Madras High Court
M/S.Radaan Textiles vs The District Magistrate And on 24 April, 2018 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 24.04.2018 CORAM: THE HONOURABLE MR.JUSTICE S.MANIKUMAR
and
THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN
W.P.No.7089 of 2018
and W.M.P.No.8789 of 2018 M/s.Radaan Textiles,
Rep. by its Partner,
Mr.K.Manickam,
No.45, Vara Thottam,
15, Velampalayam Main Road,
Opp. Airtel Tower,
Tirupur-641 652,
Tirupur District. .. Petitioner Vs. 1. The District Magistrate and District Collector, Tirupur District, Tirupur. 2. The Sub Collector, Tirupur District, Tirupur. 3. The Authorised Officer and the Chief Manager, Punjab National Bank, No.448-A, Dr.Nanjappa Road, Coimbatore-641 018. .. Respondents Prayer: Petition filed under Article 226 of the Constitution of India seeking writ of Certiorarified Mandamus calling for the records from the 1st respondent by his proceedings dated 21.02.2018 made in Ref.No.2132/2018/C3 and quash the same and direct the 2nd respondent not to take physical possession of the property viz., 3080 Sq.ft. of land and building in Survey No.331/4, Door No.27A-2, 27A-3, Gandhi Road, Anupparpalayam Pudur, 15, Velambapalayam Village, Tiruppur within the Triuppur Registration District, Tiruppur Joint-II, Sub Registration District in pursuance of the order passed by the 1st respondent dated 21.02.2018. For Petitioner : Mr.K.A.Ramakrishnan For Respondents 1&2 : Mr.M.Elumalai, G.A. (Taxes) For Respondent 3 : Mr.M.L.Ganesh,
– – – – – O R D E R
(Order of the Court was made by S.MANIKUMAR, J.) On 27.03.2018, we passed the following order:
“Material on record discloses that Radaan Textiles, a partnership firm, has borrowed loan for a sum of Rs.245 lakhs, under various heads:-
NATURE
EXISTING
PROPOSED
Fund based CC (H)
150.00
225.00
Fund based ceiling 150.00
225.00
Non fund based
Nil
Nil
Term loan 20.00
20.00
Limit of credit exposure on account of all derivative products
Nil
Nil
Total commitment
170.00
245.00 2. Land and building, comprised in R.S.No.96/2, to an extent of 3.69 acres, Nambiyur village, Erode District, has been offered as collateral security. Title deeds have been deposited, under a Deed of Memorandum, dated 20/4/2011, registered as Document No.1577 of 2011, on the file of the Sub-Registrar, Nambiyur, Erode District. Petitioner has defaulted. Hence Punjab National Bank, Coimbatore, respondent No.3, has declared the loan as Non-performing Asset, and issued demand notice, dated 16/4/2015,under Section 13 (2) of the SARFAESI Act, 2002, calling upon the borrower and the guarantor, to pay a sum of Rs.3,00,22,295/-, as on 31/3/2015, with subsequent interest. Thereafter, possession notice, dated 10/8/2015, has been issued, under Section 13 (4) of the SARFAESI Act, 2002. Apart from the loan of Rs.245 lakhs, M/s. Radaan Textiles, Tirupur, has two other loan accounts, with Punjab National Bank, Coimbatore, under the names Radaan Garments and Varun Fabs. Those two accounts were also declared as Non-Performing Asset. One Time Settlement was offered by the Bank as hereunder:-
S.NO.
NAME OF THE CONCERN
OTS AMOUNT (RS. IN CRORES)
1.
Radaan Garments
3.10
2.
Radaan Textiles
2.80
3.
Varun Fabs
2.50 Total Settlement Amount 8.40 3. In respect of Radaan Garment’s account, a sum of Rs.3.10 crores has been paid. Punjab National Bank/respondent No.3 has closed Radaan Garment’s account. Varun Fabs, an other account holder, could not settle OTS in time.
4. Punjab National Bank, respondent No.3, has issued the first e-auction sale notice, dated 2/12/2016, fixing the auction, on 5/1/2017, for recovery of Rs.3,83,23,310/-, as on 31/10/2016. Upset price has been fixed at 2,22,00,000/-. Auction failed. Therefore, second e-auction notice, dated 31/1/2017, has been issued, to recover a sum of Rs.3,87,27,989/-, as on 3/12/2006. Upset price has been fixed as Rs.1,78,00,000/-. This e-auction, fixed on 10/3/2017 has also failed. Third e-auction notice, dated 21/3/2017 has been issued, to recover a sum of Rs.3,98,26,350/-, as on 28/2/2017. Upset price has been fixed as Rs.1,51,00,000/-.

