Blatant Abuse of Process of Law’: Delhi HC dismisses Guarantor's Plea against PNB, Canara Bank, Imposes Rs 1 Lakh Cost [Read Order]
The court reiterated that a writ petition under Article 226 is an extraordinary remedy and cannot be used to bypass specific statutory procedures or interfere with the jurisdiction of other specialized forums when alternative legal channels exist.
The Delhi High Court has dismissed a writ petition filed by a guarantor against Punjab National Bank (PNB) and Canara Bank, imposing a cost of Rs. 1 lakh for what it termed an "abuse of process" and an attempt to stall legitimate recovery proceedings.
Sanjeev Krishan Sharma, the petitioner and a former director of M/s KMG A to Z Systems Pvt. Ltd., had approached the court seeking a discharge from his personal guarantee for the company's loan and the release of his mortgaged property. He also sought a stay on personal insolvency proceedings initiated against him under the Insolvency and Bankruptcy Code (IBC), arguing that simultaneous proceedings before the Debt Recovery Tribunal (DRT) and the National Company Law Tribunal (NCLT) would lead to conflicting adjudications.
The core legal issue was whether the High Court could entertain the writ petition and grant the reliefs sought when the petitioner had not exhausted the specific statutory remedies available under the Recovery of Debts and Bankruptcy Act (RDB Act), the SARFAESI Act, and the IBC.
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The court, comprising Justice Anil Kshetarpal and Justice Harish Vaidyanathan Shankar, declined to exercise its writ jurisdiction. The bench held that the petitioner had "efficacious statutory remedies" that he had failed to invoke, such as approaching the DRT for an early hearing of his applications, appealing any order to the Debt Recovery Appellate Tribunal (DRAT), or raising his objections directly before the NCLT.
The court said that a writ petition under Article 226 is an extraordinary remedy and cannot be used to bypass specific statutory procedures or interfere with the jurisdiction of other specialized forums when alternative legal channels exist. It characterized the petitioner's conduct, including filing a subsequent frivolous application, as a "blatant abuse of the process of law."
Consequently, finding that the petitioner had not followed the proper procedural path, the High Court dismissed the writ petition. The court imposed costs of Rs. 1,00,000 on the petitioner, to be deposited with the AIIMS Poor Patients' Fund within two weeks.
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