High Court of KeralaSingle Judge2024-01-11Writ petition dismissed.

Baiju R. v. State Bank of India

Case / Petition Number:W.P.(C) No.29736/2022

Neutral Citation:/

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: N. Nagareesh
Judgment Date: 2024-01-11
Court Decision / Holding: In light of Supreme Court precedents and this Court’s own rulings, the writ petition is not maintainable and is dismissed.
Final Disposition: Writ petition dismissed.

Parties to the Case

Appellants / Petitioners

Sri. Baiju R

Respondents

State Bank of India

Legal Representation & Advocates

Counsels for Petitioners

• Sri. Baiju R (Party-In-Person)

Counsels for Respondents

• JAWAHAR JOSE

Case Synopsis & Summary

Baiju R., the petitioner, challenging a SARFAESI Act proceeding, contends that the bank’s possession notice Ext.P4 is illegal and that the loan restructuring under RBI’s Resolution Plan 2020 should shield him from enforcement actions. The factual matrix shows a housing loan of ₹8,00,000 taken in 2014 by the petitioner (jointly with his wife for a loan secured by property in the wife’s name) along with a Suraksha loan of ₹63,970. The loan became Non-Performing Asset on 30.04.2021, after which proceedings under the SARFAESI Act were initiated; a Section 13(2) demand notice was issued on 04.10.2021 and a possession notice on 08.04.2022 after publication on 12.04.2022. The respondent bank argues that the restructuring plan was applicable to the housing loan, but not to the Suraksha loan, and that Ext.P4 is a consequence of an order by the Chief Judicial Magistrate under Section 14. The petitioner further alleges non-extension of moratorium and coercive insurance arrangements (SBI Life). The bank claims to have refunded insurance-related sums once the policy was cancelled. The court cites several Supreme Court and Kerala High Court precedents to hold that writs under Article 226 are not maintainable against SARFAESI proceedings where an efficacious remedy exists, and ultimately dismisses the petition.

Provisions of Law Cited

Securitisation Act (SARFAESI Act) - Sections 13(2) and 14

Legal Doctrines & Maxims

Efficacious alternative remedy under SARFAESI Act
No writ lies against SARFAESI proceedings
Writ jurisdiction restricted where statutory remedy exists; extraordinary jurisdiction not to be invoked except in extraordinary circumstances (South Indian Bank v. Naveen Mathew Philip)
Writs not maintainable against SARFAESI proceedings (Jayakrishnan A. v. Union Bank of India)

Submissions & Arguments

Contentions of Appellants / Petitioners

Applicant contends Ext.P4 possession notice under the SARFAESI Act is illegal, argues that the loan restructuring under RBI Resolution Plan 2020 should apply to the housing loan and protect him from recovery actions, points to the moratorium and alleges coercive insurance requirements; asserts that the property is mortgaged but the asset is under his wife’s ownership, and seeks to challenge the proceedings on grounds of statutory and policy non-compliance. He also seeks refund of insurance premium refunded through SBI Life.

Contentions of Respondents

Respondents contend the applicant’s housing loan restructuring was admissible under RBI Resolution Plan 2020, though not applicable to the Suraksha loan; a Section 13(2) notice was issued and a possession order under Section 14 followed; SARFAESI proceedings are within statutory ambit and writs are not maintainable; the remedy lies under the SARFAESI Tribunal/Act; the petitioner’s attempt to cancel SBI Life insurance (Ext.R1) is being processed for refunds.

Cited Precedents (5)