5. Being aggrieved by the e-auction sale notice, dated 21/3/2017, petitioner has filed SARFAESI Application No.129 of 2017, on the file of the Debts Recovery Tribunal, Coimbatore. I.A.No.812 of 2017 has been filed for stay. Though the Tribunal granted an interim order, dated 13/4/2017, against the Bank, not to confirm the sale, till 16/8/2017, subject to the condition that the petitioner should pay a sum of Rs.1 crore, directly to the Bank, in four equated instalments, petitioner has paid a sum of Rs.25 lakhs only.
6. An other sale notice, dated 12/5/2017, has been issued by the third respondent Bank, fixing the sale, on 29/5/2017. Petitioner has filed I.A.No.1059 of 2017, for stay of all further proceedings, in pursuance of the sale notice, dated 12/5/2017. Bank has issued another auction notice, dated 13/10/2017, fixing the auction, on 22/11/2017, in respect of two properties. Upset price for item No.1 of the property has been fixed at Rs.1,40,00,000/-. Said property has been knocked down for Rs.1,42,00,000/-. Challenging the above said sale, dated 22/11/2017, S.A.No.383 of 2017 has been filed, in which notice has been ordered. Third respondent bank has entered appearance, on 4/1/2018 and yet to file counter affidavit.

7. When the matter stood thus, the Authorised Officer and Chief Manager of Punjab National Bank, Tirupur branch, has made an application, under Section 14 (1) of the SARFAESI Act, 2002, praying for suitable orders/directions, to take physical possession of the property sold. After perusal of the connected records, District Magistrate-cum-District Collector, Tirupur District has passed an order, dated 21/2/2018, authorising the Sub-Collector, Tirupur, to take possession of the said property and to handover the same to the Authorised Officer, Punjab National Bank, Asset Recovery Management Branch under proper acknowledgment. The said order is assailed in the instant writ petition, on the grounds inter alia that the District Magistrate-cum-District Collector, Tirupur, has failed to discharge his duties, as required under Section 14 (1) of the SARFAESI Act, 2002, in not considering the parameters mentioned in Section 14 (i) to (ix) of the said Act. 8. Added further, Mr.K.A.Ramakrishnan, learned counsel for the petitioner submitted that except describing the properties, District Magistrate-cum-District Collector, Tirupur, has not recorded his subjective satisfaction, on the contents of the affidavit filed by the Authorised Officer of Punjab National Bank/third respondent. Learned counsel for the petitioner further submitted that even before the execution of mortgage, there were 11 tenants engaged in business in the subject property, which the District Magistrate-cum-District Collector, has failed to take note of, while passing the impugned order.
9. Reliance is also placed on the decision of the Hon’ble Supreme Court in Harshad Govardhan Sondagar Vs. International Assets Reconstruction Co Ltd., {(2014) 6 SCC 1} wherein the Hon’ble Supreme Court, at paragraph No.18 of the said judgment, held as follows:-

The opening words of sub- section (1) of Section 14 of the SARFAESI Act make it clear that where the possession of any secured assets is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred by the secured creditor “under the provisions of the Act”, the secured creditor may, for the purpose of taking possession or control of any such secured asset, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof. Thus, only if possession of the secured asset is required to be taken under the provisions of the SARFAESI Act, the secured creditor can move the Chief Metropolitan Magistrate or the District Magistrate for assistance to take possession of the secured asset. We have already held that Section 13 of the SARFAESI Act does not provide that the lease in respect of a secured asset will get determined when the secured creditor decides to take the measures in the said section. Hence, possession of the secured asset from a lessee in lawful possession under a valid lease is not required to be taken under the provisions of the SARFAESI Act and the Chief Metropolitan Magistrate or the District Magistrate, therefore, does not have any power under Section 14 of the SARFAESI Act to take possession of the secured asset from such a lessee and hand over the same to the secured creditor. When, therefore, a secured creditor moves the Chief Metropolitan Magistrate or the District Magistrate for assistance to take possession of the secured asset, he must state in the affidavit accompanying the application that the secured asset is not in possession of a lessee under the valid lease made prior to creation of the mortgage by the borrower or made in accordance with Section 65A of the Transfer of Property Act prior to receipt of a notice under sub- section (2) of Section 13 of the SARFAESI Act by the borrower. We would like to clarify that even in such cases where the secured creditor is unable to take possession of the secured asset after expiry of the period 60 days of the notice to the borrower of the intention of the secured creditor to enforce the secured asset to realize the secured debt, the secured creditor will have the right to receive any money due orwhich may become due, including rent, from the lessee to the borrower. This will be clear from clause (d) of sub-section (4) of Section 13, which provides that in case the borrower fails to discharge his liability in full within the notice period, the secured creditor may require, at any time by notice in writing, any person who has acquired any of the assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor, so much of the money as is sufficient to pay the secured debt.
10. We have gone through the impugned order.
11. Prima facie, we find that the District Magistrate-cum-District Collector, Tirpur District, first respondent has not adverted to the parameters set out in Section 14 (i) to (ix) and recorded satisfaction of the same, except as rightly contended by the learned counsel for the petitioner describing the property. Order is not only non-speaking, but apparently failure, to discharge the duties required.
12. Mr.M.Elumalai, learned Government Advocate takes notice for the District Magistrate-cum-District Collector, first respondent.
13. Notice through Court and privately, on the third respondent returnable by 10/4/2018. For the reasons stated supra, there shall be an order of interim stay of the order impugned, till 10/4/2018.

