cannot be prevented a reference to BIFR unless 75% or more of the secured creditors of a sick company propose to take action under Section 13(4) of the SARFAESI Act. The provisions similar to the provisos of Section 15(1) of the present SICA are to be found in the provisos to proposed Section 424A in the proposed amended Companies Act, 1956 and the said provisos read as under:

“Provided also that in case any reference had been before the Tribunal and a scheme for revival and rehabilitation submitted before the commencement of the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Ordinance, 2004, such reference shall abate if the secured creditors representing three-fourth in value of the amount outstanding against financial assistance disbursed to the borrower have taken measures to recover their secured debt under sub-section (4) of section 13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002):

Provided also that no reference shall be made under this section if the secured creditors representing three-fourths in value of amount outstanding against financial assistance disbursed to the borrower have taken measures to recover their secured debts under sub-section (4) of section 13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.”

(Inserted by Act 30 of 2004)

8. In our opinion, a literal interpretation of the 2nd proviso to Section 15(1) not requiring atleast 75% of the secured debt to be purchased by an asset reconstruction company or a securitization company will also defeat the objects of SICA being to prevent unemployment and loss of revenue to the state exchequer and other ills which arise from the closure of an industry. Also, if we adopt the interpretation that a purchaser of a very minuscule amount of a debt of a sick company can frustrate the revival of a sick company then the same will result in an avoidable stalemate and which will arise because the secured creditor would be able to prevent a reference for revival and rehabilitation of a sick company but he would not be able to pursue his remedy under the SARFAESI Act because he would not have the cut off percentage of 75% as required by Section 13(9) of the SARFAESI Act. To the extent possible, different provisions of Acts which are cognate and allied Acts must be interpreted harmoniously with each other and the object of the legislature will have to be understood by reading of all the special statutes taken together.

11. We are left unimpressed by the arguments on behalf of the Union of India as in our opinion, they run counter to the schemes of the SARFAESI Act and SICA. We have already given above our reasons as to the absurdity which will result if the requirements of 75% of the secured assets are not to be purchased by an asset reconstruction company or a securitization company and in spite thereof to claim benefit of the 2nd proviso to Section 15(1) of SICA. We only want to add that guidelines issued by the Reserve Bank of India reproduced above and relied upon, do not in any manner support the interpretation as is sought to be put forth by the learned Additional Solicitor General of India and on the contrary in fact indicate the requirement of 75% of the secured assets to be purchased by an asset reconstruction company or securitisation company.

12. In view of the above, our conclusion therefore is that undoubtedly, a literal interpretation of the 2nd proviso to Section 15(1) of the SICA does not require any minimum percentage of the secured assets to be purchased by an asset reconstruction company or a securitization company acting under the SARFAESI Act, however, the literal interpretation results in an absurdity and a stalemate which can and should be avoided by requiring in the 2nd proviso to Section 15(1) that the asset reconstruction company or the securitisation company must purchase at least 75% or more of the secured assets of a Sick Industrial Company before it can claim to bring into effect the second proviso to Section 15(1).”

22) Now coming to the judgments relied on by learned counsel for the respondents.

23) In Phoenix Arc Private Limited (supra), the Hon'ble Supreme Court has held in paras- 18 to 21 as under:-

“18. Even otherwise, it is required to be noted that a 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 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 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 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 [LQ/SC/1969/81] and Ramesh Ahluwalia v. State of Punjab, (2012) 12 SCC 331 [LQ/SC/2012/792] relied upon by the learned counsel appearing on behalf of the borrowers are not of any assistance to the borrowers.

19. Now, so far as the submission on behalf of the borrowers that in exercise of the powers under Article 136 of the Constitution, this Court may not interfere with the interim/interlocutory orders is concerned, the decision of this Court in State Bank of Travancore v. Mathew K.C., (2018) 3 SCC 85 [LQ/SC/2018/113] is required to be referred to.

20. In Mathew K.C. after referring to and/or considering the decision of this Court in CIT v. Chhabil Dass Agarwal, (2014) 1 SCC 603, [LQ/SC/2013/871] it was observed and held is para 5 as under: (Mathew K.C. case, SCC p. 89)

“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 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 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, as follows: (SCC p. 611, para 15)

'15. Thus, while it can be said that this Court has 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 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 [LQ/SC/1964/26] ; Titaghur Paper Mills Co. Ltd. v. State of Orissa, (1983) 2 SCC 433 [LQ/SC/1983/108] and other similar judgments that the 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 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.'”

