Haridasan K.B. v Palliyakkal Service Co-Operative Bank Ltd

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE T.R.RAVI** **TUESDAY, THE 11[TH] DAY OF OCTOBER 2022 / 19TH ASWINA, 1944** ## **WP(C) NO. 15729 OF 2022** ## **PETITIONER:** HARIDASAN K.B., S/O.BALAKRISHNAN CHETTIAR, HARISHREE, NORTH PARAVUR, ERNAKULAM DISTRICT, PIN-683 513. BY ADV SRI.DEEPAK JOY.K. ## **RESPONDENTS:** 1 PALLIYAKKAL SERVICE CO-OPERATIVE BANK (LTD) NO. 2232, REPRESENTED BY ITS SECRETARY, EZHIKKARA, NORTH PARAVUR, ERNAKULAM DISTRICT, PIN-683 513. 2 SECRETARY, PALLIYAKKAL SERVICE CO OPERATIVE BANK LTD. NO.2232, EZHIKKARA, NORTH PARAVUR, ERNAKULAM DISTRICT, PIN-683 513. 3 SPECIAL SALE OFFICER, CHENDAMANGALAM SCB GROUP, OFFICE OF ASSISTANT REGISTRAR OF OPERATIVE SOCIETIES(GENERAL), NORTH PARAVUR, ERNAKULAM DISTRICT, PIN-683 513. 4 ASSISTANT REGISTRAR OF CO OPERATIVE SOCIETIES(GENERAL), NORTH PARAVUR, ERNAKULAM DISTRICT, PIN-683 513. *R5 TO R25 DELETED 5 KANAKAPPAN.R., CHAITHANYA, THENOOR III, PARALI, PALAKKAD, ERNAKULAM DISTRICT, PIN-678 592. **WP(C) NO. 15729 OF 2022** **2** 6 ABDUL SALAM.P.M., VAYALAMPARAMBU HOUSE, CHATHANAD, ALAPPUZHA DISTRICT, PIN-688 001. 7 DEVADAS.K.B., KRISHNAKRIPA, NORTH PARAVUR, ERNAKULAM DISTRICT, PIN-683 513. 8 VARGHESE.K.A., KUNNANATT HOUSE, MO ROAD, NORTH PARAVUR, ERNAKULAM DISTRICT, PIN-683 513. 9 CHINNAKUTTY, CHAITHANYA, THENOOR III, PARALI, PALAKKAD, PIN-678 592. 10 MOHAN.K., EDF 22, XVIII, ELOOR, FACT QUARTERS, UDYOGAMANDAL, ERNAKULAM DISTRICT, PIN-683 501. 11 MIDHUN.M., EDF 22, XVIII, ELOOR, FACT QUARTERS, UDYOGAMANDAL, ERNAKULAM DISTRICT, PIN-683 501. 12 RESHMA.M., EDF 22, XVIII, ELOOR, FACT QUARTERS, UDYOGAMANDAL, ERNAKULAM DISTRICT, PIN-683 501. 13 VIJAYAN.P.K., PALATHINGAL HOUSE, NORTH PARAVUR, ERNAKULAM DISTRICT, PIN-683 513. 14 INDIRA.P.B., PALATHINGAL HOUSE, NORTH PARAVUR, ERNAKULAM DISTRICT, PIN-683 513. 15 JYOTHI LAKSHMI, EDF 22, XVIII, ELOOR, FACT QUARTERS, UDYOGAMANDAL, ERNAKULAM DISTRICT, PIN-683 501. **WP(C) NO. 15729 OF 2022** **3** |16|ABIDA.M.K.,| |---|---| ||KALAKKASSERIL HOUSE,| ||EZHIKKARA, PIN-683 513.| |17|VIMAL,| ||KUNNANNATT HOUSE, MO ROAD,| ||NORTH PARAVUR, PIN-683 513.| |18|ASHA.K.,| ||KRISHNA KRIPA,| ||NORTH PARAVUR, PIN-683 513.| |19|DRISHYA,| ||KRISHNA KRIPA,| ||NORTH PARAVUR, PIN-683 513.| |20|LISSY,| ||KUNNANATT HOUSE, MO ROAD,| ||NORTH PARAVUR, PIN-683 513.| |21|PADMARAJ.G.,| ||SIVADAM HOUSE, PERUVARAM,| ||NORTH PARAVUR, PIN-683 513.| |22|RAJALAKSHMI.N.,| ||SIVADAM HOUSE, PERUVARAM,| ||NORTH PARAVUR, PIN-683 513.| |23|RAVI.K.B.,| ||PEEDANPARAMBIL HOUSE,| ||KANNANPARAMBIL, NORTH PARAVUR,| ||PIN-683 513.| |24|AKHIL.K.B.,| ||KANNANPARAMBIL HOUSE,| ||NORTH PARAVUR, PIN-683 513.| |25|JAYA.B.G.,| ||KANNANPARAMBIL HOUSE,| ||NORTH PARAVUR, PIN-683 513.| **WP(C) NO. 15729 OF 2022** **4** *RESPONDENTS R5 TO R25 DELETED FROM THE PARTY ARRAY AS PER ORDER DATED 24.06.2022 IN I.A.1/2022 IN WP(C) 15729/2022. BY ADVS. SRI.M.M.MONAYE SRI.M.PAUL VARGHESE SMT.NIRMALA P.V. SRI.K.V.SANOSH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.10.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **WP(C) NO. 15729 OF 2022** **5** **T.R. RAVI, J.** **--------------------------------------------** W. P. (C). No. 15729 of 2022 -------------------------------------------Dated this the 11[th] day of October, 2022 ## **JUDGMENT** The petitioner is a guarantor with the credit facilities availed by respondents 5 to 25, who were initially impleaded in the writ petition, but later deleted. The property belonging to the petitioner having an extent of 59.28 Ares in Survey No.173/2/1 in Puthenvelikkara Village was mortgaged to secure the facilities. Default was committed in the repayment of the loan amount and the 1st respondent Society filed ARC Nos.1315, 1316, 1317, 1323, 1330, 1332, 1326, 1307 and 1328 of 2018. The ARCs ended in awards being passed against the defaulters. Execution petitions were preferred, which culminated in the issuance of sale notices. Exts.P1, P2 & P3 are the sale proclamation notices issued in the different execution petitions filed. Ext.P4 is the notice which was published in the Deshabhimani daily. Ext.P5 is a letter issued by the 3rd respondent to the petitioner stating that the mortgaged property will be measured on 05.05.2022. The petitioner has approached this **WP(C) NO. 15729 OF 2022** **6** Court challenging Exts.P1 to P4 sale proclamation notices on several grounds. 