14. Call on 10/4/2018.”

2. On notice, Mr.M.L.Ganesh, learned counsel for the bank submitted that when a remedy under Section 17(1) of the SARFAESI Act is available to the borrower to challenge the order of the District Magistrate and District Collector, Tirupur district, writ petition is not maintainable and on that ground, prayed for dismissal of the instant writ petition.
3. On the reliance made by the learned counsel for petitioner to the decisions of the Hon’ble Supreme Court in Harshad Govardhan Sondagar vs. International Assets Reconstruction Co. Ltd., reported in (2014) 6 SCC 1 and Vishal N.Kalsaria vs Bank of India reported in (2016) 3 SCC 762, Mr.M.L.Ganesh, learned counsel for the Bank, submitted that above two decisions were rendered prior to insertion of Rule 17 (4A) of the SARFAESI Act, 2002 which came into force on 01.09.2016 and therefore the decisions are not apposite to the facts of the case.

4. Heard the learned counsel for the parties and perused the materials on record.

5. It is true that the above said decisions were rendered prior to introduction of Section 17 (4A) of SARFAESI Act, 2002 which came into force on 01.09.2016 and that by introduction of Sub-Section (4A) to Section 17, there is an efficacious alternative remedy available to the borrower to challenge the proceedings of the District Magistrate and District Collector, Tirupur District, dated 21.02.2018, by way of an application before the Tribunal.
6. Reading of the impugned order shows that except the summary of the affidavit, required to be filed under Section 14(1) of SARFAESI Act and describing the properties, District Magistrate cum District Collector, Tirupur has not even uttered a word on his satisfaction to the contents of the affidavit.

7. At this juncture, it is relevant to extract Section 14 of SARFAESI Act, which reads as follows:
14. Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset.-
1. Where the possession of any secured asset is required to be taken by the secured creditor or if any of the secured asset is required to be sold or transferred by the secured creditor under the provisions of this Act, the secured creditor may, for the purpose of taking possession or control of any such secured asset, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such secured asset or other documents relating thereto may be situated or found, to take possession thereof, and the Chief Metropolitan Magistrate or, as the case may be, the District Magistrate shall, on such request being made to him-
a. take possession of such asset and documents relating thereto; and b. forward such asset and documents to the secured creditor.
Provided that any application by the secured creditor shall be accompanied by an affidavit duly affirmed by the authorised officer of the secured creditor, declaring that, –
(i) the aggregate amount of financial assistance granted and the total claim of the Bank as on the date of filing the application;
(ii) the borrower has created security interest over various properties and that the Bank or Financial Institution is holding a valid and subsisting security interest over such properties and the claim of the Bank or Financial Institution is within the limitation period;
(iii) the borrower has created security interest over various properties giving the details of properties referred to in sub-clause (ii) above;
(iv) the borrower has committed default in repayment of the financial assistance granted aggregating the specified amount;
(v) consequent upon such default in repayment of the financial assistance the account of the borrower has been classified as a non-performing asset;
(vi) affirming that the period of sixty days notice as required by the provisions of sub-section (2) of section 13, demanding payment of the defaulted financial assistance has been served on the borrower.
(vii) the objection or representation in reply to the notice received from the borrower has been considered by the secured creditor and reasons for non-acceptance of such objection or representation had been communicated to the borrower;
(viii) the borrower has not made any repayment of the financial assistance in spite of the above notice and the Authorised Officer is, therefore, entitled to take possession of the secured assets under the provisions of sub-section (4) of section 13 read with section 14 of the Principal Act;
(ix) that the provisions of this act and the rules made thereunder had been complied with:
Provided further that on receipt of the affidavit from the Authorised Officer, the District Magistrate or the Chief Metropolitan Magistrate, as the case may be, shall after satisfying the contents of the affidavit pass suitable orders for the purpose of taking possession of the secured assets:
Provided also that the requirement of filing affidavit stated in the first proviso shall not apply to proceeding pending before any District Magistrate or the Chief Metropolitan Magistrate, as the case may be, on the date of commencement of this Act.
(1A) The District Magistrate or the Chief Metropolitan Magistrate may authorise any officer subordinate to him, –
(i) to take poss of such assets and documents relating thereto; and (ii) to forward such assets and documents to the secured creditor.]
2. For the purpose of securing compliance with the provisions of sub-section (1), the Chief Metropolitan Magistrate or the District Magistrate may take or cause to be taken such steps and use, or cause to be used, such force, as may, in his opinion, be necessary.
3. No act of the Chief Metropolitan Magistrate or the District Magistrate done in pursuance of this section shall be called in question in any court or before any authority. 8. Bare reading of above Section makes it clear that while passing orders under Section 14 of SARFAESI Act, 2002, District Magistrate or Chief Metropolitan Magistrate, as the case may be, shall satisfy the contents of the affidavit and pass suitable orders for the purpose of taking possession of the secured assets. As stated supra, exercise of power, as is apparent, without there being any reason or satisfaction to the contents of the supporting affidavit.
9. When an administrative authority / quasi-judicial authority passes an order, there should be reasons which are heart beat of any decision. It is worthwhile to refer to a decision in M/s.Steel Authority of India Ltd., v. STO, Rourkela-I Circle & Ors. reported in 2008 (5) Supreme 281, wherein the Hon’ble Supreme Court, while testing the correctness of an order passed by the Assistant Commissioner of Sales Tax against the assessment, at Paragraph 10, held as follows:

