Biju George v. Union of India & Others

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR. JUSTICE GOPINATH P.`** ``` TUESDAY, THE 7[TH] DAY OF FEBRUARY 2023 / 18TH MAGHA, 1944 ``` ## **`WP(C) NO. 41205 OF 2022`** ## **`PETITIONER:`** ``` BIJU GEORGE, AGED 48 YEARS, S/O GEORGE, PROPRIETOR, T.C. SANITARYWARES, THERIPARAMBIL HOUSE, VINCENT DE PAUL CONVENT ROAD, PALARIVATTOM.P.O. ERNAKULAM – 682 025. BY ADVS. VARGHESE C.KURIAKOSE SUSANTH SHAJI AMRITHA.J ALBIN A. JOSEPH ``` ## **`RESPONDENTS:`** ``` 1UNION OF INDIA REPRESENTED BY SECRETARY, DEPARTMENT OF BANKING OPERATIONS SECRETARIAT, NEW DELHI – 110 001. 2SOUTH INDIAN BANK, REGIONAL OFFICE, SIB BUILDING, INFOPARK ROAD, RAJAGIRI VALLEY P.O., KAKKANAD, ERNAKULAM – 682 039, REPRESENTED BY CHIEF MANAGER. 3THE AUTHORISED OFFICER, SOUTH INDIAN BANK LTD. REGIONAL OFFICE, SIB BUILDING, INFOPARK ROAD, RAJAGIRI VALLEY P.O., KAKKANAD, ERNAKULAM – 682 039. BY ADV SUNIL SHANKER ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07.02.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` WP(C) NO. 41205 OF 2022 2 ## JUDGMENT The petitioner has approached this Court being aggrieved by the fact that proceedings under the SARFAESI Act have been initiated against him to recover amounts due under a term loan availed by the petitioner. 2. The learned counsel for the petitioner submits that the proceedings are at the stage of symbolic possession and that the petitioner is willing to clear the entire liability in instalments. He submits that the petitioner does not dispute the amounts now demanded and going by the Division Bench judgment of this Court in Sundaram BNP Paribas Home Finance Ltd. v. Nisha [2016(1) KHC 167], where the borrower does not dispute the liability and does not intend to challenge the proceedings before the Debts Recovery Tribunal in a proceeding under Section 17 of the SARFAESI Act, it is open to this Court to direct the grant of instalments. 3. The learned counsel appearing for the respondent Bank submits that the respondent Bank is not willing to concede further grant of instalments. The learned counsel for the respondent Bank submits that the total outstanding amount as WP(C) NO. 41205 OF 2022 3 ## on 17.12.2022 is Rs.12,94,017/-. 4. Having heard the learned counsel for the petitioner and the learned counsel for the respondent Bank, I am of the opinion that this writ petition can be allowed following the law laid down by a Division Bench of this Court in Sundaram BNP Paribas Home Finance Ltd. (supra), where it was held as follows: 3. The appellant, aggrieved by the said direction, has come up in the writ appeal. Adv.Sri.C.Varghese Kuriakose, learned counsel for the appellant contended that the learned Single Judge ought not to have exercised jurisdiction under Article 226 of the Constitution of India by interfering in a proceedings under the SARFAESI Act. It is submitted that the Apex Court in United Bank of India v. Satyawati Tondon and Others [2010 KHC 4518] has held that the Supreme Court, in exercise of writ jurisdiction under Article 226 of the Constitution of India, should not interfere in matters under the SARFAESI Act and no such interim order be granted staying the SARFAESI Act. He placed reliance on another judgment of the Apex Court in Devi Ispat Ltd. and another v. State Bank of India and Others [2014 KHC 4262] where the same proposition has been laid down. Another judgment relied upon by the learned counsel for the appellant is Federal Bank Ltd. v. Sagar Thomas [2003 KHC 1206]. He referred to another judgment in Mardia Chemicals v. Union of India [2004 KHC WP(C) NO. 41205 OF 2022 4 584]. 4. We have considered the submission of the learned counsel for the appellant and perused the records. 5. It is clear from the judgment of the learned Single Judge as noted above that the learned Single Judge has considered the sole prayer of the petitioner to permit her to remit the balance amount outstanding to the bank in easy instalments. The petitioner thus accepted the liability as disclosed by the bank in the impugned notice. The only indulgence granted by the learned Single Judge was that the amount of Rs.10,55,662/- which was outstanding along with the accrued interest was permitted to be paid in ten equal and successive monthly instalments commencing from 30/11/2015. The said payment was in addition to the regular instalments. Under the second direction, it was directed that in the event the petitioner commits default in respect of any of the instalments, she will loose the benefit of the judgment of the learned Single Judge and the bank was free to continue the recovery proceedings against her from the stage at which it stands at the relevant date. The judgment in Satyawati Tondon (supra), on which strong reliance has been placed by the learned counsel for the appellant was a case where, challenging the proceedings under the SARFAESI Act, a writ petition was filed and this Court had stayed the SARFAESI proceedings. The Apex Court noted the submissions of the parties and the order WP(C) NO. 41205 OF 2022 5 passed by the High Court by which the High Court had restrained the bank from taking proceedings under the SARFAESI Act with regard to the property of the petitioner. In paragraph 24, the Apex Court laid down the following: “24. 