2. It is submitted that under Rule 81(e) of the Kerala Cooperative Societies Rules, 1969 (the Rules for short), there is a requirement that the publication should also be done by beating of tom tom, which according to the petitioner has not been done in the case on hand. Another violation pointed out is that under Rule 81(e) (iv) of the Rules, there is a requirement that the sale notification states about every other matter which the Sale Officer considers material for a purchaser to know in order to judge the nature and value of the property. The petitioner submits that neither was a valuation done nor was any reserve price fixed before the sale and these aspects are evident from the sale notification which does not speak about any such reserve price or valuation of the property that is sought to be sold. His submission is that one of the most material aspect which has to be stated is the approximate value of the property that is sought to be sold and the same is missing in the sale notification. Reliance is placed on the judgment of this Court in **Peoples Urban Co-op. Bank Ltd. V. Mohanan** reported in **(1992 KHC 437)** to submit that non-compliance with Rule 81(e) of the **WP(C) NO. 15729 OF 2022** **7** Rules cannot be considered to be a mere irregularity to be ignored and that the proclamation of sale has to be published by the beat of tom tom which is mandatory. The petitioner also relies on the decision in **Antony P.X. V. State of Kerala and Others** reported in **(2017 (3) KLT 39)** , wherein this Court held that even though there is no imperative stipulation against sale of the entire property, reading of proviso to Rule 85 clearly demonstrates that, so far as may be practicable, no larger section of immovable property shall be sold than what would be sufficient to discharge the amount due with interest and expenses of attachment, if any, and sale. This Court had considered the effect of Rules 81(e) and 85 in the said decision to arrive at the conclusion mentioned above. This Court also held that the principles contained in Order XXI Rule 64 of the Code of Civil Procedure applies to the sale proceedings carried out by Cooperative Societies. In **Sosamma John V. Thrissur Co-operative Agricultural & Rural Development Bank and Others** reported in **(2018 (2) KHC 498)** , this Court was dealing with the sale under the Kerala State Co-operative Agricultural and Rural Development Bank Rules, 1986. This Court held that when sale of the mortgaged property is carried out even without fixing a fair and accurate value **WP(C) NO. 15729 OF 2022** **8** of that property, the sale is liable to be set aside. Rule 8(e) of the Kerala State Co-operative Agricultural and Rural Development Bank Rules is similar to Rule 81(e) of the Kerala Co-operative Societies Rules, when it comes to the requirement of a proclamation of sale. This Court found that sub-clause (iv) of Clause (e) of Rule 8 of the said Rules is in _pari materia_ with sub-rule (2) of Rule 66 of Order XXI of the Code of Civil Procedure, 1908, as per which the proclamation shall be drawn up as fairly and accurately as possible and Clause (e) of sub-rule (2) mandates that every other thing which the Court considers material for a purchaser to know, in order to judge the nature and value of the property shall be included in the proclamation notice. Rule 11 of the Rules is similar to Rule 85 of the Kerala Co-operative Societies Rules, whereby it is prescribed that only that portion of the mortgaged property which will be required