Cannot Entertain Writ Petition Filed Against DRT Order To Escape Pre-Deposit Requirement For Appeal Before DRAT: Andhra Pradesh HC

The Andhra Pradesh High Court recently observed that a writ petition filed against the DRT order just to escape liability of pre-deposit under Section 18 SARFAESI Act for filing appeal before DRAT can not be entertained.

The Bench of Justice Ravi Nath Tilhari and Justice V. Srinivas were dealing with a petition challenging an order from the Debts Recovery Tribunal Visakhapatnam. The Petitioner had filed an application against actions taken under Section 13 (4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the application was dismissed by the Debt Recovery Tribunal. 

The Petitioner before the High Court submitted that even though there is a statutory remedy available, a writ petition can still be filed against the DRT's order. Petitioner also emphasized that he had specifically raised concern before the DRT, asserting that the valuation of the property put up for auction was inaccurately done and undervalued. It was also pointed out that the reports submitted by the petitioner on this matter were not taken into consideration by the DRT.

However, the Respondent objected, contending that the petitioner has an equally effective statutory alternative remedy through an appeal under Section 18 of the SARFAESI Act, 2002.

Noting the submissions, the High Court stated that the limitations placed on the use of writs are voluntary but there are exceptions to the general rule of resorting to alternative remedies. The Court observed that if the case falls within any of these exceptions, it is well-established, for instance, when the statutory authority has not adhered to the provisions of the relevant law or has acted against the principles of judicial procedure, or has invoked laws that are no longer in effect, or when an order has been issued in complete disregard of the principles of natural justice, the writ can be invoked even in the presence of an equally effective alternative remedy.

However, in the present matter, the bench observed that the 2002 Act offers a comprehensive framework for addressing its subject matter. The Court stated that the act provides a specific remedy for obtaining relief concerning the measures taken and the orders passed and therefore the petitioner cannot be allowed to disregard this established legal mechanism and seek recourse from the High Court under Article 226 of the Constitution. 

"In the present case, the Act 2002, provides complete machinery on its subject and for obtaining relief in respect of the measures taken as also the orders passed the remedy is provided by the statute. The petitioner cannot be permitted to abandon that machinery and to invoke the jurisdiction of the High Court under Article 226 of the Constitution", stated the Court in its order. 

On the aspect of pre-deposit the Court stated, "So far as the pre-deposit is concerned in view of Section 18, the same is a statutory condition. The amount of pre-deposit can be reduced also by the Appellate Tribunal. The same cannot be a ground to bypass the statutory alternative remedy. The petitioner, in view of the submission advanced, appears to have approached under Article 226 of the Constitution of India, to escape the liability of deposit of statutory amount under Section 18 of the SARFAESI Act, for no disclosed reasons."

The Court accordingly refused to entertain the writ petition in view of the availability of efficacious statutory alternative remedy of appeal. 

Cause Title: Ome Sri Rama Modern v. Indian Overseas Bank & Ors. [WRIT PETITION No.28791 OF 2023]

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