High Court held that the Court Can Use Article 227 Jurisdiction for Clear Failures by the DRT.
The Kerala High Court Single-Judge Bench of Justice Gopinath P. observed that even though an alternative statutory remedy exists, the Court can still exercise its jurisdiction under Article 227 of the Constitution of India when there is a clear failure by the Tribunal to properly exercise its jurisdiction, resulting in an apparent failure of justice.
The High Court considered four separate cases challenging the interim orders passed by the Debts Recovery Tribunal (DRT) under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The petitioners contended that the Tribunal mechanically issued orders on the interlocutory applications without giving due consideration to their contentions and the well-established principles governing the grant of ad-interim relief.
During the proceedings, both sides presented their arguments, and the High Court thoroughly examined the contentions raised before the Tribunal in each case. The primary argument advanced by the petitioners was that there was a failure to properly exercise jurisdiction by the Tribunal, which warranted the High Court's interference under Article 227 of the Constitution of India.
On the other hand, the contesting respondents opposed the maintainability of the petitions, arguing that the aggrieved parties had an effective alternative remedy available to them through the appeal process before the Debts Recovery Appellate Tribunal. They contended that the High Court should not entertain the petitions in such circumstances.
The High Court acknowledged that Article 227 of the Constitution of India could be invoked to review the exercise of jurisdiction by statutory tribunals like the DRT. However, it also recognized the settled legal principle that in cases where an alternate statutory remedy is available, Article 227 should not be used as a substitute for the statutory appeal process.
Since the petitioners did have an alternative remedy through appeal before the Debts Recovery Appellate Tribunal, the High Court had to determine whether there were exceptional circumstances that justified the exercise of jurisdiction under Article 227. The Court clarified that it would refrain from delving into the merits of the contentions and limit its analysis to whether the Tribunal had correctly exercised its jurisdiction.
The Court's primary focus was on determining whether the impugned orders of the Tribunal were a result of a proper exercise of jurisdiction or not. It emphasized that if there were no exceptional circumstances justifying the invocation of Article 227, it would not entertain the petitions, and the petitioners should pursue their remedies through the appeal process before the Debts Recovery Appellate Tribunal.
In conclusion, the High Court carefully reviewed the cases challenging the Tribunal's interim orders under the SARFAESI Act, considering whether the Tribunal had exercised its jurisdiction properly. It also deliberated on the maintainability of the petitions under Article 227, given the existence of an alternative remedy of appeal before the Debts Recovery Appellate Tribunal.
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