When Can Writ Petition Under Article 226 Be Entertained In Spite Of Availability Of Alternative Remedy? SC Explains

The Supreme Court has carved out certain exceptions when a petition under Article 226 of the Constitution could be entertained in spite of availability of an alternative remedy.

The Court was deciding an appeal filed by a society named PHR Invent Educational Society against UCO Bank in an auction case.

The three-Judge Bench of Justice B.R. Gavai, Justice Rajesh Bindal, and Justice Sandeep Mehta held, “It could thus clearly be seen that the Court has carved out certain exceptions when a petition under Article 226 of the Constitution could be entertained in spite of availability of an alternative remedy.” It, therefore, mentioned the following exceptions –

(i) where the statutory authority has not acted in accordance with the provisions of the enactment in question;

(ii) it has acted in defiance of the fundamental principles of judicial procedure;

(iii) it has resorted to invoke the provisions which are repealed; and

(iv) when an order has been passed in total violation of the principles of natural justice.

Senior Advocate R. Basant appeared for the appellant while Senior Advocate Jayant Bhushan and Advocate Partha Sil appeared for the respondents.

Facts of the Case -

An appeal was filed against the order of the Telangana High Court by which it disposed of the writ petition filed by the Borrower. The High Court set aside the order of the Debts Recovery Tribunal (DRT) and allowed the miscellaneous application filed by the borrower for the restoration of the application filed by him under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

The borrower had filed a securitization application against the notice issued by the UCO Bank for the sale of his mortgaged properties which was conducted by the Authorized Officer of the bank in light of the default in repayment of loan by the borrower. The DRT dismissed the application for the restoration of the securitization application which was previously dismissed as withdrawn vide DRT order. The High Court set aside the DRT order and directed DRT to proceed with the securitization application in accordance with law.

The Supreme Court in view of the above facts observed, “In our view, the High Court ought to have taken into consideration that the confirmed auction sale could have been interfered with only when there was a fraud or collusion. The present case was not a case of fraud or collusion. The effect of the order of the High Court would be again reopening the issues which have achieved finality.”

The Court further clarified 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.

“Undisputedly, the present case would not come under any of the exceptions as carved out by this Court in the case of Chhabil Dass Agarwal (supra). … We are therefore of the considered view that the High Court has grossly erred in entertaining and allowing the petition under Article 226 of the Constitution”, it said.

Accordingly, the Apex Court allowed the appeal and quashed the order of the High Court.

Cause Title- PHR Invent Educational Society v. UCO Bank and Others (Neutral Citation: 2024 INSC 297)

Appearance:

Appellant: Senior Advocate R. Basant, Advocate Khalid M.S., AOR A. Karthik, Advocates Manu Krishnan G, Gunjan Rathore, and Kavinesh RM.

Respondents: Senior Advocate Jayant Bhushan, AOR Venkateswara Rao Anumolu, Advocates Sunny Kumar, Puneet Aggarwal, AOR Partha Sil, Advocates Sanjay Kr. Saxena, Chirag Joshi, Sayani Bhattachgarya, and Abhiraj Chaudhary.

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