“10. Reason is the heartbeat of every conclusion. It introduces clarity in an order and without the same it becomes lifeless.”
10. In Kranti Associates Private Limited and another vs Masood Ahamed Khan and Others) reported in (2010) 9 SCC 496, wherein, the Hon’ble Supreme Court has considered a catena of decisions, which are extracted hereunder:
12. The necessity of giving reason by a body or authority in support of its decision came up for consideration before this Court in several cases. Initially this Court recognised a sort of demarcation between administrative orders and quasi-judicial orders but with the passage of time the distinction between the two got blurred and thinned out and virtually reached a vanishing point in the judgment of this Court in A.K. Kraipak v. Union of India [(1969) 2 SCC 262].

13. In Keshav Mills Co. Ltd. v. Union of India [(1973) 1 SCC 380], this Court approvingly referred to the opinion of Lord Denning in R. v. Gaming Board for Great Britain, ex p Benaim [(1970) 2 QB 417] and quoted him as saying that heresy was scotched in Ridge v. Baldwin [1974 AC 40]”.

14. The expression speaking order was first coined by Lord Chancellor Earl Cairns in a rather strange context. The Lord Chancellor, while explaining the ambit of the writ of certiorari, referred to orders with errors on the face of the record and pointed out that an order with errors on its face, is a speaking order. (See pp. 1878-97, Vol. 4, Appeal Cases 30 at 40 of the Report).

15. This Court always opined that the face of an order passed by a quasi-judicial authority or even an administrative authority affecting the rights of parties, must speak. It must not be like the inscrutable face of a sphinx.

16. In Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhunjhunwala [AIR 1961 SC 1669], the question of recording reasons came up for consideration in the context of a refusal by Harinagar to transfer, without giving reasons, shares held by Shyam Sunder. Challenging such refusal, the transferee moved the High Court contending, inter alia, that the refusal is mala fide, arbitrary and capricious. The High Court rejected such pleas and the transferee was asked to file a suit. The transferee filed an appeal to the Central Government under Section 111(3) of the Companies Act, 1956 which was dismissed. Thereafter, the son of the original transferee filed another application for transfer of his shares which was similarly refused by the Company. On appeal, the Central Government quashed the resolution passed by the Company and directed the Company to register the transfer. However, in passing the said order, the Government did not give any reason. The Company challenged the said decision before this Court.

17. The other question which arose in Harinagar was whether the Central Government, in passing the appellate order acted as a tribunal and is amenable to Article 136 jurisdiction of this Court.

18. Even though in Harinagar the decision was administrative, this Court insisted on the requirement of recording reason and further held that in exercising appellate powers, the Central Government acted as a tribunal in exercising judicial powers of the State and such exercise is subject to Article 136 jurisdiction of this Court. Such powers, this Court held, cannot be effectively exercised if reasons are not given by the Central Government in support of the order (AIR pp. 1678-79, para 23).

19. Again in Bhagat Raja v. Union of India [AIR 1967 SC 1606] the Constitution Bench of this Court examined the question whether the Central Government was bound to pass a speaking order while dismissing a revision and confirming the order of the State Government in the context of the Mines and Minerals (Development and Regulation) Act, 1957, and having regard to the provision of Rule 55 of the Mineral Concession Rules. The Constitution Bench held that in exercising its power of revision under the aforesaid Rule the Central Government acts in a quasi-judicial capacity (see AIR p. 1610, para 8). Where the State Government gives a number of reasons some of which are good and some are not, and the Central Government merely endorses the order of the State Government without specifying any reason, this Court, exercising its jurisdiction under Article 136, may find it difficult to ascertain which are the grounds on which the Central Government upheld the order of the State Government (see AIR p. 1610, para 9). Therefore, this Court insisted on reasons being given for the order.

