Annam Steels Pvt Ltd and others v. Canara Bank Ltd and Punjab National Bank and Igniva PS Private Limited

## **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 6[th] DAY OF OCTOBER 2022 / 14TH ASWINA, 1944** ## **WA NO. 1355 OF 2022** **AGAINST THE ORDER IN WP(C) 24561/2022 OF HIGH COURT OF KERALA** ## **APPELLANTS/PETITIONERS IN THE WRIT PETITION:** 1 M/S ANNAM STEELS PVT LTD, (WRONGLY DESCRIBED AS ANNAN STEELS IN THE WRIT PETITION), OFFICE AT 11/40E, FASHION TOWER, CHEROOTY ROAD, KOZHIKODE, REPRESENTED BY ITS MANAGING DIRECTOR E.T.FIROZ, PIN – 673 001. - 2 E.T FIROZ, S/O.E.T.MUHAMMED BASHEER, SOUMYA, 2/1788A, FLORICAN ROAD, KALATHI AVENUE, CIVIL STATION, MALAPPARAMBU,KOZHIKODE, PIN – 673 030. - 3 A.T.MUHAMMED ALI, S/O.AHAMMED A.T., NADUVILAKANDI KURACKAL HOUSE, 12/61, KUTTIKKATTOR (P.O.), KOZHIKODE, PIN – 673 008. - 4 MUHAMMED FAVAS, AGED 42 YEARS, S/O KUNHI MOIDEEN KUTTY, FLAT NO 12 B, SKYLINE OCEANIC, OCEANIC, BEACH ROAD, KOZHIKODE, PIN – 673 032. 5 ANEES ADAM K.M., S/O.T.MUNEER, KOYAPPATHODI VILLA, KRISHNAN NAIR ROAD, MALIKADAVU, NEAR GOVT. ITI, KOZHIKODE, PIN – 673 010. - 6 SYYED MUHAMMED THAYYIL, S/O.THAYYIL KHADAR HAJI, THAYYIL HOUSE, KATTACHIRA, B.P.ANGADI (P.O.), VENGALOOR, TIRUR, MALAPPURAM, PIN – 676 102. - 7 V.ABDUL RAZZACK, S/O MUHAMMED, BARIKODAN HOUSE, ERNAD, MALAPPURAM, PIN – 673 369. - 8 ABDUL LATHEEF, RAFA PARK HOUSE, THALASSERY, KANNUR, PIN – 670 101. 9 T. AHEMMED THOTTIYIL, THOTTIYIL HOUSE, KOTTAKKAL P.O., MALAPPURAM, PIN – 676 503. - 10 P.K.SIVADASA MENON, LAKSHMI KRIPA, NORTH PARUR, ERNAKULAM, PIN – 673 032. BY ADV S.EASWARAN **2** ## **W.A.No.1355 of 2022** ## **RESPONDENTS/RESPONDENTS IN THE WRIT PETITION:** - 1 M/S.CANARA BANK LTD., CHEROOTY ROAD BRANCH, COURT ROAD, KOZHIKODE – 673001, REPRESENTED BY ITS CHIEF MANAGER AND AUTHORISED OFFICER. - 2 M/S.PUNJAB NATIONAL BANK, EROTH CENTRE, BANK ROAD, KOZHIKODE- 673 001 REPRESENTED BY ITS CHIEF MANAGER. - 3 IGNIVA PS PRIVATE LIMITED, CALICUT TRADE CENTRE , SAROVARAM BIO PARK, SAROVARAM, ERANHIPALAM, KOZHIKODE – 673 020 REPRESENTED BY ITS MANAGING DIRECTOR (IMPLEADED AS PER ORDER DATED 24.8.2022 IN IA 3/2022) BY ADV C.AJITH KUMAR ADV.P.K.SUBHASH THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 06.10.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **W.A.No.1355 of 2022** **3** ## **JUDGMENT** Dated this the 6[th] day of October 2022 ## _**Shaji P. Chaly, J.**_ The appeal is filed by the petitioners in the writ petition challenging the interim order passed by the learned Single Judge dated 1[st] day of September 2022, whereby, an earlier interim order dated 29.7.2022 was vacated. The subject issue arises under the provisions of the SARFAESI Act, 2002. The appellants are indebted to the first and second respondent banks on account of loans availed. Since there was default on the part of the appellants for repayment, action was initiated by issuing notice under Section 13(2) of the SARFAESI Act, 2002; and later the property was notified for sale and sold. The main relief sought for in the writ petition is to quash Ext.P11 sale notice and for a further direction restraining the respondents from proceeding with the sale notice. Apart from the same, other reliefs are also sought for. 2. When the matter came up for admission on 29.7.2022, a learned Single Judge deferred the confirmation of the sale **W.A.No.1355 of 2022** **4** proceedings on condition that appellants remit an amount of Rs.1,00,00,000/- (one crore) on 30.7.2022 and a further amount of Rs.6,90,00,000/- (six crores ninety lakhs) on or before 10.8.2022. In fact the appellants have deposited the said amount. However, the matter was posted before the learned Single Judge at the instance of the respondent bank, which expressed the necessity to proceed with the confirmation of sale and to vacate the interim order since according to the respondents the auction purchaser may back out. The learned Single Judge after hearing both sides; taking into account Section 13(8) of the SARFAESI Act as amended; and also the judgment of the Apex Court in _**Sree Gokulam Chit and Finance Co. Pvt. Ltd. v. Emil and Eric Hospitality Services [2021 (6) KLT 673]**_ and in _**Bank of Baroda v. Karwa Trading Company and Another [(2022) 5 SCC 168]**_ has vacated the aforesaid interim order. However, the amount of Rs.7,90,00,000/- deposited by the appellants was directed to be retained in a non-lien account, which shall be subject to final orders in the writ petition. Whatever that be, yet another observation made in the order is **W.A.No.1355 of 2022** **5** that “it is clarified that notwithstanding the above, the petitioners will be at liberty to challenge the sale, if so advised, before the appropriate forum, in accordance with law”. 