to meet the amount due need be sold. The facts in **Sosamma John (supra)** are also more or less similar to the one on hand. This Court after considering the entire law on the subject, set aside the sale notice and directed issuance of fresh sale notice after complying with the mandate of the provisions under sub-clause (iv) of Clause (e) of Rule 8 and sub-rule (1) of Rule 11 of the Rules, after fixing a fair **WP(C) NO. 15729 OF 2022** **9** and accurate value of the mortgaged property and taking a decision as to whether sale of a portion of the said property is sufficient to satisfy the amounts due. It was also directed that the decision should be taken with notice to the petitioner before the Court and the creditor Bank and after affording them an opportunity of being heard. The Hon'ble Supreme Court has in the decision in **Tech Invest India (P) Ltd. v. Assam Power & Electricals Ltd.** reported in **[(2016) 1 SCC 704]** and **Ram Kishun & Ors. V. State of UP & Ors.** reported in **[(2012) 11 SCC 511]** held that fixing of a reserve price is a requirement in a public auction. A similar view has been taken in **Shri Ambadevi Sanstha V. Joint Charity Commissioner** reported in **[(2019) 17 SCC 419]** . 3. In view of the above declaration of law, it is evident that Exts.P1 to P4 sale proclamation notices do not meet the requirements of law. The petitioner is entitled to succeed. Exts.P1 to P4 sale proclamation notices are quashed. The 3rd respondent is directed to issue fresh sale notices after complying with the mandate of Rule 81(e) and Rule 85 of the Kerala Co-operative Societies Rules and after fixing a reserve price or an upset price based on the valuation of the property and after taking a decision as to whether **WP(C) NO. 15729 OF 2022** **10** the entire property has to be sold for the purpose of discharging the debt. The 3rd respondent shall take a decision after notice to the petitioner and the 1st respondent and after hearing them. The above exercise shall be completed within two months from the date of receipt of a certified copy of this judgment. Based on the decision, the 3rd respondent shall proceed further with the sale of the property. The above directions are without prejudice to the option of the petitioner to avail other modes of settling the dues like One Time Settlement. Sd/- **T.R. RAVI JUDGE** Pn **WP(C) NO. 15729 OF 2022** **11** ## **APPENDIX OF WP(C) 15729/2022** |PETITIONER'S|EXHIBITS| |---|---| |Exhibit P1|TRUE COPY OF THE SALE PROCLAMATION NOTICE| ||DATED 18.03.2022 IN EP NO.183/19, 184/19,| ||185/19, 186/19, 187/19 AND 189/19.| |Exhibit P2|TRUE COPY OF THE SALE PROCLAMATION NOTICE| ||18.03.2022 IN EP NO.190/19, 191/19,| ||192/19, 193/19, 194/19, 195/19 AND 196/19.| |Exhibit P3|TRUE COPY OF THE SALE PROCLAMATION NOTICE| ||DATED 18.03.2022 IN EP NO.197/19, 198/19,| ||199/19, 200/19, 201/19, 202/19 AND 203/19.| |Exhibit P4|TRUE COPY OF THE SALE PROCLAMATION NOTICES| ||AS PUBLISHED IN DESHABHIMANI NEWS PAPER| ||DAILY DATED 01.05.2022 (RELEVANT PORTION).| |Exhibit P5|TRUE COPY OF LETTER DATED NIL ISSUED BY| ||THE 3RD RESPONDENT.| |Exhibit P6|TRUE COPY OF THE LETTER NO.156/22-23 DATED| ||06.05.2021 ISSUED BY THE 2ND RESPONDENT.| ## ADDL. DOCUMENT PRODUCED ALONG WITH I.A.NO.2 OF 2022 EXHIBIT P6 TRUE COPY OF THE VALUATION REPORT SUBMITTED BY ER.GEORGE F.CHETHALAN, CHARTERED ENGINEER (INDIA), THOPPUMPADY DATED 9.5.2022 ## RESPONDENTS' EXHIBITS Exhibit R1(A) TRUE COPY OF THE DETAILS OF THE ACKNOWLEDGMENT BY THE RESPECTIVE OFFICERS IN TOKEN OF HAVING RECEIVED AND PUBLISHED THE SALE PROCLAMATION ON 12.4.2022 **WP(C) NO. 15729 OF 2022** **12** |Exhibit R1(B)|TRUE COPY OF THE SALE PROCLAMATION NOTICE| |---|---| ||DATED 1.5.2022 IN THE MATHRUBHOOMI DAILY| |Exhibit R1(C)|TRUE COPY OF THE PROCLAMATION FOR SALE OF| ||PROPERTY DATED 17.3.2022| |Exhibit R1(D)|TRUE COPY OF THE SALE NOTICE DATED| ||17.3.2022| |Exhibit R1(E)|TRUE COPY OF THE DETAILS OF THE DUE AMOUNT| ||AS ON 15.6.2022.|