High Court of KeralaSingle Judge2024-02-06Writ petition dismissed.

Dinesan v. Kerala State Co-operative Bank

Case / Petition Number:WP(C) No.2684 of 2024

Neutral Citation:/null

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: N. Nagareesh, J.
Judgment Date: 2024-02-06
Court Decision / Holding: The writ petition is dismissed. The court held that Exts.P1 and P2 do not conclusively establish initiation before the account was declared NPA, and the issues are factual, requiring evidence. The petitioner has an effective alternate remedy under Section 18, and writ jurisdiction is not appropriate for such disputed questions of fact.
Final Disposition: Writ petition dismissed.

Parties to the Case

Appellants / Petitioners

Dinesan

Respondents

Kerala State Co-operative Bank represented by Authorized Officer Sahakarana Sathapthi Mandiram, Kovilkathumpadam, Thrissur
Sri P.C. Sasidharan

Legal Representation & Advocates

Counsels for Petitioners

• Adv N.K. Mohanlal

Counsels for Respondents

• Standing Counsel (for respondent Bank)

Case Synopsis & Summary

The petitioner, Dinesan, is the Managing Director of a private limited company which availed an overdraft facility of ₹5 crores from the Kerala State Co-operative Bank in 2015, secured by mortgages on three immovable properties. Following loan default, the Bank declared the account as a non-performing asset (NPA) and invoked SARFAESI 2002 proceedings; an Ext.P1 possession notice was issued and the Bank filed an ARC for recovery of ₹7,68,13,635/-. The respondent then approached the Chief Judicial Magistrate, Thrissur under Section 14 of SARFAESI, resulting in Ext.P3 order appointing an Advocate Commissioner to take possession of the secured assets. The petitioner challenged Ext.P1 and Ext.P3, arguing that SARFAESI proceedings were initiated before the account was declared NPA, that one property is agricultural (which would be ineligible under SARFAESI), and that possession notice was not affixed or published; that security interest was not registered under Section 26B. He also contended there was misdescription of properties and suppression of tenant occupancy. The court observed that Exts.P1 and P2 alone do not prove initiation before NPA; these are factual issues requiring evidence. The court noted the existence of an effective appellate remedy under Section 18 and held writ jurisdiction unsuitable for disputed questions of fact, dismissing the petition while leaving the bank’s remedies intact.

Provisions of Law Cited

SARFAESI Act, 2002 - Section 13(4) (possession notice)SARFAESI Act, 2002 - Section 14 (CJM proceedings/appointment of Advocate Commissioner)SARFAESI Act, 2002 - Section 18 (appeal to Appellate Tribunal)SARFAESI Act, 2002 - Section 26B (Central Registry)Kerala Co-operative Societies Act - Section 69 (arbitration/recovery)

Legal Doctrines & Maxims

Alternative remedy doctrine (existence of Sec 18 appeal under SARFAESI)
Writ jurisdiction vs. disputed questions of fact (Article 226 limitations)
Natural justice considerations cited in broader arguments (viability of writ)

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner argued that SARFAESI proceedings were initiated before the loan account was declared NPA, alleging misdescription of properties, suppression of tenancy, lack of possession notice affixation and lack of Central Registry registration under Sec 26B. He urged that Exts.P1 and P3 be quashed and relied on a decision that alternate remedies may not bar a writ in cases of fundamental rights or violations of natural justice, asserting the proceedings were wholly without jurisdiction and fact-intensive.

Contentions of Respondents

The respondents contended that SARFAESI proceedings are subject to the appellate remedy under Section 18 and that the issues are facts to be established in evidence; the Bank was entitled to pursue recovery under the Act, with the petition presenting questions of fact that warrant dismissal of the writ petition.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
South Indian Bank Limited & Others v. Naveen Mathew Philip & Another	2023 (4) KLT 29	Mentioned Only	Cited to illustrate that alternate remedies may not bar a writ petition in certain contexts; however, the court did not rely on this proposition to allow the petition, instead noting the factual nature of the case and the availability of Sec 18.