21. Applying the law laid down by this Court in Mathew K.C. 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 of India is an abuse of process of the court. The writ petitions 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 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 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 SARFAESI Act. Filing of the writ petition by the borrowers before the High Court is nothing but an abuse of 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 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 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. ”

24) In Varimadugu Obi Reddy (supra), the Hon'ble Supreme Court has held in para - 36 as under:-

“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 indeed was appealable under Section 18 of thesubject 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 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 18 of the 2002 Act.”

25) In O.C. Krishnan (supra), the Hon'ble Supreme Court has held in para - 5, 6 & 7 as under:-

“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 Due to Banks and Financial Institutions Act, 1993 (for short “ the”). The High Court ought not to have exercised its jurisdiction under Article 227 in view of the provision for alternative remedy contained in the. We do not propose to go into the correctness of the decision of the High Court 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 and the financial institutions. There is a hierarchy of appeal provided in the, 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 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 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.

7. For the aforesaid reasons, this appeal is allowed and the impugned order of the Calcutta High Court in CO No. 1305 of 1997 is set aside.”

26) In Ruchi Agrotech (supra), this Court has held in para 14 to 15 as under:-

“14. In the matter of M/s Techno Drillers Through Its Partner vs. Aditya Birla Finance Limited Through Its Authorised Officer, W.P.(227) No. 547 of 2023 this Court vide order dated 13.07.2023 at paragraph 9 & 10 held as under:

“9. The Hon'ble Supreme Court in the matter of 'M/s South Indian Bank Ltd. and Ors. v. Naveen Mathew Philip and Anr. Reported in MANU/SC/0400/2023 : 2023 LiveLaw(SC) 320, held that “a party should not approach the High Court under Article 226 of the Constitution without exhausting the statutory remedy, rendering the writ petition filed by the borrower under the SARFAESI Act, 2002 not maintainable.”

10. Likewise, in the case of 'Varimaduga Obi Reddy v. B. Shreenivasulu and Others' reported in MANU/SC/1495/2022 : 2023 2 SCC 168, [LQ/SC/2022/1455 ;] in which the Hon'ble Supreme Court emphasized that if the borrower has an available remedy under Section 18 of the SARFAESI Act, 2002, writ petition against the dismissal of an application is not maintainable.”

15. In the present case, on 10.05.2021 legal notice demanding payment of outstanding dues to the tune of Rs.3,21,19,651/- was issued to the petitioners and same was replied to by the guarantor on 20.05.2021 and thereafter, on 18.10.2022 the petitioners filed amended S.A. No. 501 of 2018 challenging the order passed by the District Magistrate dated 28.06.2021. On 28.6.2021, the order was passed by the learned District Magistrate. The petitioners kept mum for 16 months and thereafter, they challenged the order. On 19.05.2023, auction notice was issued and the same was within the knowledge of the petitioners and therefore, it was challenged before the learned DRT by filing an application on 29.05.2023 and thereafter, vide order dated 07.06.2023 interim order was passed in favour of the petitioners and they were directed to deposit Rs.1,00,00,000/- in four installments, therefore, the stand taken by the learned counsel for the petitioners to the effect that sufficient time as provided under Rule 8(6) of the Security Interest (Enforcement) Rules, 2002 has not been provided is misconceived.”

27) In M/s Techno Drillers Through Its Partner (supra), this Court observed in para - 9 to 12 as under:-

“9) The Hon'ble Supreme Court in the matter of 'M/s South Indian Bank Ltd. and Ors. v. Naveen Mathew Philip and Anr.' reported in 2023 liveLaw(SC) 320, held that “a party should not approach the High Court under Article 226 of the Constitution without exhausting the statutory remedy, rendering the writ petition filed by the borrower under the SARFAESI Act, 2002 not maintainable.

10) Likewise, in the case of 'Varimaduga Obi Reddy v. B. Shreenivasulu and Others' reported in 2023 2 SCC 168, [LQ/SC/2022/1455 ;] in which the Hon'ble Supreme Court emphasized that if the borrower has an available remedy under Section 18 of the SARFAESI Act, 2002, writ petition against the dismissal of an application is not maintainable.”

