Abdul Rahman @ Rahman v. The South Indian Bank Ltd and 2 others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **TUESDAY, THE 10TH DAY OF JANUARY 2017/20TH POUSHA, 1938** **WP(C).No. 34701 of 2016 (K)** **----------------------------** ## **PETITIONER(S): -------------** **ABDUL RAHMAN @ RAHMAN, S/O MUHAMMEDEKUTTY HAJI, AGED 52 YEARS, MAMBULLY NJALIL HOUSE, THRITHALA VILLAGE, DESOM, OTTAPPALAM TALUK, PALAKKAD DISTRICT.** **BY ADVS.SRI.LINDONS C.DAVIS SMT.E.U.DHANYA** **RESPONDENT(S):** **--------------** **1. THE SOUTH INDIAN BANK LTD, REPRESENTED BY ITS CHIEF MANAGER, REGIONAL OFFICE, PALAKKAD-678 001.** ## **2. AUTHORIZED OFFICER,** **THE SOUTH INDIAN BANK LTD, REGIONAL OFFICE, PALAKKAD-678 001.** **3. RAJESH,** **S/O KUMARAN, PROPRIETOR, ALIKKAL JEWELLERY, ARANGOTTUKARA POST 680 593.** **R1 BY ADV. SRI.K.K.JOHN,SC,SOUTH INDIAN BANK BY ADV. SRI.ASISH K.JOHN** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10-01-2017,ALONG WITH W.P.(C).40744/2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **EL** ## **WP(C).No. 34701 of 2016 (K)** ## **----------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS** **----------------------P1 TRUE COPY OF THE LEASE AGREEMENT EXECUTED ON 01-04-2016 BETWEEN THE PETITIONER AND 3RD RESPONDENT. P2 TRUE COPY OF THE NOTICE DATED 16-08-2016 ISSUED BY THE ADVOCATE COMMISSIONER, SRI P. SASIDHARAN IN CRL MP NO.4764/2016 OF CJM, PALAKKAD.** **P3 TRUE COPY OF THE CRL MP NO 6079/2016 FILED BY THE PETITIONER IN CRL MP NO 4764/2016 PENDING BEFORE CJM, PALAKKAD.** ## **RESPONDENT(S)' EXHIBITS** **-----------------------** **R1(A) COPY OF THE INTERIM REPORT DATED 20.09.2016 FILED BY THE ADVOCATE COMMISSIONER IN CMP NO.4764/2016.** **R1(B) COPY OF THE ORDER PASSED BY CJM COURT ALLOWING BREAKOPEN OF SECURED BUILDING DATED 20.09.2016 IN CMP NO.6078/2016.** **R1(C) COPY OF THE ORDER PASSED BY CJM COURT DISMISSING THE OBJECTION RAISED BY PETITIONER DATED 25.10.2016 IN CMP NO.6079/2016.** **R1(D) COPY OF THE REPORT FILED BY THE ADVOCATE COMMISSIONER SRI. P. SASIDHARAN IN CMP. NO.4764/2016 DATED 31.10.2016.** **TRUE COPY** **P.S. TO JUDGE** **EL** ## **K. VINOD CHANDRAN, J.** -----------------------------------------W.P.(C) Nos. 34701 & 40744 of 2016 -----------------------------------------Dated: 10[th] January, 2017 ## **J U D G M E N T** The petitioner has filed the two writ petitions with respect to a SARFAESI proceeding initiated against the 3[rd] respondent. 2. The petitioner's contention is that the petitioner was in possession of the residential building, based on an agreement produced at Ext.P1, and his employees were residing there, when the 3[rd] respondent was issued with a notice by the Commissioner appointed by the Chief Judicial Magistrate, as is seen from Ext.P2 produced in W.P.(C) No.34701/2016. The petitioner is said to have then approached the Chief Judicial Magistrate Court, Palakkad; which Court ## **W.P.(C) Nos.34701 & 40744/2016** **-2-** appointed the Commissioner for taking possession of the residence; by Ext.P3 application asserting possession and also seeking recall of the order appointing the Commissioner. The petitioner also filed W.P.(C) No.34701/2016 on 28.10.2016, which was filed as a today moving matter, and in the same an interim order was passed in the afternoon at 1.45 keeping in abeyance the dispossession of the petitioner from the secured asset. 3. The petitioner has filed W.P.(C) No.40744/2016 challenging the dispossession made of the petitioner, despite the interim order in the earlier writ petition. The petitioner also impugned the orders passed by the Magistrate at Exts.P5 and P6 and the notice issued by the Commissioner at Ext.P2. For all practical purposes the earlier writ petition is infructuous. However, the respondent Bank has filed a ## **W.P.(C) Nos.34701 & 40744/2016** **-3-** counter affidavit in the said writ petition and hence, both the writ petitions are considered together. 4. The counter affidavit of the respondent Bank indicates that a notice under Section 13(2) of the SARFAESI Act was issued on 15.01.2016 and received by the 3[rd] respondent on 21.01.2016. It is after the issuance of notice under Section 13(2), that Ext.P1 lease agreement was executed to circumvent the provisions of the Act and enable setting up of a claim by the lessee. It is also submitted that the Commissioner had filed final report, as is indicated from Ext.R1(d), in which the Commissioner had been deputed on 27.08.2016, on which day the Commissioner could not take over possession since there was a stay in O.P. (DRT) No.73/2016, keeping in abeyance the proceedings on condition of payment of Rs. 1 crore within a month, by the original borrower, who was the ## **W.P.(C) Nos.34701 & 40744/2016** **-4-** petitioner in the original petition. The condition having not been complied with, the Commissioner is said to have visited the property and taken over possession of the same on 28.10.2016, for and on behalf of the Bank. 5. It is seen from the report filed, produced at Ext.R1(d) that there was none residing in the residential building and the keys of the building was handed over to the Commissioner by the uncle of the 3[rd] respondent. It is also seen from the report that the persons who were witnesses to the taking over, as revealed from the mahasar, had also submitted categorically before the Commissioner that there was nobody residing in the house for the last 7 to 8 months. The petitioner's contention is that Ext.P5 order produced in W.P.