Invocation of extraordinary writ jurisdiction under Article 226 unjustified when effective alternative remedy is available

Chengalam Service Co-Operative Bank Ltd. Vs Rajkumar (Kerala High Court)

Facts- In the writ petition, the petitioners allege that they had availed loans from the third respondent-the Bank, by offering 99.9 cents of property as security. Due to the onset of Covid pandemic, they were unable to make prompt repayments. As on date, the balance amount outstanding is not substantial. Hence, if a breathing time is given, the petitioners will clear the outstanding liability. The petitioners have not received any notice from the Bank calling upon them to make any payments. They were taken aback on receipt of a notice from the second respondent to the effect that the property given as security for the loan transactions would be proceeded against for realization of the defaulted amounts. As the petitioners are left with no other efficacious and alternative remedy of speedy nature, the writ petition is being filed praying for a writ of mandamus directing the second respondent to forthwith consider and pass orders on Exts.P7 to P9 applications filed seeking setting aside of Exts.P1 to P3 exparte awards.

The question is, should this Court invoke its discretionary extra-ordinary jurisdiction under Article 226 of the Constitution to grant relief to such a person, who is supposed to have drained the appellant-Chengalam Service Co-operative Bank (the Bank) of its resources by availing loans one after the other, to be specific 16 loans, in his own name and in the name of the members of his family, relatives and close aides and thereafter defaulted payment resulting in a liability of about two and odd crores of rupee, due to the appellant-Bank. This act of one individual, submits the learned senior counsel for the Bank, has landed the Bank in a precarious financial situation, on the brink of financial bankruptcy, due to which the Bank is unable to even return the deposits of its customers due to paucity of funds.

Conclusion- It is a settled position that the High Court do not ordinarily entertain a writ petition under Art.226 of the Constitution of India if an effective alternative remedy is available to the aggrieved person or if the statute itself provides for a mechanism for redressal of the grievance. It is also well settled that alternative remedy does not act as an absolute bar for entertaining a writ petition where the vires of any statutory provision is under challenge or the order impugned is completely without jurisdiction or has been passed in clear violation of the principles of natural justice.

In Balkrishna Ram v. Union of India, AIR 2020 SC 341 it has been held that the principle that the High Court should not exercise its extraordinary writ jurisdiction when an efficacious alternative remedy is available, is a rule of prudence and not a rule of law.

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