11) Section 18 of the SARFAESI Act, 2002 provides as under:

18. Appeal to Appellate Tribunal. –

(1) Any person aggrieved, by any order made by the Debts Recovery Tribunal 1 [under section 17, may prefer an appeal along with such fee, as may be prescribed] to an Appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery Tribunal.– (1) Any person aggrieved, by any order made by the Debts Recovery Tribunal 2 [under section 17, may prefer an appeal along with such fee, as may be prescribed] to an Appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery Tribunal.” 2 [Provided that different fees may be prescribed for filing an appeal by the borrower or by the person other than the borrower:] 3 [Provided further that no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal fifty per cent of the amount of debt due from him, as claimed by the secured creditors or determined by the Debts Recovery Tribunal, whichever is less: Provided also that the Appellate Tribunal may, for the reasons to be recorded in writing reduce the amount to not less than twenty-five per cent of debt referred to in the second proviso]

(2) Save as otherwise provided in this Act, the Appellate Tribunal shall, as far as may be, dispose of the appeal in accordance with the provisions of the Recovery of Debts Due to Banks and Financial institutions Act, 1993 (51 of 1993) and rules made thereuner.

12) Taking into consideration the facts and circumstances of the present case, and the law laid down by the Hon'ble Supreme Court in the matter of M/s South Indian Bank Ltd. and Ors (supra) and Varimadugu Obi Reddy (supra), this Court has no hesitation to hold that the petitioners have efficacious alternative remedy to prefer an appeal under Section 18 of the SARFAESI Act, 2002 and they may raise all grounds available to them before the Appellate Tribunal, therefore, I do not find any good ground to entertain the instant petition. Consequently, the instant petition is dismissed at motion stage.“

28) In Devendra Kumar Rai (supra) the division bench of the High Court of Madhya Pradesh held that interlocutory orders issued by the Debts Recovery Tribunal can be appealed before the Debts Recovery Appellate Tribunal (DRAT) under Section 18(1) of the SARFAESI Act, 2002.

29) In Pramila Doshi (supra), the High Court of Madhya Pradesh has held in para - 24 to 36 as under:-

Maintainability and Entertainability :-

24. In our considered opinion, the words 'maintainability’ and entertainability' have different meaning and connotation in law. The Full Bench Judgment of this Court in M/s Kowa Spinning Ltd. (supra) does not deal with the question of maintainability. In our opinion, this is settled in law that writ petition is maintainable before this Court despite availability of statutory alternative remedy on certain conditions, such as :- (i) Order impugned is passed by an authority having no jurisdiction. (ii) The Principles of natural justice are grossly violated. 9 (iii) Constitutionality of the enabling provision itself is called in question etc. [see Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai and others, (1998) 8SCC 1]

25. However, every petition which is maintainable cannot be entertained by short-circuiting the statutory alternative remedy. Thus, the words ‘maintainability’ and ‘entertainability' are used for different purposes. We are inclined to hold that present petition is maintainable but deem it proper to deal with the aspect whether it is entertainable.

26. The Full Bench in Kowa Spinning Ltd. (supra) opined as under :-

“36. We have referred to the aforesaid decisions only to indicate that there are no inflexible rules for exercise of discretion by High Court while issuing the prerogative writ of certiorari. It would depend upon the facts of each case. As has been held in the case of Indian Hume Pipe Co. Ltd. (AIR 1977 SC 1132 [LQ/SC/1977/115] ) (supra), there is no impropriety involves a pure question of law. In the case of Champalal Binani (AIR 1970 SC 645 [LQ/SC/1969/499] ) (supra), the Supreme Court expressed the view that where the order is on the face of it erroneous and raises question of jurisdiction, the High Court can indubitably entertain the writ petition. Thus, it is graphically clear that there is no bar for entertaining a writ petition under Articles 226 and 227 of the Constitution of India where an alternative remedy has not been taken resort to. It is a self-imposed restraint and restriction by the Court itself. While exercising such power under the Constitution the Court is required to keep in view certain factors. As has been notices when an order is passed without jurisdiction or when principles of natural justice are violated or when the vires of an Act is challenged, or where enforcement of any of the fundamental right is sought or where a pure question of law arises or where a strong case has been made out the Court may exercise the discretion. It is further noted that the Apex Court has also observed that the grounds are not exhaustive. No strait-jacket formula can be laid down. It will depend upon the facts of each case.”

