Alekutty Poulose and K.P. Tomy v. State of Kerala and Others

## **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 18TH DAY OF MARCH 2021 / 27TH PHALGUNA, 1942** # **WA.No.502 OF 2021** **AGAINST THE JUDGMENT IN WP(C) 6201/2021(A) OF HIGH COURT OF KERALA DATED 10.3.2021** ## **APPELLANTS/PETITIONOERS:** |**1**|**SMT.ALEKUTTY POULOSE**| |---|---| ||**AGED 79 YEARS, W/O LATE POULOSE,**| ||**KALATHINAMATTATHIL HOUSE, KELAKAM P.O.**| ||**KELAKAM VILLAGE, IRITTY TALUK,**| ||**KANNUR DISTRICT, PIN-670 674.**| |**2**|**MR. K.P. TOMY,**| ||**AGED 49 YEARS, S/O LATE POULOSE,**| ||**KALATHINAMATTATHIL HOUSE, KELAKAM P.O.**| ||**KELAKAM VILLAGE, IRITTY TALUK,**| ||**KANNUR DISTRICT, PIN-670 674.**| ||**BY ADV. SRI.P.T.ABHILASH**| ## **RESPONDENTS/RESPONDENTS:** **1 STATE OF KERALA REPRESENTED BY ITS SECRETARY TO GOVERNMENT, DEPARTMENT OF LAND REVENUE, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001. 2 THE DISTRICT COLLECTOR, CIVIL STATION, COLLECTORATE ROAD, THAVAKKARA, KANNUR, PIN-670 002.** _**W.A.502/2021**_ 2 - **3 THE AUTHORISED OFFICER, THE SOUTH INDIAN BANK, REGIONAL OFFICE, KVR TOWER, PAMPAN MADHAVAN ROAD, TALAP, KANNUR 670 002.** - **4 THE BRANCH MANAGER, SOUTH INDIAN BANK, PERAVOOR BRANCH, PERAVOOR, KANANUR DISTRICT, PIN-670 673.** - **5 THE CONVENOR, STATE LEVEL BANKERS COMMITTEE CELL, CANARA BANK BUILDING, M.G ROAD, THIRUVANANTHAPURAM-695 001.** **SRI.ARAVINDAKUMAR BABU SR.GOVT.PLEADER FOR R1 & 2 SRI.GEORGE VARGHESE SC FOR R3 & R4** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 18.03.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** _**W.A.502/2021**_ 3 'CR' ## JUDGMENT Dated this the 18th day of March 2021 ## S. Manikumar, CJ. Instant writ appeal is directed against judgment in W.P.(C). No.6201 of 2021 dated 10.3.2021, by which a learned Single Judge declined to grant the prayers sought for. 2. Short facts leading to filing of writ appeal are as under : The petitioners in W.P.(C). No.6201/2021 are the appellants and agriculturists. The 2[nd] petitioner has availed an agricultural loan KCC, (Kisan Credit Card) of an amount of Rs. 44,00,000/- from the 4[th] respondent bank. However due to some unforeseen incident happened in his life, like treatment of his father and flood etc., the appellants could not repay the amount in time. Thereafter, during 2017 the 4[th] respondent has taken possession of the above property and the appellants have made certain payments and regularized the above said loan. 3. In the meantime, the 4[th] respondent bank has approached the learned CJM, Thalassery under section 14(1) of SARFEASI Act by suppressing the material fact that the mortgaged loan is an agricultural loan and that the property is an agricultural property. Without ascertaining the said fact, the learned CJM has ordered to appoint an Advocate Commissioner. In the meantime, the 1[st] appellant has filed a _**W.A.502/2021**_ 4 representation before the Hon'ble Minister for Agriculture and thereafter, the matter was sent before the Convenor, State Level Banker's Committee Cell, Thiruvananthapuram/5[th] respondent for consideration. Thereafter, the appellants have approached this Court and filed W.P.(C) No. 28007/2019 and the same was disposed directing the Convenor/5[th] respondent to consider the representation filed by the 1[st] appellant with in period of 2 to 3 weeks and the above matter is stayed for a period of one month. 4. Thereafter, the appellant has forwarded the certified copy of the judgment to the 5[th] respondent as per Annexure 1 representation. In the meanwhile the 4[th] respondent bank has filed O.A No.52/2020 before the DRT for recovery of money and at the same time the Branch Manager, South Indian Bank, Peravoor/4[th] respondent has been trying to evict the appellants from their agricultural land. Therefore, the appellants approached this Court and filed W.P.(C) No.6201/2021. Without considering the above aspects, a learned Single Judge has dismissed the writ petition. Aggrieved by the non-consideration the above aspects and dismissal of the writ petition, instant Appeal is filed. 