20. In Mahabir Prasad Santosh Kumar v. State of U.P. [(1970) 1 SCC 764], while dealing with the U.P. Sugar Dealers’ Licensing Order under which the licence was cancelled, this Court held that such an order of cancellation is quasi-judicial and must be a speaking one. This Court further held that merely giving an opportunity of hearing is not enough and further pointed out where the order is subject to appeal, the necessity to record reason is even greater. The learned Judges held that the recording of reasons in support of a decision on a disputed claim ensures that the decision is not a result of caprice, whim or fancy but was arrived at after considering the relevant law and that the decision was just. (See SCC p. 768, para 7 : AIR p. 1304, para 7.) 21. In Travancore Rayon Ltd. v. Union of India [(1969) 3 SCC 868], the Court, dealing with the revisional jurisdiction of the Central Government under the then Section 36 of the Central Excises and Salt Act, 1944, held that the Central Government was actually exercising judicial power of the State and in exercising judicial power reasons in support of the order must be disclosed on two grounds. The first is that the person aggrieved gets an opportunity to demonstrate that the reasons are erroneous and secondly, the obligation to record reasons operates as a deterrent against possible arbitrary action by the executive authority invested with the judicial power (see SCC p. 874, para 11 : AIR pp. 865-66, para 11).

22. In Woolcombers of India Ltd. v. Workers Union [(1974) 3 SCC 318] this Court while considering an award under Section 11 of the Industrial Disputes Act insisted on the need of giving reasons in support of conclusions in the award. The Court held that the very requirement of giving reason is to prevent unfairness or arbitrariness in reaching conclusions. The second principle is based on the jurisprudential doctrine that justice should not only be done, it should also appear to be done as well. The learned Judges said that a just but unreasoned conclusion does not appear to be just to those who read the same. Reasoned and just conclusion on the other hand will also have the appearance of justice. The third ground is that such awards are subject to Article 136 jurisdiction of this Court and in the absence of reasons, it is difficult for this Court to ascertain whether the decision is right or wrong (see SCC pp. 320-21, para 5 : AIR p. 2761, para 5).

23. In Union of India v. Mohan Lal Capoor [(1973) 2 SCC 836] this Court while dealing with the question of selection under the Indian Administrative Service/Indian Police Service (Appointment by Promotion) Regulations held that the expression reasons for the proposed supersession should not be mere rubber-stamp reasons. Such reasons must disclose how mind was applied to the subject-matter for a decision regardless of the fact whether such a decision is purely administrative or quasi-judicial. This Court held that the reasons in such context would mean the link between materials which are considered and the conclusions which are reached. Reasons must reveal a rational nexus between the two (see SCC pp. 853-54, paras 27-28 : AIR pp. 97-98, paras 27-28).
24. In Siemens Engg. and Mfg. Co. of India Ltd. v. Union of India [(1976) 2 SCC 981], this Court held that it is far too well settled that an authority in making an order in exercise of its quasi-judicial function, must record reasons in support of the order it makes. The learned Judges emphatically said that every quasi-judicial order must be supported by reasons. The rule requiring reasons in support of a quasi-judicial order is, this Court held, as basic as following the principles of natural justice. And the rule must be observed in its proper spirit. A mere pretence of compliance would not satisfy the requirement of law (see SCC p. 986, para 6 : AIR p. 1789, para 6).

25. In Maneka Gandhi v. Union of India [(1978) 1 SCC 248],which is a decision of great jurisprudential significance in our constitutional law, Beg, C.J. in a concurring but different opinion held that an order impounding a passport is a quasi-judicial decision (SCC p. 311, para 34 : AIR p. 612, para 34). The learned Chief Justice also held, when an administrative action involving any deprivation of or restriction on fundamental rights is taken, the authorities must see that justice is not only done but manifestly appears to be done as well. This principle would obviously demand disclosure of reasons for the decision.

26. Y.V. Chandrachud, J. (as His Lordship then was) in a concurring but a separate opinion in Maneka Gandhi also held that refusal to disclose reasons for impounding a passport is an exercise of an exceptional nature and is to be done very sparingly and only when it is fully justified by the exigencies of an uncommon situation. The learned Judge further held that law cannot permit any exercise of power by an executive to keep the reasons undisclosed if the only motive for doing so is to keep the reasons away from judicial scrutiny. (See SCC p. 317, para 39 : AIR p. 613, para 39.) 27. In Rama Varma Bharathan Thampuram v. State of Kerala [(1979) 4 SCC 782] V.R. Krishna Iyer, J. speaking for a three-Judge Bench held that the functioning of the Board was quasi-judicial in character. One of the attributes of quasi-judicial functioning is the recording of reasons in support of decisions taken and the other requirement is following the principles of natural justice. The learned Judge held that natural justice requires reasons to be written for the conclusions made (see SCC p. 788, para 14 : AIR p. 1922, para 14).

