In a nuanced ruling, the apex court has elucidated the parameters within which High Courts may entertain writ petitions under Article 226 of the Constitution, particularly in instances where alternative statutory remedies exist. Castigating the High Court’s intervention in auction sale proceedings conducted by a bank under the SARFAESI Act, the Supreme Court underscored the necessity for caution in such matters.
Highlighting the principle that a petition under Article 226 should not be entertained if an effective alternative remedy is available, the bench comprising Justices BR Gavai, Rajesh Bindal, and Sandeep Mehta emphasized the need for adherence to statutory mechanisms for grievance redressal. The court’s rebuke stemmed from a case where a borrower, dissatisfied with the Debt Recovery Tribunal’s auction sale order, sought recourse through a writ petition before the High Court, resulting in the nullification of the sale.
However, the Supreme Court’s judgment, penned by Justice BR Gavai, elucidated that such interference by the High Court was unwarranted in the absence of fraud or collusion, as the issues had attained finality. The court delineated exceptions wherein Article 226 petitions could be entertained despite alternative remedies, such as instances of procedural impropriety, defiance of judicial principles, invocation of repealed provisions, or violation of natural justice.
Furthermore, the court lamented the trend of High Courts entertaining petitions under Article 226 despite the existence of statutory remedies, citing the United Bank of India v. Satyawati Tondon case. The court underscored the comprehensive procedural frameworks enshrined in statutes for debt recovery and urged High Courts to exercise discretion judiciously, mindful of the ramifications on banks’ and financial institutions’ rights to recover dues.
Consequently, the appeal was allowed, overturning the High Court’s order, and the borrower was saddled with a cost of Rs. 1 Lakh. This ruling serves as a clarion call for legal prudence and adherence to statutory avenues in matters of public interest and financial jurisprudence.
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