5. Before the writ court, petitioner has sought for the following reliefs: “i. Issue a writ of mandamus or any other appropriate writ, order or direction to the 3[rd] and 4[th] respondent to stay the entire proceedings against the petitioners, till the final _**W.A.502/2021**_ 5 disposal of the matter pending before the 5[th] respondent as directed by Ext. P10 judgment, forthwith; ii. issue a writ of mandamus or any other appropriate writ, order or direction commanding the 3[rd] and 4[th] respondents not to proceed the recovery proceedings against the petitioners till the disposal of the O.A. No. 52/2020 pending before the DRT-1, Ernakulam, forthwith; iii. issue a writ of certiorari to quash entire proceedings before the Hon'ble CJM, Thalassery to take possession in the agricultural property owned by the petitioners, and provide reasonable time to the petitioners till the final disposal of pending O.A. 52/2020 and Ext.P7 before the 5[th] respondent, forthwith.” 6. Adverting to the same and taking note of the decision of the Hon'ble Supreme Court in Authorised Officer, State Bank of Travancore and Another v. Mathew K.C. r eported in (2018) 3 SCC 85 and facts of this case, learned Single Judge of this Court, at paragraphs 4 to 7, held thus: “4. I have considered the submissions so advanced and perused the materials placed before me along with memo of petition. Undisputedly, the petitioner had availed financial assistance from the respondent No.4 Bank, but he has failed to repay that loan. The notice at Ext.P1 issued under the SARFAESI Act by the 4th respondent to the petitioners makes it clear that the loan was declared as nonperforming asset and the petitioners were called upon to pay the outstanding amount of Rs.54,35,014/- with interest immediately. The petitioners were warned that failing to _**W.A.502/2021**_ 6 comply the notice at Ext.P1 dated 17/04/2017, further action under the SARFAESI Act will be taken. Ext.P3 is the possession notice issued by the 4th respondent to the petitioner under Rule VIII(1) of the Security Interest (Enforcement) Rules, 2002 as well as under Section 13 of the SARFAESI Act. 5. The communication at Ext.P8 shows that the learned Chief Judicial Magistrate had appointed the concerned advocate as commissioner for taking possession of the secured asset and that is how, the possession of the secured asset was to be taken on 15/10/2019. Feeling aggrieved by this communication, the petitioner had approached this Court by filing writ petition bearing No.28007/2019 in which the order mentioned in above referred paragraph came to be passed and the coercive steps were directed to be kept in abeyance for a limited period of one month from the date of this judgment at Ext.P10. That one month is already over since long. 6. In these facts and circumstances, the instant petition is filed for challenging the steps which are being taken by the secured creditor under the SARFAESI Act for taking possession of the secured asset. The original application bearing no. 52/2020 filed by the secured creditor for recovery of money is reportedly pending before the Debt Recovery Tribunal. The petitioner has not pointed out the averments in that application for perusal of this Court. 7. Nothing is pointed out to show that the secured assets are comprising of agricultural land. Even if that is so, the remedy if any with the petitioner is to approach the DRT to show that the steps taken by the secured creditor under the SARFAESI Act are illegal and unsustainable. In the light of foregoing discussion, the petition as _**W.A.502/2021**_ 7 framed and filed challenging the action taken by the secured creditor under the SARFAESI Act is not maintainable in view of judgment of the Hon'ble Apex Court in the matter of Authorized Officer, SBT & Another Vs. Mathew KC ((2018) 3 SCC 85). The same is accordingly dismissed.” 7. Though Mr.P.T.Abhilash, learned counsel for the appellant made submissions on the grounds raised, we are not inclined to accept the same for the reason that notice issued under Section 13(4) of the SARFAESI Act, 2002, is different from seeking assistance under Section 14 of the Act from the learned Judicial Magistrate, for taking physical possession of the property. That apart, the secured creditor has filed Original Application No.52 of 2020 for recovery, before the Debt Recovery Tribunal. 