Hassan Basri T.D. v. The South Indian Bank Ltd.

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ``` PRESENT THE HONOURABLE MR.JUSTICE ANIL K. NARENDRAN ``` ## **`&`** ## **`THE HONOURABLE MR.JUSTICE G. GIRISH`** ``` FRIDAY, THE 9[TH] DAY OF FEBRUARY 2024 / 20TH MAGHA, 1945 ``` ``` WA NO.179 OF 2024 ``` ``` AGAINST THE JUDGMENT DATED 19.01.2024 IN WP(C)NO.2299 OF ``` ``` 2024 OF HIGH COURT OF KERALA ``` ## **`APPELLANT/PETITIONER:`** ``` HASSAN BASRI T.D. AGED 39 YEARS S/O. T.D. AHAMED, MUNEEF MANZIL, CHATTANCHAL, CHENGALA P.O., THEKKIL, CHENGALA, KASARAGOD, PIN – 671 541. ``` ``` BY ADV SHIBA M SAMUEL ``` ## **`RESPONDENT/RESPONDENT:`** ``` THE SOUTH INDIAN BANK LTD., REGIONAL OFFICE KANNUR, SIB HOUSE, CHALAD-ALAVIL ROAD, KANNUR, PIN – 670014. REPRESENTED BY ITS AUTHORISED OFFICER. ``` ``` SRI.MOHAN JACOB GEORGE, SC ``` ``` THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 09.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` 2 W.A.No.179 of 2024 ## **JUDGMENT** ## **Anil K. Narendran, J.** The appellant is one of the legal heirs of late T.D. Ahamed, who was the Managing Director of M/s.Delcon Engineering Private Limited, Panaji Goa, which availed an Overdraft Facility of Rs.11 Crores and a Bank Guarantee (non-funded facility) of Rs.4 Crores as per loan account No.06710810000002 with the Cherkala Branch of the respondent-South Indian Bank. The petitioner and other legal heirs of Ahamed stood as guarantors and created security interest over the landed properties comprised in Rs.Sy.No.255/1 Pt of Thekkil Village, Kasargod Taluk. The load account became a Non-Performing Asset (NPA) with effect from 31.03.2021. The respondent Bank initiated proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), by issuing notice under Section 13(2). Symbolic possession of item No.1 property and physical possession of item No.2 property were taken on 27.12.2023. The appellant paid Rs.1 Crore on 02.11.2022, vide Ext.P1 pay in slip and a further sum of Rs.2.39 Crores on 28.11.2023, vide Ext.P2 pay in slip. The appellant requested the respondent Bank to grant six months to completely clear the overdue amount. While the appellant and other legal 3 W.A.No.179 of 2024 heirs of Ahamed were making earnest efforts to clear the dues by disposing of their immovable properties, the Authorised Officer of the respondent Bank issued Ext.P3 tender cum auction notice dated 11.12.2023 for the sale of item Nos.1 and 2 properties for realisation of a sum of Rs.15,24,23,176.72, as on 10.12.2023, with further interest, penal interest and costs from 11.12.2023. As per Ext.P3 notice, the date fixed for the opening of sealed tenders was 19.01.2024. 2. On 17.01.2024, the appellant filed W.P.(C)No.2299 of 2024 before this Court, invoking the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India, seeking a writ of mandamus or any other order or direction, directing the respondent Bank to exclude penal interest and all extra charges and permit the appellant-petitioner to settle the account by offering him an opportunity to regularise the loan account, which has been classified as a Non-Performing Asset (NPA); and a writ of mandamus or any other order or direction, directing the respondent to accept the arrears tendered by the petitioner in 40 instalments. 3. The learned Single Judge dismissed the writ petition as not maintainable, in the light of the decisions of the Apex Court in **United Bank of India v. Satyawati Tondon [(2010) 8 SCC** 4 W.A.No.179 of 2024 **110]** , **State Bank of Travancore v. Mathew K.C. [(2018) 3 SCC 85]** and **South India Bank Ltd. v. Naveen Mathew Philip** **[2023 (4) KLT 29: (2023) SCC online (SC) 435]** and the decision of a Division Bench of this Court in **Anilkumar N.V. v.** **State Bank of India and others [2020 (2) KLT 756]** . In the impugned judgment, on the question of maintainability of the writ petition, the learned Single Judge has also relied on the decision of this Court in **Jayakrishnan A. v. Union Bank of India and others [2023:KER:63842]** . 4. Heard the learned counsel for the appellant-petitioner and also the learned counsel for the respondent Bank. 5. In **South India Bank Ltd. v. Naveen Mathew Philip [2023 (4) KLT 29: (2023) SCC online (SC) 435]** , in the context of the challenge made against the notices issued under Section 13(4) of the SARFAESI Act, the Apex Court reiterated the settled position of law on the interference of the High Court invoking Article 226 of the Constitution of India in commercial matters, where an effective and efficacious alternative forum has been constituted through a statute. In the said decision, the Apex Court took judicial notice of the fact that certain High Courts continue to interfere in such matters, leading to a regular supply of cases before the Apex Court. The Apex Court reiterated that a 5 W.A.No.179 of 2024 writ of