Abdul Hameed Valiyakathe v. The Manager, ICICI Bank Edapal Branch, Malappuram and The Authorized Officer ICICI Bank, Malappuram

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR** ## **&** **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **THURSDAY, THE 26TH DAY OF NOVEMBER 2020 / 5TH AGRAHAYANA, 1942** ## **WA.No.1030 OF 2020** **AGAINST THE JUDGMENT IN WP(C) 3450/2020(E) OF HIGH COURT OF KERALA** ## **APPELLANT/PETITIONER:** **ABDUL HAMEED VALIYAKATHE, AGED 56 YEARS, S/O.ABOOBACKER HAJI, RESIDING AT VALIYAKATH VEEDU, KOLALAMBU DESOM, PONNANI TALUK, EDAPAL P.O., MALAPPURAM DISTRICT-679 576.** **BY ADVS. SRI.C.R.JAYAKUMAR SRI.NOBEL RAJU** ## **RESPONDENTS/RESPONDENTS:** **1 THE MANAGER, ICICI BANK EDAPAL BRANCH, MALAPPURAM-679 576. 2 THE AUTHORIZED OFFICER ICICI BANK, PEEKAY'S ARCADE, OPPOSITE MUNICIPAL BUS STAND, MALAPPURAM-679 519.** ## **ADV.SRI.PRADEESH CHACKO FOR RESPONDENTS** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 26.11.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **W.A.No.1030 of 2020** **2** ## **JUDGMENT** Dated this the 26[th] day of November, 2020 ## **S.Manikumar, C.J.** Instant writ appeal is directed against the judgment in W.P.(C)No.3450 of 2020 dated 11.2.2020, by which a learned single Judge, after taking note of the submission of the Bank that the controversy has already been settled in the Lok Adalat wherein the appellant had agreed to deposit a sum of Rs.36 lakhs as the 1[st] instalment by March 2020 towards discharging dues to the tune of Rs.90 lakhs to the Bank, and that the above said fact had been suppressed in the writ petition, dismissed the same with cost of Rs.10,000/-. Being aggrieved, instant writ appeal is filed, inter alia, on the following grounds: - i. The learned single Judge ought to have looked into the fact that the loan repayment of the appellant/petitioner cannot be fulfilled without the part sale of the property. The bank had not provided opportunity to the appellant/petitioner to sell part of the pledged property to clear the due amount. - ii. The period of loan was not expired and there is no need to sell the property at this juncture since the appellant/petitioner is ready to clear the entire loan amount by selling part of the pledged property. - iii. The bank is adopting a stiff necked attitude due to the fact that the property of the petitioner is situated in a keen locality. - iv. The appellant/ petitioner is ready to remit the entire loan amount by selling part of the pledged property. Of course there is delay **W.A.No.1030 of 2020** **3** and latches from the part of the appellant/petitioner who was a NRI business man and due to some unforeseen contingencies he could not clear the liability. - v. The learned Single Judge ought to have allowed the request of the petitioner to sell the part of the pledged property because the remaining portion of the property and the residential building situated therein will satisfy multiples of due amount. There is no law or rule which gives the right to the bank to proceed with the whole of the secured asset mortgaged with the bank for satisfying the liability. - vi. The learned Single Judge ought to have looked into the fact that the appellant/petitioner had availed a housing loan for Rs.1,02,00,509 (Rupees One Crore Two lakhs and Five hundred Nine Rupees only) from the first respondent bank by pledging property measuring 69.5 Cents of land in July 2014. As per the terms of the loan, it will expire only in September,2024. The court below ought to have directed the bank to provide a statement of accounts to the petitioner. - vii. The court below ought to have directed the bank to show the calculation arrived at the said huge amount even after the payment of instalments till 2018. - viii. The appellant/petitioner is ready to sell a part of the pledged property (43.5 cents) for a total sale consideration of Rs. 70 lakhs with an intention to satisfy the terms of settlement. - ix. The court below ought to have considered the market value of the remaining 26 cents of landed property and the residential building situated therein is 3 crores. - x. The appellant/petitioner entered into an agreement for private sale dated 31.01.2020 with one Mr. Navas S/o Aboobacker Haji, **W.A.No.1030 of 2020** **4** Kololumb Desom, Ponnani, Malappuram District. The respondent bank is purposefully delaying the sale of the property for the purpose of increasing the liability. If the liability is increased the respondent can take possession of the property and sell the property to the purchasers of the bank. 2. Material on record discloses that the appellant has availed a housing loan of Rs.1,02,00,509/- from the respondent Bank by mortgaging his property, measuring 69.5 cents of land, in July 2014. The period of loan was for ten years. However, the appellant defaulted in making payment from March, 2018. Hence the Bank initiated action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 and filed M.C.No.116 of 2019 before the Chief Judicial Magistrate Court, Manjeri to take physical possession of the mortgaged property. 3. The said proceedings was challenged by the appellant in W.P. (C)No.3450 of 2020 and he sought for the following reliefs: “I. To issue a writ of mandamus or any other appropriate writ order or direction compelling and commanding the respondents to permit the petitioner to clear the enter loan liability under OTS within six months. II. To issue a writ of mandamus or any other appropriate writ order or direction compelling and commanding the first respondent to consider Exhibit-P4 representation in accordance with law and to take appropriate actions thereon towards redressing the grievances of the petitioner. **W.A.No.1030 of 2020** **5** III. To issue a writ of mandamus or any other appropriate writ order or direction compelling and commanding the first respondent to permit the petitioner to sell part of the pledged property.” 