8. On the aspect of entertaining a writ petition filed against matters arising out of SARFAESI Act, 2002, repeatedly, the Hon'ble Supreme Court held that writ against proceeding under the said Act is not maintainable. Reference can be made to a few decisions of the Hon'ble Apex Court on that aspect. In Authorised Officer, State Bank of Travancore and Another v. Mathew K.C. reported in (2018) 3 SCC 85 , at paragraphs 15 to 18, the Hon'ble Apex Court held as under: “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 under a _**W.A.502/2021**_ 8 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 tax payers 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 United Bank of India v. Satyawati Tondon and others [AIR 2010 SC 3413], 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 , [1969 AIR 556, 1969 SCR (1) 518], Whirlpool Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 1], and Harbanslal Sahnia v. Indian Oil Corpn. Ltd. [AIR 2003 SC 2120] and some other judgments, then the High Court may, after considering all the relevant parameters and public interest, pass an appropriate interim order.” (emphasis supplied) _**W.A.502/2021**_ 9 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 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. 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.” 18. The impugned orders are therefore contrary to the law laid down by this Court under Art.141 of the Constitution and unsustainable. They are therefore set aside and the appeal is allowed.” (emphasis supplied) 9. In Civil Appeal Nos.10243-10250 of 2018 [ICICI Bank Ltd. v. Umakanta Mohapatra and Others] , by order dated 5.10.2018, the Hon'ble Apex Court has reaffirmed the legal position that High Court has _**W.A.502/2021**_ 10 no jurisdiction to entertain writ petitions under Article 226 of the Constitution of India, relating to matters under the SARFAESI Act, 2002, wherein a statutory remedy is available by filing an application under Section 17 of the said Act. 10. Question as to whether the subject property is an agricultural property and whether the loan availed is an agricultural loan, is a matter of evidence. Appellant can always file an application under Section 17 of the Act before the Tribunal against the order made under Section 14 of the Act, adduce evidence before the Tribunal and seek for appropriate orders. 11. Reference can be made to the decision of the Hon'ble Supreme Court in United Bank of India v. Satyawati Tondon and others reported in [(2010) 8 SCC 110 - AIR 2010 SC 3413] wherein at paragraph 17, it is held thus: “17. There is another reason why the impugned order should be set aside. If respondent No.1 had any tangible grievance against the notice issued under Section 13(4) or action taken under Section 14, then she could have availed remedy by filing an application under Section 17(1). The expression `any person' used in Section 17(1) is of wide import. It takes within its fold, not only the borrower but also guarantor or any other person who may be affected by the action taken under Section 13(4) or Section 14. Both, the Tribunal and the Appellate Tribunal are empowered to pass interim orders under Sections 17 and 18 and are required to decide the matters within a fixed time schedule. It is thus _**W.A.502/2021**_ 11 evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective. 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 dues are 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, 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.” 12. The said judgment has been considered by the Hon'ble Supreme Court in Kanaiyalal Lalchand Sachdev & Ors vs State Of Maharashtra & Ors reported in [(2011) 2 SCC782], wherein at paragraphs 22 and 23, it is held thus: “22.We are in respectful agreement with the above enunciation of law on the point. It is manifest that an action under Section 14 of the Act constitutes an action taken after the stage of Section 13(4), and therefore, the same would fall within the ambit of Section 17(1) of the Act. Thus, the Act _**W.A.502/2021**_ 12 itself contemplates an efficacious remedy for the borrower or any person affected by an action under Section 13(4) of the Act, by providing for an appeal before the DRT. 23. In