Jaya Coffee Works Vs Canara Bank (Karnataka High Court)
Summary: The Karnataka High Court at Bengaluru dismissed Writ Petition No. 25288 of 2026 filed by M/s Jaya Coffee Works, represented by its proprietor Thamaya M.D., and Sri Thamaya M.D. against Canara Bank. The petition was filed under Articles 226 and 227 of the Constitution of India seeking, among other reliefs, a writ of certiorari quashing the impugned sale notice/e-auction No. ARM/MNG/F628/490/2026-27 dated 14.07.2026, which was scheduled to be conducted on 21.08.2026.
The Court recorded that the parties advanced several contentions and that it had heard the arguments and perused the papers. The Court noted that the authorised officer of the Bank had issued a possession notice under the SARFAESI Act and Rules and identified the petitioner’s grievance as relating to the issuance of the possession notice.
The Court held that a person aggrieved by notices issued under the SARFAESI Act or Rules is not without a remedy. Such a person has the liberty to file objections and also approach the Debts Recovery Tribunal under Section 17 of the SARFAESI Act. The Court observed that the Supreme Court has settled the law through a catena of decisions that a possession notice cannot be challenged by filing a writ petition, as the litigant is not remediless and the Tribunal has been established specifically to adjudicate the dispute.
The Court emphasised that Article 226 is not intended to circumvent statutory procedures. Where a right or liability is created by a statute and the statute itself prescribes a remedy or procedure for enforcing that right or liability, the statutory remedy should ordinarily be pursued before seeking the discretionary remedy under Article 226. The Court further observed that a petition under Article 226 should not ordinarily be entertained unless the statutory remedies are ill-suited to meet the demands of an extraordinary situation.
While dealing with the availability of an alternative remedy, the Court specifically referred to United Bank of India Vs. Satyawati Tondon and Others. The Court noted the Supreme Court’s observation that High Courts had continued to ignore the availability of statutory remedies under the DRT and SARFAESI Act and exercised jurisdiction under Article 226 in matters concerning recovery of dues, thereby having serious adverse impact on the rights of banks and financial institutions. The Supreme Court had accordingly cautioned that High Courts should exercise their discretion in such matters with great caution, care and circumspection.
The Court also referred to the Phoenix Case, observing that the Supreme Court had held that filing a writ petition before the High Court under Article 226 in such circumstances amounted to an abuse of the process of the Court. The Court noted that where notices are issued under Sections 13(2) and 13(4) of the SARFAESI Act, the litigant has a statutory and efficacious remedy by filing an appeal/application under the SARFAESI Act, and the High Courts have been cautioned against entertaining such writ petitions. TaxGuru has separately reported the Phoenix ARC ruling concerning the availability of the statutory remedy in SARFAESI matters.
The Court therefore declined to exercise its discretionary writ jurisdiction and held that the petition was devoid of merits. The writ petition was accordingly dismissed. At the same time, the Court granted liberty to the petitioner to approach the appropriate forum, if so advised and if the law permits.
Consequent upon dismissal of the writ petition, any interim order granted earlier stood discharged and any pending interlocutory applications were disposed of. The order thus does not adjudicate the underlying SARFAESI measures on their merits; the dismissal rests on the availability of the statutory remedy and the Court’s decision not to exercise writ jurisdiction.
Cases Discussed
- United Bank of India Vs. Satyawati Tondon and Others — referred to on the principle that High Courts should ordinarily require parties challenging SARFAESI recovery measures to pursue the statutory remedies available under the SARFAESI Act and before the DRT.
- Phoenix Case — referred to for the proposition that a writ petition under Article 226 challenging SARFAESI action should not be entertained where an efficacious statutory remedy is available.
FULL TEXT OF THE JUDGMENT/ORDER OF THE HIGH COURT OF KARNATAKA
Sri.Kiran B., counsel for the petitioner and Smt.Sanjana C., counsel on behalf of Sri.Ranjan Kelkar., for caveator / respondent No.2 appeared in person.
2. This petition is filed seeking following reliefs:
(a) Issue a writ of certiorari or any other writ quashing the impugned sale notice / e-auction No.ARM/MNG/F628/490/2026-27, dated:14.07.2026, vide Annexure “X” to be conducted on 21.08.2026 issued by the respondent No.2.
(b) Grant such other reliefs as this Hon’ble Court deems fit, in the circumstances of the case, in the interest of justice and equity.
3. Counsel for the respective parties urged several contentions. Heard the arguments and perused the papers with care.
4. The authorized officer of the Bank had issued possession notice under the SARFAESI Act and Rules. The petitioner’s grievance is about the issuance of the possession notice. Any person/s aggrieved by issuance of notices under SARFAESI Act/ Rules are not powerless. They have a liberty of filing objections and also approach DRT under Section 17 of the Act, appealing to the Tribunal if needed. The Apex Court has settled the law in a catena of decisions that a possession notice cannot be challenged by filing a writ petition. The litigants are not remediless, as the Tribunal has been established specifically to adjudicate the lis.
It is significant to note that Article 226 is not intended to circumvent statutory procedures. When a right or liability is created by a statute which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before seeking the discretionary remedy under Article 226. The law is also well settled that a petition under Article 226 should not be entertained unless the statutory remedies are ill-suited to meet the demands of an extraordinary situation.
Moreover, the Apex Court has also observed in the case of UNITED BANK OF INDIA V/S. SATYAWATI TONDON AND OTHERS that the High Courts continue to ignore the availability of statutory remedies under the DRT and SARFAESI Act and exercised jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of the Banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with great caution, care and circumspection.
The Apex Court in Phoenix Case’s has held that filing of writ petition before the High Court under Article 226 of Constitution of India is an abuse of process of the Court. It is also observed that whenever a notice is issued under Section 13(2) and 13(4) of the SARFAESI Act, a litigant has statutory efficacious remedy by filing an appeal under the SARFAESI Act, and has cautioned the High Courts not to entertain the writ petitions. Hence, I decline to exercise discretionary powers under writ jurisdiction. The petition is devoid of merits.
Accordingly, the writ petition is dismissed. The petitioner may approach the appropriate forum if so advised and if the law permits.
Because of dismissal of the Writ Petition, interim order granted if any stands discharged and pending interlocutory applications if any are disposed of.