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 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." 6. There cannot be any dispute to the proposition laid down by the Apex Court that the High Court, in WP(C) NO. 41205 OF 2022 6 exercise of jurisdiction under Article 226 of the Constitution of India should not stay the proceedings under the SARFAESI Act and ordinarily the petitioner should be asked to avail statutory remedy provided under Section 17 of the SARFAESI Act. In Satyawati Tondon (supra), the High Court entertained the writ petition and stayed the further proceedings under Section 13(4) of the SARFAESI Act. Present is the case where, although possession notice was sought to be quashed in the prayer made, at the time of hearing, the only prayer pressed was that the petitioner may be permitted to clear the outstanding amount due to the bank in easy instalments. The only indulgence asked for was to grant her some time to clear the outstanding amount along with interest accrued together with regular instalments. The learned Single Judge exercised his discretion in granting ten instalments to pay the entire outstanding amount along with interest accrued with regular instalments. The learned Single Judge did not stay the proceedings and, by the 2[nd] direction, gave liberty to the bank to proceed further from the stage at which it stands at the relevant date, in the event of any single default committed by the petitioner. We are of the view that the interest of the bank was protected by the judgment passed by the learned Single Judge and it cannot be said to be an order by which the proceedings of the bank were either stayed or interfered with. I also take note of the fact that the petitioner does not WP(C) NO. 41205 OF 2022 7 dispute the liability and he does not intend to challenge the proceedings by filing a securitisation application before the Debts Recovery Tribunal under Section 17 of the SARFAESI Act. In the light of the above and following Sundaram BNP Paribas Home Finance Ltd. (supra) this writ petition will stand disposed of directing as follows: - (i)The petitioner will be permitted to clear the outstanding amount of Rs.12,94,017/-(Rupees twelve lakhs ninety four thousand and seventeen only) along with any accrued interest, costs and charges in 15 equated monthly instalments. - (ii)The first instalment shall be paid on or before 28.02.2023 and the subsequent instalments shall be paid on or before the last working day of every succeeding month. - (iii) In the event of default of any one instalment, the respondent bank shall be entitled to proceed in accordance with law. - (iv) In order to enable the petitioner to repay the entire amounts, all coercive proceedings shall be kept in abeyance. The writ petition is disposed of as above. The statement of the petitioner that he does not intend to challenge the proceedings under Section 17 of the SARFAESI Act is recorded. **==> picture [89 x 43] intentionally omitted <==** **----- Start of picture text -----**<br> Sd/-<br> GOPINATH P.<br> JUDGE<br>**----- End of picture text -----**<br> DK WP(C) NO. 41205 OF 2022 8 ## **`APPENDIX OF WP(C) 41205/2022`** ``` PETITIONER EXHIBITS ``` - `Exhibit P1` ``` TRUE PHOTOSTAT COPY OF THE NOTICE DECLARING THAT THE TRANSACTION BECAME NON PERFORMING ASSET ISSUED BY THE RESPONDENTS 2 AND 3 DATED 29.08.2022 ``` - `Exhibit P2 TRUE PHOTOSTAT COPY OF THE LOAN RECALL NOTICE DATED 22.09.2022 ISSUED BY THE RESPONDENTS 2 AND 3` - `Exhibit P3 TRUE PHOTOSTAT COPY OF THE DEMAND NOTICE DATED 28.09.2022 ISSUED BY THE RESPONDENTS 2 AND 3` - `Exhibit P4 TRUE PHOTOSTAT COPY OF THE OBJECTION DATED 01.10.2022 SUBITTED BY THE PETITIONER BEFORE THE RESPONDENTS 2 AND 3` - `Exhibit P5 TRUE PHOTOSTAT COPY OF THE OBJECTION DATED 07.10.2022 ISSUED BY THE 3RD RESPONDENT.` - `Exhibit P6 TRUE PHOTOSTAT COPY OF THE POSSESSION NOTICE DATED 13.12.2022 ISSUED BY THE RESPONDENTS 2 AND 3` - `Exhibit P7 TRUE PHOTOSTAT COPY OF THE REPRESENTATION DATED 14.12.2022 SUBMITTED BY THE PETITONER TO THE RESPONDENTS 2 AND 3.`