our opinion, therefore, the High Court rightly dismissed the petition on the ground that an efficacious remedy was available to the appellants under Section 17 of the Act. It is well-settled that ordinarily relief under Articles 226/227 of the Constitution of India is not available if an efficacious alternative remedy is available to any aggrieved person. (See: Sadhana Lodh Vs. National Insurance Co. Ltd. & Anr.; Surya Dev Rai Vs. Ram Chander Rai & Ors.; State Bank of India Vs. Allied Chemical Laboratories & Anr.).” ## 13. That apart, in **UCO Bank v. District Magistrate, Allahabad** , [AIR 2011 All 36], the Allahabad High Court held that when the District Magistrate on being satisfied that the property of which possession is sought, is secured and passes an order then the District Magistrate need not to adjudicate the question as to whether asset has been properly mortgaged or mortgage is valid or not measure which is governed by Section 14 i.e. action taken under Section 13(4) by the Bank under whether are valid or not, is a question which has to be raised under Section 17. 14. In **Asset Recovery Corporation India Ltd. v. State of Maharashtra** , [IV (2012) BC 733 (DB) : 2011 ( 6 ) MhLj 737], the Bombay High Court held that the order of the District Magistrate under Section 14 being in aid of measure that secured creditor seeks to take _**W.A.502/2021**_ 13 under Section 13(4) of the Act and the remedy of borrower is under Section 17 of the Act. 15. In **Deepak Panch v. Sent Bank Home Finance Ltd.** , [AIR 2011 Chh 32], the Hon’ble Chhattisgarh High Court held that the proceeding initiated by the appellant borrower by filing a writ in the High Court to challenge the action taken under Section 14 of the Act is not liable to be entertained as the alternative remedy of filing an application before the Tribunal under Section 17 available and not before the High Court. 16. In **Bharatbhai Ramniklal Sata Proprietor of Satyajeet Trading Co. v. Collector and District Magistrate** , [AIR 2010 Guj 72 : II (2010) BC 293], the Hon'ble Gujarat High Court held that when an order is passed under Section 14 of the Act, it being an assistance to a secured creditor to take measure under Section 13(4) of the Act is open for the borrower to challenge the same under Section 17 the SARFAESI Act, 2002. 17. In **Trade Well v. Indian Bank** reported in [2008] 81 SCL 173 (Bom.) - 2007 Cr. LJ 2544 (Bom.), the Bombay High Court held that if the order is passed by the District Magistrate for taking over of possession, then no notice is required to be served to the borrower against such an order and that the remedy is application under Section 17 which is to be resorted by the borrower as well as the third party. _**W.A.502/2021**_ 14 18. In **K.R. Chandrasekaran v. Union of India** , [2012 ( 3 ) CTC 239 : III (2012) BC 527], the High Court of Madras held that the constitutional validity of the SARFAESI Act, 2002 has been upheld by the Hon'ble Supreme Court in Mardia Chemicals Ltd. v. Union of India, 110 (2004) DLT 665 (SC)=II (2004) BC 397 (SC)=II (2004) SLT 991=2004 (2) CTC 759 (SC). The principle of sub silentio, even though no express opinion made by the Hon'ble Supreme Court about Section 14, but its validity is not open to be challenged and, therefore, held that if an order is passed under Section 14 of the Act, then a remedy to a person aggrieved, would be the remedy as available under Section 17 of the Act. 19. Giving due consideration to the material on record, reasons assigned by the learned Single Judge and the decisions stated supra, we do not think that the appellant has made out a case for interference. Accordingly, writ appeal is dismissed. Sd/S. Manikumar, Chief Justice Sd/Shaji P. Chaly, Judge sou. _**W.A.502/2021**_ 15 ## **APPENDIX** ## **PETITIONER'S EXHIBITS** **ANNEXURE A1 TRUE COPY OF THE REPRESENTATION DATED 10.2.2020 SUBMITTED BY THE 2ND APPELLANT BEFORE THE 5TH RESPONDENT (WITHOUT ENCLOSURES) ANNEXURE A2 TRUE COPY OF THE RECEIPT OF THE ANNEXURE A1 REPRESENTATION SUBMITTED TO THE 5TH RESPONDENT DATED 10.2.2020 ANNEXURE A3 TRUE COPY OF THE CERTIFICATE DATED 4.11.2019 ISSUED BY THE AGRICULTURAL OFFICER, KELAKAM WITH ENGLISH TRANSLATION. // TRUE COPY // P.A. TO JUDGE.**