Babu P.O. and Sherly Babu v. Kerala Gramin Bank

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** # **THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR** **&** **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY** **TUESDAY, THE 7[TH] DAY OF JUNE 2022 / 17TH JYAISHTA, 1944** **WA NO. 626 OF 2022** **AGAINST THE JUDGMENT IN WP(C) 6649/2022 OF HIGH COURT OF KERALA 11.3.2022** ## **APPELLANT/PETITIONERS:** - 1 BABU P.O., AGED 54 YEARS, S/O. OUSEPH, PORATHUR HOUSE, MAROTTICHAL P.O, THRISSUR DISTRICT – 680 014. - 2 SHERLY BABU, AGED 47 YEARS, W/O. BABU, PORATHUR HOUSE, MAROTTICHAL P.O, THRISSUR DISTRICT – 680 014. - BY ADV K.R.SRIPATHI ## **RESPONDENTS/RESPONDENTS:** - 1 KERALA GRAMIN BANK, REGIONAL OFFICE, THRISSUR, REPRESENTED BY ITS AUTHORIZED OFFICER – 680 005. - 2 THE MANAGER, KERALA GRAMIN BANK, EAST FORT BRANCH, THRISSUR DISTRICT – 680 005. THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 07.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.A.No.626 of 2022 :: 2 :: ## **JUDGMENT** Dated this the 7[th] day of June 2022 ## **S.MANIKUMAR, C.J.** This writ appeal is filed challenging the judgment dated 11.3.2022 in W.P.(C)No.6649 of 2022. Appellants are the petitioners in the writ petition. 2. The writ petition was filed challenging the recovery proceedings initiated against the residential property under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 read with Rule 8(6) of the Security Interest (Enforcement) Rules, 2002. 3. Relief sought for by the appellants herein in the writ petition is to permit them to pay the overdue amount in convenient monthly instalments after deducting penal interests and hidden charges. 4. By the impugned judgment, writ court held that the appellants herein can pay the amount of Rs.12,47,232/- in equal instalments. Relevant portion of the judgment reads thus: “5. Having regard to the circumstances of the case and the situation now prevailing, apart from the submissions made as recorded above, I am of the view that the petitioners can be granted an opportunity to repay the overdue amount in '12' instalments and thereafter, if the amount so directed is repaid W.A.No.626 of 2022 :: 3 :: within the time as directed above, to have the loan account regularised. 6. Accordingly, there will be a direction to the respondent bank to accept repayment of the entire overdue amount of Rs.12,47,232/- along with bank charges from the petitioners and regularise the loan account of the petitioners on the following conditions: (i) The overdue amount of Rs.12,47,232/- shall be repaid in '12' equated monthly instalments. (ii) The first instalment shall be paid on or before 08.04.2022. (iii) Petitioners shall continue to pay the regular EMI’s along with the instalments directed above. (iv) In the event of default of any one instalment, the respondent bank shall be entitled to proceed in accordance with law. (v) In order to enable the petitioners to repay the entire amounts, all coercive proceedings shall be kept in abeyance. The writ petition is disposed of as above.” ## 5. Being aggrieved by the above, appellants/petitioners preferred review petition and the review petition was allowed by reviewing the direction to regularise the loan. ## 6. Relevant portion of the judgment reads thus: “2. After hearing the learned counsel for the petitioner as well as the learned Standing Counsel for the respondents, I am satisfied that there is an error in the judgment though not in the manner submitted by the petitioner. In the judgment, reference to Rs.12,47,232/- as the overdue amount is in fact the total outstanding amount. Therefore the direction to regularise the loan account on payment of the overdue amount of Rs.12,47,232/-is an error apparent on the face of record. W.A.No.626 of 2022 :: 4 :: Accordingly, I review the judgment to the extent mentioned below :- The word “overdue” mentioned in the judgment shall be deleted and be substituted with the word “outstanding” and the direction to regularise the loan account as stipulated in paragraph 5 as well as Clause No.(iii) shall stand reviewed. In conclusion, the petitioner is given the liberty to repay the entire outstanding amount of Rs.12,47,232/- in '12' equated monthly instalments. The review petition is allowed as above.” 7. Mr.K.R.Sripathi, learned counsel for the appellants submitted that the specific prayer of the appellants herein is to grant of some breathing time to settle the overdue amount and to permit regularisation of the loan from then on. It is further submitted that the tenure of the loan is not over and the appellants herein have more instalments and time to pay the remaining instalments. The limited grievance of the appellants/petitioners is with respect to the amount which is in arrears. 8. We have heard learned counsel for the parties and perused the materials available on record. 9. Though Mr.K.R.Sripathi, learned counsel for the appellants advanced arguments on the basis of averments and grounds, having regard to the judgment of Hon'ble Supreme Court in **Authorised Officer, State Bank of Travancore and Another v. Mathew K.C.** reported in **(2018) 3 SCC 85,** wherein it has been held that writ petitions assailing the W.A.No.626 of 2022 :: 5 :: correctness of proceedings initiated under the SARFAESI Act, 2002 are not maintainable, we are not inclined to entertain the instant appeal. ## 10. 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 Supreme 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 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 W.A.No.626 of 2022 :: 6 :: 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) 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.” W.A.No.626 of 2022 :: 7 :: 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.” 11. 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 has 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, wherein a statutory remedy is available by filing an application under Section 17 of the said Act. 12. Loan transaction is purely contractual and this court, under Article 226 of the Constitution of India should not interfere in contractual matters, in rescheduling loan payment. Despite the pronouncement of the Hon'ble Supreme Court on the maintainability of writ petitions relating to SARFAESI proceedings, this Court on earlier occasions, had extended indulgence in granting time for payment of the amounts due and payable to the bank. Considering the entire material on record, we do not find any error in the impugned judgment warranting interference. If any coercive action is taken by the Bank as per the provisions of SARFAESI Act, 2002, it W.A.No.626 of 2022 :: 8 :: is always open to the appellants to challenge the same in accordance with law. Appeal fails and it is dismissed. **sd/S.MANIKUMAR CHIEF JUSTICE** **sd/SHAJI P. CHALY JUDGE** jes