28. In Gurdial Singh Fijji v. State of Punjab [(1979) 2 SCC 368] this Court, dealing with a service matter, relying on the ratio in Capoor, held that rubber-stamp reason is not enough and virtually quoted the observation in Capoor to the extent that: (Capoor case, SCC p. 854, para 28) 28. Reasons are the links between the materials on which certain conclusions are based and the actual conclusions. (See AIR p. 377, para 18.) 29. In a Constitution Bench decision of this Court in H.H. Shri Swamiji of Shri Amar Mutt v. Commr., Hindu Religious and Charitable Endowments Deptt. [(1979) 4 SCC 642]. while giving the majority judgment Y.V. Chandrachud, C.J. referred to (SCC p. 658, para 29) Broom’s Legal Maxims (1939 Edn., p. 97) where the principle in Latin runs as follows:

Cessante ratione legis cessat ipsa lex. 30. The English version of the said principle given by the Chief Justice is that: (H.H. Shri Swamiji case, SCC p. 658, para 29) 29. reason is the soul of the law, and when the reason of any particular law ceases, so does the law itself. (See AIR p. 11, para 29.) 31. In Bombay Oil Industries (P) Ltd. v. Union of India [(1984) 1 SCC 141], this Court held that while disposing of applications under the Monopolies and Restrictive Trade Practices Act the duty of the Government is to give reasons for its order. This Court made it very clear that the faith of the people in administrative tribunals can be sustained only if the tribunals act fairly and dispose of the matters before them by well-considered orders. In saying so, this Court relied on its previous decisions in Capoor and Siemens Engg. discussed above.

32. In Ram Chander v. Union of India [(1986) 3 SCC 103], this Court was dealing with the appellate provisions under the Railway Servants (Discipline and Appeal) Rules, 1968 condemned the mechanical way of dismissal of appeal in the context of requirement of Rule 22(2) of the aforesaid Rules. This Court held that the word consider occurring in Rule 22(2) must mean that the Railway Board shall duly apply its mind and give reasons for its decision. The learned Judges held that the duty to give reason is an incident of the judicial process and emphasised that in discharging quasi-judicial functions the appellate authority must act in accordance with natural justice and give reasons for its decision (SCC pp. 106-07, para 4 : AIR p. 1176, para 4).

33. In Star Enterprises v. City and Industrial Development Corpn. of Maharashtra Ltd. [(1990) 3 SCC 280] a three-Judge Bench of this Court held that in the present day set-up judicial review of administrative action has become expansive and is becoming wider day by day and the State has to justify its action in various fields of public law. All these necessitate recording of reason for executive actions including the rejection of the highest offer. This Court held that disclosure of reasons in matters of such rejection provides an opportunity for an objective review both by superior administrative heads and for judicial process and opined that such reasons should be communicated unless there are specific justifications for not doing so (see SCC pp. 284-85, para 10).

34. In Maharashtra State Board of Secondary and Higher Secondary Education v. K.S. Gandhi [(1991) 2 SCC 716], this Court held that even in domestic enquiry if the facts are not in dispute non-recording of reason may not be violative of the principles of natural justice but where facts are disputed necessarily the authority or the enquiry officer, on consideration of the materials on record, should record reasons in support of the conclusion reached (see SCC pp. 738-39, para 22).

35. In M.L. Jaggi v. MTNL [(1996) 3 SCC 119], this Court dealt with an award under Section 7 of the Telegraph Act and held that since the said award affects public interest, reasons must be recorded in the award. It was also held that such reasons are to be recorded so that it enables the High Court to exercise its power of judicial review on the validity of the award. (See SCC p. 123, para 8.) 36. In Charan Singh v. Healing Touch Hospital [(2000) 7 SCC 668] a three-Judge Bench of this Court, dealing with a grievance under the CP Act, held that the authorities under the Act exercise quasi-judicial powers for redressal of consumer disputes and it is, therefore, imperative that such a body should arrive at conclusions based on reasons. This Court held that the said Act, being one of the benevolent pieces of legislation, is intended to protect a large body of consumers from exploitation as the said Act provides for an alternative mode for consumer justice by the process of a summary trial. The powers which are exercised are definitely quasi-judicial in nature and in such a situation the conclusions must be based on reasons and held that requirement of recording reasons is too obvious to be reiterated and needs no emphasising. (See SCC p. 673, para 11 : AIR p. 3141, para 11 of the Report.) 37. Only in cases of Court Martial, this Court struck a different note in two of its Constitution Bench decisions, the first of which was rendered in Som Datt Datta v. Union of India [AIR 1969 SC 414] where Ramaswami, J. delivering the judgment for the unanimous Constitution Bench held that provisions of Sections 164 and 165 of the Army Act do not require an order confirming proceedings of Court Martial to be supported by reasons. This Court held that an order confirming such proceedings does not become illegal if it does not record reasons. (AIR pp. 421-22, para 10 of the Report.)
38. About two decades thereafter, a similar question cropped up before this Court in S.N. Mukherjee v. Union of India [(1990) 4 SCC 594]. A unanimous Constitution Bench speaking through S.C. Agrawal, J. confirmed its earlier decision in Som Datt in S.N. Mukherjee case, SCC p. 619, para 47 : AIR para 47 at p. 2000 of the Report and held that reasons are not required to be recorded for an order confirming the finding and sentence recorded by the Court Martial.