Case Name	Citation	Treatment	Explanation
United Bank of India v. Satyawati Tondon and others	(2010) 8 SCC 110	Positive	Held that no writ petition lies against SARFAESI proceedings; efficacious remedy exists under the SARFAESI Act.
Authorised Officer, State Bank of Travancore v. Mathew K.C.	2018 (1) KLT 784	Positive	Affirmed that writ petitions against SARFAESI proceedings are not maintainable given statutory remedies.
Anilkumar v. State Bank of India	2020 (2) KLT 756	Positive	Division Bench declined Article 226 jurisdiction against SARFAESI proceedings, reinforcing non-interference stance.
South Indian Bank Limited v. Naveen Mathew Philip	2023 (4) KLT 29	Positive	Apex Court held that constitutional remedies are extraordinary and only available when statutory redress is lacking; caution against unfettered interference.
Jayakrishnan A. v. Union Bank of India and others	W.P.(C) No.30803/2023	Positive	Held writ petition challenging SARFAESI proceedings not maintainable where effective remedy exists under the Act.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE N.NAGARESH** **THURSDAY, THE 11[TH] DAY OF JANUARY 2024/21ST POUSHA, 1945** **WP(C) NO. 29736 OF 2022** **PETITIONER:** **SRI. BAIJU R AGED 52 YEARS CHAVARASHIKOM, PATTATHANAM NAGAR -2, K OLLAM - 691 021,** **BY ADV SRI. BAIJU R(Party-In-Person)** **RESPONDENT:** **STATE BANK OF INDIA, REPRESENTED BY MANAGER RACPC, 1ST FLOOR, RAVI'S ARCADE, NEAR IRON BRIDGE, KOLLAM-691 013, PIN – 691013** **BY ADV JAWAHAR JOSE** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.01.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C) No.29736/2022 : 2 : ## **N. NAGARESH, J.** ````````````````````````````````````````````````````````````` ## W.P.(C) No.29736 of 2022 ````````````````````````````````````````````````````````````` _Dated this the 11[th] day of January, 2024_ ## **J U D G M E N T** ~ ~ ~ ~ ~ ~ ~ ~ ~ The petitioner states that he was employed in gulf countries and during the Covid-19 pandemic, he lost his jobs and had to return to native place at Kollam. In the year 2014, the petitioner had taken a loan of ₹8,00,000/- from the respondent-Bank. The loan was taken for construction of house and had a tenure of 20 years. 2. The petitioner was remitting EMI at the rate of ₹8,700/- since June, 2014 till 2017 and thereafter at the rate of ₹7,500/- till June, 2020. The petitioner had the benefit of moratorium due to Covid, for six months. The Bank issued a letter to the petitioner proposing to restructure the loan. According to the petitioner, the Bank restructured the loan for W.P.(C) No.29736/2022 : 3 : two years. The petitioner states that he has remitted ₹5,05,920/- so far towards the loan. The respondent forced the petitioner to take insurance in the year 2019. The petitioner has been remitting insurance premium also since 2019. 3. To the surprise of the petitioner, the respondentBank issued a lawyer notice proposing to take physical possession of the secured asset on 20.09.2022. The petitioner states that the tenure of the loan is till the year 2034. The petitioner and family members are residing in the residential house which is mortgaged to the respondents. Ext.P4 lawyer notice is illegal, contends the petitioner. The petitioner therefore seeks to direct the respondents not to proceed with Ext.P4. 4. The respondent entered appearance through Standing Counsel and resisted the writ petition. The petitioner and his wife have jointly applied for a housing loan and a Suraksha loan. The property belong to the petitioner's wife having an extent of 3.45 Ares in Thrikkaruva Village was W.P.(C) No.29736/2022 : 4 : mortgaged as security. The petitioner was granted ₹8 lakhs as housing loan and ₹63, 970/- as Suraksha loan. 5. The loan account was declared as NPA on 30.04.2021. Thereafter, proceedings under the Securitisation Act were initiated. Section 13(2) demand notice was issued on 04.10.2021. The petitioner did not make any objection to the Section 13(2) notice. Therefore, possession notice was issued on 08.04.2022 which was published in newspapers on 12.04.2022. The respondents have approached the Chief Judicial Magistrate invoking Section 14 for taking over physical possession of the property. 6. The respondents submitted that the petitioner was eligible for restructuring of his housing loan. Due to restructuring, the petitioner is only obliged to repay the amount from 23.12.2022. But, the restructuring plan is not applicable to the Suraksha loan availed by the petitioner. As the petitioner failed to pay the instalments in Suraksha loan recovery proceedings were initiated in respect of the said loan. It is in the said circumstances that Ext.P4 notice was W.P.(C) No.29736/2022 : 5 : issued by the Advocate Commissioner. 7. The Standing Counsel submitted that after filing the writ petition, the petitioner has sent e-mail on 12.11.2022 to SBI Life Insurance seeking to cancel the Rinn Raksha Policy. The SBI has cancelled the policy and issued Ext.R1(c) communication to the petitioner. The petitioner is entitled to a refund of ₹63,970/- from the SBI Life Insurance. On receipt of the said amount, it will be credited to the loan account. As on 03.12.2022, the amount payable by the petitioner in the Suraksha loan is ₹83,659/-. After duly crediting the refund, the petitioner needs to pay an amount of ₹20,000/- to the Suraksha loan account. The writ petition is without any merits and it is liable to be dismissed. 8. I have heard the learned counsel for the petitioner and the learned Standing Counsel representing the respondent. 9. The petitioner has availed a housing loan of ₹8 lakhs and funding of home loan insurance cover of ₹63,970/-. This is evident from Ext.R1(g) letter dated W.P.