(Emphasis supplied)

27. A minute reading of this verdict of Full Bench makes it clear that the writ proceeding was held to be maintainable depending upon the facts of each case. The petition can be maintained despite availability of alternative remedy when the order is erroneous and raises question of jurisdiction. In the same judgment, it was held that High Court has imposed restraint and restriction on itself. In this view of the matter, in our view the basic question is whether the impugned order passed by the Tribunal imposing the condition can be said to be without jurisdiction Jurisdictional error:-

28. Learned counsel for the petitioners have taken pains to submit that the Tribunal did not have jurisdiction to impose such condition. For this purpose, they cited certain orders passed by this Court. However, in our opinion the curtains are finally drawn on this aspect by the Supreme Court in the case of Mardia Chemicals Ltd. (supra), the relevant paragraph of the same reads as under :-

“80(3).That the Tribunal in exercise of its ancillary powers shall have jurisdiction to pass any stay/interim order subject to the condition as it may deem fit and proper to impose.” (Emphasis supplied)

29. The ratio decidendi of this judgment was followed by the Division Bench of Madras High Court in the case of 2007 SCC OnLine Mad 1332, Ramco Super Leathers Ltd. & Ors. Vs UCO Bank & Anr. The same issue cropped up before the Full Bench of the Madras High Court in the case reported in 2008-2-L.W.381 (M/s Lakshmi Shankar Mills (P) Ltd., & others vs. The Authorised Officer/Chief Manager, Indian Bank & others). The Full Bench in para-22(i) opined as under :-

“22. In the light of the foregoing discussion, we summarise our findings as follows :- (i) The right of the bank is not automatically suspended upon filing of an application under Section 17 of the Securitisation Act and the secured creditor can proceed to auction secured asset whether no stay is granted by the Tribunal.” (Emphasis supplied)

30. We are in respectful agreement with the above view taken by the Full Bench of Madras High Court. The finding given by the Full Bench in para-22(i) is the complete answer to the contention (C) of the learned counsel for the petitioners which is reduced in writing in para-4 of this order.

31. So far judgment of this Court in R-R Flours Mills Private Ltd and Alok Saboo (supra) of this Court and judgment of Supreme Court in Vijay Kumar Madan (supra) are concerned, suffice it to say that the said judgments were passed in different factual backdrop. The condition so imposed were relatable to a particular statutory provision of C.P.C. or otherwise. In that backdrop, the Courts held that the conditions are onerous. At the cost of repetition, the petitioners have not laid necessary foundation by means of pleadings in the writ petition assailing the condition by calling it ‘onerous’. In our view, the pleadings are backbone/foundation of a petition. In absence of minimum essential pleadings, on the basis of oral submission alone, interference cannot be made. The Apex Court in Rajasthan State Industrial Development and Investment Corpn. v. Diamond and Gem Development Corpn. Ltd., (2013) 5 SCC 470 [LQ/SC/2013/176] opined as under :-

“22. ---------Furthermore, while granting such a writ, the court must make every effort to ensure from the averments of the writ petition, whether there exist proper pleadings. In order to maintain the writ of mandamus, the first and foremost requirement is that the petition must not be frivolous, and must be filed in good faith.” (Emphasis supplied)

32. Apart from this, in our opinion the Tribunal had inherent power to grant interim relief. The Tribunal was also competent to impose necessary conditions while granting interim relief to secure the ends of justice. A conjoint reading of Section 17(7) of the Securitisation Act and Section 19(25) of Recovery of Debts and Bankruptcy Act, 1993, leaves no room for any doubt that the Tribunal was well within its jurisdiction while imposing a condition for depositing the amount. Thus, we are unable to persuade ourselves with the line of argument that Tribunal did not have jurisdiction at all to impose any condition.

33. The ancillary question is whether the condition so imposed by impugned order dated 22.06.2022 is ‘onerous in nature’. In order to show that said condition is onerous, the minimum expectation from the petitioners was to plead with accuracy and precision that the said order is onerous and why it is termed as ‘onerous’ by the petitioners.

34. On a specific query from the Bench, Shri Wajid Hyder, learned counsel for the petitioners could not show any such pleading where with utmost clarity it is pleaded that condition was onerous. No reasons are also shown as to why the condition was treated to be either ‘heavy’ or ‘onerous’ condition. In absence of basic foundation/pleading in the review application, no fault can be found in the order of Tribunal rejecting the Review application.

35. We also find substance in the argument of learned Senior counsel for the Bank that the petitioners on the one hand gave offer of paying Rs.3.50 crores while giving one time settlement offer and while making pleadings in their Review Application, on the other hand, when it comes to fulfill a condition imposed by the Tribunal, they called the said condition as ‘onerous’.