39. It must be remembered in this connection that the court martial as a proceeding is sui generis in nature and the Court of Court Martial is different, being called a court of honour and the proceedings therein are slightly different from other proceedings. About the nature of Court Martial and its proceedings the observations of Winthrop in Military Law and Precedents are very pertinent and are extracted hereinbelow:
Not belonging to the judicial branch of the Government, it follows that Courts Martial must pertain to the executive department; and they are in fact simply instrumentalities of the executive power, provided by Congress for the President as Commander-in-Chief, to aid him in properly commanding the Army and Navy and enforcing discipline therein, and utilised under his orders or those of his authorised military representatives. 40. Our Constitution also deals with court-martial proceedings differently as is clear from Articles 33, 136(2) and 227(4) of the Constitution.

41. In England there was no common law duty of recording of reasons. In Stefan v. General Medical Council [(1999) 1 WLR 1293 (PC) it has been held: (WLR p. 1300) The established position of the common law is that there is no general duty imposed on our decision makers to record reasons.
It has been acknowledged in the Justice Report, Administration Under Law (1971) at p. 23 that:
No single factor has inhibited the development of English administrative law as seriously as the absence of any general obligation upon public authorities to give reasons for their decisions. 42. Even then in R. v. Civil Service Appeal Board, ex p Cunningham [(1991) 4 All ER 310 (CA), Lord Donaldson, Master of Rolls, opined very strongly in favour of disclosing of reasons in a case where the Court is acting in its discretion. The learned Master of Rolls said: (All ER p. 317) it is a corollary of the discretion conferred upon the Board that it is their duty to set out their reasoning in sufficient form to show the principles on which they have proceeded. Adopting Lord Lane, C.J.’s observations [in R. v. Immigration Appeal Tribunal, ex p Khan (Mahmud) [1983 (2) ALL ER 420 (CA)] All ER at p. 423, QB at pp. 794-95], the reasons for the lower amount is not obvious. Mr Cunningham is entitled to know, either expressly or inferentially stated, what it was to which the Board were addressing their mind in arriving at their conclusion. It must be obvious to the Board that Mr Cunningham is left with a burning sense of grievance. They should be sensitive to the fact that he is left with a real feeling of injustice, that having been found to have been unfairly dismissed, he has been deprived of his just desserts (as he sees them). 43. The learned Master of Rolls further clarified by saying: (Civil Service Appeal Board case [(1991) 4 All. ER 310 (Ca), All ER p. 317) Thus, in the particular circumstances of this case, and without wishing to establish any precedent whatsoever, I am prepared to spell out an obligation on this Board to give succinct reasons, if only to put the mind of Mr Cunningham at rest. I would therefore allow this application. 44. But, however, the present trend of the law has been towards an increasing recognition of the duty of court to give reasons (see North Range Shipping Ltd. v. Seatrans Shipping Corpn. [(2002) 1 WLR 2397). It has been acknowledged that this trend is consistent with the development towards openness in the Government and judicial administration.

45. In English v. Emery Reimbold and Strick Ltd. [(2002) 1 WLR 2409]. It has been held that justice will not be done if it is not apparent to the parties why one has won and the other has lost. The House of Lords in Cullen v. Chief Constable of the Royal Ulster Constabulary [(2003) 1 WLR 1763], Lord Bingham of Cornhill and Lord Steyn, on the requirement of reason held: (WLR p. 1769, para 7) 7. First, they impose a discipline which may contribute to such refusals being considered with care. Secondly, reasons encourage transparency Thirdly, they assist the courts in performing their supervisory function if judicial review proceedings are launched. 46. The position in the United States has been indicated by this Court in S.N. Mukherjee in SCC p. 602, para 11 : AIR para 11 at p. 1988 of the judgment. This Court held that in the United States the courts have always insisted on the recording of reasons by administrative authorities in exercise of their powers. It was further held that such recording of reasons is required as the courts cannot exercise their duty of review unless they are advised of the considerations underlying the action under review. In S.N. Mukherjee this Court relied on the decisions of the US Court in Securities and Exchange Commission v. Chenery Corpn. [87 L Ed. 626] and Dunlop v. Bachowski [44 L Ed 2d 377] in support of its opinion discussed above.