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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** **TUESDAY, THE 6[TH] DAY OF FEBRUARY 2024 / 17TH MAGHA, 1945** **WP(C) NO. 2684 OF 2024** ## **PETITIONER:** **DINESAN AGED 53 YEARS S/O KESAVAN MANICKAN ARACKAL HOUSE, PALISSERY P.O. THRISSUR DISTRICT., PIN – 680027** **BY ADV N.K.MOHANLAL** **RESPONDENT:** **KERALA STATE CO-OPERATIVE BANK REPRESENTED BY AUTHORISED OFFICER SAHAKARANA SATHAPTHI MANDIRAM, KOVILAKATHUMPADAM, THRISSUR, PIN – 680022** **SRI.P.C.SASIDHARAN** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C) No.2684/2024 : 2 : ## **N. NAGARESH, J.** ````````````````````````````````````````````````````````````` ## W.P.(C) No.2684 of 2024 ````````````````````````````````````````````````````````````` _Dated this the 6[th] day of February, 2024_ ## **J U D G M E N T** ~ ~ ~ ~ ~ ~ ~ ~ ~ The petitioner is Managing Director of a Private Limited Company. The Company availed Overdraft facility of ₹5 Crores on 28.04.2015 from the respondent-Bank. Three pieces of immovable property were mortgaged by way of security. 2. When repayment of loan defaulted, the Bank declared the Company account as NPA and invoked proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Ext.P1 Section 13(4) possession notice was issued. The Bank also filed arbitration case invoking Section 69 of the Kerala Co-operative Societies Act for recovery of W.P.(C) No.2684/2024 : 3 : ₹7,68,13,635/-. The respondent approached the Chief Judicial Magistrate's Court, Thrissur under Section 14 of the Act, 2002. The CJM passed Ext.P3 order appointing an Advocate Commissioner to take over physical possession of the secured asset. The petitioner is challenging Ext.P1 notice and Ext.P3 order. 3. The petitioner states that the proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is without jurisdiction as proceedings were initiated before declaring the loan account as NPA. Ext.P4 Section 14 notice indicated that the initial notice under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was issued on 31.12.2016. Ext.P2 ARC filed by the respondent would state that the account was declared as Non Performing Asset on 01.05.2018. The securitisation proceedings were therefore obviously initiated before declaring the account as Non Performing Asset. Exts.P1 and P3 are therefore liable to be W.P.(C) No.2684/2024 : 4 : set aside, contended the counsel for the petitioner. 4. The counsel for the petitioner further argued that item No.3 property mentioned in Ext.P1 notice is an agricultural property, which is evidenced by Ext.P4 photograph. There is a residential building also in the property. Item No.1 property is also a residential plot. Ext.P1 notice does not disclose existence of a residential building. A tenant is residing in item No.1 property. This fact was suppressed while filing affidavit in Chief Judicial Magistrate's Court under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. 5. On behalf of the petitioner, it is further alleged that possession notice was not affixed on the secured asset nor was it published in newspapers. The security interest is not registered at the Central Registry as contemplated under Section 26B of the Act, 2002. The entire proceedings are therefore illegal and arbitrary and are liable to be quashed. W.P.(C) No.2684/2024 : 5 : 6. I have heard the learned counsel for the petitioner and the learned Standing Counsel representing the respondent. 7. The prime argument of the petitioner is based on Exts.P1 and P2. Ext.P1 indicates that notice under the Act, 2002 was issued on 31.12.2016 and the loan account was declared NPA on 01.05.2018 subsequently. I find that based on Exts.P1 and P2 alone, it cannot be concluded that proceedings under the Act, 2002 were initiated before declaring the loan account as NPA. It is possible that the account was declared as Non Performing Asset even prior to 31.12.2016. These are matters of evidence. 8. The further allegation of the petitioner is that one of the properties sought to be proceeded against is an agricultural property and hence the said property cannot be proceeded against under the Act, 2002. The petitioner would further allege that possession notice had not been affixed on the secured asset and was not published in newspapers. These are also questions of fact. The Securitisation and W.P.(C) No.2684/2024 : 6 : Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 provides for an appellate remedy under Section 18 which states that any person aggrieved by any order made by the Debts Recovery Tribunal may prefer an appeal to the Appellate Tribunal. The petitioner therefore has an effective alternate remedy against Ext.P1 notice and Ext.P3 order. 9. The counsel for the petitioner relied on the judgment in _**South Indian Bank Limited and others v. Naveen Mathew Philip and another** [2023 (4) KLT 29]_ and argued that alternative remedy shall not operate as a bar when a writ petition is filed for enforcement of any fundamental right or where there has been a violation of the principles of natural justice or where the order or proceedings are wholly without jurisdiction or when vires of an Act is challenged. But, the issues involved in this case consists questions of fact. The issues raised by the petitioner involve disputed questions of facts which cannot be adjudicated in exercise of writ jurisdiction under Article 226 of W.P.(C) No.2684/2024 : 7 : the Constitution of India. Under the circumstances, I do not deem it appropriate to entertain this writ petition. The writ petition is therefore dismissed. Sd/- **N. NAGARESH, JUDGE** aks/02.02.2024 W.P.(C) No.2684/2024 : 8 : ## **APPENDIX OF WP(C) 2684/2024** ## **PETITIONER'S EXHIBITS** **Exhibit-P1 A TRUE COPY OF NOTICE OF POSSESSION DATED 26/6/2018 ISSUED BY THE RESPONDENT Exhibit-P2 A TRUE COPY OF PLAINT IN ARC 629/2021 FILED BY RESPONDENT BANK FOR RECOVERY OF RS. 7,68,13,635/-INCLUDING INTEREST, PENAL INTEREST AND OTHER CHARGES BEFORE JOINT REGISTRAR OF COOPERATIVE SOCIETY, THRISSUR Exhibit-P3 A TRUE COPY OF ORDER IN MC 563/2022 DATED 18/10/22 OF HON'BLE CHIEF JUDICIAL MAGISTRATE,THRISSUR. Exhibit-P4 A TRUE COPY OF PHOTOGRAPH SHOWING THE CULTIVATION IN THE PROPERTY RESPONDENT'S EXHIBITS EXHIBIT R1(A) A TRUE COPY OF THE ADVOCATE COMMISSIONER NOTICE DATED 1/12/2022**