36. In this view of the matter, we are unable to hold that the orders impugned passed by the Tribunal are either without jurisdiction or suffer from any procedural impropriety and illegality. The scope of interference under Article 227 of the Constitution is limited. This Court cannot sit in appeal and consider the factual backdrop of the matter. Moreso, when main case of petitioners is pending before the Tribunal. The petition although is maintainable, is not entertainable for the reasons stated hereinabove. Thus, while declining interference in discretionary jurisdiction, we are only inclined to observe that it will be lawful for the Tribunal to take up S.A.No.500/2022 on the next date of hearing and make endeavour to decide the matter finally. The parties undertake to argue the matter finally on the next date of hearing

30) I have heard learned counsel for the parties at length, considered their rival submissions made hereinabove, perused the documents and also considered the judgments passed by the Hon’ble Supreme Court and various High Courts.

31) In the earlier round of litigation i.e. W.P. (227) No.490/2023 the petition was allowed and the matter was remitted back to the learned DRT to decide the stay application preferred by the petitioners taking note of the grounds raised in said application and written submissions as many grounds were not taken into consideration including that of Section 13(9) of the SARFAESI Act, 2002. The parties appeared before learned DRT Jabalpur, certain documents were filed and thereafter a fresh order was passed, which is under challenge.

32) The learned tribunal held that an agreement was entered into between consortium members/respondents on 24.03.2015 and Punjab National Bank was authorized to place demand notice according to provisions of Section 13(4) of the SARFAESI Act, 2002. Further, a consent letter was also issued on 04.12.2021 in pursuance of the meeting held between consortium members dated 03.12.2021 and respondent no. 1 (lead bank) was authorized for joint action. It is further held by the learned Tribunal that the provisions of Section 13(9) of the SARFAESI Act, 2002 have been complied with. The learned tribunal has considered all the issues raised by the petitioners in their stay application and after recording its satisfaction affirmed the conditions imposed vide order dated 08.06.2023.

33) From a perusal of the order impugned and grounds raised by learned counsel for the petitioner it is quite vivid that the learned tribunal has complied with the order passed by this Court in W.P. (227) No. 490/2023. With regard to 13(9) of the SARFAESI Act, 2002, it would be worthy to mention here that the Hon’ble Supreme Court in the matter of Transcore (supra) held that Section 13(9) provides for one more instance when permission of DRT may be required under the first proviso to Section 19(1) of the DRT Act. The agreement between the secured creditors in such cases is required to be placed before DRT not as a fetter on the rights of the secured creditors but out of abundant caution. Generally, such agreements are complex in measure, particularly because rights of each of the secured creditors in the consortium may be required to be looked into. However, if before DRT, all the secured creditors in such consortium enter into an agreement under Section 13(9) then no such further inquiry is required to be made by DRT. In such cases, DRT has only to see that all the secured creditors in the consortium are represented under the agreement. The point to be noted is that the scheme of the NPA Act does not deal with disputes between the secured creditors and the borrower. The reason is that the NPA Act proceeds on the basis that the liability of the borrower has crystallized and that his account is classified as non-performing asset in the hands of the bank/FI.”

34) Further, in Chemstar Organics India Limited (supra), the Delhi High Court observed that if Section 13(9) of the SARFAESI Act, 2002 is read in that context, it is obvious that this is a beneficial provision for the secured creditors and not the debtor.

35) In Andshra Pradesh State Financial Corporation (supra), Telangana High Court has held that it is true that under Section 13(9) of the SARFAESI Act, 2002, a secured creditor is entitled to proceed with the enforcement of security if secured creditors representing not less than three-forth in value of the amount outstanding give consent. However, a creditor who had not obtained a first pari-passu charge and who holds only a second charge cannot invoke Section 13(9) of the SARFAESI Act, 2002.

36) The judgments of Transcore (supra), Chemstar Organics India Limited (supra) and Andhra Pradesh State Financial Corporation (supra) have been relied on by the learned counsel for the petitioners.

37) Further, it is equally well settled that the borrower has an alternative remedy under Section 18 of the SARFAESI Act, 2002 to raise all the grievances and grounds available to him before the DRT. The Hon’ble Supreme Court in the matters of M/s South Indian Bank Ltd. (supra) and Varimadugu Obi Reddy (supra) has categorically held that a party should not approach the High Court under article 226 of the Constitution of India without exhausting the alternative remedy as such the present writ petition is not maintainable.

38) In view of the above, the petition is liable to be and is hereby dismissed. The petitioners would be at liberty to raise all defences available to him before the Debt Recovery Appellate Tribunal (DRAT).