3. The paramount contention advanced by the appellants is that the learned Single Judge erred egregiously in vacating the interim order even without a written plea on behalf of the respondents. It is also submitted that the appellants have deposited Rs.7.90 crores as directed by the learned Single Judge as per an interim order dated 29.7.2022. It is further submitted that the price quoted in single bid was 7.91 crores and therefore, it was clear that the respondents have colluded with the 3[rd] respondent who had quoted one lakh above the reserve price for the property. That apart, it is submitted that the learned Single Judge did not notice that the respondent bank could not have demanded 25% of the sale price and requirement to deposit the 25% of the sale price arises only when the sale is confirmed by the authorised officer. That apart, it is submitted that in the light of the interim order the authorised officer could not have permitted to confirm the sale **W.A.No.1355 of 2022** **6** and the contrary act of the authorised officer clearly amounted to contempt of court. Other contentions are also raised. 4. On the other hand, learned counsel appearing for the respondent bank submitted that by virtue of Section 13(8) of the SARFAESI Act as amended, no redemption of property is possible and therefore the order of the learned Single Judge initially passed to defer the confirmation of the sale was not proper and that is the reason why it was vacated at a later point of time. 5. We have heard learned counsel for the appellants Sri.S.Easwaran, learned counsel for the respondents 1 and 2 Sri.C.Ajithkumar and learned counsel for the 3[rd] respondent Sri.P.K.Subhash and perused the pleadings and material on record. 6. The sole question to be considered is whether any interference is required to the interim order passed by the learned Single Judge. 7. In fact it was relying upon Section 13(8) of the SARFAESI Act as amended, learned Single Judge has vacated the interim **W.A.No.1355 of 2022** **7** order passed on 29.7.2022, which was done taking note of the statutory provision that without the concurrence of the secured creditor redemption of mortgage is not possible after the proceedings are initiated under the Act 2002. Whatever the assertions raised in the appeal, in our opinion, are subject matters to be considered by the learned Single Judge in the writ petition. Therefore, we do not think any interference is required to the interim order of the learned Single Judge insofar as vacating the earlier interim order is concerned. However, as we have pointed out above, the main relief sought for by the appellants is to quash Ext.P11 sale notice on various grounds. But while vacating the interim order, the learned Single Judge almost declined the main relief with respect to the challenge to the sale notice. It is well settled in law that a final relief sought for may not be considered at an interlocutory stage. 8. In that view of the matter, even though we are not inclined to interfere with the order of the learned Single Judge vacating the interim order dated 29.7.2022, the observation made that “the petitioners will be at liberty to challenge the **8** ## **W.A.No.1355 of 2022** sale, if so advised, before the appropriate forum, in accordance with law” is vacated; and the parties will be at liberty to request for early hearing of the matter before the learned Single Judge. The interim order passed by this court on 06.09.2022 staying further proceedings under the confirmation of sale, would stand vacated. Writ appeal is disposed of as above. **Sd/-** **S.MANIKUMAR CHIEF JUSTICE** **Sd/-** **SHAJI P. CHALY JUDGE** jes //TRUE COPY// P.S. TO JUDGE