Easy Access To Justice A Facet Of Right To Life: J&K High Court Allows SARFAESI Actions To Be Challenged Under Article 226 Till Local DRTs Are Established

In their earnest bid to advance hassle-free access to substantial justice Chief Justice N. Kotiswar Singh & Justice Wasim Sadiq Nargal have emphasised that till such a fora or benches are established the litigants can invoke the writ jurisdiction of this Court under Article 226 of the Constitution of India.

“..We would hold that this Court would have jurisdiction to entertain petitions under Article 226 of the Constitution of India to consider challenges to various actions initiated by the financial institutions/banks under the SARFAESI Act, in spite of the availability of alternative redressal forum at the DRT located in Chandigarh, as we consider this alternative forum to be inefficacious to the litigants in the UTs of J&K and Ladakh”.

Background:

These observations stemmed from petitions filed by borrowers in J&K and Ladakh challenging actions taken against them by banks and financial institutions under the SARFAESI Act. The petitioners argued that the Act's designated alternative remedy of approaching DRTs was not effective due to their remote locations. The vast distance to Chandigarh, they contended, imposed undue financial hardship and violated their fundamental right to access justice as guaranteed under Article 21 of the Constitution.

The petitioners highlighted the significant challenges associated with travelling to the DRT in Chandigarh, including high airfare costs due to limited air connectivity and lack of direct flights, difficult road conditions and harsh weather in J&K and Ladakh.

The petitioners further pointed to the limited access to affordable legal representation, as outstation lawyers would need to be engaged and the lack of proper infrastructure for e-filing and virtual hearings in many parts of J&K and Ladakh.

The banks and financial institutions, represented by the respondents, countered that Section 17 of the Act provides an alternative remedy, and the High Court should not entertain these writ petitions.

Observations Of The Court:

Acknowledging the existence of an alternative remedy under Section 17 the bench emphasized that the remedy needs to be 'efficacious' to be considered valid. While the DRTs themselves were deemed legally adequate forums, their location in Chandigarh posed a substantial challenge due to the considerable distance from J&K and Ladakh.

Drawing from the principles laid down in Anita Kushwaha vs. Pushap Sudan 2016 the court meticulously examined the multifaceted concept of access to justice and emphasized the indispensability of a redressal forum that is easily, readily, and regularly available to borrowers and aggrieved parties, especially in matters as crucial as those governed by the SARFAESI Act.

“..non-availability of Debts Recovery Tribunal within the UT of Jammu and Kashmir and UT of Ladakh does appear to constitute a denial of easy access to justice, which is a facet of the fundamental right guaranteed under Article 21 of the Constitution. Thus, without going in detail into all the other aspects of access to justice as elaborately discussed in the case of Anita Kushwaha (supra) including that the State must provide an effective adjudicatory mechanism and that the process of adjudication must be speedy”, the bench remarked.

Underscoring the limitations of virtual hearings, citing issues with internet connectivity and the irreplaceable value of physical appearances in certain cases the Court emphasized that the geographical distance, economic hardship, and lack of infrastructure significantly hindered access to justice for borrowers in J&K and Ladakh.

The court also lamented the difficulties faced due to the lack of domestic courts with jurisdiction following the State Reorganisation Act of 2019 which impacted cases handled under the SARFAESI Act and observed,

“The pain and disappointment of the litigants in the UT of Jammu and Kashmir and UT of Ladakh in depriving the domestic courts of jurisdiction under the SARFAESI Act at present are quite palpable..now the litigants are compelled to approach the DRT located in a far off place encumbered with numerous difficulties as discussed above, denying the comfort and convenience available to litigants where DRTs are established in their own States”.

Highlighting the imperative of ensuring an effective and just implementation of the SARFAESI Act by providing litigants with a redressal forum that is not only accessible but also efficacious the bench emphasized that the establishment of local DRTs or alternative benches within Jammu and Kashmir and Ladakh is crucial to mitigate the burdensome and expensive proceedings faced by litigants.

“Unless the adjudicating forum is readily, easily and regularly available, it can prejudicially affect their right to easy access to justice which appears to be in the position in the present cases where a large number of petitioners have approached this Court alleging irregular/malafide/illegal acts on the part of the Banks/financial institutions by violating provisions of the SARFEASI Act”, the bench pointed.

Spotlighting the potential for grave injustices in the absence easily accessible redressal forum for borrowers and debtors under the SARFAESI Act the bench thus held that the writ petitions were maintainable and acknowledged the need for further examination on the merits of each case.

Given the significant financial implications of interim orders, the court underscored the need for expeditious disposal of the petitions and directed that the petitions be listed again after a month for individual consideration.

Case Title: M/S Hotel Alpine Ridge Vs Union Of India and Other Connected Petitions

Citation: 2024 LiveLaw (JKL) 83

Counsel For Petitioners: Mr. Arif Sikander Mir & Ors

Counsel For Respondents: Mr. T.M. Shamsi, DSGI & Ors

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