certiorari is to be issued over a decision when the court finds that the process does not conform to the law or the statute. In other words, courts are not expected to substitute themselves with the decision-making authority while finding fault with the process along with the reasons assigned. Such a writ is not expected to be issued to remedy all violations. When a Tribunal is constituted, it is expected to go into the issues of fact and law, including a statutory violation. A question as to whether such a violation would be over a mandatory prescription as against a discretionary one is primarily within the domain of the Tribunal. The issues governing waiver, acquiescence and estoppel are also primarily within the domain of the Tribunal. The object and reasons behind the SARFAESI Act are very clear as observed in **Mardia Chemicals Ltd. v. Union of India [(2004) 4 SCC 311]** . While it facilitates a faster and smoother mode of recovery sans any interference from the court, it does provide a fair mechanism in the form of the Tribunal being manned by a legally trained mind. The Tribunal is clothed with a wide range of powers to set aside an illegal order, and thereafter, grant consequential reliefs, including repossession and payment of compensation and costs. Section 17(1) of the SARFAESI Act gives an expansive meaning to the expression ‘any person’, who could approach the Tribunal. 6 W.A.No.179 of 2024 ## 6. In **Naveen Mathew Philip [2023 (4) KLT 29]** the Apex Court noticed that, in matters under the SARFAESI Act, approaching the High Court for the consideration of an offer by the borrower is also frowned upon by the Apex Court. A writ of mandamus is a prerogative writ. The court cannot exercise the said power in the absence of any legal right. More circumspection is required in a financial transaction, particularly when one of the parties would not come within the purview of Article 12 of the Constitution of India. When a statute prescribes a particular mode, an attempt to circumvent that mode shall not be encouraged by a writ court. A litigant cannot avoid the non-compliance of approaching the Tribunal, which requires the prescription of fees, and use the constitutional remedy as an alternative. In paragraph 17 of the decision, the Apex Court reiterated the position of law regarding the interference of the High Courts in matters pertaining to the SARFAESI Act by quoting its earlier decisions in **Federal Bank Ltd. v. Sagar Thomas [(2003) 10 SCC 733]** , **United Bank of India v. Satyawati Tondon [(2010) 8 SCC 110]** , **State Bank of Travancore v. Mathew K.C. [(2018) 3 SCC 85]** , **Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir [(2022) 5 SCC 345]** and **Varimadugu Obi Reddy v. B. Sreenivasulu [(2023) 2 SCC 168]** wherein the said practice has 7 W.A.No.179 of 2024 ## been deprecated while requesting the High Courts not to entertain such cases. In paragraph 18 of the said decision, the Apex Court observed that the powers conferred under Article 226 of the Constitution of India are rather wide, but are required to be exercised only in extraordinary circumstances in matters pertaining to proceedings and adjudicatory scheme qua a statute, more so in commercial matters involving a lender and a borrower, when the legislature has provided for a specific mechanism for appropriate redressal. 7. In **Naveen Mathew Philip [2023 (4) KLT 29]** the Apex Court reiterated the position of law regarding the interference of the High Courts in matters pertaining to the SARFAESI Act by quoting its earlier decisions, wherein the said practice has been deprecated while requesting the High Courts not to entertain such cases. 8. A writ of mandamus is a prerogative writ. The court cannot exercise the said power in the absence of any legal right. In **Bhaskara Rao A.B. v. CBI [(2011) 10 SCC 259]** the Apex Court reiterated that, generally, no court has the competence to issue a direction contrary to law nor can the court direct an authority to act in contravention of the statutory provisions. The courts are meant to enforce the rule of law and not to pass orders 8 W.A.No.179 of 2024 or directions that are contrary to what has been injected by law. 9. In **Sanil Kumar v. Authorised Officer, Indian Overseas Bank [2023 (6) KHC 146]** , a Division Bench of this Court in which one among us [Anil K. Narendran, J.] was a party, noticed that in view of the provisions under Article 141 of the Constitution of Inda, the law declared by the Apex Court in **Naveen Mathew Philip [2023 (4) KLT 29]** is binding on all courts within the territory of India. In the above circumstances, we find no reason to interfere with the impugned judgment of the learned Single Judge. This writ appeal fails, and the same is accordingly dismissed. No order as to costs. Sd/- ## **ANIL K. NARENDRAN, JUDGE** Sd/- **G. GIRISH, JUDGE** AMV