4. Though the appellant prayed for reversal of the judgment on various grounds, this court is not inclined to accept the same for the reason that the Hon'ble Supreme Court in various decisions, held that writ petition against the SARFAESI proceedings is not maintainable. In this regard, reference can be made to a few decisions: “(i) In **United Bank of India v. Satyawati Tondon and others** [(2010) 8 SCC 110 - AIR 2010 SC 3413], the High Court restrained further proceedings under Section 13(4) of the Act. Upon a detailed consideration of the statutory scheme under the SARFAESI Act, availability of remedy to the aggrieved under Section 17 before the Tribunal and the appellate remedy under Section 18 before the Appellate Tribunal, object and purpose of the legislation, Honourable Apex Court observed that a writ petition ought not to be entertained in view of the alternate statutory remedy available. “43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc. the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such **W.A.No.1030 of 2020** **6** dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, the High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55. It is a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection.” ## (ii) In **ICICI Bank Ltd. v. Umakanta Mohapatra and Others** reported in 2018 (13) SCALE 724, the Hon'ble Supreme Court reaffirmed the legal position that High Court has no jurisdiction to entertain writ petitions under Article 226 of the Constitution of India, relating to matters coming under the purview of SARFAESI Act, 2002, where a statutory remedy is available by filing an application under Section 17 of the said Act. (iii) In **Authorised Officer, State Bank of Travancore and Another v. Mathew K.C.** reported in **(2018) 3 SCC 85** , the Hon'ble Supreme Court observed thus: “15. It is the solemn duty of the Court to apply the correct law without waiting for an objection to be raised by a party, especially when the law stands well settled. Any departure, if permissible, has to be for reasons discussed, of the case falling **W.A.No.1030 of 2020** **7** under a defined exception, duly discussed after noticing the relevant law. In financial matters grant of ex-parte interim orders can have a deleterious effect and it is not sufficient to say that the aggrieved has the remedy to move for vacating the interim order. Loans by financial institutions are granted from public money generated at the taxpayers expense. Such loan does not become the property of the person taking the loan, but retains its character of public money given in a fiduciary capacity as entrustment by the public. Timely repayment also ensures liquidity to facilitate loan to another in need, by circulation of the money and cannot be permitted to be blocked by frivolous litigation by those who can afford the luxury of the same. The caution required, as expressed in Satyawati Tandon (supra), has also not been kept in mind before passing the impugned interim order:- “46. It must be remembered that stay of an action initiated by the State and/or its agencies/instrumentalities for recovery of taxes, cess, fees, etc. seriously impedes execution of projects of public importance and disables them from discharging their constitutional and legal obligations towards the citizens. In cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which (sic will) ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad, Whirlpool Corpn. v. Registrar of Trade Marks and Harbanslal Sahnia v. Indian Oil Corpn. Ltd. and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass an appropriate interim order.” 16. The writ petition ought not to have been entertained and the interim order granted for the mere asking without assigning special reasons, and that too without even granting opportunity to the Appellant to contest the maintainability of the **W.A.No.1030 of 2020** **8** writ petition and failure to notice the subsequent developments in the interregnum. The opinion of the Division Bench that the counter affidavit having subsequently been filed, stay/modification could be sought of the interim order cannot be considered sufficient justification to have declined interference. 17. The writ petition ought not to have been entertained and the interim order granted for the mere asking without assigning special reasons, and that too without even granting opportunity to the Appellant to contest the maintainability of the writ petition and failure to notice the subsequent developments in the interregnum. The opinion of the Division Bench that the counter affidavit having subsequently been filed, stay/modification could be sought of the interim order cannot be considered sufficient justification to have declined interference. 18. We cannot help but disapprove the approach of the High Court for reasons already noticed in Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engineering Works (P) Ltd. and Another, 1997 (6) SCC 450, observing :- “32. When a position, in law, is well settled as a result of judicial pronouncement of this Court, it would amount to judicial impropriety to say the least, for the subordinate courts including the High Courts to ignore the settled decisions and then to pass a judicial order which is clearly contrary to the settled legal position. Such judicial adventurism cannot be permitted and we strongly deprecate the tendency of the subordinate courts in not applying the settled principles and in passing whimsical orders which necessarily has the effect of granting wrongful and unwarranted relief to one of the parties. It is time that this tendency stops.” (iv) In **Civil Appeal Nos.10243-10250 of 2018** [ **ICICI Bank Ltd. v. Umakanta Mohapatra and Others** ], by order dated 5.10.2018, the Honourable Apex Court reaffirmed the legal position that High Court has no jurisdiction to entertain writ petitions under Article 226 of the Constitution of India, relating to matters coming under the purview of SARFAESI Act, 2002, where **W.A.No.1030 of 2020** **9** a statutory remedy is available by filing an application under Section 17 of the said Act.” 5. Having regard to the difficulties expressed during the Covid-19 Pandemic, we are inclined to interfere with the judgment made in W.P. (C)No.3450 of 2020 dated 11.2.2020 insofar as the costs imposed on the appellant, is concerned. Accordingly, direction issued to pay the sum of Rs.10,000/- by way of costs alone is deleted. Writ appeal is allowed in part. In all other respects, judgment in W.P.(C) No.3450 of 2020 dated 11.2.2020 would remain intact. Pending interlocutory applications, if any, shall stand closed. Sd/- **S. Manikumar Chief Justice** Sd/- **Shaji P. Chaly Judge** vpv /true copy/ P.A. to Judge