(C) No.29736/2022 : 6 : ## 29.01.2014. The petitioner has signed Ext.R1(g). 10. The petitioner's case is that the respondent has not extended the benefit of moratorium to the petitioner and has acted in violation of the RBI Circulars. It is to be noted that as per the restructuring plan which was given to the petitioner based on Resolution Plan 2020 of the Reserve Bank of India, the restructuring plan is not applicable to the Suraksha loan availed by the petitioner. The petitioner has committed default with respect to the Suraksha loan and it is for that reason that the respondents have initiated recovery proceedings invoking the Securitisation Act. 11. Be that as it may, the petitioner is challenging Ext.P4 notice issued by the Advocate Commissioner. Ext.P4 notice is resultant to an order passed by the Chief Judicial Magistrate, in exercise of the powers under Section 14 of the Securitisation Act. If the petitioner is aggrieved by any proceedings under the Securitisation Act, the petitioner has to resort to a remedy available under the Securitisation Act. W.P.(C) No.29736/2022 : 7 : 12. The grievance of the petitioner is relating to the proceedings initiated by the respondents under Sections 13 and 14 of the Securitisation Act and the attempt of the respondents to take over and sell the secured asset provided by the petitioner. 13. It is settled law that no writ would lie against the proceedings initiated by a financial institution under the provisions of the SARFAESI Act. In _**United Bank of India v. Satyawati Tondon and others** [(2010) 8 SCC 110]_ , the Hon’ble Apex Court declared that no writ petition shall be entertained against the proceedings initiated under the SARFAESI Act at the instance of a defaulter since the statute provides for an efficacious alternate remedy. 14. In the judgment in _**Authorised Officer, State Bank of Travancore v. Mathew K.C.** [2018 (1) KLT 784],_ the Hon’ble Apex Court reiterated that no writ petition would lie against the proceedings under the SARFAESI Act in view of the statutory remedy available under the said Act. W.P.(C) No.29736/2022 : 8 : 15. Following the judgment in _**Satyawati Tondon**_ (supra), a Division Bench of this Court in the judgment in _**Anilkumar v. State Bank of India** [2020 (2) KLT 756]_ declined to exercise jurisdiction under Article 226 of the Constitution of India against the proceedings initiated under the Securitisation Act. 16. In _**South Indian Bank Limited v. Naveen Mathew Philip** [2023 (4) KLT 29]_ , the Apex Court held that when the legislature has provided a specific mechanism for appropriate redressal, the powers conferred under Article 226 of the Constitution of India shall be exercised only in extraordinary circumstances. 17. In Jayakrishnan A. v. Union Bank of India and others (W.P.(C) No.30803/2023), this Court held that writ petition challenging any proceedings under the Securitisation Act is not maintainable since the aggrieved person has an effective and efficacious remedy before the Tribunal constituted under the Act which is competent to adjudicate the issues of fact and law, including statutory violations. W.P.(C) No.29736/2022 : 9 : In the light of the categorical pronouncements of law made by the Apex Court and by this Court, the above writ petition is not maintainable and it is dismissed. Sd/- **N. NAGARESH, JUDGE** aks/09.01.2024 W.P.(C) No.29736/2022 ## : 10 : ## **APPENDIX OF WP(C) 29736/2022** ## **PETITIONER'S EXHIBITS** **Exhibit P1 A TRUE COPY OF LETTER SEND BY BANK THROUGH EMAIL ON 09.12.2020 WITH REGARD TO RESTRUCTURING OF LOAN Exhibit P2 A TRUE COPY OF THE LETTER ISSUED BY THE RESPONDENT BANK AND ACCEPTED BY ME ON 09.02.2021 Exhibit P3 A TRUE COPY OF RBI RESOLUTION PLAN 2020 Exhibit P4 A TRUE COPY OF NOTICE ISSUED BY RESPONDENT'S ADVOCATE ON 01.09.2022 FOR TAKING POSSESSION ON 20.09.2022** ## **RESPONDENT'S EXHIBITS** **Exhibit-R(1)(a) True copy of Insurance Certificate issued from the SBI Life Insurance. Exhibit-R(1)(b) True copy of the email communication dated 26-9-2022 together with the attachment appended to the said email. Exhibit-R(1)(c) True copy of communication dated 2511-2022.** ## **PETITIONER'S EXHIBITS** **Exhibit P5 The true copy of the police report dated 14.02.2022 Exhibit P6 True copy of the letter issued from SBI life insurance company ltd at Mumbai dated 31.10.2022 Exhibit P7 True copy of the Bank Statement from the Branch at Kadavoor dated 23.09.2022 Exhibit P8 True copy of the mail was issued to me from the SBI life insurance company at Mumbai Office dated 30.11.2022 Exhibit P9 The true copy of the letter was issued by the manager at SBI Kadavoor Branch dated 26.12.2022** W.P.(C) No.29736/2022 ## : 11 : ## **RESPONDENT'S EXHIBITS** - **Exhibit-R(1)(d) True copy of the Power of Attorney dated 27-12-2013 executed by the writ petitioner in favour of his his wife Mrs. Praveena.** - **Exhibit-R(1)(e) True copy of the application dated 291-2014 submitted by the borrower for the Suraksha Loan** - **Exhibit-R(1)(f) True copy of the communication issued by the bank to the borrower, as regards the sanctioning of Suraksha Loan** - **Exhibit-R(1)(g) True copy of the loan sanctioning letter dated 29-1-2014 duly acknowledged by the borrowers and the guarantor.** - **Exhibit-R(1)(h) True copy of the loan agreement executed by the borrowers.** **PETITIONER'S EXHIBITS** - **Exhibit P (10) True copy of the letter was received and Table of sum assured benefits from the SBI life insurance company ltd at Mumbai dated: 13/10/2022** - **Exhibit P (11)** - **The statement regarding suraksha insurance, housing loan and directly remitted receipt to SBI branch Kadavoor dated: 23/09/2022, 26/09/2022**