47. Summarising the above discussion, this Court holds:
(a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.
(b) A quasi-judicial authority must record reasons in support of its conclusions.
(c) Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.
(d) Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power.
(e) Reasons reassure that discretion has been exercised by the decision-maker on relevant grounds and by disregarding extraneous considerations.
(f) Reasons have virtually become as indispensable a component of a decision-making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies.
(g) Reasons facilitate the process of judicial review by superior courts.
(h) The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the lifeblood of judicial decision-making justifying the principle that reason is the soul of justice.
(i) Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants’ faith in the justice delivery system.
(j) Insistence on reason is a requirement for both judicial accountability and transparency.
(k) If a judge or a quasi-judicial authority is not candid enough about his/her decision-making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism.
(l) Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or rubber-stamp reasons is not to be equated with a valid decision-making process.
(m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision-making not only makes the judges and decision-makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor.)
(n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision-making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See Ruiz Torija v. Spain EHRR, at 562 para 29 and Anya v. University of Oxford, wherein the Court referred to Article 6 of the European Convention of Human Rights which requires, adequate and intelligent reasons must be given for judicial decisions.
(o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of due process.”

11. On the aspect of alternative remedy, it is well settled that there are line of judgements on both sides. Exercise of power under Article 226 of the Constitution of India is equitable. Entertaining a writ petition, when a alternative remedy is available, is again a self imposed restraint.
12. The general principles of law to be followed while entertaining a writ petition, when an alternative remedy is available, as per the decision of the Hon’ble Apex Court in U.P.State Spinning Co. Ltd. Vs. R.S.Pandey and Another (2005) 8 SCC 264, at para No.11 are as follows:
“Except for a period when Article 226 was amended by the Constitution (Forty-Second Amendment) Act, 1976, the power relating to alternative remedy has been considered to be a rule of self-imposed limitation. It is essentially a rule of policy, convenience and discretion and never a rule of law. Despite the existence of an alternative remedy it is within the jurisdiction or discretion of the High Court to grant relief under Article 226 of the Constitution. At the same time, it cannot be lost sight of that though the matter relating to an alternative remedy has nothing to do with the jurisdiction of the case, normally the High Court should not interfere if there is an adequate efficacious alternative remedy. If somebody approaches the High Court without availing the alternative remedy provided, the high Court should ensure that he has made out a strong case or that there exist good grounds to invoke the extraordinary jurisdiction.” (emphasis is ours) 13. The Hon’ble Apex Court, after considering a catena of cases, in Shauntlabai Derkar and Another Vs. Maroti Dewaji Wadaskar {(2014) 1 Supreme Court Cases 602}, at para Nos.15 to 18, held as follows:-
“15. Thus, while it can be said that this Court has recognised some exceptions to the rule of alternative remedy i.e, where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or when an order has been passed in total violation of the principles of natural justice, the proposition laid down in Thansingh Nathmal Case {Thansigh Nathmal Vs. Supt. of Taxes, AIR 1964 SC 1419}, Titaghur Paper Mills Case {Titaghur Paper Mills Co. Ltd Vs. State of Orissa (1983) 2 SCC 433} and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is crated by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation.(Emphasis is ours) 14. In the case on hand, impugned order of the District Magistrate and District Collector, Tirupur is not in consonance with Section 14 of the SARFESI Act, 2002. Shauntlabai Derkar’s case applies to the case on hand.

15. In the light of the above decisions and discussion, while declining to accept the submissions of Mr.M.L.Ganesh, learned counsel for the Bank to dismiss the writ petition on the grounds of availability of alternative remedy, on the facts and circumstances of the case, we deem it fit to set aside the impugned order and remand the matter to the District Magistrate and District Collector, Tirupur to pass orders in accordance with the parameters set out under Section 14 of the SARFAESI Act, within a period of four weeks, from the date of receipt of a copy of this order.

16. In the result, writ petition is allowed with the above direction. Consequently, connected miscellaneous petition is closed. No costs.

[S.M.K., J.] [V.B.S., J.] 24.04.2018 Index : Yes Internet: Yes kk Note: Issue order copy on 28.04.2018.
To 1. The District Magistrate and District Collector, Tirupur District, Tirupur. 2. The Sub Collector, Tirupur District, Tirupur. 3. The Authorised Officer and the Chief Manager, Punjab National Bank, No.448-A, Dr.Nanjappa Road, Coimbatore-641 018. S.MANIKUMAR, J.
AND
V.BHAVANI SUBBAROYAN, J. kk W.P.No.7089 of 2018
and W.M.P.No.8789 of 2018 24.04.2018

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