STEELOFLEX ENGINEERS P LTD Vs. UCO BANK

JUDGEMENT

(1.) THE opp. party UCO Bank filed an application under the Recovery of the Debts Due to Banks and Financial Institutions Act, 1993 (in short 'the Act') numbered as O. A. No. 215 of 2001 in the Debts Recovery Tribunal CuttaCk (in short 'the Tribunal') for recovery of outstanding dues against the three petitioners. The case of the opp. party Bank before the Tribunal was that the bank sanctioned a cash credit limit of Rs. 17 lakhs and bill purchase limit of Rs. 10 lakhs and Bank guarantee limit of Rs. 50 lakhs in favour of the petitioner No. 1 and the petitioner Nos. 2 and 3 executed letters of guarantee for the cash credit limit of Rs. 17 lakhs and bill purchase limit of Rs. 10 lakhs. On behalf of the petitioner No. 1, the petitioner Nos. 2 and 3 also executed a letter of hypothecation of goods for Rs. 17 lakhs and letter of hypothecation of movable plant and machinery for Rs. 77 lakhs and an agreement for bill purchase of Rs. 10 lacks, and total sum of Rs. 46,02,380.56 p. is due and payable by the petitioners to the Bank in the disputed accounts. In the said Original Application, the opp. party Bank also filed an interim application praying for an order restraining the petitioner No. 3 from alienating/disposing of the properties mentioned in the schedule of the said application. The petitioners filed an objection to the said application before the Tribunal stating, inter alia, that the valuation of the assets of the factory of the petitioner No. l works out to Rs. 1.4 crores after disposal of the old and unusable articles and such valuation is to the knowledge of the opp. party Bank. In the said objection the petitioners contended that the opp. party Bank should not be encouraged by the Tribunal by passing an interim order as prayed for and the interim application should be rejected in limine and the petitioners be granted leave for taking joint steps for negotiation with prospective buyers to sell away the present assets of the factory of the petitioner No. 1. The Tribunal after considering the contentions of the parties, passed orders on 3.4.2002 restraining the petitioners by way of the injunction from disposing of or alienating the properties mentioned in the schedule to the interim application. In the said order dated 3.4.2002, however, the Tribunal clarified that the order will not restrain the petitioner from finding prospective purchasers and taking them to the Bank to liquidate their dues and to move the Tribunal if any such agreement is arrived at by both the parties for necessary orders. Aggrieved by the said order dated 3.4.2002 of the Tribunal, the petitioners have filed this writ petition under Article 226 of the Constitution.

(2.) MR . R. B. Mohapatra, learned counsel for the petitioners submitted that the properties listed in the schedule to the interim application filed before the Tribunal belonged to the petitioner No.3 and the Tribunal should not have passed an order restraining the petitioner No. 3 from disposing of or alienating the said properties when the valuation of the plaint and machinery of the factory which have been hypothecated in favour of the Bank by the petitioner No. 1 is more than Rs. 1.4 crores.

(3.) In Punjab National Bank v. O.C. Krishnan and Ors. (supra) the Supreme Court has held that when an appeal is available under 20 of the Act against an order passed by the Tribunal, the High Court ought not to exercise the jurisdiction for entertaining the writ petition under Article 226 of the Constitution against the order of the Tribunal. But it is well settled that mere provision of alternative remedy in a statute against the order does not oust the jurisdiction of the High Court under Article 226 of the Constitution but the High Court may choose in appropriate cases not to exercise the jurisdiction under Article 226 as a self restraint if an alternative remedy is available under the statute.