Dr. Mohith Venu v. The Authorized Officer, HDFC Ltd.

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR** **&** **THE HONOURABLE MR. JUSTICE SHAJI P.CHALY WEDNESDAY, THE 4[TH] DAY OF AUGUST 2021 / 13TH SRAVANA, 1943 WA NO. 974 OF 2021** **AGAINST THE JUDGMENT IN WP(C) 12510/2021 OF HIGH COURT OF KERALA, ERNAKULAM DATED 22.6.2021** **APPELLANT/PETITIONER:** **DR. MOHITH VENU AGED 41 YEARS, S/O.VENUKUTTAN, SOUPARNIKA, P.K.NAGAR, VADAKKEVILA P.O., KOLLAM - 691 001.** **BY ADV P.K.BABU** **RESPONDENT/RESPONODENT:** **THE AUTHORIZED OFFICER HDFC LTD., HDFC HOUSE, VAZHUTHACAUD, THIRUVANANTHAPURAM - 695 010.** **BY SRI K.K.CHANDRAN PILLAI(SR.)** **BY ADV MICKY THOMAS** **THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 04.08.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** _**W.A. No.974/2021**_ 2 ## J U D G M E N T Dated this the 4[th] day of August, 2021 ## S. Manikumar, CJ. Writ Petition is filed for quashing Exhibit P3 proceedings and also for a direction permitting the writ petitioner/appellant to clear the loan account, if OTS facility is granted for which Ext.P2 request is filed before the respondent. In the Writ Petition it is specifically contended that the petitioner/appellant has altogether remitted Rs.33 lakhs. He has expressed his willingness to pay off the entire amount by way of OTS scheme. 2. Before the writ court, when the matter came up for admission, the learned counsel for the bank orally submitted that Ext.P2 has already been decided by the Bank. However, the appellant/writ petitioner submitted that, Ext.P2 and prayer for settling the issue under OTS scheme were not properly considered in its true spirit by the respondent bank. Considering the rival submissions and going through the material on record, writ court held thus: “ Heard both sides. 2. Learned counsel appearing for the petitioner submits that the petitioner has preferred A representation at Ext.P2 for One Time Settlement in respect of the defaulted amount of loan for _**W.A. No.974/2021**_ 3 Rs.64 lakhs taken by the petitioner in the year 2014. Learned counsel appearing for the petitioner submits that the respondent has not decided the said representation properly and they be directed to decide the said representation. It is further argued that possession notice has already been issued, which is at Ext.P3 and the same needs to be quashed. 3. Learned Standing Counsel appearing for the respondent submits that on 28.03.2014, a loan of Rs.68 lakhs was taken by the petitioner and as he defaulted in payment of instalments, notice under Section 13(2) of the SARFAESI Act was issued on 04.10.2017. It is further argued that then, by resorting the provision under Section 14 of the SARFAESI Act, an application was preferred before the learned Chief Judicial Magistrate and on 06.02.2018, the Advocate Commissioner was appointed to take possession of the secured asset. According to the learned standing Counsel appearing for the respondent, the act of taking possession was obstructed by the petitioner as well as so called tenant on 04.05.2018 and the so called tenant preferred a Writ Petition bearing No.15531 of 2018, which was disposed by this Court by granting the so called tenant an opportunity to approach the Debts Recovery Tribunal and accordingly, the possession was deferred by one month by this Court. Ultimately the Securitisation Application bearing No.256 of 2018 filed by the tenant came to be rejected by the learned Debts Recovery Tribunal on 07.12.2018. With this, it is further stated by the learned Standing Counsel appearing for the respondent, on instructions, that the petitioner has also approached the learned Debts Recovery Tribunal by filing Securitisation Application No.230 of 2019 and _**W.A. No.974/2021**_ 4 the stay petition filed therein has been rejected long back on 22.07.2019. 4. It is thus clear that the petitioner has already challenged the action taken by the respondent under the SARFAESI Act before the Debts Recovery Tribunal by filing Securitisation Application No.230 of 2019. As such, challenge to the notice under Section 14 of the SARFAESI Act, so also, the act of the Advocate Commissioner in intimating the debtor regarding taking of possession cannot be made before this Court by taking resort to the writ jurisdiction of this Court. As such, challenge to the communication at Ext.P3 fails. Learned Standing Counsel for the respondent, on instructions, submitted that the proposal at Ext.P2 dated 27.02.2019 has already been decided by the respondent. In the light of these facts, no case for interference is made out by the petitioner. The petition is therefore, dismissed.” Being aggrieved instant appeal is filed. 3. Appellant has contended that the writ court ought to have considered that because of the Covid-19 pandemic situation, settling of issue under OTS scheme has to be considered after taking note of the financial crisis faced by the appellant/petitioner. 4. It is further submitted that the Learned Single Judge erred in dismissing the Writ Petition stating that the dismissal of stay petition in S.A.No.230/2019 by the Debt Recovery Tribunal, Ernakulam is a bar to _**W.A. No.974/2021**_ 5 take the same contentions in the Writ Petition. It is also submitted that even though the main Petition is pending before the Debt Recovery Tribunal, pendency of the SA in the Debt Recovery Tribunal may not be a ground for rejection of Ext.P2. 5. It is further submitted that appellant is ready and willing to clear the dues of respondent, if OTS facility is granted. Respondent Bank need be concerned only with the money which is due from the appellant. 6. Bank has already considered the OTS request and rejected by Ext.P3 communication. Repeatedly, the Hon'ble Supreme Court has held that writ petitions as against proceedings initiated under the SARFAESI Act, 2002 should not be entertained. Reference can be made to a few decisions of the Hon'ble Supreme Court on that aspect. 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 _**W.A. No.974/2021**_ 6 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 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 _**W.A. No.974/2021**_ 7 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.” 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.” 7. 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 reaffirmed the legal position that High Court has _**W.A. No.974/2021**_ 8 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, where a statutory remedy is available by filing an application under Section 17 of the said Act. 8. In K.C.Mathew's case, Hon'ble Apex Court stated that writ petition challenging proceedings initiated against SARFAESI Act, 2002 is not maintainable, in the light of the alternate remedy provided under the statute. Following the decision in K.C.Mathew's case, we are not inclined to interfere with the judgment in Writ Petition (C) No.12510 of 2021 dated 22.6.2021. Giving due consideration to the grounds raised and in the light of the decisions stated supra, writ appeal fails and it is dismissed. Sd/S. Manikumar, Chief Justice Sd/Shaji P. Chaly, Judge sou.