(C) No.40744/2016 was issued and on the very same day the Commissioner was deputed even before the copy was served on the petitioner. The petitioner had also ## **W.P.(C) Nos.34701 & 40744/2016** **-5-** filed a subsequent petition before the Magistrate Court seeking implementation of the High Court order. 6. The petitioner, as has been found in Ext.P5, has no locus standi, especially since the lease, if at all genuine, has been executed after the mortgage of the property and even after the issuance of Section 13(2) notice on the borrower. The learned Chief Judicial Magistrate, who disposed of the application filed by the petitioner, had rightly referred to the decision of the Hon'ble Supreme Court in **Harshad Govardhan Sondagar v. International Assets Reconstruction Co. Ltd. - 2014 (3) KLT 357 (SC)** and **Vishal N. Kalsaria v. Bank of India - 2016 (1) KLT 623 (SC)** to hold that the petitioner a subsequent lessee, who was inducted after the mortgage without the consent of the mortgagee; did not have any locus standi to file the above application. ## **W.P.(C) Nos.34701 & 40744/2016** **-6-** 7. It is also to be noticed that the petitioner, though contends that he is in occupation, the report of the Commissioner is against such contention taken by the petitioner. The learned Chief Judicial Magistrate also found that except for the production of a lease agreement nothing was produced to substantiate the claim of possession of the petitioner. Neither was the advance as stipulated in the agreement nor the payment of monthly rent or electricity bills substantiated before Court. 8. The further application filed before the Chief Judicial Magistrate was for implementation of the High Court order. The Magistrate, out of deference to the pendency of the writ petition before the High Court and also the interim order passed, had directed the Bank to ## **W.P.(C) Nos.34701 & 40744/2016** **-7-** hand over the keys to the Court, which has been done by the Bank. Exhibit P6 order indicates that the respondent bank filed an application before the Chief Judicial Magistrate Court on 26.07.2016, on which date the Commissioner was appointed and the case posted to 30.08.2016. On the 30[th] it was reported that the original borrower had approached the High Court with O.P. (DRT) No. 73 of 2016; in which an interim order was passed keeping in abeyance, the taking of the property on condition of payment of Rs. 1 crore within a period of one month. The borrower failed to comply with the condition imposed by High Court and the Commissioner attempted to take possession of property, when the premises were found to be locked. This further belies the occupation by the petitioner. ## **W.P.(C) Nos.34701 & 40744/2016** **-8-** 9. The Commissioner also filed an interim report before the Court seeking further directions. On 20.09.2016 the Chief Judicial Magistrate permitted the Commissioner to break open the lock for the purpose of taking possession of the property. On the very same day an application was filed by the petitioner contending lease, which application was dismissed on 25.10.2016. As a direct consequence of the dismissal of the claim petition, the CJM Court also directed the Commissioner to proceed further and take possession of the building and property and hand over the same to the Bank; which was complied with on the morning of 28.10.2016. The Chief Judicial Magistrate found that the possession of the property was taken over in the morning, before the High Court order, and out of deference to the orders passed in the writ petition the keys were directed to be handed over to the Court **-9-** ## **W.P.(C) Nos.34701 & 40744/2016** pending consideration of the writ petition by the High Court. 10. On consideration of the entire facts, definitely the possession of the building was taken over by the Commissioner prior to the order passed by this Court in W.P.(C) No.34701/2016. The petitioner also was found to be not in possession of the building, as is evidenced from the reports of the Commissioner. Twice when the Commissioner visited the property the same was locked and there was also no evidence of any habitation. The facts as revealed from the orders and the reports would indicate that the petitioner was set up by the 3[rd] respondent to agitate the cause before this Court allegedly, on the basis of a lease agreement executed at Ext.P1, which cannot be countenanced by this Court. The petitioner, as has been rightly found by the learned Chief Judicial Magistrate, cannot impair the recovery ## **W.P.(C) Nos.34701 & 40744/2016** **-10-** proceedings, based on an alleged lease agreement executed after initiation of recovery proceedings. The facts as reported by the Commissioner before the lower Court, too stands against the assertion of occupation by the petitioner. For all the above reasons, the writ petitions would stand dismissed. The learned Magistrate would hand over the keys back to the respondent Bank, who will proceed in accordance with law. No Costs. Sd/K.VINOD CHANDRAN, JUDGE jjj 10/1/17